Consumer Protection Laws and Information

Do you have a secret bank account or credit card?  Have you hidden purchases from your significant other?  An article on CNBC this week says a recent survey by the website creditcard.com found just over one quarter of the approximately 1,000 people they surveyed had a secret bank account and/or credit card.  The survey found that older Americans were more likely to have the secret bank accounts or credit cards and nearly 40% of baby boomers made secret purchases of $500.00 or more.   A splurge purchase of $500.00 or more can devastate a budget in many households.  Does your family have…Read   More

We all have gotten the calls…..your phone rings and normally you wouldn’t answer an unknown number. But this call caught you off guard or maybe it was a number very similar to one you are familiar with. You answer with “Hello” or some other greeting and then an automated voice identifies a business or agency. After the brief intro, the recording will ask: “Can you hear me clearly?” How would most of us answer? Of course, we would say “Yes” and that’s it! Your voice may have just been recorded by a scammer who could plan on using your affirmative…Read   More

The fallout continues from Wells Fargo’s settlement with the Consumer Financial Protection Bureau (CFPB) over the bank’s fake account scandal. Last September, federal regulators announced that Wells Fargo employees created upwards of 2 million bank and credit card accounts without customer approval. The settlement included $185 million dollars in fines—the largest ever issued by the regulatory agency. Not long after the settlement came to light, California’s state treasurer announced a suspension of business dealings with Wells Fargo citing a lack of public trust in the bank. Although Wells Fargo has made attempts to save its public image (firing thousands of…Read   More

Last fall, Wells Fargo admitted it had created over 2 million phony accounts as a result of an incentives program that rewarded employees who increased their sales numbers. Some employees who tried to report these wrong activities were retaliated against and fired. Wells Fargo says that they have now learned that some of these whistleblower reports do have merit.  As a result, they have hired a third party to review claims by current and former employees who had called the ethics line and were terminated or had received a “corrective action” in their employee file within twelve months. Wells Fargo…Read   More

I previously blogged about the issues that led ITT Technical Institute to close its doors and file for bankruptcy.  Now, five former ITT students have filed a class action complaint against ITT in its bankruptcy proceeding.  The class action is filed on behalf ITT students who were harmed by ITT’s conduct.  Lawyers from the Project on Predatory Student Lending at Harvard Law School filed the adversary proceeding in the bankruptcy case, which is being overseen by Judge James Carr in the Southern District of Indiana. In addition to alleging violations of consumer protection statutes and breach of contract, the former…Read   More

Yet again there is more fallout from the Wells Fargo phony account scandal.  Numerous media outlets from the New York Times to the Wall Street Journal are reporting a new scandal linked to Wells Fargo. In addition to the initial congressional investigation concerning phony accounts (see here and here) and the more recent CFPB report (see here), U.S. insurer Prudential Financial is now investigating whether Wells Fargo employees signed up customers for its life insurance policies without their knowledge. According to a wrongful termination suit filed in New Jersey state court by three former managers in Prudential’s corporate investigation division,…Read   More

“Unchecked Incentives Can Produce Unauthorized Account Openings, Deceptive Sales Tactics, and Other Illegal Practices” according to the CFPB. In the wake Wells Fargo’s phony account scandal, see here, the Consumer Financial Protection Bureau (CFPB) issued a bulletin warning financial companies that linking bonuses and incentives of their employees to sales goals or other business goals can lead to abuse if not property managed.  Banks and other financial companies use bonuses, commissions, promotions and other incentives to encourage their employees to accomplish business objectives.  Many times these programs commonly reward employees or services providers for selling or referring new products or services…Read   More

Three Reverse Mortgage Firms Fined

Posted on December 9th, 2016 by Ed Woods

On Wednesday, USA Today reported that three reverse mortgage firms entered into consent agreements with the Consumer Financial Protection Bureau for using deceptive advertising. According to the USA Today report, the deceptive advertising consisted of claims by the firms that a consumer could not lose their home in connection with the advertised reverse mortgages. The three firms are American Advisors Group, Reverse Mortgage Solutions, and Aegean Financial. Misleading Advertisements The investigation by the CFPB found that ads were used that contained scripted language which was misleading. One script contained the question, “Can I Lose My Home?” which was followed by…Read   More

The Consumer Financial Protection Bureau (CFPB) issued warning letters to 44 mortgage lenders and mortgage brokers. The Bureau has information that appears to show they may be required to collect, record, and report data about their housing-related lending activity, and that they may be in violation of those requirements. “Financial institutions that fail to report mortgage information as required make it harder to identify and address discriminatory lending,” said CFPB Director Richard Cordray. “No mortgage lender that is required to report their loan data can avoid this responsibility.” Home Mortgage Disclosure Act Requires Data Collection The Home Mortgage Disclosure Act,…Read   More

The Consumer Financial Protection Bureau (CFPB) has issued a new rule designed to help protect users of prepaid card users and account holders. Prepaid Cards and Accounts Prepaid accounts are one of the newer ways to store and spend your money. These include prepaid cards that you buy in stores or digital wallet accounts that you get online. With most prepaid accounts, you can spend the money you’ve loaded in advance for daily expenses or withdraw cash from an ATM. You can also have your income directly deposited into most types of prepaid accounts. New Rule for Displaying Prepaid Fee Information…Read   More