In its monthly complaint report, the CFPB reported that the top three financial products or services receiving complaints in December, 2016, were, in descending order, debt collection, credit-reporting, and mortgages. Mortgage servicers garnered complaints for such things as misapplication of payments and ineffective resolution of borrowers’ problems with their loans. To account for monthly and seasonal fluctuations, the report compares complaints against companies in three-month segments to the same period the prior year. Equifax, Wells Fargo and TransUnion had the dubious honor of being the top three complained–about companies in the period from August to October, 2016. With respect to complaints relating to types of loans, the three-month average for complaints concerning student loans rose by 109% over the same period last year. The three states with the greatest increase in consumer complaints were Alaska, Georgia and Louisiana.
Tag Archive: CFPB
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Alaska, Georgia and Louisiana Top CFPB’s List for Consumer Complaint Filings
Posted by NCBRC - February 13th, 2017
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CFPB Goes After Student Loan Servicer
Posted by NCBRC - January 19th, 2017
In a Press Release issued on January 18, the CFPB announced that it was suing the nation’s largest student loan servicer, Navient Corporation, for illegal activity at every stage of the student loan process. The company is accused of systematically creating obstacles to repayment by providing bad information, incorrectly processing payments and failing to act on customer complaints. The complaint alleges that Navient’s conduct resulted in borrowers paying much more than they would have had their loans been properly serviced and had they been given accurate information about alternative repayment plans.
Navient, formerly part of Sallie Mae, Inc., services more than 12 million student loans approximately half of which are through its contract with the Department of Education.
According to CFPB Director, Richared Cordray, “For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans. At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.”
Specifically, the CFPB accuses Navient and two of its subsidiaries, Pioneer Credit Recovery and Navient Solutions, of:
- Failing to correctly apply or allocate payments to borrower’s accounts,
- Steering borrowers who had trouble repaying their loans away from the lower repayment plans they were entitled to under federal law and into forbearance programs which allow interest to accrue while the borrower is on hiatus from repaying the loan,
- Failing to inform borrowers enrolled in income-driven repayment plans of the need to renew those plans annually,
- Deceiving private student loan borrowers as to the steps necessary to release a co-signer from the loan,
- Harming the credit of disabled borrowers including severely injured veterans.
The lawsuit alleges violations of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the FCRA and the FDCPA.
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CFPB Takes Action Against Reverse Mortgagees
Posted by NCBRC - December 8th, 2016
On December 7, the CFPB took action against three reverse mortgage lenders for engaging in deceptive advertising practices in violation of the Mortgage Acts and Practices Advertising Rule. The companies, American Advisors Group, Reverse Mortgage Solutions, and Aegean Financial, engaged in a misleading practice by, among other things, misinforming consumers that they could not lose their homes with a reverse mortgage. The three consent orders require the companies to cease deceptive practices, implement procedures to comply with all laws, and pay penalties ranging from $65,000 to $400,000. American Advisors Group is the largest reverse mortgage lender in the country. Because of the complexity of reverse mortgages, the CFPB has made a point of studying and reporting on advertising abuses within the industry.
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Who’s Watching You?
Posted by NCBRC - February 1st, 2016
The CFPB has published its 2016 list of consumer reporting companies. These companies collect financial information and provide consumer reports to other companies. The CFPB list includes the name and contact information from the three largest nationwide consumer reporting companies—Equifax, Experian, and TransUnion—as well as dozens of specialty reporting companies that collect information for specific purposes such as employment screening, tenant screening, and bank account screening, utilities, medical, etc. The report gives guidance and contact information for obtaining your free, yearly, credit report from any of the three largest companies. It also explains what information the specialty companies collect and to whom the information is disseminated. It is important to note that with respect to the specialty companies it is possible not to discover a negative credit report until after adverse action has been taken by a potential employer, landlord, etc. The report provides tips on which specialty reports might be important for you to fact-check depending on your specific situation. Contact information for each of the reporting companies is provided in the report and, like the largest consumer reporting companies, most provide free yearly reports. As a consumer, you have the right to see what is in your reports and to dispute any inaccuracies.
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CFPB Sues over Deceptive Pension Advances
Posted by NCBRC - November 25th, 2015
The Consumer Federal Protection Bureau and the New York Department of Financial Services are seeking to enjoin deceptive lending practices by two pension advance companies. CFPB v. Pension Funding LLC, No. 8:15-cv-01329 (C.D. Cal.). On August 20, 2015, the agencies filed suit against Pension Funding LLC and Pension Income LLC and managing members, Steven Covey, Edwin Lichtig, and Rex Hofelter, alleging that the individuals and companies were in “violation of federal and New York law through the offering of pension advance products that came with hidden fees and interest charges that were not properly disclosed to consumers.” Specifically, the complaint alleges that the companies engaged in a scheme under which elderly consumers would send them eight years’ worth of pension payments in exchange for a lump sum. Though the consumers would be promised little to no fees or interest, in fact, the transactions included a hidden effective interest rate of more than 28 percent and were in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act and New York usury laws.
The agencies moved for preliminary injunction and the companies responded that the transactions at issue were sales rather than loans and, therefore, the companies and individuals were not “lenders” over which the CFPB and DFS could exercise jurisdiction.
The agencies responded that “the facts establish that Defendants’ pension-advance transactions constituted loans under the CFPA, as consumers incurred debt and were granted the right to defer its payment, in this case typically over a period of eight years. That pension payments the consumers were entitled to receive were expected to be used to repay the debt does not change the fundamental character of the transaction, and Defendants’ arguments to the contrary are unavailing.”
A hearing on the motion for preliminary injunction is scheduled for December 18, 2015.
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CFPB Sues Over Student Financial Aid Scam
Posted by NCBRC - November 4th, 2015
Taking advantage of confusion and concern over the costs of higher education, a financial aid scam has garnered millions of dollars in fees for bogus student loan financial services. The scam is run by Armond Aria using companies called Global Financial Support, Inc., Student Financial Resource Center and College Financial Advisory. The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against the companies and Aria in the District Court for the Southern District of California alleging that Aria and his companies violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by misleading consumers about their services. Specifically the complaint alleges that the company issues marketing letters to students and their families offering to conduct searches to match students with individualized financial aid opportunities. The letters falsely represent affiliation with the government or academic institution and demand a fee ranging from $59 to $78 to conduct the search. Students are instructed to fill out an application and pay the fee in accordance with a meaningless deadline or risk losing the opportunity to receive financial aid. In return, the applicants receive either nothing at all, or a general booklet on financial aid. In fact, the Department of Education operates the Free Application for Federal Student Aid (FAFSA), a national program enabling students to apply for college loans and grants. There is no fee associated with this program.
The lawsuit seeks both injunctive relief to stop the unlawful practices and restitution for those consumers harmed by the illegal conduct.
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CFPB Penalizes Two Largest Debt Buyers
Posted by NCBRC - September 21st, 2015
In a September 9, 2015, press release, the CFPB announced that it took action against the nation’s two largest debt buyers and collectors: Encore Capital Group and Portfolio Recovery Associates. Encore’s subsidiaries, also named in the action, are Midland Funding LLC, Midland Credit Management, and Asset Acceptance Capital Corp. Together, the two companies have bought over $200 billion in defaulted loans.
The Bureau found that both companies bought debts that “were potentially inaccurate, lacking documentation, or unenforceable. Without verifying the debt, the companies collected payments by pressuring consumers with false statements and churning out lawsuits using robo-signed court documents.” The all-too-familiar list of wrongdoing includes attempts to collect on debts that they knew were inaccurate or unenforceable by means of meritless lawsuits that they expected to, and often did, win by default, in violation of the FDCPA and the Dodd-Frank Wall Street Reform and Consumer Protection Act. They lied to consumers about their legal burdens and threatened litigation that was, in fact, not being considered. They harassed consumers with phone calls before 8:00 a.m. and after 9:00 p.m. and, in some instances, made collection calls to the consumer over 20 times in a two-day period.
The enforcement action consists of requiring both entities to stop reselling debts, stop collection efforts with respect to unverified debts, ensure accuracy when filing lawsuits, provide information to consumers such as the name of the creditor and charge-off balance, provide original documentation of the debt, use accurate affidavits, and cease collections efforts on time-barred debts.
Encore was ordered to pay up to $42 million in refunds and to dismiss all pending lawsuits or cease collection efforts on judgments involving misrepresentation.
Portfolio was ordered to pay $19 million in refunds where it made similar legal claims and where it collected payments on default judgments for debts that were barred by the statute of limitations.
Finally, Encore was ordered to pay $10 million and Portfolio $8 million to the CFPB;s Civil Penalty Fund.
The Encore consent order can be found at: http://files.consumerfinance.gov/f/201509_cfpb_consent-order-encore-capital-group.pdf
The Portfolio Recovery Associates consent order can be found at: http://files.consumerfinance.gov/f/201509_cfpb_consent-order-portfolio-recovery-associates-llc.pdf
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Green Tree Servicing Settles with FTC and CFPB for $63 million
Posted by NCBRC - May 6th, 2015
The Federal Trade Commission and the Consumer Financial Protection Bureau have announced a $63 million settlement in a dispute with the national mortgage servicing company, Green Tree Servicing. The FTC and CFPB charged Green Tree with thug-like collection methods including: barraging the debtor with phone calls as early as 5 a.m. and as late as 11 p.m.; threatening debtors with arrest, imprisonment, and garnishment; yelling at consumers and using obscene language; mocking illnesses and other personal situations causing financial distress; revealing debts to employers, neighbors, family; and taking payments out of debtors’ accounts without consent. It also failed to honor loan modifications, misapplied payments, provided incorrect creditor information to consumer reporting agencies, and overcharged or demanded unnecessary fees. $48 million of the settlement will go to affected consumers and $15 million represents civil penalties.
In addition to the $63 million dollars, the settlement requires Green Tree to clean up its act by implementing “a home preservation plan to offer options to consumers whose loans were transferred to the company during the time covered by the complaint.” It must cease collection on disputed debts until the completion of an investigation and verification of amounts owed. “The proposed order also prohibits Green Tree from making material misrepresentations about loans, processing procedures, payment methods, and fees, from taking unauthorized withdrawals from consumer accounts, and from violating the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Real Estate Settlement Procedures Act.” In short, the order requires Green Tree to competently and honorably perform the services a loan “servicer” is meant to perform.
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Claim Forms Available in Ocwen Settlement
Posted by NCBRC - July 10th, 2014
In December, 2014, Ocwen Financial Corporation and Ocwen Loan Servicing entered into a consent order with 49 States and the District of Columbia to provide $2 billion in principal reduction to underwater borrowers and provide $125 million to foreclosure victims as a result of Ocwen’s systemic misconduct at every stage of the mortgage servicing process. Notice packages have now been mailed to affected borrowers and The National Ocwen Settlement Administrator, responsible for handling settlement claims, has created a website with information for consumers who were harmed by Ocwen’s actions. In addition, the CFPB has posted instructions for filing claims under the settlement agreement in its blog.
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CFPB Takes Action Against Deferred-Interest Medical Credit Card
Posted by NCBRC - December 12th, 2013
Following closely on the heels of the CFPB’s recent action against pay day lender Cash America, the CFPB has taken action against medical credit card company, CareCredit. CareCredit, a subsidiary of GE Capital Retail Bank, offers medical credit cards through over 175,000 offices of health care providers such as dentists and vision care professionals. In a consent order issued on December 10th, the CFPB ordered CareCredit to refund up to $34.1 million to more than one million patients who were deceptively enrolled for the medical credit card. Read More
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