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On September 8, the FTC’s Chief Administrative Law Judge (“ALJ”) issued an initial decision finding that a company providing tax filing software services engaged in deceptive advertising practices in violation of Section 5 of the FTC Act. In March of 2022, the FTC filed an administrative complaint alleging that the company’s advertisements misled consumers into believing that any user could file their taxes for free on the company’s platform, when in reality, the free service offerings were only available to approximately one third of tax filers.…

Continue Reading FTC Judge Orders Tax Filing Software Company to Stop Advertising Products as “Free”

On September 11, the FTC announced that it had reached a settlement with two “people-search” companies which would resolve charges that the companies had engaged in practices that violated the Fair Credit Reporting Act (“FCRA”). The California-based defendants market “people-search” services, allowing users to search unlimited background reports on individuals, and charge monthly subscription fees to view the full reports. Searches can be run using an individual’s name and/or city and state of residence.…

Continue Reading FTC Settles FCRA Suit Against “People-Search” Companies

On August 22, the CFPB filed a lawsuit against an installment lending company and several of its subsidiaries in South Carolina federal court, alleging that the company engaged in illegal “loan-churning” practices that generated hundreds of millions of dollars in loan costs and fees. The CFPB’s complaint alleges that many of the installment lender’s “loan-churning” practices constituted unfair, deceptive, and abusive acts or practices (“UDAAPs”) in violation of the CFPA. Specifically, the CFPB alleges that the installment lender harmed consumers by:…

Continue Reading CFPB Sues Installment Lender for Alleged Loan Churning Operation

On August 18, the FTC published guidance for third party sellers detailing how the INFORM Consumers Act, which took effect on June 27, may impact their businesses. The INFORM Act provides that online marketplaces where high-volume third party sellers offer new or unused consumer products must collect, verify, and disclose certain information about those sellers. Online marketplaces must also offer a clear mechanism for consumers to report suspicious activity.…

Continue Reading FTC Publishes INFORM Act Guidance for Third Party Sellers

On August 15, CFPB Director Rohit Chopra announced plans for new CFPB rules that would strictly limit the types of consumer data that can be sold by businesses and ensure that data brokers comply with the Fair Credit Reporting Act (“FCRA”). The announcement came during a White House roundtable event focused on protecting individuals’ data privacy and as part of a broader federal crackdown on third-party data brokers. Director Chopra highlighted two proposals in particular that the CFPB is considering.…

Continue Reading CFPB Forecasts New Rule Cracking Down on Consumer Data Sales

On June 20, the FTC announced that it has sent letters to 50 online marketplaces nationwide notifying them about their obligations to comply with the new Integrity, Notification, and Fairness in Online Retail Marketplaces (“INFORM”) for Consumers Act, which is set to take effect on June 27, 2023. A template sample of the FTC’s letter can be accessed here.…

Continue Reading FTC Notifies Online Marketplaces of Obligations Under INFORM Act

On May 15, the Pennsylvania Attorney General Attorney General Michelle Henry announced a $11 million settlement with a rent-to-own lender and its subsidiaries accused of engaging in predatory financing practices. Among other claims, the AG alleged that the company and its subsidiaries disguised the nature of financing products it offered, concealed outstanding balances, engaged in deceptive collection practices, and used a web portal that allowed retailers to sign consumers up for financing without their knowledge. In particular, the lender disguised one-year rent-to-own agreements as “100-Day Cash Payoffs” and then concealed the balances owed. In its initial complaint, the AG alleged that these actions violated Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, Rental-Purchase Agreement Act, Goods and Services Installment Sales Act, and Fair Credit Extension Uniformity Act. The company did not admit to any of the Attorney General’s allegations and continues to expressly deny any wrongdoing in the case.…

Continue Reading Pennsylvania AG Targets Rent-to-Own Company for Alleged Deceptive and Predatory Practices

On April 14, the CFPB filed a statement of interest in a case currently pending before the United States District Court for the Southern District of Florida in an attempt “to help protect consumers from discriminatory targeting.” In a press release announcing the filing of the statement of interest, the CFPB explained that “discriminatory targeting” is the act of directing predatory or otherwise harmful products or practices at certain groups, neighborhoods, or parts of a community.…

Continue Reading CFPB Statement of Interest Highlights Focus on Discriminatory Access to Credit

In December, a Utah-based bank and its service provider entered into an assurance of discontinuance with the Iowa Attorney General and the Iowa Division of Banking, settling an investigation into allegedly usurious installment loans that the bank made to Iowa consumers. The Iowa AG alleges that, between March 2020 and April 2022, the bank made more than 1,600 installment loans to Iowa residents that imposed excessive finance charges in violation of state and federal law. Some of these loans, according to the Iowa AG, carried interest rates of nearly 200 percent, far in excess of the maximum allowable finance charge of 21 percent under the Iowa Consumer Credit Code and the limits established by Section 521 of the federal Depository Institutions and Deregulation Monetary Control Act.…

Continue Reading Iowa AG Usury Investigation into Bank Partnership Ends in Settlement

On July 29, the CFPB and DOJ issued a joint letter to the auto lending and leasing industry reminding auto companies of their obligations under the Servicemembers Civil Relief Act (SCRA). The SCRA affords special protections to servicemembers and their dependents against unfair or predatory practices by auto lenders, including:
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Continue Reading Regulators Remind Auto Industry of Servicemember Protections

On July 27, CFPB Director Chopra was interviewed in multiple publications, here and here, about, among other topics, how the CFPB could seek to help mortgage borrowers strained by the Federal Reserve’s battle against inflation and how the agency is looking at cryptocurrency. Below are some of the more important updates from the interviews.
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Continue Reading CFPB’s Chopra Has Payments and Crypto In Focus