On April 15, the CFPB and FTC announced the release of a joint annual report to Congress administering the Fair Debt Collection Practices Act (FDCPA).  The annual report highlights both agencies’ efforts to protect and provide debt collection relief to consumers, particularly in light of the COVID-19 pandemic and resulting economic hardship.
Continue Reading CFPB Signals Foray into Protecting Small Businesses from Abusive Debt Collectors

On April 12, the CFPB filed a complaint against a credit reporting agency (CRA), two of its subsidiaries, and a former senior executive for violating a 2017 consent order issued to the company related to alleged deceptive marketing regarding its credit scores and other credit-related products.  The CFPB alleges that the CRA continued its unlawful behavior and employed deceitful digital “dark patterns” to profit from customers and also alleges violations of the CFPA, EFTA/ Regulation E, and the FCRA/Regulation V.  The order seeks a permanent injunction, damages, civil penalties, consumer refunds, restitution, disgorgement and the CFPB’s costs.
Continue Reading CFPB Sues Credit Reporting Agency and Former Senior Executive

State and federal crypto and NFT-related enforcement actions continue to occupy the regulatory landscape with an apparent uptick coinciding with the issuance of The White House’s Executive Order in March (we discussed the Biden Executive Order here). The following are some enforcement actions from state and federal regulators since the Executive Order.
Continue Reading Crypto Round-up: Executive Order Coincides with Uptick in Enforcement Actions

On March 30, the CFPB settled with a student loan servicer to resolve allegations that the servicer made deceptive statements to student loan borrowers and misrepresented their forgiveness and repayment options, including deceiving borrowers with Federal Family Education Loan Program (FFELP) loans about their eligibility for Public Service Loan Forgiveness (PSLF).  The consent order requires the servicer to pay a $1 million civil money penalty.
Continue Reading CFPB Fines Student Loan Servicer $1 Million to Settle Alleged UDAAP Violations

On March 31, the FTC and Illinois State Attorney General announced a settlement of charges against a large, multistate auto dealer that allegedly discriminated against black consumers and included illegal junk fees for unwanted “add-ons” in customers’ bills.
Continue Reading FTC Imposes Record-Setting $10M Fine Against Multistate Auto Dealer, Settling Charges of Racial Discrimination and Unauthorized Charges

On March 18, the U.S. District Court for the Southern District of Texas issued an injunction against a Texas-based credit repair company that allegedly made false promises to remove negative information from credit reports and filed false identity theft reports to explain negative items on credit reports. The court granted an injunction against the company, finding violations of Section 5 of the FTC Act, the Credit Repair Organizations Act, and the Telemarketing and Consumer Fraud and Abuse Prevention Act. The permanent injunction imposes financial restrictions on the defendants and halts their operations.
Continue Reading FTC, DOJ Halt Credit Repair Operation Over Deceptive Practices

On March 8, the FTC settled with the operators of an online stock trading platform over allegations that the operators fraudulently marketed investment-related services that they claimed would enable consumers to make consistent profits and beat the market.  FTC alleged that the consumers were misled and those who subscribed to the operators’ stock and option trading services were trapped into hard-to-cancel subscription plans with costly charges.
Continue Reading Online Investment Site Settles with FTC, $2.4M Fine

On February 28, the FTC announced that the operators of an alleged credit card interest rate reduction scam will be permanently banned from the debt relief industry as part of court orders resolving charges by the FTC and the Florida AG.  The FTC and Florida AG alleged that the operators engaged in deceptive and abusive practices violating the FTC Act, the Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act in selling credit card interest rate reduction services to consumers.  According to the joint complaint, the operators made telephone calls claiming to permanently and substantially reduce consumers’ credit card interest rates, posed as the consumers’ credit card company representatives or affiliates and allegedly claimed they could save consumers thousands of dollars in credit card interest and enable them to pay off their debt faster.  According to the FTC, the operators left people even deeper in debt after they paid upfront fees of between $995 and $4995, as well as substantial fees to transfer their existing debts to new cards.
Continue Reading FTC Bans Operators of Alleged Debt Relief Scam, $5.3M penalty

On February 15, the CFPB released Bulletin 2022-02 to reiterate the prohibition in the Electronic Fund Transfer Act (EFTA) that financial companies with government benefit contracts may not require consumers to establish an account at a particular financial institution as a condition of receipt of a government benefit.  The bulletin notes that the prohibition under the EFTA ensures that consumers receiving the government benefits, such as Social Security payments, veterans’ benefits, and unemployment insurance have a choice with respect to how they receive their funds.
Continue Reading CFPB Takes Aim at Prepaid Card Providers Distributing Government Benefits

On January 28, the FTC announced that it banned an automotive marketing company and its owner from the auto industry for the next twenty years for allegedly engaging in unfair and deceptive practices in violation of the FTC Act and failing to comply with the Truth in Lending Act’s (TILA) disclosure requirements.  According to the FTC’s opinion, the company sent mail advertisements directing consumers to visit auto sales websites, inaccurately suggesting that these websites were affiliated with a government COVID-19 stimulus program. Consumers also received direct mail advertisements from the company purportedly informing them that they had won specific and valuable cash prizes that could be collected upon visiting a car dealership. Once consumers visited the dealerships as directed, they learned that they had not won the prize listed in the mailings.  The company was also found to violate TILA’s requirements for advertising “closed-end credit” to prominently disclose key financing terms that consumers need to determine the true cost of the advertised car loans.
Continue Reading FTC Order: Auto Marketing Company and Owner Banned From Industry for Misleading Consumers