On September 13, the CFPB filed a complaint against a nonbank corporation and its CEO, alleging that the company engaged in deceptive and abusive acts through misleading advertising and unjustified, exorbitant fees related to its credit card program. The CFPB claims these actions violate both the Consumer Financial Protection Act and the Truth in Lending Act.Continue Reading CFPB Cracks Down on Credit Services Provider for Gouging and Trapping Consumers
On August 5, the FTC announced a proposed settlement which included a $12 million fine in connection with a complaint it filed against operators of a credit repair operation in May of 2022. The initial complaint alleged that the company violated the Credit Repair Organizations Act, the FTC Act’s prohibition against unfair, deceptive, and abusive acts and practices, and the Telemarketing Sales Rule, by preying on consumers with low credit scores by deceptively promising credit building services they could not deliver on, and taking illegal advance fees. Continue Reading Allegedly Deceptive Credit Repair Scheme Settles with FTC for $12 Million
On July 29, the FTC filed a stipulated order settling claims against an online career-training company on the grounds that it engaged in deceptive advertising. In addition to injunctive relief barring the company from engaging in deceptive acts, the order requires the company to pay a $15.7 million fine and cancel approximately $27.8 in consumer debt. Continue Reading FTC Settles Action Against Online Career-Training Company for Deceptive Advertising
On July 11, the Federal District Court for the Middle District of Florida granted the FTC’s request for a temporary restraining order against operators of a debt relief enterprise that unlawfully charged consumers illegal advance fees.
In the FTC’s July 9 complaint, the Commission alleges that the company and its owners falsely promised to enroll consumers in programs that guaranteed low monthly loan repayments followed by a lump-sum loan forgiveness. In exchange for enrollment in their program, the operators charged consumers advance fees of several hundred dollars followed by monthly fees of as much as $29. The FTC alleges that while the company stated it would apply consumers’ monthly payments to their loan balances, in reality it kept the consumers’ money and moved it offshore. As part of their scheme, the defendants falsely claimed that they were affiliated with the Department of Education.Continue Reading FTC’s Shuts Down Operators of Debt Relief Enterprise
On June 28, the FTC announced it had filed an action in federal court against a California-based student debt relief enterprise for deceptive practices, including unlawfully obtaining advance fees for debt relief, and pretending to be affiliated with the Department of Education for engaging new customers. The U.S. District Court for the Central District of California entered a temporary restraining order on June 24 against the defendants.Continue Reading FTC Files Action Against Student Debt Relief Enterprise
On May 13, the FTC’s amendment to the Safeguards Rule relating to the reporting of data breaches and security incidents, which were announced in October of 2023, became effective.Continue Reading Reminder: FTC Safeguards Rule Notification Requirement Now In Effect
On April 25, the FTC took action against a Washington-based bill payment company and its two co-founders alleging that the company used misleading search ads to impersonate consumers’ billers and deceptive design practices to mislead those consumers into paying “junk fees” they tacked on to consumers’ bills. Continue Reading FTC Calls Out Bill Payment Company’s Use of Dark Pattern Practices
On May 1, the FTC announced a settlement in federal court in the Northern District of Georgia against a payment processing company, along with its former CEO and senior vice president, for the company’s role in handling transactions for a debt-relief company engaging in fraud. The defendants have agreed to a settlement that includes a $10 million payment to compensate affected consumers and tighter restrictions on future business operations.Continue Reading FTC Cracks Down on Payments Processor for Facilitating Fraud
On March 29, the CFPB and the FTC jointly filed an amicus brief with the Eleventh Circuit in a matter involving a dispute under the Fair Credit Reporting Act. The case involves a consumer who filed disputes with a consumer reporting agency (CRA) after discovering multiple errors in her credit file, including incorrect personal information. However, the CRA failed to delete the disputed information, notify any furnishers of the consumer’s dispute, or provide the sources of the disputed information. The consumer sued, alleging the CRA violated the FCRA’s reinvestigation requirement by failing to reinvestigate her dispute regarding her name, address, and SSN information. The CRA claimed the text of the CRA did not require it to reinvestigate incorrect personal identifying information. At summary judgment, the district court found that while the reinvestigation requirement applied to personal identifying information, the CRA did not “willfully or negligently” violate the FCRA because its interpretation of the reinvestigation requirement was not objectively unreasonable.Continue Reading CFPB and FTC Argue Consumer Reporting Companies Have an Obligation to Correct Errors in Joint Amicus Brief
On March 7, the FTC announced it had finalized substantial revisions to the Telemarketing Sales Rule (the proposed rule was discussed here). Since promulgated in 1995, the TSR has been amended four times, most recently in 2015. This latest revision to the TSR significantly expands its reach by bringing business to business (B2B) telemarketing calls within its scope. Moreover, the revisions substantially enhanced the TSR’s recordkeeping requirements which will likely have a major impact on telemarketers’ compliance efforts. Key revisions to the TSR include:Continue Reading FTC Announces Major Expansion of Telemarketing Sales Rule
On February 6, the FTC announced that it had reached proposed settlements with several defendants in a pending action where the parties were accused of operating a fraudulent student debt relief scheme and collecting so-called “junk fees” from consumers.Continue Reading FTC Announces Settlement of Junk Fee Enforcement Action