PayPal Must Pay $25M In Refunds, Penalties For Illegally Signing Customers Up For Online Credit Product

PayPal Must Pay $25M In Refunds, Penalties For Illegally Signing Customers Up For Online Credit Product

The Consumer Financial Protection Bureau alleges that online payment platform PayPal signed up customers for PayPal credit accounts without authorization, forced customers to use this credit line instead of their preferred payment methods, and failed to address disputes. As a result, PayPal will pay a total of $25 million in refunds and penalties. [More]

(Newton Free Library)

CFPB Wants To Hear Your Comments On Student Loan Servicing Practices

Outstanding student loan debt now totals more than $1.2 trillion in the U.S., and it’s only going to grow as college tuitions continue to outpace inflation. Meanwhile, student loan servicers aren’t exactly making it easy for borrowers to pay down that debt with confusing and inconsistent policies and an apparent reluctance to work with troubled borrowers. In an effort to see if the repayment process can be made less byzantine, the Consumer Financial Protection Bureau is asking for you to share your thoughts on the state of student loan servicing. [More]

(Hammerin Man)

Legislators Once Again Trying To Delay New Lending Protections For Military Personnel

The Department of Defense is trying to do something good for servicemembers by closing loopholes in the Military Lending Act that can leave military personnel vulnerable to predatory lenders. But these safeguards are now the target of a Congressman who has received substantial campaign contributions from payday lenders. [More]

Verizon, Sprint To Pay $158 Million To Settle Wireless Bill-Cramming Allegations

Verizon, Sprint To Pay $158 Million To Settle Wireless Bill-Cramming Allegations

Several months after AT&T and T-Mobile reached multimillion-dollar settlements with federal regulators to close the books on allegations of bill-cramming — illegal, unauthorized third-party charges for services like premium text message subscriptions — both Sprint and Verizon have also decided to pay the regulatory piper. Combined, the two wireless companies will pay $158 million to settle cramming claims with the FCC and the Consumer Financial Protection Bureau. [More]

(Hammerin Man)

House Panel Strikes Provision That Would Delay Added Military Lending Act Protections

Yesterday we reported that Congress would make a decision whether or not it would intervene to slow the Department of Defense’s work to create new rules aimed at closing loopholes in the Military Lending Act that often leave military personnel vulnerable to predatory financial operations. Thankfully, legislators saw the need for more protections regarding military lending and determined the rules could go into effect as planned. [More]

Congress May Delay Predatory Lending Protection For Military Personnel

Congress May Delay Predatory Lending Protection For Military Personnel

The Military Lending Act prevents military personnel from being caught in revolving debt traps of triple-digit interest loans from predatory financing operations like payday and auto-title lenders, but there are loopholes that allow some lenders to get around the MLA’s 36% APR interest rate cap, resulting in the loss of millions of dollars to servicemembers each year and raising issues of national security. The Dept. of Defense is currently working toward new rules that would add protections for military personnel, but Congress may intervene to slow the DoD from making progress. [More]

Robocalling Phantom Debt Collector Accused Of Harassing, Defrauding Consumers

Robocalling Phantom Debt Collector Accused Of Harassing, Defrauding Consumers

People hate debt collectors, perhaps as much as, if not more than, they despise robocalls from telemarketers. And phantom debt collectors — those who attempt to collect debts that aren’t owed to them, if at all — are among the worst of the bunch. So when you combine the automated recorded messages of robocalls with the incessant harassment of phantom debt collectors, you create a particularly loathsome Frankenstein’s monster. [More]

Will Congress Try To Kill The Consumer Financial Protection Bureau?

Will Congress Try To Kill The Consumer Financial Protection Bureau?

Since its creation as part of the 2010 Dodd-Frank financial reforms, the Consumer Financial Protection Bureau has been a target of pro-bank, anti-regulation lawmakers who contend that the agency lacks legislative oversight and puts too much authority in the hands of a single director. With the recent political power shift in the Senate and another presidential election on the horizon, some advocates are concerned that the anti-CFPB movement may take hold on Capitol Hill. [More]

While fewer than 8% of all banks put arbitration clauses on deposit accounts, those few banks account for nearly half of all insured deposits in the U.S. (source: CFPB)

In Wake Of Arbitration Report, Consumer Advocates Ask CFPB To Revoke Banks’ “License To Steal”

This morning, the Consumer Financial Protection Bureau released its final report on forced arbitration, showing how banks and credit card companies use contractual clauses to short-circuit class-action lawsuits from their customers. Now that the Bureau has done its research, consumer advocates are calling on regulators to use their authority to end the practice. [More]

Banks & Credit Card Companies Saving Millions By Taking Away Your Right To Sue

Adam Fagen

Tens of millions of American consumers have clauses in their credit card, checking account, student loan, and wireless phone contracts that take away their rights to sue those companies in a court of law, and more than 93% of these people have no idea they’ve had this right taken away from them. The companies involved are presumably quite happy about this lack of awareness, as it results in millions of dollars in savings that aren’t being passed on to you. [More]

(Philip Taylor)

CFPB Wants Better, Faster Database Of Credit Card Agreements

Much like a restaurant that has to shutter for a short time while installing new kitchen equipment, federal regulators occasionally have to press pause on an important process to fix things for the long haul. So in order to improve the Consumer Financial Protection Bureau’s public database of credit card agreements, the agency is planning to give banks a brief break from having to file those documents with the system. [More]

More Than 50M Consumers Have Free Access to Credit Scores, But Some Don’t Know What To Do With Them

More Than 50M Consumers Have Free Access to Credit Scores, But Some Don’t Know What To Do With Them

Last year the Consumer Financial Protection Bureau began an initiative urging credit card issues to provide consumers with free credit scores on their monthly bills. Since then, a number of financial institutions have begun providing the information, leading more than 50 million consumers to have free and regular access to their scores. [More]

(Taber Andrew Bain)

Wells Fargo, Chase To Pay $35.7M For Allowing Illegal Mortgage Kickbacks

Federal law prohibits giving or receiving kickbacks in exchange for a referral of business related to a real-estate-settlement service, but for four years a now-defunct title company in Maryland provide cash, marketing materials and consumer information in exchange for referrals. And now the banks have agreed to pay more than $35 million — including $11.1 million in redress to affected consumers — for their sins. [More]

(Photo: Blitzcat)

Senator Calls On Regulators To Take Closer Look At Rent-To-Own Stores

To people strapped for cash but looking to make a big-dollar purchase, the idea of financing that item through a rent-to-own store can be tempting. After all, most of us can afford $30/month, but not everyone has $900 on hand. But those monthly payments may go on for years, meaning you’ll pay double or triple the face-value of that purchase by the time you’re done. In the last decade, this rent-to-own model has become increasingly popular, especially among lower-income Americans. Now one U.S. Senator is asking federal regulators to keep a close eye on this retail industry. [More]

(Hammerin Man)

Protecting Military Servicemembers From Predatory Loans Is A National Security Issue

In recent years, we’ve written a number of stories about laws aimed at protecting active-duty servicemembers and their families from predatory loans and the businesses that try to take advantage of loopholes in these rules. Some readers have asked why members of our armed forces merit protections not available to civilians. But this isn’t about just doing something nice for our soldiers; it’s about removing a threat to national security. [More]

(northernplateguy)

CFPB Suit: Texas Company Charged Consumers Millions In Fees For Credit Card They Couldn’t Use

Credit cards, while often a risky financial product, can at times prove to be a proverbial lifesaver when you get into a pinch. For that reason, most consumers who apply for a card envision using it as a valid form of payment for any number of reasons. While a Texas-based company marketed their credit card as general-use, consumers quickly found out that wasn’t actually the case. And so, the Consumer Financial Protection Bureau has filed suit against the company for its allegedly deceptive ways. [More]

(Spidra Webster)

CFPB Lawsuit: Sprint Made Millions Off Consumers Acting As A “Breeding Ground” For Bill-Cramming

Just a day after rumors surfaced that Sprint could be facing a $105 million from the Federal Communications Commission for allegedly overcharging customers using a practice known as “bill-cramming,” the Consumer Financial Protection Bureau has filed a lawsuit against the carrier for the bogus charges placed on customer’s phone bills. [More]

(Meneer Dijk)

New Requirement Aims To Curb Inaccurately Reported Medical Debt

Medical bills account for nearly half of all collections notices on consumers’ credit reports, affecting more than 43 million Americans. Meanwhile, it’s been shown that medical billing is fraught with errors and many consumers sent to collections for these debts are penalized too harshly. A new federal requirement hopes to reduce this overly negative impact of medical debt on credit reports. [More]