Credit and Debit Card Ratings

Consumer Financial Protection Report: Mishandling Credit Report Errors, Hassling Consumers and More

Harassing phone calls. Credit report errors. Payday loan company employees showing up at a customer’s workplace demanding money. These are just some of the more troubling findings in a recent report from the Consumer Financial Protection Bureau (CFPB), which was set up in the wake of the financial meltdown to police financial products and services.

The latest Consumer Financial Protection Bureau report highlights the agency’s regulatory supervisory activities between November 2013 and February 2014. According to the CFPB, which has a nationwide network of examiners whose job it is to review how well financial services companies are complying with the law, credit bureaus are not always properly handling credit report errors. This is important for a consumer’s financial protection because mistakes about how someone repays their debts can hurt their chances for qualifying for a mortgage or car loan or even nix their chances of landing a job.

Although the CFPB didn’t name the credit bureaus in its report, it did note that at least one had not been properly processing documentation provided by consumers seeking to dispute an error on their credit report. The law allows consumers to provide documentation to correct credit report errors, information that the credit bureaus are supposed to forward along to creditors so that a dispute can be resolved. Because this was not happening, the CFPB issued a warning to the non-compliant credit bureaus.

The CFPB also found some debt collectors egregiously violated the Fair Debt Collection Practices Act (FDCPA). The FDCPA is an attempt to rein in abusive practices and harassment by companies seeking to recoup money loaned to consumers. Yet the agency found that constraints imposed by the FDCPA were routinely ignored. For instance, one unnamed company made around 17,000 phone calls to consumers outside hours allowed by the FDCPA. “In addition, the entity also violated the FDCPA when it repeatedly contacted more than one thousand customers, contacting some consumers as often as 20 times within two days,” says the report.

Additionally, the FDCPA does not permit debt collectors to make false or misleading statements in their efforts to collect money they’re owed. Investigators from the CFPB discovered one company was routinely filing lawsuits riddled with factual inaccuracies about how much a consumer owed. “When the consumer filed an answer, the entity would dismiss the suit because it was unable to locate documentation to support its claims,” says the report.

The CFPB also cited one payday loan company for sending employees to the workplace of consumers in order to collect debts. This was occurring despite the fact that consumers had specifically requested that it stop and the practice being in violation of the Dodd-Frank Act.

 

Author: Chris Warren

  • Consumer Financial Protection Report: Mishandling Credit Report Errors, Hassling Consumers and More

    Consumer Financial Protection Report: Mishandling Credit Report Errors, Hassling Consumers and More

    Harassing phone calls. Credit report errors. Payday loan company employees showing up at a customer’s workplace demanding money. These are just some of the more troubling findings in a recent report from the Consumer Financial Protection Bureau (CFPB), which was set up in the wake of the financial meltdown to police financial products and services.

    The latest Consumer Financial Protection Bureau report highlights the agency’s regulatory supervisory activities between November 2013 and February 2014. According to the CFPB, which has a nationwide network of examiners whose job it is to review how well financial services companies are complying with the law, credit bureaus are not always properly handling credit report errors. This is important for a consumer’s financial protection because mistakes about how someone repays their debts can hurt their chances for qualifying for a mortgage or car loan or even nix their chances of landing a job.

    Although the CFPB didn’t name the credit bureaus in its report, it did note that at least one had not been properly processing documentation provided by consumers seeking to dispute an error on their credit report. The law allows consumers to provide documentation to correct credit report errors, information that the credit bureaus are supposed to forward along to creditors so that a dispute can be resolved. Because this was not happening, the CFPB issued a warning to the non-compliant credit bureaus.

    The CFPB also found some debt collectors egregiously violated the Fair Debt Collection Practices Act (FDCPA). The FDCPA is an attempt to rein in abusive practices and harassment by companies seeking to recoup money loaned to consumers. Yet the agency found that constraints imposed by the FDCPA were routinely ignored. For instance, one unnamed company made around 17,000 phone calls to consumers outside hours allowed by the FDCPA. “In addition, the entity also violated the FDCPA when it repeatedly contacted more than one thousand customers, contacting some consumers as often as 20 times within two days,” says the report.

    Additionally, the FDCPA does not permit debt collectors to make false or misleading statements in their efforts to collect money they’re owed. Investigators from the CFPB discovered one company was routinely filing lawsuits riddled with factual inaccuracies about how much a consumer owed. “When the consumer filed an answer, the entity would dismiss the suit because it was unable to locate documentation to support its claims,” says the report.

    The CFPB also cited one payday loan company for sending employees to the workplace of consumers in order to collect debts. This was occurring despite the fact that consumers had specifically requested that it stop and the practice being in violation of the Dodd-Frank Act.

     

  • Visa Attacks Prepaid Fee Confusion

    Visa Attacks Prepaid Fee Confusion

    It’s getting harder and harder for prepaid card issuers to be sneaky about their fees. Earlier this year the Pew Charitable Trusts issued a report detailing the lack of uniformity when it comes to prepaid fee disclosures and proposed a model disclosure box to make it easy for consumers to compare the fees associated with different products. Soon after that announcement, Chase declared that its Chase Liquid Prepaid Card would adopt Pew’s disclosure suggestions.

    On June 3rd, Visa decided to weigh in on the prepaid fee disclosure issue. Working in conjunction with Pew and the Center for Financial Services Innovation, Visa announced that it has developed an easily understandable designation for consumers to look for in order to know quickly whether a prepaid card meets certain standards related to fees, disclosure and benefits. Prepaid card issuers that qualify can include a seal on their packaging and marketing materials that indicate their compliance with certain criteria. Think of it as a prepaid version of the “fair trade” sticker that graces coffee packaging.

    “We felt it was important to go beyond current requirements in the marketplace and bring transparency to this growing product area,” says Ryan McInerney, president of Visa Inc. “This Visa designation will signify a new level of simplicity, protection and opportunity, enabling cardholders to confidently manage their spending every day.”

    In order to qualify for the Visa designation, prepaid cards must meet a variety of standards such as offering a flat monthly fee that includes all day-to-day uses for the card. In other words, there are a lot of things that prepaid card issuers can’t charge for, such as point of service (POS) cash back, in-network ATM transactions, PIN or signature transaction fees and customer service or overdraft fees.

    Additionally, qualifying cards must also offer specific consumer protections. Among other things, to receive a seal of approval cards have to include FDIC insurance, dispute resolution rights and Visa’s zero liability coverage.

    According to Pew’s Susan Weinstock, who directs the group’s consumer banking initiatives, Visa’s move is important. “Visa is taking an important step forward by acknowledging the importance of clear disclosures and consumer protections,” she says. “It’s particularly encouraging that Visa is not allowing overdrafts on these cards, in light of our research on consumer prepaid card use.”

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