Tag: CFPB

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Credit Card Companies want you to give up Your Right to Sue. Here’s how to protect your Rights

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Before signing up for a new credit card, scan through the fine print and search for the word “arbitration.”  What you will find is that the company requires you to resolve all conflicts through a binding dispute resolutions process, rather than going to court.

These clauses are common among cell phone carriers, financial institutions and online service providers such as Netflix and Amazon.  Some companies provide the option to opt-out of mandatory arbitration, if you act quickly enough.  In fact, more than a quarter of the more than 400 credit card contracts analyzed by the Consumer Financial Protection Bureau included an opt-out provision.

For Citi Card customers, you may even have gotten a chance for a do-over.  This past year, the issuer revised its customer agreements, giving them a new opportunity to opt-out of the company’s standard arbitration agreement.

As with many opt-out notices, instructions can be vague and time is of the essence.   Here are some guidelines consumers should follow when requesting an opt-out.

  • Follow instructions. Read the opt-out provision carefully and follow the instructions exactly. It is necessary to include enough information to identify the person and convey their intent to opt-out.
  • Identify yourself. If the directions are vague, use a standard business letter format, with the date and address at the top.  Include all pertinent details such as your account number, customer ID and your contact information.
  • Be direct. Be as clear and concise as possible in your writing. If you go to court, the lawyers for the company will try and argue that you were not clear or did not mean what you said.
  • Keep records. If an email option is given, use that.  An email automatically generates a time stamp.  If you do not need to send a physical letter, keep a copy for your records.  Save any responses you receive and send the letter certified mail, so you receive confirmation of its receipt.

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If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Banks Revise Student Loan Contracts to Help Borrowers Avoid Automatic Default

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Private lenders are revising student loan contracts to ensure borrowers are not placed in default when the co-signer of their loan dies or declares bankruptcy. In a letter obtained by The Washington Post, Consumer Bankers Association President Richard Hunt informed Consumer Financial Protection Bureau (CFPB) director Richard Cordray that the 10 member banks who offer student loans, including Wells Fargo, PNC Bank, Discover and Sallie Mae, have changed their policy on these type auto defaults.

The banks will no longer trigger a default when a co-signer dies, while most will do the same in the event of a bankruptcy. The same policy will apply with existing loans.

Earlier this year, the CFPB warned bankers that they were at risk of breaking the law by automatically placing people who were current on their loans in default. The practice occurs in the private student loan market, where banks and other financial firms provide education financing with loan contracts that give them the right to trigger a default, even if the loan is being paid on time. Auto defaults leave borrowers with no choice but to repay the entire balance of the loan or ruin their credit, making it difficult to purchase a home or car.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Credit, Timothy Kingcade Posts

Thousands of Wells Fargo Employees Fired over Phony Accounts

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Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts without customer consent, according to federal regulators.  The phony accounts, some dating back to 2011, caused the bank to accumulate unwarranted fees and allowed Wells Fargo employees to boost their sales and increase profits.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), said in a statement.

Wells Fargo confirmed to CNNMoney that it had fired 5,300 employees over the last few years related to the unethical behavior. Employees went so far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

In addition, Wells Fargo employees submitted applications for 565,443 credit card accounts without their customers’ knowledge or consent. Approximately 14,000 of those accounts incurred more than $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.

Wells Fargo has agreed to pay “full restitution to all victims.” As part of the settlement, Wells Fargo must make changes to its sales practices and internal oversight. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.

Even though the Wells Fargo scandal took place nationally, the settlement in L.A. requires the bank to specifically alert all of its California customers to review their accounts and terminate ones they do not recognize or want.

Click here read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

 

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

CFPB Stops Illegal Practices by Student Loan Servicers & U.S. Dept. of Education Debt Collectors

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The Consumer Financial Protection Bureau (CFPB) has taken action against debt collectors and servicers who took advantage of student loan borrowers by making illegal garnishment threats and using illegal auto default provisions in loan contracts.

The violations include:

1. CFPB examiners found that one or more debt collectors threatened wage garnishment against federal student loan borrowers who were not eligible for garnishment. The National Consumer Law Center (NCLC) documented abuses by private collection agencies that the U.S. Dept. of Education hires to collect federal student loans in its 2014 report.

2. CFPB examiners found that one or more servicers of private student loans were unfairly invoking “auto-default” clauses to treat both the borrower and the co-signer in default if either of them died or filed bankruptcy. Auto-default clauses allow the servicer to demand payment of the entire loan balance even if all payments on the loan are up to date.

The Department of Education terminated the contracts of five private collection agencies after finding abuses in February 2015, but more needs to be done through enhanced monitoring and guidance for all private collection agencies to ensure they are consistently providing borrowers with accurate information regarding their loans.

Too many student loan borrowers have already been harmed by this abusive practice, which penalizes student borrowers who are current on their payments, simply because the co-signer has died or filed bankruptcy.

NACBA President Ed Boltz said: “This positive step by CFPB puts an end to an outrageous guilty-until-proven-innocent situation where individuals faithfully paying off student loans are thrown into default because of the status of their co-signer. The fact that a co-signer on a student loan has filed for bankruptcy to deal with other debts is in no way a basis for putting into default a student loan that is being paid on time. It is time that the federal government stands up for student loan borrowers who are doing everything right but nonetheless could see their credit ruined as the result of an unrelated action of a co-signer.”

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Debt Collector on Trial for Targeting Financially-Struggling Consumers

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A Georgia man who prosecutors say organized a scheme that victimized more than 6,000 consumers nationwide is set to go to trial.  Prosecutors say John Williams spearheaded efforts to defraud at-risk consumers from 2009 to 2014 into paying approximately $4.1 million by misrepresenting the status of their debts and consequences of not paying. John Williams’ debt collection agency Williams, Scott & Associates LLC was shut down in 2014.

The trial comes when there is a time of heightened regulatory attention toward debt collection, which the Consumer Financial Protection Bureau (CFPB) considers the No. 1 most-complained about area of consumer financial services.

Debt collection firms, like the one in this case, purchase delinquent debts, oftentimes for pennies on the dollar, then attempt to collect the full amount the original lender claimed. These firms claim they are simply seeking recovery on a rightfully-owed debt.  However, regulators say many of these firms engage in abusive tactics while targeting financially-struggling individuals.

Prosecutors at Williams, Scott & Associates contacted consumers and falsely referred to themselves as “detective” or “investigator,” claimed to be tied to government agencies and even threatened arrest.

Scripts employees read on the calls included legal-sounding language, like the “statute of limitations” on the consumers’ “civil legal rights” had expired, according to prosecutors.  The six employees arrested with Williams have pleaded guilty.  Williams has pleaded not guilty to the charge of conspiracy to commit wire fraud.  He has been held without bail since his arrest and faces up to 20 years in prison.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Federal Suit would take Google’s Payday lending crackdown a step further

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Google has announced that beginning in July, it will stop selling ads to payday lenders and other companies in the business of short-term, high-interest consumer loans. Currently, when a consumer types into Google “need cash now,” the results are paid advertisements from high interest lenders and companies that refer them customers.

However, beneath those paid advertisements are search results with links to websites, such as INeedALoan.net and LocalCashNow.com that promise to connect borrowers with the same type of predatory loans.  But a lawsuit filed by a federal watchdog could make it harder for those lead-generation sites to operate and may even put some out of business.

Last year, the Consumer Financial Protection Bureau (CFPB) sued T3Leads, a Burbank broker that sells consumer loan inquiries to online lenders alleging that it does little to prevent the lead-generation sites it works with from making misleading claims.

Online lenders are already worried over Google’s decision to no longer sell ads for short-term or high-interest loans — those that must be repaid within 60 days or that carry interest rates of 36% or higher. Google sources said the policy, which goes into effect July 13, will also apply to lead-generation websites that sell consumer data to those lenders.

On the typical lead-generation site, borrowers fill out an application, provide names, addresses, even Social Security and bank account numbers. Once borrowers click submit, it triggers a series of nearly instant transactions.

First, the information is usually sold by the lead-generation site to an aggregator like T3. Next, the aggregator auctions the information to lenders. Finally, the borrower is automatically redirected to the website of whichever lender won the auction.

The CFPB alleges that the process can result in consumers being tricked into taking out loans from lenders that charge the highest interest because often they are the highest bidders for the lead.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief

Consumer Financial Protection Bureau Takes Action against Debt Collection Agencies Auto-Suing Borrowers

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The Consumer Financial Protection Bureau (CFPB) has ordered two debt collection firms to stop an illegal collection operation that used automated lawsuit generator.  The law firm- Pressler & Pressler, LLP and debt buyer- New Century Financial Services, Inc. have been harassing consumers with lawsuits often based on “flimsy or nonexistent evidence.”

“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray in a press release. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”

The lawsuits were allegedly manufactured by an automated system unsupervised by a lawyer, but rather untrained support staff, which spent less than 30 seconds on some cases to verify the claims of each lawsuit.

The CFPB found that the lawsuits violated the Dodd-Frank Act on three counts: making false or empty allegations about consumer debts, filing suits with bad information, and harassment with “unsubstantiated court filings.”  The civil penalties include $2.5 million to $1 million for the law firm and $1.5 million for the debt buyer.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Foreclosures, Timothy Kingcade Posts

Military members have twice the amount of debt collector complaints

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According to a recent study by the Consumer Financial Protection Bureau (CFPB), members of the military submit debt collector complaints at twice the rate of civilians.  Debt collection, mortgages and credit reporting were the subject of most of the complaints, according to the CFPB’s report.

While the higher rate of complaints could be due to a variety of factors, including time away for deployments and frequent moves from base to base, it is concerning because unpaid debts can threaten a military career.

The complaints concern disputes over money owed, debt collector calls to commanding officers and threats against security clearances held by service members. Veterans also complained of bill collectors trying to collect on medical bills that should have been paid for by the Department of Veterans Affairs.

It is unfortunate that the brave men and women who serve our country are being targeting by these unfair, deceptive and abusive debt collection practices.  But it also comes as a warning to members of the military to diligently check their credit reports and proactively protect their credit files while away from home.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:

http://www.insidearm.com/daily/debt-collection-news/cfpb-report-highlights-high-rate-of-collection-complaints-from-servicemembers/

https://www.washingtonpost.com/news/powerpost/wp/2016/03/23/military-members-have-twice-the-bill-collector-complaints/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Feds Shut Down Illegal Student Loan Debt Relief Company

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The Consumer Financial Protection Bureau (CFPB) filed a lawsuit last December against Student Loan Processing.US, a debt relief operation that allegedly stole millions of dollars from consumers promising to provide repayment benefits.  Today, the CFPB has taken some drastic measures to put an end to this organization once and for all. It requested that a federal district court enter a final judgment and order it to shut down Student Loan Processing.US and refund customers millions of dollars.

According to the CFPB’s lawsuit, since 2011, Student Loan Processing.US (a fictitious business name of Irving Web Works, Inc.) along with its owner, allegedly marketed and advertised services to advise and assist borrowers applying for Dept. of Education federal student loan repayment programs.

The CFPB alleges that College Education Services and Student Loan Processing.US illegally tricked borrowers into paying upfront fees for these benefits. Many times the company told consumers that it was a “consultation service” for the Dept. of Education. The company even went so far as to use a logo that resembles a government seal, stamps “official business” on its mail to consumers and cites federal law prohibiting mail tampering to create the impression that its marketing material are sent or endorsed by the federal government.

The company would then charge consumers upfront enrollment fees of either 1% of their federal student loan balance or $250, whichever amount was higher. The CFPB reports that the company required borrowers to pay the entire fee before it would even mail an application to consumers.

The ruling also found in favor of the CFPB on its claims that College Education Services and Student Loan Processing.US violated the Telemarketing Sales Rule and the Dodd Frank Act’s prohibition against deceptive acts or practices by collecting payment information from customers before disclosing the total cost of the company’s services.

According to the final judgment, Student Loan Processing.US will be ordered to pay more than $8.2 million in relief and damages to customers.

For individuals struggling with student loan debt, it’s important to remember that the Department of Education provides numerous plans to borrowers with federal student loans to make payments more affordable FREE of charge.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Federal agency warns student loan companies about automatic defaults

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The Consumer Financial Protection Bureau (CFPB) is giving student loan companies a strict warning when it comes to collecting from borrowers in default when the co-signer of their loan dies or files for bankruptcy.  These “auto defaults” leave borrowers with no choice but to repay the loan in full or ruin their credit, making it difficult to purchase a home or car.

This practice often occurs in the private student loan market, where banks and other lenders provide educational financing with loan contracts that give them the right to trigger a default even if the loan is being paid on time.  Now the student loan companies are at risk of breaking the law, if they continue with this practice.

When parents or grandparents take on the legal responsibility of a loan, students can get lower interest rates because the co-signers are obligated to repay the debt if the borrower does not.

Lenders often require a co-signer to make the debt more attractive to investors. They will typically release a co-signer from the loan agreement if the borrower has made consistent on-time payments.  However, some lenders and loan servicers make this process difficult by having the borrower jump through hoops to get such a release, according the CFPB. They often request proof of graduation, transcripts, employment or salary, and even conduct credit checks.

The bureau first brought attention to auto defaults two years ago after receiving complaints from consumers whose loans were placed in default because of the death or bankruptcy of a co-signer.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.