Consumer Financial Protection Bureau Archives - Page 5 of 8

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

Posted on November 17, 2016by Admin

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.

Click here to read more on this story.

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

Posted on November 2, 2016by Admin

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.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Beware of Credit Card Skimming Scams at Gas Stations

Posted on October 25, 2016by Admin

Consumer protection officials are warning consumers about a new form of high-tech theft that can affect all credit and debt card users. Scammers are using devices known as ‘skimmers’ at gas pumps to steal account information from debit and credit cards that are swiped. These devices are also commonly found at ATMs.

According to Mississippi state Attorney General, Jim Hood, the devices are difficult to detect and come in two forms: internal or external. The external devices fit over the actual card readers at the pumps. The internal devices are typically communication cables connected to a device that records data from the cards.

“These devices may go undetected for weeks, all the while gathering sensitive account information from unsuspecting consumers,” Hood said. “Consumers need to call their financial institutions immediately if they see any unauthorized activity on their accounts, and watch closely for signs of tampering when using gas pumps or ATMs.”

Authorities offer the following tips to avoid becoming a victim of card skimming:

Pick pumps close to the entrance of the gas station or convenience store. Skimmers usually target pumps that are not near the entrance.
Pay with cash.
If you’re using a debit card, choose the option to process the payment as credit so scammers do not have access to your PIN.
Lightly wiggle the card reader on the pump. External skimmers might feel loose and come off.
Ask gas stations and convenience stores what type of anti-skimming measures they have adopted.

According to the Florida Department of Agriculture and Consumer Services, more than 250 skimmers were confiscated from gas pumps between July 2015 and July 2016. Approximately 100 consumers’ card numbers were stolen from each device and $1,000 stolen from each consumer.

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 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, Credit, Debt Relief, Timothy Kingcade Posts

Wells Fargo Sends Statement to Consumers with Important Updates following Scandal

Posted on October 24, 2016by Admin

Nearly two months after the Wells Fargo scandal was first revealed by the Consumer Financial Protection Bureau (CFPB), the bank has issued statements to customers with important updates about the steps the bank has taken to make amends.

The statement begins by apologizing to consumers stating that, “We are deeply committed to serving you and your financial needs, and in those instances, we did not live up to our commitment. This is inconsistent with our values and with the culture we work hard to maintain. It’s not who we are as a company.”

The statement goes on to say, “Here’s what we are already doing:”

Putting your interests first. We have eliminated product sales goals for our retail banking team and members who serve customers in our bank branches and call centers.
Proactively communicating with you. We now send a confirmation after you open a new consumer or small business checking, savings, or credit card account so you know what is happening and can tell us if anything we have confirmed is different than what you expected.
Full transparency. You can always see your active accounts any time when enrolled in Wells Fargo Online.
Fixing what went wrong. We have provided full refunds to customers we have already identified and we are broadening our scope of work to find customers we may have missed. If we have any doubt about whether one of your accounts was authorized, and any fees were incurred on that account, we will contact you and refund fees.

The statement issued by the bank is the result of a CFPB investigation which resulted in the Bureau fining the bank $185 million for unethical business practices. The CFPB found the bank had opened approximately two million unauthorized deposit and credit card accounts.

Click here to read a timeline of events of the Wells Fargo Scandal.

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.

Related Resources:

http://www.bizjournals.com/atlanta/news/2016/10/22/wells-fargo-sends-customers-statement-about.html

Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Consumer Financial Protection Bureau Concerned by Student Loan Servicers’ Practices

Posted on October 7, 2016by Admin

The Consumer Financial Protection Bureau (CFPB) recently expressed concerns over a practice that is being used by some student loan servicers known as “redisclosure” of payment terms. Redisclosure causes a borrowers monthly bill to fall when extra payments are made.

Experts believe that student loan servicers are using the redisclosure tactic to make it harder for borrowers to save money on interest. Once the monthly payment amount is reduced, the term of the loan is extended, causing the borrower to pay more in interest over time.

For example, if a borrower starts out owing $25,000 in student loans payable for a 10-year term with $300 monthly payments and decides to pay an extra $100 each month toward the principal, some loan providers will drop the monthly bill to be less than $300 per month to possibly extend the term of the loan.

“When borrowers pay more than they owe, they expect to save money on interest charges and get out of debt faster. But the practice we highlighted can hold these borrowers back, making it harder and more expensive for student loan borrowers to pay back their loan and get out of debt,” CFPB official Mike Pierce said.

The good news is that you can tell your loan servicer to set your monthly payment back to a requested payment amount, if you discover it has been lowered. You can also tell your service provider what to do with your extra money each month. For example, you can ask that a standing instruction be placed on your account so that the extra money you pay each month goes toward the loan with the highest interest rate.

Click here to read more on this story.

Bankruptcy Law, Credit, Student Loans, Timothy Kingcade Posts

The Consumer Financial Protection Bureau Handled One Million Complaints in Five Years

Posted on September 30, 2016by Admin

The Consumer Financial Protection Bureau (CFPB) recently published the September 2016 Monthly Complaint report. The report revealed that more than five years after opening its doors, the CFPB has handled more than one million complaints.

“Since opening our doors in 2011, we have handled over one million complaints from consumers about their problems with financial products and services. Not only have we achieved substantial relief for consumers, but hearing directly from consumers is fundamental to our mission. We can better protect all consumers because of what we learn from those who have submitted complaints and shared their experiences with us,” said CFPB Director Richard Cordray.

The CFPB was initially handling complaints regarding credit cards, upon opening its doors in July 2011. However, it later expanded to handle complaints in several other areas of finance, such as: mortgages, bank accounts and services, private student loans, vehicle and other consumers loans, credit reporting, money transfers, debt collection and payday loans.

Debt collection recently surpassed mortgages to become the top complaint the CFPB receives. Out of the one million complaints, the CFPB has received 244,008 mortgage complaints and 264,123 complaints regarding debt collection.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How to deal with ‘old’ debt

Posted on September 21, 2016by Admin

When a debt exceeds the statute of limitations, it is referred to as “time-barred debt.” That means creditors cannot legally sue you. But they may still try. They may continue contacting you. It is important you proceed with caution, because the practice of debt collection has many pitfalls.

Perhaps you never took out the debt, that the collector has the wrong amount or that you already paid and the collection attempt is a mistake.

A debt collector should send you a validation notice within five days of first contacting you. This notice should include the debt owed, the amount, date of last payment, who the collector is and how to request information on the original creditor. If you do not receive this notice within 10 days after the debt collector first contacts you, ask for it.

Challenge it!

If you are being asked to pay a time-barred debt that is not yours, that was already paid off or invalid, you can write the creditor to dispute the debt.

You have 30 days from first contact to challenge the debt before it is deemed accepted by default. If you dispute the debt within this window, debt collection efforts must stop until the issue is resolved.

Be as specific as possible in your letter. Say why the debt collection attempt is invalid, including information about payment history or why the debt may not be yours and any other relevant information. Send the letter by certified mail so you get confirmation of receipt.

If for any reason you feel the debt collector has violated your consumer rights, file a complaint with the Consumer Financial Protection Bureau or the Federal Trade Commission.

The Fair Debt Collections Practices Act (FDCPA) originally enacted in 1978 requires that debt collectors provide consumers with certain basic information such as the amount of debt owed and the name of the creditor to whom the debt is owed. A lesser-known requirement of the FDCPA says debt collectors must give consumers a 30-day notice to dispute the debt before it is assumed as valid.

Pay it off- but proceed with caution.

Although you may think paying a little bit of the debt owed will get the creditor off your back, it can make things much worse. Making even a single payment on time-barred debt can bring it back from the dead and reset the statute of limitations. In some states, even if you pay as little as a $1, you will reactivate the entire debt and you can be sued for the original debt plus fees.

If you want to pay off the debt, you have several options:

Pay in full with a lump sum;
Work with the creditor to set up a payment plan;
Make an agreement to settle the debt by paying a portion.

If you pay the debt in full, make sure the collector sends you a confirmation in writing. Hold onto this in case the payment is not properly recorded or the debt gets sold, again.

Discharge the debt through bankruptcy.

If you feel the debt is just too much to pay off or you want to rid yourself of the debt for good, you could file for Chapter 7 bankruptcy. After filing, you are likely to see your credit scores improve.

Steps to take if you are sued.

Creditors may sue you even though a debt is past its statute of limitations.

The most important thing: DO NOT ignore the lawsuit. Ignoring it will likely lead to an automatic judgment against you and result in wage garnishment. Consider talking with an attorney about how to proceed, and gather all documents you have proving that the debt is time-barred.

Related Resources:

http://www.latimes.com/business/la-fi-expired-debt-20160917-snap-story.html

Credit, Timothy Kingcade Posts

Thousands of Wells Fargo Employees Fired over Phony Accounts

Posted on September 13, 2016by Admin

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.

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

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

Posted on August 24, 2016by Admin

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.

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

Dept. of Education Debt Collectors Face Added Scrutiny

Posted on August 16, 2016by Admin

Following recent scrutiny from Congress and the Obama administration, private companies that service student loans for the federal government are about to face new rules from the Consumer Financial Protection Bureau.

Under the new regulations introduced in July, debt collectors would be limited in the ways they can contact borrowers in an effort to curb abuse and harassment. For example, debt collectors could be prevented from calling borrowers more than a half-dozen times a week and likely would have to document that the debt they are trying to collect is legitimate before contacting borrowers.

Student loan servicers have drawn criticism from the government, after federal regulators including the bureau warned in September of “widespread problems” in the student loan industry.

Among the bigger issues is that millions of borrowers have had their debts transferred between servicers with little notice and that millions of borrowers have fallen into default despite the availability of federal programs that offer income-based repayment plans.

Nearly 4 million people with federal student loans are in default, according to the Department of Education. This year, the consumer bureau has received almost as many complaints about servicing of federal student loans as it has for private student loans.

Click here to read more on this story.