One analyst, Farukh Farooqi of Marquis Research, told IMFnews that Ocwen’s board should consider dumping CEO Ron Faris. “I mean where does the buck stop?” Farooqi said.
Conversations with Capitol Hill insiders, industry lobbyists and trade group representatives suggest the CFPB is going to face a double-barreled threat from a Republican-controlled U.S. Senate and House of Representatives in the 114th Congress that convenes in January. On the one hand, the GOP is expected to be aggressive in holding numerous oversight hearings on a number of issues having to do with the CFPB. On the other hand, Republicans also are likely to push multiple pieces of legislation relating to the bureau and its rulemaking. A number of tweaks, revisions and technical corrections to the Dodd-Frank Wall Street Reform and Consumer Protection Act are expected as well. Elaborating on the legislative front, Joe Pigg, vice president and senior counsel ...
The CFPB sued Sprint Corp. last week for allegedly billing wireless customers tens of millions of dollars in unauthorized third-party charges from 2004 to 2013. The issue here involves charges for what are known as “premium text messages” or “premium short messaging services” because they are frequently delivered by text messages. Examples of such products and services include ringtones, wallpaper images, and text messaging providing flirting tips, horoscopes, and other digital content. Some third-party goods were sold with one-time charges, costing about $0.99 to $4.99, according to the bureau’s complaint. Often, they were monthly subscriptions that cost about $9.99 a month. Most consumers were targeted online, according to the CFPB. Consumers clicked on ads that brought them to websites asking ...
The CFPB and the attorneys general of North Carolina and Virginia brought an enforcement action against three related firms last week, alleging they used illegal debt collection practices against U.S. military service members. Freedom Stores (also known as Freedom Furniture and Electronics) is a Virginia-based retailer that caters to U.S. military members with stores located near military bases nationwide. Freedom Stores offers credit to consumers purchasing its merchandise and transfers the contracts to an affiliated company, Freedom Acceptance Corp. Owners and top executives John Melley and Leonard Melley Jr. also own Military Credit Services, which provides financing for purchases made at over 300 independent consumer-goods retailers, primarily catering to service members. The CFPB and the states filed a proposed consent ...
In another example of multi-agency, multi-jurisdictional legal action, the CFPB and Florida’s Attorney General Office brought an enforcement against two student debt-relief companies accused of tricking borrowers into paying upfront fees for federal loan benefits. “We allege that both companies exploited vulnerable student loan borrowers, made false promises about their debt-relief services, and charged illegal upfront fees,” said CFPB Student Loan Ombudsman Rohit Chopra. The bureau and the Florida AG shut down Tampa-based student loan debt-relief company College Education Services, and its owners, Marcia Elena Vargas and Frank Liz, for allegedly scamming students into paying upfront fees for student loan debt consolidation, loan forgiveness, and relief from garnishments, services that were never provided or not performed as promised, according to ...
The CFPB sued a Dallas-based company, Union Workers Credit Services, for allegedly deceiving consumers into paying fees to sign up for what it advertises to be a general-use credit card that actually can only be used to buy products from the company. “The business model for Union Workers Credit Services is built on duping consumers into signing up for a sham credit card,” said CFPB Director Richard Cordray. “Hundreds of thousands of people, including a great many union members who were specially targeted, have been tricked into spending millions of dollars for a so-called credit card that can really only be used to buy the company’s own products, ” he added. “From the misleading photos of nurses and firemen on ...
In response to growing concern over medical debt collection and reporting, the CFPB announced at a recent public field hearing that it will require major credit reporting companies to provide regular accuracy reports as part of ongoing examinations. The reports are to highlight key risk areas for consumers, such as disputes filed with the credit reporting agencies. Some of the metrics in the accuracy report are to include: Furnishers with the most overall disputes: If a credit reporting company continuously experiences a disproportionately large number of consumer disputes about information from a particular furnisher, the CFPB said it expects the credit reporting agency to investigate, identify if there is a problem, and take appropriate action. Industries with the most disputes: ...
Consumer complaints to the CFPB about credit reporting-related issues fell 10 percent industrywide during the third quarter of the year, but leapt more than 100 percent on a year-over-year basis, according to an analysis of the bureau’s complaint database by Inside the CFPB. Drawing definitive conclusions on the data may be premature, given that the bureau has only been collecting complaints about credit reporting since the fourth quarter of 2012. However, a close look at the available data suggests a seasonal jump in consumer grievances takes place in the first quarter of the year. For example, in the first quarter of 2013, gripes jumped 63.7 percent. Similarly, in the first quarter of 2014, complaints leaped 101.5 percent [with exclusive chart] ...
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