The Survive and Thrive Boomer Guide

FTC bans three defendants from selling student debt relief and telemarketing

Three defendants in a student loan debt relief scheme have been ordered to pay millions to resolve Federal Trade Commission charges that they deceived consumers by promising to reduce or eliminate their student loan debt.

A federal court found that Brian Colombana, Impetus Enterprise Inc., and Fig Tree & Co. deceptively marketed student loan debt relief services, tricked consumers into paying illegal upfront fees, and failed to deliver the promised debt relief.

The court entered judgments against the defendants of nearly $11 million. They’re banned from selling debt relief products and services and telemarketing.

Federal financial agency charges Fifth Third Bank with opening unauthorized accounts and signing consumers up for unapproved products and services

Photo: Ed! (Photography)

The Consumer Financial Protection Bureau filed a lawsuit in Illinois Monday against Fifth Third Bank, one of the largest banks in the Midwest.

The CFPB alleges that for several years Fifth Third, without consumers’ knowledge or consent: opened deposit and credit-card accounts in consumers’ names; transferred funds from consumers’ existing accounts to new, improperly opened accounts; enrolled consumers in unauthorized online-banking services; and activated unauthorized lines of credit on consumers’ accounts.

The lawsuit claims that Fifth Third violated the Consumer Financial Protection Act’s prohibition against unfair and abusive acts or practices. It also charges the bank with violating the Truth in Lending Act and the Truth in Savings Act.

The CFPB alleges that for years and continuing through at least 2016, Fifth Third used:

Wells Fargo to pay $3 billion for fake account scandal

Wells Fargo has agreed to pay $3 billion to resolve civil and criminal charges related to its practice between 2002 and 2016 of pressuring employees to meet unrealistic sales goals that led to millions of accounts being created under false pretenses or without consent, the U.S. Department of Justice announced Monday. 

As part of the agreement with the department and the Securities and Exchange Commission, Wells Fargo admitted that it collected millions of dollars in fees and interest to which it wasn't entitled, harmed the credit ratings of some customers, and unlawfully misused customers’ sensitive personal information, including customers' identification.

“When companies cheat to compete, they harm customers and other competitors,” said Michael D. Granston, deputy assistant attorney general for the department’s Civil Division. “This settlement holds Wells Fargo accountable for tolerating fraudulent conduct that is remarkable both for its duration and scope, and for its blatant disregard of customer’s private information.”

Debt collector settles with FTC, New York over fraudulent scheme

The operator of a debt collection scheme has settled claims by the Federal Trade Commission and New York attorney general that he and the companies he controlled lied to consumers about how much debt they owed and used illegal scare tactics to collect it.

Under the settlement, Robert Heidenreich, who ran the scheme from the Buffalo-New York area is permanently banned from the debt collection business and prohibited from misleading consumers about any financial products. The FTC filed its lawsuit in the case in October 2018.

“Together, the FTC and the New York Attorney General stopped the latest in a line of illegal and abusive debt collectors,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “As a result of this joint law enforcement action, Mr. Heidenreich will never again be allowed to collect debts.”

Federal judge approves merger of T-Mobile and Sprint, but states may appeal

 

A federal judge approved the merger of T-Mobile and Sprint Tuesday, ignoring complaints from 14 government agencies and consumer advocates that the merger will harm competition and result in higher prices.

The decision removes the last big stumbling block for the $26 billion merger, proposed more than a year ago.

On June 11, 2019, 13 states and Washington, D.C., filed a lawsuit to stop the deal from going through, saying the merger of two of the four national wireless carriers would harm consumers nationwide by reducing competition in the market and putting access to affordable, reliable wireless service at risk.

If you’ve had problems arranging a funeral, tell the FTC as it looks at changes to its Funeral Rule

In Tuesday’s email, I received a notice from the Federal Trade Commission that outlines its proposal to reexamine the Funeral Rule. The rule, adopted in 1984, protects consumers from unfair and deceptive practices in the sale of funeral products and services.

My heart sank when I read the email. With the Trump administration destroying laws on pesticides, clean water, consumer protection, and many others, I worried this is another attempt to hurt consumers.

My first prize-winning article as a journalist was on funeral costs. I’m including the article in the book I’m writing on my journalism career, “Follow the Money: My Life as a Financial Journalist.”

CFPB takes action to weaken standard that prohibits consumer abuse in financial transactions

The Consumer Financial Protection Bureau has issued a policy statement that attempts to narrow the federal law that prohibits abusive financial acts and practices by banks, debt collectors, payday lenders, and other consumer finance companies.

After the 2008 financial crisis, Congress passed a law that prohibits abusive acts or practices in consumer finance. Current federal law prohibits taking unreasonable advantage of consumers who don’t have the ability to protect themselves or lack an understanding of the risks in complicated financial contracts.

“Today’s policy statement attempts to rewrite federal law without authorization from Congress or a court order,” said Christopher Peterson, director of financial services for the Consumer Federation of America. “The new policy statement fabricates a ‘good faith’ exception that lets businesses engaging in abusive practices off the hook for financial penalties when they claim violations of the law were unintentional.”

CFPB sues Citizens Bank for allegedly improperly handling credit card disputes

Citizens Bank is being sued by the Consumer Financial Protection Bureau for allegedly violating the federal Truth in Lending Act and other consumer protection laws by failing to properly manage and respond to credit card disputes.

The lawsuit alleges that Citizens automatically denied consumers’ billing error notices and claims of unauthorized use in some cases. It also alleges that Citizens, the second-largest retail bank in the Pittsburgh region, failed to fully refund finance charges and fees when consumers had valid disputes or fraud claims. In addition, the CFPB charges Citizens failed to send consumers required acknowledgement letters and denial notices in response to billing error notices.

Top consumer stories for 2019

As usual, most of the end-of-the-year, round-up articles are about national issues or corporations. If consumers are mentioned, it’s usually about how they’re responding to some corporation.

For the most part, it’s been a grim year for consumers. With the Trump administration that is so probusiness and anti-consumer, the not much is happening for consumers that's positive.

1. President Donald Trump is impeached.

We have a president who puts his personal interests above the public interest. He tried to bribe the Ukrainian president to get him to investigate a political rival. As a result, he’s been impeached by the U.S. House of Representatives. This is incredible.

How a percentage of the American can support Trump is a great mystery to me. He and his administration announce anti-consumer proposals almost daily.

In addition, we have a president who lies. Since he was elected, Trump has told more than 15,000 false or misleading claims. In 2019, he’s said that the U.S. economy today is the best in history, he passed the biggest tax cut in history, the U.S. has lost money on trade deficits, article II of the Constitution lets him do whatever he wants, windmills cause cancer, and toilet flushes are up. All are untrue.

2. Consumer rights and programs are under continual attack from President Trump and his administration.

The Republican conservatives want to reduce the size of government and give corporations more power. Almost daily, we read about how the Trump administration has done it or is planning to do it. Some examples include:

• The Trump administration’s decision to roll back light bulb standards will cost consumers billions.
• The U.S. Department of Agriculture’s rule speeding up pork lines and reducing inspectors endangers the lives and safety of consumers and workers. 
• Corporations keep breaking the law due to declining federal prosecutions.
• The Consumer Financial Protection Bureau and seven states launch an “innovation network” that will approve new, risky financial products and protect them from enforcement.
• The CFPB fails consumers by not carrying out the payday lending rule.
• Fewer children’s products were recalled in 2018.
• Under Trump, enforcement of consumer financial laws drops sharply, especially in areas with the highest complaints.

The list goes on and on. Government regulations and programs help consumers. Reducing the size of government and slashing consumer regulations just helps corporations make more profits at the expense of consumers.

Errors on criminal background checks continue to keep consumers from getting jobs, housing, report shows

Passing a criminal background check is usually required to get a job or housing, however, employers and landlords are making decisions based on inaccurate reports. 

A report, “Broken Records Redux: How Errors by Criminal Background Check Companies Continue to Harm Consumers Seeking Jobs and Housing,” from the National Consumer Law Center, finds that problems with accuracy in criminal background check reports are still wide spread.

“Unfortunately, many background screening companies still seem to prioritize profit over accuracy, leading to reports that cost consumers’ jobs and housing,” said Ariel Nelson, center staff attorney and author of the report.