Payday loans, debt collection, credit reports – all have big problems

0

Payday lending, credit collection, and debt collection are some examples of negligent and abusive practices that are being investigated by the federal government.

This is the summary from a long report prepared by the Consumer Financial Protection Bureau. It surveyed three industries before launching enforcement actions.

Reviewers stated that they found numerous problems in the three “nonbank” business groups. They also noted flaws with the way they handle complaints from consumers and the ways they identify potential problems for their customers. For more information go to paydaynow.net and check their offers.

Payday loans

Payday loans sound appealing. Although they are an option for consumers who need cash fast, payday loans can lead to long-term debt and high interest rates.

The CFPB discovered that payday lenders engages in deceptive practices to collect their debts. This includes threatening consumers with lawsuits that are not necessary. This is an illegal deceptive practice.

CFPB investigators also reported cases where payday lenders were illegally harassing borrowers at the workplace, calling them several times a week and even going to their work places.

According to the examiners, payday lenders are known for hiring third-party collectors to collect their debts. However, they fail to supervise them to prevent illegal and deceptive practices.

Recover your debt

There are approximately 4,500 debt collection agencies in the United States. This generates a large volume of complaints that are very similar to those of payday lenders.

Misleading claims about litigation and arrests were two of the most frequent problems. Examiners discovered that debt collectors often violated Fair Debt Collection Practices Act. They filed lawsuits that implied they were intending to prove their claims.

If consumers respond to collectors, they are generally disqualified from bringing suit because they cannot produce supporting documents.

Collectors made illegal and excessive calls to consumers. Examiners discovered that debt collectors had made over 17,000 calls to consumers in excess of the FDCPA’s time limits. Further, the company violated the law by repeatedly calling over 1,000 consumers as many as 20 times in a matter of two days.

In failing to investigate consumer credit disputes, debt collectors were also negligent.

Credit reporting agencies

Reviewers also discovered many problems with consumer credit bureaus. This included failing to properly deal with consumer disputes.

The majority of agencies are required to send litigation documents to data suppliers – companies that the consumer has done business. Reviewers have found that they often fail to do so.

Then,?

Now that the CFPB has passed its exams, what next?

According to the agency, when it finds problems, its examiners alert the companies responsible and, if necessary, the CFPB initiates an investigation that could lead the agency to taking enforcement action.

Returned $ 70 Million

In addition, the report notes that repairs have been made to more than $ 70,000,000 for approximately 775,000.

Richard Cordray, director of CFPB, stated that non-bank financial institutions have been subject to prudential oversight at the federal level. This holds them responsible for how they treat customers. “CFPB’s supervision of banks and other non-bank financial institutions exposes risky practice and delivers results to consumers. We are pleased that our supervision program was able to bring in more than $ 70 million for consumers in the last few months.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, (Dodd-Frank Act), gives the CFPB the power to oversee certain non-bank entities such as student lenders and mortgage companies. Private and payday lenders as well as other non-bank entities that the Bureau has defined as “larger players” through its rulemaking are all covered.

Share.

Leave A Reply