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Regulators - legislators

Thursday, July 02, 2009

FTC advisory opinion in favor of collectors is absolute proof of its corruption

The FTC just issued an advisory letter that left the ACA “delighted” and completely preempts the FDCPA validation requirement.

http://www.acainternational.org/files.aspx?p=/images/14382/p064803-ftc-advisory-opinion.pdf

...

After reviewing the language of the FDCPA and the Rule, and considering the goals of the statute and the regulation, the Commission concludes that a debt collector does not violate Section 805(c) of the FDCPA if the consumer directly disputes information after sending a written “cease communication” to the collector, and the collector complies with the Rule by means of a communication that has no purpose other than complying with the Rule by stating (1) the results of the investigation or (2) the collector’s belief that the communication is frivolous or irrelevant.

...

I don’t have a problem with a collector being allowed to contact a consumer despite the cease and desist to VALIDATE the account after receiving the dispute.  However, the FTC clearly ENCOURAGES collectors to simply state that they find the dispute frivolous WITHOUT validating!

Of course “somebody” should send a letter to the FTC to ask WHY collectors all of sudden don’t have to validate disputed accounts anymore.  Too bad that I’m the only person who cares and I just can’t afford to waste my time on documenting the corruption of the regulators without getting paid.

Last year I tried to start a membership organization like the ACA for consumers, but NOBODY wanted to pay a few bucks to finance these types of activities and lobby for consumer rights.  It is understandable that many people with collections don’t have a lot of extra money, but don’t tell me you don’t have $20.  So, good luck to you all!  You get what you paid for.

Here are some of my and my clients’ FTC complaints:

http://liarsandcheats.info/

Wednesday, July 01, 2009

Obama’s new consumer protection agency to regulate collectors?

Here’s the collection industry’s view on the prospect of regulation by Obama’s new consumer protection agency:

ARM Firms to Get New Regulator Under Treasury Proposal Issued this Week
July 1, 2009

The Obama administration made it official yesterday in releasing a proposal for a new consumer protection agency: the ARM industry will be included in the reforms. And it’s not just the FDCPA; FCRA and Gramm-Leach-Bliley are included.

by Cynthia Wilson
insideARM
July 1, 2009

Calls to transfer the administration of the Fair Debt Collections Practices Act (FDCPA) to another federal regulator intensified this week when the Obama administration, through the U.S. Treasury Department, on Tuesday unveiled its plan to create an independent consumer protection agency.

The Consumer Financial Protection Agency Act of 2009 would give the new agency the authority to oversee all consumer protection laws and write new rules to protect consumers against deceptive and unfair practices. The act specifically defines the FDCPA as an existing law that would fall under the purview of the new agency. Furthermore, it proposes to amend the FDCPA to replace current regulator the Federal Trade Commission with the new agency in most language.

The proposal confirms speculation last week that the debt collection law would fall under the authority of the new agency ("Proposed Consumer Financial Protection Agency May Oversee FDCPA Enforcement,” June 25).

“This agency will have only one mission – to protect consumers – and have the authority and accountability to make sure that consumer-protection regulations are written fairly and enforced vigorous,” Treasury Secretary Timothy Geithner said when he unveiled the legislation.

Sen. Christopher Dodd, chairman of the Senate Committee on Banking, Housing, and Urban Affairs, immediately praised the legislation saying, “the Administration is addressing the colossal failures that led to the economic crisis with a bold and aggressive plan. Creating an independent agency whose sole focus is protecting consumers - be it credit card holders, anyone with a bank account, or families with mortgages or student loans – is really the key to creating the foundations for a stronger economy.”

The Federal Trade Commission (FTC), however, which currently regulates FDCPA, doesn’t appear ready to relinquish oversight of the debt collection law.  In a report last February, the commission requested that Congress to give it the authority to make and implement FDCPA rules.

Kathleen Day, spokeswoman for the Center for Responsible Lending, a non-partisan, non-profit research and policy group, said she doesn’t expect the FTC or any agency overseeing consumer protection laws to abdicate their authority easily.

“A lot of agencies will fight,” to retain their authority, she said. “That’s what happens when changes comes in Washington.”

But Day said she believes there’s a lot of momentum on Capitol Hill to make the agency a reality.

“This (economic bailout) is a big crisis and taxpayers are really mad.  Regulators abdicated their role in protecting consumers to the banks.  You can’t have safety and soundness if you abuse the consumer,” she said.

Legislation to create an independent body to look out for consumer interest was first introduced last March by Democrat Rep. William Delahunt of Massachusetts.  Last week Delahunt reiterated his support along with others during a hearing on enhancing financial products regulation before the House Committee on Financial Services. Likewise, Committee Chairman Rep. Barney Frank said he wants the committee to pass legislation to create the agency by the end of July and hopes that a bill addressing the panel and other parts of the President’s financial regulatory plan will clear Congress this fall.

Under the Treasury Department’s proposal, in addition to overseeing the FDCPA, the Consumer Financial Protection Agency would regulate the Alternative Mortgage Transaction Parity Act; the Community Reinvestment Act; the Consumer Leasing Act; the Electronic Funds Transfer Act; the Equal Credit Opportunity Act; the Fair Credit Billing Act; the Fair Credit Reporting Act; the Gramm-Leach-Bliley Act, and several other consumer protection laws.

It is absurd that the FTC wants to continue “enforcement” only to be able to NOT enforce.  They’re fighting to be able to to protect the big collection firms and banks.

I haven’t read anything yet on FCRA enforcement which has been effectively halted since Bush took office in 2000.

And, while it’s nice to dream about a consumer protection agency that does its job, we might as well believe in Santa Claus.  Obama is OWNED by the bankers and Wallstreet.  For details, watch the Obama Deception.

Monday, June 29, 2009

Lexington bribed the FTC?  Another worthless FTC credit repair settlement

These LIARS at the FTC:

“The FTC advises that only time, effort, and a personal debt repayment plan can improve your credit report.”

If you want to do me a HUGE favor, please file a complaint about me and my claims that YES, I CAN get you substantially higher credit scores if you are willing to PAY me, possibly settle some debts and you have the guts to sue in the corrupt US courts.

Contact info is in the FTC press release below, I’d love to be able to put on the record how STUPID these morons are.  It makes my blood boil to see their outrageous lies.

Please see my complaints to the FTC and the FTC doing NOTHING to stop the most egregious and malicious systemic incorrect credit reporting:

http://credit-reporting-collection-ftc-complaints.info/

And to add insult to injury, they’re going after some wannabe credit repair outfit with so few customers, they can’t even pay the fine. 

This is NOT a coincidence, but part of the grand scheme to have the average person get scammed by credit repair outfits while doing NOTHING to force the CRAs, creditors and collectors to comply with the law.

Things are EXACTLY as the FTC and the Obama administration want them to be.

And they’re leaving Lexington alone!

I see the FALSE Lexington claims all the time right here in the Google ads.  Lexington pays a LOT of money for every click on these ads because their scam is so profitable.

What’s going on?

Who at the FTC is on the Lexington payroll?

Below is the 6/25/09 FTC press release:

‘Credit Repair’ Operation Settles with FTC; Company Made False Claims and Charged Illegal Up-Front Fees

A federal court has ordered a credit repair operation and its principals to stop making false claims and requiring advance payment for credit repair services. The agreed-upon court orders are a result of a settlement between the Federal Trade Commission and the “credit repair” defendants.

The Commission sued the defendants in October 2008 as part of “Operation Clean Sweep,” a crackdown on credit repair operations. The defendants represented that they could remove negative but accurate information from consumers’ credit reports, including bankruptcies and late fees. According to the FTC, the defendants charged consumers up to $59.95 initially, then $59.95 per month, to send letters to credit reporting agencies disputing information on the consumers’ credit reports. Contrary to the defendants’ representations to consumers, those dispute letters failed to remove accurate negative information from the consumers’ credit reports.

The orders bar the defendants from violating the Credit Repair Organizations Act by charging clients fees in advance and claiming that a credit repair organization can permanently remove negative information from credit reports, even when the information is accurate. They also bar the defendants from making deceptive claims when marketing any product or service, including credit repair services.

The orders further prohibit the defendants from collecting money from consumers who purchased their services before December 3, 2008, when the court halted their unlawful practices, and from disclosing or benefitting from customers’ personally identifiable or financial information. The orders require them to take reasonable measures to protect consumers’ personally identifiable information during its disposal.

The order against Ace Group, Inc., doing business as American Credit Experts, Inc., The Ace Group, Inc., The Ace Group, and ACE; Legal Credit Repair Center, Inc.; Michael Singer, and Gerald Roth, imposes a $20,645,754 judgment that will be suspended if Singer and Roth pay $5,000 each because of their inability to pay the full judgment. The order against Melvin Kessler also imposes a $20,645,754 judgment, which is suspended based on his inability to pay. If the defendants are found to have misrepresented their financial condition, the full judgments will become due immediately. The orders also contain record-keeping and reporting provisions to allow the FTC to monitor compliance with the orders.

The FTC advises that only time, effort, and a personal debt repayment plan can improve your credit report. The first step is to learn what information is in your credit report. Federal law requires that the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – provide you with a free copy of your credit report once every 12 months, if you ask for it. To order your free report, visit annualcreditreport.com, call 1-877-322-8228, or complete and mail the Annual Credit Report Request Form. If you find errors or mistakes in your credit report, federal law gives you the right to have them corrected – free of charge. Credit repair information is available in “Credit Repair: How to Help Yourself,” at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm.

The Commission vote authorizing staff to file each of the stipulated final orders was 4-0. The orders were filed in the U.S. District Court for the Southern District of Florida and were entered by the court on June 3 and June 15, 2009.

NOTE: Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Leonard L. Gordon
FTC’s Northeast Region
212-607-2829

Michele Stolls
FTC’s Northeast Region
212-607-2834

Robin Eichen
FTC’s Northeast Region
212-607-2803
(Ace Group)
(FTC File No. X090003

Friday, August 01, 2008

FDIC orders restitution for subprime credit card holders

FDIC Seeks in Excess of $200 Million Against Credit Card Company and Two Banks for Deceptive Credit Card Marketing

FOR IMMEDIATE RELEASE
June 10, 2008 Media Contact:
David Barr (202) 898-6992

The Federal Deposit Insurance Corporation (FDIC) issued enforcement actions today against CompuCredit Corporation, Atlanta, Georgia, and two FDIC-supervised banks for allegedly marketing subprime credit cards in violation of the Federal Trade Commission Act (FTC Act) The FDIC settled with a third bank also involved with CompuCredit.

The enforcement actions seek orders that would correct the FTC Act violations, and provide restitution to consumers in the form of credits for certain fees and charges arising from the deceptive marketing practices. It is estimated that such credits will exceed $200 million. The restitution is being sought against CompuCredit, First Bank of Delaware, Wilmington, Delaware, and First Bank & Trust, Brookings, South Dakota. The FDIC is also seeking civil money penalties (CMPs) of $6.2 million against CompuCredit, and a total of $431,000 against First Bank of Delaware and First Bank & Trust.

“Consumers suffer significant problems due to inadequate credit card disclosures and predatory lending practices, particularly with some subprime products,” said FDIC Board member Thomas J. Curry. “These FDIC actions underscore that banks must ensure that they actively supervise their third party partners and adequately assess and address the risks posed to consumers by certain credit card products.”

The enforcement actions against CompuCredit, First Bank of Delaware and First Bank & Trust are in connection with CompuCredit’s credit card solicitations for three general categories of Visa and MasterCard branded credit card products. The first is a fee-based credit card that was marketed to consumers with low credit scores. The FDIC alleges that the solicitations failed to adequately disclose significant upfront fees and misrepresented the consumer’s initial available credit. The solicitations appeared to offer credit cards with a $300 credit limit; however, consumers were immediately charged as much as $185 in inadequately disclosed fees, leaving them with as little as $115 in available credit.

The second is a credit card that offered “up to $3,250” in available credit to consumers with slightly higher credit scores. The FDIC alleges that CompuCredit failed to adequately disclose that only half of the consumer’s credit limit would be available for the first 90 days. Additionally, CompuCredit failed to disclose that it would monitor consumers’ purchases, and potentially reduce their credit limits based on undisclosed “behavioral” scoring models.

The third is a debt transfer Visa credit card marketed to consumers with charged off debt. The FDIC alleges that the solicitations represented that the consumer’s prior charged off debt would be immediately transferred to the card and reported to consumer reporting agencies as paid in full. Consumers who accepted the offer, however, were actually enrolled in a debt repayment plan and did not receive a Visa card unless they paid 25% to 50% of their charged off debt over a 12-month period. For the few consumers who did so, the credit card they received had nominal available credit.

Columbus Bank and Trust, Columbus, Georgia, settled the FDIC’s allegations relating to CompuCredit by agreeing to a Cease and Desist Order and a CMP in the amount of $2.4 million. The Cease and Desist Order includes provisions requiring that solicitations contain clear and prominent disclosures upfront of all fees and restrictions that affect a consumer’s initial available credit, as well as a broad prohibition against material misrepresentations related to credit cards; and provisions requiring the maintenance of adequate systems and controls, especially for the oversight of third party-partners.

Columbus Bank and Trust Company also agreed to an Order for Restitution which requires the Bank to create and maintain an account in the amount of $7.5 million, as a limited guarantee of restitution sought against CompuCredit for specified credit card accounts that were activated between 2001 and 2005. Columbus Bank and Trust’s obligation to pay restitution is a limited guarantee and is contingent upon successful litigation by the FDIC against CompuCredit, should the latter be unable to fund cash refunds to certain consumers. Columbus Bank and Trust also agreed to cooperate with the FDIC and FTC in the parallel actions against CompuCredit.

Director Curry noted that Columbus Bank and Trust Company agreement to a Cease and Desist Order confirms that “an institution’s board of directors and senior management are ultimately responsible for managing activities conducted through third-party relationships, and identifying and controlling risks arising from such relationships, to the same extent as if the activity were handled within the institution.” He noted that the FDIC’s Guidance for Managing Third Party Risk, issued June 6, 2008, also reinforces this principle.

Separately, the Federal Trade Commission (FTC) filed a parallel federal court action against CompuCredit. These actions against CompuCredit are the result of investigations by the two agencies.

The FTC lawsuit also names Jefferson Capital Systems, a subsidiary of CompuCredit, as a defendant for violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA).

Copies of the FTC’s complaint and the FDIC’s Notices of Charges are available at each agency’s web site. The FTC’s web site may be found at http://www.ftc.gov, and at the FDIC’s web site at http://www.fdic.gov.

The .pdf files are linked with the press release, I’ll try to do some reading next week.  Am too busy working on my response to the TU motion to dismiss.

Sunday, May 25, 2008

FTC to check into Fair Isaac’s fictitious late payments?

A reader contacted me after an FTC attorney actually CALLED him in response to his complaint about Capital One charge-off notations being misinterpreted as late payments by Fair Isaac’s credit scoring formula.  The reader asked whether he could provide my contact info to the FTC and of course I’ll be THRILLED to see some action.

Here is the link with the screenshots of the myFICO fictitious lates:

http://creditlegislation.org/activists/forum11/19.html

I have never been able to get to anyone willing to investigate anything at the FTC, not even after I sued it in 2003.  So I’m not holding my breath, but it sure would be cool to see regulatory action against Fair Isaac.

After all, artificially low credit scores are a major contributor to the subprime crisis as GOOD PEOPLE were forced into high rate mortgages due to minimum FICO score requirements for just about all mortgages.

Artificially HIGH scores caused the credit crisis as unqualified people received credit (mortgage, auto and credit cards) who would NOT have been approved based on traditional common sense underwriting.

Credit scoring doesn’t predict defaults, it CAUSES defaults.

The proof is in the pudding, the daily news about delinquencies and defaults.  The banks relied on “predictive” credit scores.  As long-time readers know, I’ve been submitting my comments about the obvious defects in credit scores to the regulators since 2004!

Credit scoring wasn’t the only reason for the credit crisis, but it was a substantial contributing factor.