Recently in lawsuits/laws Category
The Federal Reserve Board on Thursday approved final rules that would better protect credit card users by prohibiting certain unfair acts or practices and improving the disclosures consumers receive in connection with credit card accounts and other revolving credit plans.
The final rules prohibiting certain credit card practices were adopted under the Federal Trade Commission Act, and are being issued concurrently with substantially similar final rules by the Office of Thrift Supervision and the National Credit Union Administration. Among other things, the rules will:
* Protect consumers from unexpected interest charges, including increases in the rate during the first year after account opening and increases in the rate charged on pre-existing credit card balances
* Forbid banks from imposing interest charges using the "two-cycle" billing method
* Require that consumers receive a reasonable amount of time to make their credit card payments
* Prohibit the use of payment allocation methods that unfairly maximize interest charges
* Address subprime credit cards by limiting the fees that reduce the amount of available credit.
Public Citizen's Consumer Law & Policy Blog provides a summary of regulations;
1. Interest rate changes -- The rule (Section 535.24) requires savings associations to disclose at account opening the annual percentage rates (APRs) that will apply to the account and prohibits savings associations from increasing APRs unless expressly permitted. Savings associations are permitted to increase a rate at the expiration of a specified period, provided that the increasing rate was also disclosed at account opening. Once an account has been open for a year, a savings association may increase the rate for new transactions by providing a 45-day advance notice, as required by Regulation Z. Savings associations may also increase a variable rate due to the operation of an index. Finally, they may increase a rate on existing balances when the consumer is more than 30 days delinquent in paying the credit card bill.
2. Reasonable time to pay -- The rule (Section 535.22) prohibits savings associations from treating a payment as late unless the consumer has been provided a reasonable amount of time to make the payment. As a "safe harbor," a reasonable time would be considered to be 21 days.
3. Payment allocation -- When an account has balances with different APRs, the rule (Section 535.23) requires savings associations to allocate amounts paid in excess of the minimum payment using one of two specified methods: either allocating the excess payment to the highest interest balance, or proportionately to all balances.
4. Double-cycle billing -- The rule (Section 535.25) prohibits savings associations from using the practice sometimes referred to as two-cycle billing, when a savings association imposes finance charges based on balances associated with previous billing cycles.
5. High-fee subprime cards -- The rule (Section 535.26) prohibits savings associations from charging fees for the issuance or availability of credit that consume the majority of the available credit during the first year after account opening. Fees exceeding 25 percent of the available credit must be spread over no less than the first six months that the account is open, rather than charged as a lump sum during the first billing cycle.
The Fed's Press Release regulations appear here.
The final rules prohibiting certain credit card practices were adopted under the Federal Trade Commission Act, and are being issued concurrently with substantially similar final rules by the Office of Thrift Supervision and the National Credit Union Administration. Among other things, the rules will:
* Protect consumers from unexpected interest charges, including increases in the rate during the first year after account opening and increases in the rate charged on pre-existing credit card balances
* Forbid banks from imposing interest charges using the "two-cycle" billing method
* Require that consumers receive a reasonable amount of time to make their credit card payments
* Prohibit the use of payment allocation methods that unfairly maximize interest charges
* Address subprime credit cards by limiting the fees that reduce the amount of available credit.
Public Citizen's Consumer Law & Policy Blog provides a summary of regulations;
1. Interest rate changes -- The rule (Section 535.24) requires savings associations to disclose at account opening the annual percentage rates (APRs) that will apply to the account and prohibits savings associations from increasing APRs unless expressly permitted. Savings associations are permitted to increase a rate at the expiration of a specified period, provided that the increasing rate was also disclosed at account opening. Once an account has been open for a year, a savings association may increase the rate for new transactions by providing a 45-day advance notice, as required by Regulation Z. Savings associations may also increase a variable rate due to the operation of an index. Finally, they may increase a rate on existing balances when the consumer is more than 30 days delinquent in paying the credit card bill.
2. Reasonable time to pay -- The rule (Section 535.22) prohibits savings associations from treating a payment as late unless the consumer has been provided a reasonable amount of time to make the payment. As a "safe harbor," a reasonable time would be considered to be 21 days.
3. Payment allocation -- When an account has balances with different APRs, the rule (Section 535.23) requires savings associations to allocate amounts paid in excess of the minimum payment using one of two specified methods: either allocating the excess payment to the highest interest balance, or proportionately to all balances.
4. Double-cycle billing -- The rule (Section 535.25) prohibits savings associations from using the practice sometimes referred to as two-cycle billing, when a savings association imposes finance charges based on balances associated with previous billing cycles.
5. High-fee subprime cards -- The rule (Section 535.26) prohibits savings associations from charging fees for the issuance or availability of credit that consume the majority of the available credit during the first year after account opening. Fees exceeding 25 percent of the available credit must be spread over no less than the first six months that the account is open, rather than charged as a lump sum during the first billing cycle.
The Fed's Press Release regulations appear here.
You can bet there's a lot of buzz over today's unexpected announcement that LifeLock, and TransUnion, one of the "big three" credit bureaus, have entered into an Agreement to collectively utilize TransUnion's automated system to help streamline LifeLock's process of placing fraud alerts, and opt outs, for their subscribers.
At first glance this Agreement would seem implausible, to say the least. However, with a second glance it makes perfect sense. If in fact their common goal is to thwart identity theft and their objectives are focused squarely on how best to protect consumers and creditors by reducing risk and loss from fraud, then sharing a secure automated system -is a logical and wise choice -but I can't help but wonder, how this latest news will affect Experian -and their lawsuit against LifeLock.
Be careful what you wish for -lest it come true!
Experian filed a lawsuit against LifeLock earlier this year claiming the company was misusing the fraud alert system as laid out in the Fair Credit Reporting Act (FCRA) and in doing so was costing them money. In a nut shell, Experian wanted LifeLock to stop setting fraud alerts on behalf of consumers period! But I don't think this latest Agreement between TransUnion and LifeLock is exactly what they were wishing for!
Experian, Equifax and TransUnion all place fraud alerts on consumer credit reports, on a daily basis. Consumers can request a fraud alert by calling one bureau who then shares the consumer's request with the other two bureaus. With fraud alerts in place, creditors, lenders, or other prospective users of your consumer report must take steps to verify your identity before they can issue new credit, increase credit lines, and obtain utilities, cell phones or new loans.
Ultimately, if TransUnion is now going to essentially "set" consumer fraud alerts on behalf of LifeLock and their subscribers -it would appear as though Experian's lawsuit may have run its course. And you can be certain that this Agreement is not good news for Experian.
LifeLock came bursting on the scene a few years ago and since then has grown to become the leading identity theft protection company with well over a million subscribers who find their array of proactive services both of value and convenience when fighting against identity theft.
In addition to being proactive, they additionally take over the time-consuming process of dealing with banks and creditors to help consumers restore their name in the event an identity theft occurs. Among their services, such as scouring underground websites where our information is bought and sold, replacing lost or stolen wallet contents, one of the services that directly relates to utilizing TransUnion's proprietary service is the setting of fraud alerts and reactivating them, as the system call for, every 90 days.
LifeLock's proven desire to continue to find ways to deter identity thieves, form useful partnerships, pursue stronger consumer protection measures -and their continued efforts to educate the public, says a lot about their commitment to promote consumer protection.
I hope this unlikely and unexpected announcement of a joint venture between LifeLock and TransUnion will serve to remind others, including our government, that working together to circumvent problems -regardless of personal agendas or corporate profits, is the best way to become part of the solution, and not the problem. And it doesn't hurt to remember that Karma -is unavoidable!
For the full press release click here.
At first glance this Agreement would seem implausible, to say the least. However, with a second glance it makes perfect sense. If in fact their common goal is to thwart identity theft and their objectives are focused squarely on how best to protect consumers and creditors by reducing risk and loss from fraud, then sharing a secure automated system -is a logical and wise choice -but I can't help but wonder, how this latest news will affect Experian -and their lawsuit against LifeLock.
Be careful what you wish for -lest it come true!
Experian filed a lawsuit against LifeLock earlier this year claiming the company was misusing the fraud alert system as laid out in the Fair Credit Reporting Act (FCRA) and in doing so was costing them money. In a nut shell, Experian wanted LifeLock to stop setting fraud alerts on behalf of consumers period! But I don't think this latest Agreement between TransUnion and LifeLock is exactly what they were wishing for!
Experian, Equifax and TransUnion all place fraud alerts on consumer credit reports, on a daily basis. Consumers can request a fraud alert by calling one bureau who then shares the consumer's request with the other two bureaus. With fraud alerts in place, creditors, lenders, or other prospective users of your consumer report must take steps to verify your identity before they can issue new credit, increase credit lines, and obtain utilities, cell phones or new loans.
Ultimately, if TransUnion is now going to essentially "set" consumer fraud alerts on behalf of LifeLock and their subscribers -it would appear as though Experian's lawsuit may have run its course. And you can be certain that this Agreement is not good news for Experian.
LifeLock came bursting on the scene a few years ago and since then has grown to become the leading identity theft protection company with well over a million subscribers who find their array of proactive services both of value and convenience when fighting against identity theft.
In addition to being proactive, they additionally take over the time-consuming process of dealing with banks and creditors to help consumers restore their name in the event an identity theft occurs. Among their services, such as scouring underground websites where our information is bought and sold, replacing lost or stolen wallet contents, one of the services that directly relates to utilizing TransUnion's proprietary service is the setting of fraud alerts and reactivating them, as the system call for, every 90 days.
LifeLock's proven desire to continue to find ways to deter identity thieves, form useful partnerships, pursue stronger consumer protection measures -and their continued efforts to educate the public, says a lot about their commitment to promote consumer protection.
I hope this unlikely and unexpected announcement of a joint venture between LifeLock and TransUnion will serve to remind others, including our government, that working together to circumvent problems -regardless of personal agendas or corporate profits, is the best way to become part of the solution, and not the problem. And it doesn't hurt to remember that Karma -is unavoidable!
For the full press release click here.
Equifax has reached a settlement with the State of Indiana after the attorney general there says the company broke Indiana law. Equifax will pay $65,000 to settle allegations it waited too long to notify and freeze consumers' credit reports.
Attorney General Steve Carter says Indiana law requires credit-reporting agencies to freeze credit reports within five business days of being notified by consumers. Carter says Equifax did not do that for 19 people, including one who had to wait about two months.
The state also requires the agencies to notify Indiana consumers within 10 business days after their credit reports have been frozen. Carter says Equifax did not do that for 24 people. He says one person had their notification delayed by six months.
Indiana passed the credit-freeze law in 2007 to help protect consumers from identity theft.
Under the law, consumers may mail letters to each of the three credit reporting agencies -- Equifax, Experian and Trans Union -- and demand new creditors be banned for accessing their credit reports. That means an identity thief would be unable to take out new credit in a consumer's name, even with an accurate Social Security number.
The state also requires the agencies to notify Indiana consumers within 10 business days that their credit reports have been frozen. However, Equifax failed to do that for 24 people, including one whose notification was delayed for six months, Carter said.
Source: IndyStar.com
Attorney General Steve Carter says Indiana law requires credit-reporting agencies to freeze credit reports within five business days of being notified by consumers. Carter says Equifax did not do that for 19 people, including one who had to wait about two months.
The state also requires the agencies to notify Indiana consumers within 10 business days after their credit reports have been frozen. Carter says Equifax did not do that for 24 people. He says one person had their notification delayed by six months.
Indiana passed the credit-freeze law in 2007 to help protect consumers from identity theft.
Under the law, consumers may mail letters to each of the three credit reporting agencies -- Equifax, Experian and Trans Union -- and demand new creditors be banned for accessing their credit reports. That means an identity thief would be unable to take out new credit in a consumer's name, even with an accurate Social Security number.
The state also requires the agencies to notify Indiana consumers within 10 business days that their credit reports have been frozen. However, Equifax failed to do that for 24 people, including one whose notification was delayed for six months, Carter said.
Source: IndyStar.com
Under a settlement with the Texas Attorney General Greg Abbott, NCO Financial Systems, the world's largest debt collector, has agreed to validate debts BEFORE they attempt to collect them from innocent consumers. What a Concept!
The State of Texas claims that among complaints filed with their office, consumers say that NCO employees made unlawful harassing and threatening phone calls and oftentimes using profanity to get them to pay up.
Investigators also discovered that some of the debts that NCO demanded payment on belonged to people with different middle initials or Social Security numbers.
To settle with the State of Texas NCO agreed to spend $300,000 over three years to monitor its practices and additionally pay $150,000 into a three-year restitution fund to compensate Texans harmed by its acts.
With money tight and people out of work, the last thing they anyone needs is to be harassed and hounded by aggressive, pompous, foul-mouthed debt collectors who believe they are above the laws. Will NCO live up to their promises to police themselves?
Promises to adhere to consumer protection laws are not new to NCO though...
Upon Settling with the State of Pennsylvania, NCO promised to pay $300,000, but specifically denied that they had engaged in unlawful or inappropriate business practices. The agreement also required "NCO to comply with consumer protection laws and to maintain certain policies and procedures designed to facilitate and monitor its ongoing compliance".
And then of course there was this settlement: NCO Group to Pay Largest FCRA Civil Penalty to Date
One of the nation's largest debt-collection firms will pay $1.5 million to settle Federal Trade Commission charges that it violated the Fair Credit Reporting Act (FCRA) by reporting inaccurate information about consumer accounts to credit bureaus. The civil penalty against Pennsylvania-based NCO Group, Inc. is the largest civil penalty ever obtained in a FCRA case. MORE
Know your rights under the Fair Debt Collection Practices Act. If you are contacted by a debt collector there are laws designed to protect you from being harassed or intimidated over a debt -whether or not you actually owe it!
See earlier blogs here:
The Importance of Knowing your Rights ...
The State of Texas claims that among complaints filed with their office, consumers say that NCO employees made unlawful harassing and threatening phone calls and oftentimes using profanity to get them to pay up.
Investigators also discovered that some of the debts that NCO demanded payment on belonged to people with different middle initials or Social Security numbers.
To settle with the State of Texas NCO agreed to spend $300,000 over three years to monitor its practices and additionally pay $150,000 into a three-year restitution fund to compensate Texans harmed by its acts.
With money tight and people out of work, the last thing they anyone needs is to be harassed and hounded by aggressive, pompous, foul-mouthed debt collectors who believe they are above the laws. Will NCO live up to their promises to police themselves?
Promises to adhere to consumer protection laws are not new to NCO though...
Upon Settling with the State of Pennsylvania, NCO promised to pay $300,000, but specifically denied that they had engaged in unlawful or inappropriate business practices. The agreement also required "NCO to comply with consumer protection laws and to maintain certain policies and procedures designed to facilitate and monitor its ongoing compliance".
And then of course there was this settlement: NCO Group to Pay Largest FCRA Civil Penalty to Date
One of the nation's largest debt-collection firms will pay $1.5 million to settle Federal Trade Commission charges that it violated the Fair Credit Reporting Act (FCRA) by reporting inaccurate information about consumer accounts to credit bureaus. The civil penalty against Pennsylvania-based NCO Group, Inc. is the largest civil penalty ever obtained in a FCRA case. MORE
Know your rights under the Fair Debt Collection Practices Act. If you are contacted by a debt collector there are laws designed to protect you from being harassed or intimidated over a debt -whether or not you actually owe it!
See earlier blogs here:
The Importance of Knowing your Rights ...
As a long-time advocate who encourages consumer education, and corporate responsibility I support and respect companies and organizations who take an active role in educating consumers on the risks of identity theft and/or consumer protection rights.
However, having said that, I feel compelled to comment on a recent Angie's List article about LifeLock. The article now appears to have spurred on at least one competitor to blog about it -and if history is a predictor of the future, soon more will follow.
Early this fall I was contacted by Mr. Pogue, a reporter with Angie's List. He said he was working on a story specifically about LifeLock and asked if we could arrange a convenient time to speak about their services and why as an advocate I found them to be of value. We ended up having a lengthy conversation and talked extensively about identity theft, LifeLock and why I chose to subscribe to their services.
While reading the article that was released this week, I was stunned and dismayed on several levels. I was extremely disappointed that it appeared as though Angie's List had regrettably veered from their longtime policy of reporting on company services with an unbiased, fair and balanced viewpoint.
With just a glance I could tell they were dredging up old news and it appeared as though they were reinserting that same old rusty bullet back inside a gun that has been fired at LifeLock on numerous occasions ever since the ex-CEO of LifeLock left the company, (shortly after LifeLock came on the scene) and Experian decided to sue them crying about their lost profits! Please!...See: Experian, the pot called and wants its kettle back!
But it wasn't that the reporter opted to leave out my comments and opinions about LifeLock's services from his article that makes me want to speak up on this matter.
Instead, it was LifeLock's competitor's claims (and Angie's List assertions) that Angie's List "provides unbiased reports and reviews about service companies" when clearly in this particular story, that doesn't appear to be the case. I left a comment on the above linked competitor's site that noted my concerns of this article -however it appears as though it has been removed.
The type of smear campaign the original article seems to intentionally invoke, not only leaves a bad taste in my mouth, but makes many of us question the agenda of those who perpetuate this type of yellow journalism that includes dredging up old news designed to capitalize on someone else's misfortune. Mr. Maynard has a family and to continue to run old news and plaster pictures depicting him as a criminal -is needless, insensitive, mean-spirited -and has nothing to do with LifeLock!
LifeLock employs hundreds of families, has over a million customers -and to my knowledge they have not harmed anyone! There are many companies out there offering various types of id theft protection -yet it appears that LifeLock is the only company that old gun is repeatedly aimed at!
It really rubs me the wrong way when people forget the real problem is identity theft! It's identity thieves I am afraid of ...not LifeLock! And it's consumers I care about -not company profits!
The truth of the matter is I happen to find value in services that help remove the heavy burden of protecting my identity and reducing the impact should my data be compromised or stolen again. Consumers can certainly take on many of the tasks that LifeLock, and other companies, have to offer. However, they are also left on their own to handle the time consuming recovery tasks as well. It's my choice not to!
While following the latest smear campaign against LifeLock, I couldn't help but be reminded of the recent Presidential campaign and the polls that proved the public isn't at all impressed with dirty campaigns, and with good reason!
In order to make informed decisions and choices, we need to rely on integrity and honest depictions of what a particular company has to offer -not what a competing company claims the other doesn't!
It's a funny thing, I have yet to see LifeLock engage in smear tactics against any of their competitors -and they are the leading identity theft protection company out there. That speaks volumes. I wish more companies and journalists would follow their lead. As this latest round of ugliness spreads, it will be interesting to see who takes the high road -and who doesn't!
However, having said that, I feel compelled to comment on a recent Angie's List article about LifeLock. The article now appears to have spurred on at least one competitor to blog about it -and if history is a predictor of the future, soon more will follow.
Early this fall I was contacted by Mr. Pogue, a reporter with Angie's List. He said he was working on a story specifically about LifeLock and asked if we could arrange a convenient time to speak about their services and why as an advocate I found them to be of value. We ended up having a lengthy conversation and talked extensively about identity theft, LifeLock and why I chose to subscribe to their services.
While reading the article that was released this week, I was stunned and dismayed on several levels. I was extremely disappointed that it appeared as though Angie's List had regrettably veered from their longtime policy of reporting on company services with an unbiased, fair and balanced viewpoint.
With just a glance I could tell they were dredging up old news and it appeared as though they were reinserting that same old rusty bullet back inside a gun that has been fired at LifeLock on numerous occasions ever since the ex-CEO of LifeLock left the company, (shortly after LifeLock came on the scene) and Experian decided to sue them crying about their lost profits! Please!...See: Experian, the pot called and wants its kettle back!
But it wasn't that the reporter opted to leave out my comments and opinions about LifeLock's services from his article that makes me want to speak up on this matter.
Instead, it was LifeLock's competitor's claims (and Angie's List assertions) that Angie's List "provides unbiased reports and reviews about service companies" when clearly in this particular story, that doesn't appear to be the case. I left a comment on the above linked competitor's site that noted my concerns of this article -however it appears as though it has been removed.
The type of smear campaign the original article seems to intentionally invoke, not only leaves a bad taste in my mouth, but makes many of us question the agenda of those who perpetuate this type of yellow journalism that includes dredging up old news designed to capitalize on someone else's misfortune. Mr. Maynard has a family and to continue to run old news and plaster pictures depicting him as a criminal -is needless, insensitive, mean-spirited -and has nothing to do with LifeLock!
LifeLock employs hundreds of families, has over a million customers -and to my knowledge they have not harmed anyone! There are many companies out there offering various types of id theft protection -yet it appears that LifeLock is the only company that old gun is repeatedly aimed at!
It really rubs me the wrong way when people forget the real problem is identity theft! It's identity thieves I am afraid of ...not LifeLock! And it's consumers I care about -not company profits!
The truth of the matter is I happen to find value in services that help remove the heavy burden of protecting my identity and reducing the impact should my data be compromised or stolen again. Consumers can certainly take on many of the tasks that LifeLock, and other companies, have to offer. However, they are also left on their own to handle the time consuming recovery tasks as well. It's my choice not to!
While following the latest smear campaign against LifeLock, I couldn't help but be reminded of the recent Presidential campaign and the polls that proved the public isn't at all impressed with dirty campaigns, and with good reason!
In order to make informed decisions and choices, we need to rely on integrity and honest depictions of what a particular company has to offer -not what a competing company claims the other doesn't!
It's a funny thing, I have yet to see LifeLock engage in smear tactics against any of their competitors -and they are the leading identity theft protection company out there. That speaks volumes. I wish more companies and journalists would follow their lead. As this latest round of ugliness spreads, it will be interesting to see who takes the high road -and who doesn't!
Payday Lending (sometimes called cash advance): is the practice of using a post-dated check or electronic checking account information as collateral for a short-term loan.
To qualify, borrowers need only personal identification, a checking account, and an income from a job or government benefits, like Social Security or disability payments. In a bad economy consumers often turn to payday loans and end up getting trapped on a never-ending cycle of debt!
Who offers Payday Loans?
Check cashers, payday storefronts, and sometimes pawnbrokers. You can find these locations in strip malls, near convenience or liquor stores, and in neighborhoods where there are few bank branches. Payday lenders also sell their loans on the internet. Recently the FTC and the State of Nevada stepped in to curb abusive and deceptive practices;
FTC Charges 10 Internet Payday Lenders with Deceptive Lending and Collection Tactics
The Federal Trade Commission and the State of Nevada have charged 10 related Internet payday lenders and their principals, based mainly in the United Kingdom, with violating federal and state law by not disclosing key loan terms to U.S. consumers and using abusive and deceptive collection tactics.
According to the complaint filed by the FTC and the State of Nevada, through Web sites such as www.cash2day4u.com, the defendants offered consumers loans of $500 or less within 24 hours without requiring a credit check, proof of income, or documentation. Consumers who applied for a loan on the defendants' Web site were required to provide their bank account and Social Security numbers.
As stated in the complaint, the defendants' representatives called applicants and told them that they qualified for a loan, typically around $200, that had to be repaid by their next payday with a fee ranging from $35 to $80. They explained that if the loan was not repaid by then, it would be extended automatically for an extra fee that would be debited from the consumer's bank account "until the loan is repaid." Consumers were required to give the defendants access to their accounts for payment of the fees. Some consumers were told to call the defendants before their payday to ask them to debit the full loan amount from their accounts.
The complaint states that the defendants did not disclose key loan terms in writing, including the annual percentage rate, the payment schedule, the amount financed, the total number of payments, and any late payment fees. Consumers who asked for written disclosures were told that the transaction was oral only. According to the complaint, the defendants told consumers that they would send written disclosures after the phone call, but consumers never received them. After paying the defendants - sometimes hundreds of dollars above the loan amounts - many consumers concluded that they had more than repaid their loans and terminated the defendants' access to their bank accounts, often by closing the accounts. Many consumers then received abusive and deceptive collection calls from the defendants aimed at regaining access to their accounts.
According to the complaint, the defendants falsely claimed that consumers were legally obligated to repay the loans, even though the loans did not comply with payday lending laws in many consumers' states and the defendants were not licensed to make consumer loans in thosestates. The defendants falsely threatened consumers with arrest, lawsuits, property seizure, or wage garnishment, and repeatedly called consumers, coworkers, and employers at their workplace, using abusive language and disclosing consumers' purported debts.
The corporate defendants are:
Cash Today, Ltd.,
The Heathmill Village, Ltd.,
Leads Global, Inc.,
Waterfront Investments, Inc.,
ACH Cash, Inc.,
HBS Services, Inc.,
Lotus Leads, Inc.,
First4Leads, Inc.,
Rovinge International, Inc.,
The Harris Holdings, Ltd.,
And each also doing business as Cash Today, Route 66 Funding, Global Financial Services International, Ltd., Interim Cash, Ltd., and BIG-INT, Ltd. The individual defendants are Aaron Gershfield, Ivor Gershfield, and Jim Harris.
The defendants are charged with violating the FTC Act by using unfair and deceptive collection tactics, including falsely threatening consumers with arrest or imprisonment, falsely claiming that consumers are legally obligated to pay the debts; making false threats to take legal action that they cannot take; and repeatedly calling consumers at work and using abusive and profane language and disclosing consumers' purported debts to coworkers, employers, and other third parties.
The defendants are also charged with violating the Truth in Lending Act and Regulation Z by failing to make required written disclosures, clearly and conspicuously, before consummating a consumer credit transaction, including the amount financed, itemization of the amount financed, the finance charge, the annual percentage rate, the payment schedule, the total number of payments, and any late payment fees.
In addition, they are charged with violating Nevada's Deceptive Trade Act by not disclosing loan terms, making false representations in collecting debts, and selling loans to consumers without licenses.For more information on Payday Loans visit AFFIL.org.
For additional information on predatory lending see earlier blog.
Do you know your rights under the Fair Debt Collection Practices Act?
See earlier blog: The Importance of Knowing your Rights & Hiring an Experienced Attorney to Protect them.
To qualify, borrowers need only personal identification, a checking account, and an income from a job or government benefits, like Social Security or disability payments. In a bad economy consumers often turn to payday loans and end up getting trapped on a never-ending cycle of debt!
Who offers Payday Loans?
Check cashers, payday storefronts, and sometimes pawnbrokers. You can find these locations in strip malls, near convenience or liquor stores, and in neighborhoods where there are few bank branches. Payday lenders also sell their loans on the internet. Recently the FTC and the State of Nevada stepped in to curb abusive and deceptive practices;
FTC Charges 10 Internet Payday Lenders with Deceptive Lending and Collection Tactics
The Federal Trade Commission and the State of Nevada have charged 10 related Internet payday lenders and their principals, based mainly in the United Kingdom, with violating federal and state law by not disclosing key loan terms to U.S. consumers and using abusive and deceptive collection tactics.
According to the complaint filed by the FTC and the State of Nevada, through Web sites such as www.cash2day4u.com, the defendants offered consumers loans of $500 or less within 24 hours without requiring a credit check, proof of income, or documentation. Consumers who applied for a loan on the defendants' Web site were required to provide their bank account and Social Security numbers.
As stated in the complaint, the defendants' representatives called applicants and told them that they qualified for a loan, typically around $200, that had to be repaid by their next payday with a fee ranging from $35 to $80. They explained that if the loan was not repaid by then, it would be extended automatically for an extra fee that would be debited from the consumer's bank account "until the loan is repaid." Consumers were required to give the defendants access to their accounts for payment of the fees. Some consumers were told to call the defendants before their payday to ask them to debit the full loan amount from their accounts.
The complaint states that the defendants did not disclose key loan terms in writing, including the annual percentage rate, the payment schedule, the amount financed, the total number of payments, and any late payment fees. Consumers who asked for written disclosures were told that the transaction was oral only. According to the complaint, the defendants told consumers that they would send written disclosures after the phone call, but consumers never received them. After paying the defendants - sometimes hundreds of dollars above the loan amounts - many consumers concluded that they had more than repaid their loans and terminated the defendants' access to their bank accounts, often by closing the accounts. Many consumers then received abusive and deceptive collection calls from the defendants aimed at regaining access to their accounts.
According to the complaint, the defendants falsely claimed that consumers were legally obligated to repay the loans, even though the loans did not comply with payday lending laws in many consumers' states and the defendants were not licensed to make consumer loans in thosestates. The defendants falsely threatened consumers with arrest, lawsuits, property seizure, or wage garnishment, and repeatedly called consumers, coworkers, and employers at their workplace, using abusive language and disclosing consumers' purported debts.
The corporate defendants are:
Cash Today, Ltd.,
The Heathmill Village, Ltd.,
Leads Global, Inc.,
Waterfront Investments, Inc.,
ACH Cash, Inc.,
HBS Services, Inc.,
Lotus Leads, Inc.,
First4Leads, Inc.,
Rovinge International, Inc.,
The Harris Holdings, Ltd.,
And each also doing business as Cash Today, Route 66 Funding, Global Financial Services International, Ltd., Interim Cash, Ltd., and BIG-INT, Ltd. The individual defendants are Aaron Gershfield, Ivor Gershfield, and Jim Harris.
The defendants are charged with violating the FTC Act by using unfair and deceptive collection tactics, including falsely threatening consumers with arrest or imprisonment, falsely claiming that consumers are legally obligated to pay the debts; making false threats to take legal action that they cannot take; and repeatedly calling consumers at work and using abusive and profane language and disclosing consumers' purported debts to coworkers, employers, and other third parties.
The defendants are also charged with violating the Truth in Lending Act and Regulation Z by failing to make required written disclosures, clearly and conspicuously, before consummating a consumer credit transaction, including the amount financed, itemization of the amount financed, the finance charge, the annual percentage rate, the payment schedule, the total number of payments, and any late payment fees.
In addition, they are charged with violating Nevada's Deceptive Trade Act by not disclosing loan terms, making false representations in collecting debts, and selling loans to consumers without licenses.For more information on Payday Loans visit AFFIL.org.
For additional information on predatory lending see earlier blog.
Do you know your rights under the Fair Debt Collection Practices Act?
See earlier blog: The Importance of Knowing your Rights & Hiring an Experienced Attorney to Protect them.
According to the FBI, identity theft affects about ten million Americans each year, costing individuals and businesses $52 billion. It often appears as though companies are reactive when a data loss occurs, as opposed to being proactive and making it a priority to offer identity theft protection and/or education to their customers, employees and clients before a data loss happens. The obvious pattern of offering free monitoring services after data is compromised, does nothing to prevent harm to those affected by such loss. Fines, penalties, monitoring services and defending lawsuits resulting from a data theft is much more costly and detrimental to business. And in some cases the expense of rectifying the mess left behind by a hacker or thief may force some businesses to close their doors.
Those businesses that will be required to comply with the new Red Flag Rule requirements and initiate identity theft prevention policies and procedures will hopefully be effective in reducing the number of breaches that lead to identity thefts.
Here's a few of the latest data breaches reported during the last two weeks;
MediCorp offers up ID theft protection
MediCorp Health System offers fraud protection to patients whose personal information was exposed on its computer system. MediCorp Health System has offered hundreds of patients a free subscription to a credit-monitoring service after their private medical information was exposed online.
MediCorp, the parent company of Mary Washington Hospital, made the offer last week, nearly a month after patient data temporarily became available to the public.
Letters went to 760 people who had used the online registration system, said Mahogany Hart, spokeswoman for MediCorp. Many were maternity patients who had preregistered online for delivery of their babies at the Fredericksburg hospital.
Jina Haikey, MediCorp's privacy officer, told patients in the letter that the company has contracted with ID Experts, a computer security firm, to notify patients of any changes in their credit reports. MORE
Personal data of some N.C. residents stolen.
A state-owned laptop computer with personal information about 85,045 North Carolina residents was stolen last month in Atlanta, state officials announced today.
The information included the full Social Security numbers of 52,391 clients of the state Division of Aging and Adult Services, said Lori Walston, spokeswoman for the state Department of Health and Human Services. It also included personal data about 32,645 additional clients, including the last four digits of their Social Security numbers. MORE
Clients' data missing, Harvard Law warns
Computer backup lost during transit
Harvard Law School is alerting thousands of clients from a legal services clinic after a computer tape containing their Social Security numbers, addresses, and financial information was lost in September.
The personal information, dating back 10 years, belonged to about 21,000 people who sought help through the school's legal services center in Jamaica Plain, Robert London, a school spokesman, said yesterday. About 8,000 records of present and former clients contained Social Security numbers; another 13,000 had other identification information. MORE
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If you believe you may be affected by this latest data breach,or any other recently reported losses listed on this blog, take the time to place fraud alerts and/or freeze your credit...and see earlier blog for additional steps you can take to avoid the impact of an identity theft: Are you one of the tens of millions to be notified your information is in the hands of thieves? Do you have a plan of action?
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Identity Theft Victim Sues 3 Stores
Man Says Companies Didn't Protect Him From ID Theft
A Howard County, MD man is suing three companies, claiming they didn't protect his identity from being stolen.
Police said Lavon Caldwell and members of his theft ring stole the identities of at least 15 people and used them to buy several items, including cars. One of those victims was Gregory Peel. "I received correspondence in the mail saying that my tags were in," Peel said. "It's like you're watching a movie and you're the character."
Prosecutors said they think Caldwell used fake driver's licenses. "It was just amazing that the driver's licenses looked really good," said Detective Colleen Richarts of the Baltimore County Regional Auto Theft Task Force. She said she spoke with Caldwell after his arrest. watch report
Those businesses that will be required to comply with the new Red Flag Rule requirements and initiate identity theft prevention policies and procedures will hopefully be effective in reducing the number of breaches that lead to identity thefts.
Here's a few of the latest data breaches reported during the last two weeks;
MediCorp offers up ID theft protection
MediCorp Health System offers fraud protection to patients whose personal information was exposed on its computer system. MediCorp Health System has offered hundreds of patients a free subscription to a credit-monitoring service after their private medical information was exposed online.
MediCorp, the parent company of Mary Washington Hospital, made the offer last week, nearly a month after patient data temporarily became available to the public.
Letters went to 760 people who had used the online registration system, said Mahogany Hart, spokeswoman for MediCorp. Many were maternity patients who had preregistered online for delivery of their babies at the Fredericksburg hospital.
Jina Haikey, MediCorp's privacy officer, told patients in the letter that the company has contracted with ID Experts, a computer security firm, to notify patients of any changes in their credit reports. MORE
Personal data of some N.C. residents stolen.
A state-owned laptop computer with personal information about 85,045 North Carolina residents was stolen last month in Atlanta, state officials announced today.
The information included the full Social Security numbers of 52,391 clients of the state Division of Aging and Adult Services, said Lori Walston, spokeswoman for the state Department of Health and Human Services. It also included personal data about 32,645 additional clients, including the last four digits of their Social Security numbers. MORE
Clients' data missing, Harvard Law warns
Computer backup lost during transit
Harvard Law School is alerting thousands of clients from a legal services clinic after a computer tape containing their Social Security numbers, addresses, and financial information was lost in September.
The personal information, dating back 10 years, belonged to about 21,000 people who sought help through the school's legal services center in Jamaica Plain, Robert London, a school spokesman, said yesterday. About 8,000 records of present and former clients contained Social Security numbers; another 13,000 had other identification information. MORE
********************************************
If you believe you may be affected by this latest data breach,or any other recently reported losses listed on this blog, take the time to place fraud alerts and/or freeze your credit...and see earlier blog for additional steps you can take to avoid the impact of an identity theft: Are you one of the tens of millions to be notified your information is in the hands of thieves? Do you have a plan of action?
***********************************************************
Identity Theft Victim Sues 3 Stores
Man Says Companies Didn't Protect Him From ID Theft
A Howard County, MD man is suing three companies, claiming they didn't protect his identity from being stolen.
Police said Lavon Caldwell and members of his theft ring stole the identities of at least 15 people and used them to buy several items, including cars. One of those victims was Gregory Peel. "I received correspondence in the mail saying that my tags were in," Peel said. "It's like you're watching a movie and you're the character."
Prosecutors said they think Caldwell used fake driver's licenses. "It was just amazing that the driver's licenses looked really good," said Detective Colleen Richarts of the Baltimore County Regional Auto Theft Task Force. She said she spoke with Caldwell after his arrest. watch report
