Tuesday, May 24th, 2016
Fake Debt Collectors Phish for Personal Info; Know the Red Flags with BBB Tips
May 23, 2016
Better Business Bureau of Central New England has received several reports from local consumers reporting contact from dishonest callers claiming to be collecting outstanding debts. A common scam, victims receive calls demanding immediate payment or request for personal financial information, failure to comply may results in threats of arrest, jail time, garnished wages or calls to your family or employer. BBB wants locals to know the red flags of this scam and their rights when it comes to debt collection practices.
“The calls are often threatening in nature and request immediate action,” said Nancy B. Cahalen, President and CEO of the Better Business Bureau of Central New England. “The callers don’t know if you actually owe a debt, but they hope that the threat of serious consequences will be enough to take action without investigating the matter. This is a huge red flag, any legitimate caller should give you time to review and follow up.” Typically you will receive a call claiming to be collecting overdue payments. When you start to press for more details or perhaps deny the debt the caller becomes aggressive and hostile. Despite the threats, the callers do not have any power to have you arrested or to enforce any other consequence. In many cases, the overdue bills do not exist. Even if you do owe debts, there are rules that all debt collectors must follow.
BBB has tips to deal with intimidating phone calls. The best protection against debt collection scams is simply knowing your rights. Here’s a quick overview.
- Ask the debt collector to provide official “validation notice” of the debt. Debt collectors are required by law to provide the information in writing. The notice must include the amount of the debt, the name of the creditor and a statement of your rights under the Fair Debt Collection Practices Act. If the self-proclaimed collector won’t provide the information, hang up.
- If you think that a caller may be a fake, ask for his name, company, street address, and telephone number. Then, confirm that the collection agency is real by contacting your BBB or through an internet search.
- Do not provide or confirm any bank account, credit card or other personal information over the phone until you have verified the call.
- Check your credit report for by going to annualcreditreport.com or calling (877) 322-8228. This will help you determine if you have outstanding debts or if there has been suspicious activity under your name.
- Tell your loved one to place a fraud alert on his/her credit report. If scammers mention family members and have information like their name, relationship and phone number, they probably have a lot more.
- File a complaint with the Federal Trade Commission if the caller uses threats. The Fair Debt Collection Practices Act prohibits debt collections from being abusive, unfair or deceptive
Tuesday, May 10th, 2016
Please contact us if Trustmark Recovery is attempting to collect money from you.
Thursday, May 5th, 2016
FOR IMMEDIATE RELEASE:
May 5, 2016
Office of Communications
Tel: (202) 435-7170
CONSUMER FINANCIAL PROTECTION BUREAU PROPOSES PROHIBITING MANDATORY ARBITRATION CLAUSES THAT DENY GROUPS OF CONSUMERS THEIR DAY IN COURT
Bureau Seeks Comment on Proposal to Ban a Contract Gotcha that Prevents Groups of Consumers from Suing Consumer Financial Companies
WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) is seeking comments on proposed rules that would prohibit mandatory arbitration clauses that deny groups of consumers their day in court. Many consumer financial products like credit cards and bank accounts have contract gotchas that generally prevent consumers from joining together to sue their bank or financial company for wrongdoing. These widely used clauses leave consumers with no choice but to seek relief on their own – usually over small amounts. With this contract gotcha, companies can sidestep the legal system, avoid accountability, and continue to pursue profitable practices that may violate the law and harm countless consumers. The CFPB’s proposal is designed to protect consumers’ right to pursue justice and relief, and deter companies from violating the law.
“Signing up for a credit card or opening a bank account can often mean signing away your right to take the company to court if things go wrong,” said CFPB Director Richard Cordray. “Many banks and financial companies avoid accountability by putting arbitration clauses in their contracts that block groups of their customers from suing them. Our proposal seeks comment on whether to ban this contract gotcha that effectively denies groups of consumers the right to seek justice and relief for wrongdoing.”
In recent years, many contracts for consumer financial products and services – from bank accounts to credit cards – have included mandatory arbitration clauses. They affect hundreds of millions of consumer contracts. These clauses typically state that either the company or the consumer can require that disputes between them be resolved by privately appointed individuals (arbitrators) except for cases brought in small claims court. Where these clauses exist, either side can generally block lawsuits from proceeding in court. These clauses also typically bar consumers from bringing group claims through the arbitration process. As a result, no matter how many consumers are injured by the same conduct, consumers must proceed to resolve their claims individually against the company.
Through the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress required the CFPB to study the use of mandatory arbitration clauses in consumer financial markets. Congress also gave the Bureau the power to issue regulations that are in the public interest, for the protection of consumers, and consistent with the study.
Released in March 2015, the CFPB’s study showed that very few consumers ever bring – or think about bringing – individual actions against their financial service providers either in court or in arbitration. The study found that class actions provide a more effective means for consumers to challenge problematic practices by these companies. According to the study, class actions succeed in bringing hundreds of millions of dollars in relief to millions of consumers each year and cause companies to alter their legally questionable conduct. The study showed that at least 160 million class members were eligible for relief over the five-year period studied. Those settlements totaled $2.7 billion in cash, in-kind relief, and attorney’s fees and expenses. In addition, these figures do not include the potential value to consumers of class action settlements requiring companies to change their behavior. However, where mandatory arbitration clauses are in place, companies are able to use those clauses to block class actions.
The CFPB proposal is seeking comment on a proposal to prohibit companies from putting mandatory arbitration clauses in new contracts that prevent class action lawsuits. The proposal would open up the legal system to consumers so they could file a class action or join a class action when someone else files it. Under the proposal, companies would still be able to include arbitration clauses in their contracts. However, for contracts subject to the proposal, the clauses would have to say explicitly that they cannot be used to stop consumers from being part of a class action in court. The proposal would provide the specific language that companies must use.
The proposal would also require companies with arbitration clauses to submit to the CFPB claims, awards, and certain related materials that are filed in arbitration cases. This would allow the Bureau to monitor consumer finance arbitrations to ensure that the arbitration process is fair for consumers. The Bureau is also considering publishing information it would collect in some form so the public can monitor the arbitration process as well.
The benefits to the CFPB proposal would include:
- A day in court for consumers: The proposed rules would allow groups of consumers to obtain relief when companies skirt the law. Most consumers do not even realize when their rights have been violated. Often the harm may be too small to make it practical for a single consumer to pursue an individual dispute, even when the cumulative harm to all affected consumers is significant. The CFPB study found that only around 2 percent of consumers with credit cards who were surveyed would consult an attorney or otherwise pursue legal action as a means of resolving a small-dollar dispute. With class action lawsuits, consumers have opportunities to obtain relief from the legal system that, in practice, they otherwise would not receive.
- Deterrent effect: The proposed rules would incentivize companies to comply with the law to avoid group lawsuits. Arbitration clauses enable companies to avoid being held accountable for their conduct. When companies know they can be called to account for their misconduct, they are less likely to engage in unlawful practices that can harm consumers. Further, public attention on the practices of one company can affect or influence their business practices and the business practices of other companies more broadly.
- Increased transparency: The proposed rules would make the individual arbitration process more transparent by requiring companies that use arbitration clauses to submit any claims filed and awards issued in arbitration to the CFPB. The Bureau would also collect correspondence from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to adhere to the arbitration forum’s standards of conduct. The collection of these materials would enable the CFPB to better understand and monitor arbitration. It would also provide insight into whether companies are abusing arbitration or whether the process itself is fair.
The proposed rules which the CFPB is seeking comment on would apply to most consumer financial products and services that the CFPB oversees, including those related to the core consumer financial markets that involve lending money, storing money, and moving or exchanging money. Congress already prohibited arbitration agreements in the largest market that the Bureau oversees – the residential mortgage market.
In October 2015, the Bureau published an outline of the proposals under consideration and convened a Small Business Review Panel to gather feedback from small companies. In addition to consulting with small business representatives, the Bureau sought input from the public, consumer groups, industry, and other stakeholders before continuing with the rulemaking. That process concluded in December 2015 with a written report to the Bureau’s director, which is also being released today.
The public is invited to comment on these proposed regulations when they are published in the Federal Register. Written comments will be carefully considered before final regulations are issued.
The proposal is available at: http://files.consumerfinance.gov/f/documents/CFPB_Arbitration_Agreements_Notice_of_Proposed_Rulemaking.pdf
The Small Business Review Panel report is available at: http://files.consumerfinance.gov/f/documents/CFPB_SBREFA_Panel_Report_on_Pre-Dispute_Arbitration_Agreements_FINAL.pdf
The March 2015 CFPB report on arbitration is available at: http://www.consumerfinance.gov/reports/arbitration-study-report-to-congress-2015/