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    Edelman, Combs, Latturner, & Goodwin, LLC

    20 South Clark Street
    Suite 1500
    Chicago, IL 60603
    Phone: 312-739-4200
    Fax: 312-419-0379

    E-mail Us  |  Chicago Law Office

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    More re fake debt collectors

    Tuesday, May 24th, 2016

    Fake Debt Collectors Phish for Personal Info; Know the Red Flags with BBB Tips



    May 23, 2016

    past due noticeBetter 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 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

    Second mortgages/ home equity lines of credit

    Thursday, May 19th, 2016

    Please contact us if someone is trying to collect an Illinois second mortgage or home equity line of credit.

    Trustmark Recovery

    Tuesday, May 10th, 2016

    Please contact us if Trustmark Recovery is attempting to collect money from you.

    Debt Collector Settles FTC Charges It Violated Fair Credit Reporting Act

    Monday, May 9th, 2016

    Debt Collector Settles FTC Charges It Violated Fair Credit Reporting Act

    Defendant Will Pay $72,000, Be Required To Use Proper Procedures


    A Texas-based debt collection agency will pay $72,000 in civil penalties and be required to adopt new procedures to settle Federal Trade Commission charges that it violated the requirements of the Fair Credit Reporting Act (FCRA).

    The FTC’s complaint alleges that Credit Protection Association (CPA) failed to follow the requirements of the FCRA’s Furnisher Rule by not having adequate policies and procedures in place to handle consumer disputes regarding information the company provided to credit reporting agencies. The FTC also alleges that CPA did not have a policy requiring notice to consumers of the outcomes of investigations about disputed information and that in numerous instances consumers were not informed whether information they disputed had been corrected.

    “When consumers dispute potentially incorrect information in their credit reports, companies must not only investigate those disputes, but also let consumers know whether the information has been corrected.  Otherwise, consumers may be unaware of additional steps they may need to take under the FCRA, including filing dispute statements directly with credit reporting agencies,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.  “Companies that fail to live up to these obligations can expect to hear from the FTC.”

    In its complaint, the FTC alleges that while CPA did have written policies regarding how disputes were handled, employees were not adequately trained on those policies, and the policies themselves failed to address the Furnisher Rule’s requirements. The complaint notes that in many cases CPA failed to keep copies of documentation from consumers that disputed the information CPA had provided to reporting agencies.

    The complaint also alleges that CPA often relied on its clients – the original debt holders – to investigate credit reporting disputes, but its processes for transmitting consumers’ dispute information to its clients were inconsistent.  The complaint also alleges that the company had no meaningful way to audit or analyze how it handled consumer disputes.

    Under the terms of the settlement, CPA will be required to pay $72,000 in civil penalties, and will also be required to put in place policies and procedures that comply with the requirements of the FCRA and the Furnisher Rule. The company will also be required to follow the rule’s requirements related to conducting dispute investigations and informing consumers of their outcome.

    The case is part of Operation Collection Protection, an ongoing federal, state and local crackdown on debt collectors that use illegal practices.

    The Commission vote to authorize the staff to refer the complaint to the U.S. Department of Justice and to approve the proposed stipulated order was 3-0. The DOJ filed the complaint and proposed order on behalf of the Commission in U.S. District Court for the Northern District of Texas.

    NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.



    Thursday, May 5th, 2016

    May 5, 2016

    Office of Communications
    Tel: (202) 435-7170

    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:

    The Small Business Review Panel report is available at:

    The March 2015 CFPB report on arbitration is available at:

    FTC complaint vs. subscription renewal company

    Tuesday, May 3rd, 2016


    Extra! Extra! Read all about this subscription deception

    Many people have subscriptions to their beloved dailies or weeklies. But that notice in the mail saying your subscription is about to expire, or offering to get a subscription started, could be from a company that has no relationship with your newspaper or magazine. It may be from a scammer who wants to get into your wallet.

    The FTC filed a complaint to stop Liberty Publishers Service, Inc., Associated Publishers Network, Inc., Express Publishers Service, Inc., and others from soliciting new subscriptions and renewals from people. The FTC says these companies sent out mailers that looked like real notices saying people’s subscriptions would automatically renew if they paid, and claiming to offer the lowest available rates.

    Except those claims weren’t true. The rates were actually up to 40 percent higher than the publishers’ and some people never even got their papers. And when people tried to cancel their payments, the FTC says they either were unsuccessful or only got a partial refund.

    How to avoid being misled by deceptive subscription offers?

    • Pay online at the newspaper’s or magazine’s website or contact the subscription department by phone. Use the number on your paper, online, or on a previous bill.
    • Consider auto-renewal and payment, so you don’t have to rely on renewal notices sent by postal mail. If possible, pay with a credit card. It offers fraud protections.
    • Be aware of changes to your bill. If the price or billing period changes, contact the publication using contact info you know is real. You can confirm rate offers with the subscriptions department.
    • Be on the lookout for suspicious invoices. If you have questions or suspect an invoice is fake, check with your publication’s subscription department.

    And if a company misleads you with a subscription offer, report it to the FTC.

    Marketers of Simple Pure Supplements Settle FTC Court Action

    Tuesday, May 3rd, 2016

    Marketers of Simple Pure Supplements Settle FTC Court Action

    Marketers of green coffee bean extract weight-loss supplements, male enhancement products, and skin care products will forfeit assets totaling approximately $9.2 million, and have already turned over a Ferrari to settle the Federal Trade Commission’s court action brought against them in October 2014.

    The proposed stipulated final order bans individual defendants Danelle Miller and Jason Miller and 42 corporations the couple controlled (the Health Formulas defendants) from advertising or selling weight-loss supplements and negative option sales plans, making unsupported health claims for other products, and debiting consumers’ bank accounts without their consent.

    “The defendants made misleading claims about their products, locked people into recurring charges, and debited bank accounts without permission, said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “As a result of their outrageous behavior, they’re now banned from using continuity programs or selling weight-loss products, and they’ve surrendered millions of dollars.”

    The FTC’s action alleged that Health Formulas, LLC, its related entities, and principals used telemarketing, the Internet, print, radio, and television advertisements to deceptively pitch a variety of dietary supplements and other weight-loss, virility, muscle-building, and skin cream products.

    The defendants tricked consumers into disclosing their personal financial information through the use of a “free trial” or discount program with undisclosed costs, and then enrolled them, often without their authorization, in a negative option program in which defendants automatically charged consumers for monthly shipments.

    The defendants also failed to provide a way for consumers to stop the automatic charges, and failed to disclose material facts about their refund and cancellation policy. In addition, the FTC alleged the defendants had no basis for the extreme weight-loss claims they made for their weight-loss products. The FTC charged defendants with violating the Restore Online Shoppers’ Confidence Act (ROSCA), the FTC Act, the Commission’s Telemarketing Sales Rule, and the Electronic Fund Transfer Act (EFTA).

    In addition to the bans on negative option and weight loss marketing, the final order against the Health Formulas defendants prohibits misrepresentations regarding evidence used to support product claims, requires clear disclosures during any sale regarding the material terms and conditions of the transaction, cancellation and refund policies, and requires substantiation for any claims made about the health benefits or efficacy of any food, drug, or dietary supplement.

    The order also bars the defendants from the telemarketing violations alleged in the complaint. The remainder of the $105 million judgment will be suspended after the defendants surrender over $9 million in personal and business assets based on the defendants’ inability to pay more.

    Late last year, defendants Chapnick, Smukler & Chapnick, Inc.; Brandon Chapnick and Keith Smukler, and several other corporate entities they controlled (the CSC defendants) agreed to a court order settling the charges against them.

    That order, which the Commission approved by a 4-0 vote, bans the CSC defendants from negative-option sales (with minor exceptions) and from advertising, promoting, or selling dietary supplements, prohibits them from making sales misrepresentations, requires them to provide clear disclosures during any sale regarding the material terms and conditions of the transaction, cancellation and refund policies, and prohibits a range of deceptive and abusive telemarketing practices. The order also imposes a judgment of $105 million, which was suspended upon payments to the Commission totaling more than $664,000.

    The Commission vote approving the proposed stipulated final order against the Health Formulas defendants was 3-0. It was filed in the U.S. District Court for the District of Nevada. This settlement will conclude the action against all the defendants charged in this case.

    NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

    The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

    Contact Information

    Mitchell J. Katz
    Office of Public Affairs

    Danielle Estrada
    Bureau of Consumer Protection

    Melissa Dickey
    Bureau of Consumer Protection

    Related Case

    Health Formulas, LLC, Doing Business As Simple Pure Nutrition

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