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CONSUMER FINANCIAL PROTECTION BUREAU UNVEILS STUDENT LOAN ‘PAYBACK PLAYBOOK’ TO PROVIDE BORROWERS WITH PERSONALIZED SNAPSHOT OF REPAYMENT OPTIONS Prototype Disclosures Outline Path to Affordable Payments for Borrowers Trying to Avoid Debt Distress
WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) unveiled the student loan Payback Playbook, a set of prototype disclosures that outline a path to affordable payments for borrowers trying to avoid student debt distress. The Payback Playbook provides borrowers with personalized information about their repayment options from loan servicers so they can secure a monthly payment they can afford. The Payback Playbook would be available to borrowers on their monthly bills, in regular email communications from their student loan servicers, or when they log into their student loan accounts.
“Millions of consumers needlessly fall behind on their student loan debt, despite their right under federal law to a payment they can afford,” said CFPB Director Richard Cordray. “The Payback Playbook, which has grown out of our joint work with Illinois Attorney General Lisa Madigan and her colleagues, is designed to help ensure student loan servicers provide personalized information, tailored to the borrower’s individual situation. This will help these borrowers take action, stay on track, and steer clear of financial distress.“
About 43 million Americans owe student loan debt, with outstanding debt estimated at $1.3 trillion. The Department of Education offers numerous plans to borrowers with federal student loans that help make payments more affordable. These include options that let borrowers set their monthly payment based on their income. Repayment plan options for federal loans have expanded in recent years, but record numbers of student borrowers continue to struggle with debt. One out of four student loan borrowers are currently in default or scrambling to stay current on their loans, despite the availability of income-driven repayment options for the vast majority of borrowers.
According to a government audit, 70 percent of federal Direct Loan borrowers in default earned incomes low enough to qualify for reduced monthly payment under an income-driven repayment plan. These findings and the continued problems reported by student loan borrowers raise serious concerns that millions of consumers may not be receiving important information about repayment options or may encounter breakdowns when attempting to enroll.
Prototype Student Loan Payback Playbook The first-of-its-kind prototype student loan Payback Playbook outlines repayment options for consumers who may be struggling to keep up with their monthly payment or trying to choose among dozens of plans. The Payback Playbook that most borrowers receive from their servicer will help cut through the clutter by clearly presenting three personalized repayment options. Struggling borrowers who have missed a payment or are at risk of default will receive a Payback Playbook that provides a single option with personalized instructions written in plain language describing how to lower their monthly payment. The proposed Payback Playbook features will include:
Personalized payment options: The Payback Playbook would require servicers to provide personalized information tailored to borrowers’ specific circumstances that show what their payments will be under different repayment plans. This information would include the number of payments over the life of the loan, monthly payment amounts, and whether payments will change over time.
No fine print: The Payback Playbook describes each option using clear, straightforward language that makes it easier for borrowers to understand the different plans, pick one that fits their financial situation, and stay on track.
Real-time, up-to-date information: The Payback Playbook provides borrowers with updated information when their plans or circumstances change so they can keep on top of their payments. This includes how much longer they need to make payments until their loan is paid off or forgiven.
The Payback Playbook is available online and the public can provide feedback on these prototype disclosures through June 12, 2016. In the coming months, the Department of Education plans to finalize these disclosures, informed by the public feedback shared with the Bureau, to ensure that student loan servicers provide the information borrowers need to obtain monthly payments they can afford. The Department of Education, working with the CFPB, plans to finalize and implement these disclosures as part of the new vision for serving student loan borrowers announced earlier this month.
In a related action, the Bureau today also released a new action guide to help military borrowers navigate their student loan repayment options and take advantage of special consumer protections designed to help men and women in uniform manage their debt while serving our country.
Reforming Student Loan Servicing The CFPB’s development of the prototype Payback Playbook was informed by the ongoing work of state law enforcement agencies and a public inquiry last year. The inquiry identified widespread concerns about student loan servicing practices. Servicers are a crucial link between borrowers and lenders. They manage borrowers’ accounts, process monthly payments, and communicate directly with borrowers. When facing unemployment or other financial hardship, borrowers may contact student loan servicers to enroll in alternative repayment plans, obtain deferments or forbearances, or request a modification of loan terms.
The CFPB’s inquiry into the practices of student loan servicers received more than 30,000 comments from student loan borrowers, servicers, policy experts, and consumer advocates, describing widespread servicing failures that can drive student loan borrowers into default. Consumers reported miscommunication from servicers that caused distress, increased costs, and prevented borrowers from obtaining affordable payments. Also, some borrowers trying to avoid default reported falling prey to debt relief scammers that charge illegal upfront fees while promising to enroll borrowers in free federal consumer protections, including income-driven repayment plans.
The Bureau has made it a priority to take action against companies that are engaging in illegal student loan servicing practices. Earlier this year, the CFPB announced that its oversight work ended a range of illegal practices at certain student loan servicers, as identified by the Bureau’s supervisory program. The CFPB will also continue to monitor the student loan servicing market and intends to explore potential industry-wide rules to increase borrower protections. Today’s announcement builds on an interagency framework for market-wide reform announced in September 2015 in coordination with the Department of Education and Department of the Treasury.
“The Obama Administration continues to look for ways to make college more affordable and accessible for all families. A college degree is one of the best investments a student can make in his or her future, and it remains the clearest path to the middle class,” said U.S. Secretary of Education John B. King Jr. “We want student borrowers to know that they have the support they need to manage their debt and navigate the options available to them to pay back their loans.”
Student Loan Initiatives from the Department of Education and the Department of the Treasury Today, the Department of Education and the Department of the Treasury, in consultation with the Bureau, also announced further actions aimed at protecting student loan borrowers:
Student loan borrowers’ rights and expectations: The administration, in consultation with the Bureau and informed by work with Illinois Attorney General Madigan and other state law enforcement officials, has released a series of new student loan borrower rights and expectations. This provides a framework to help ensure borrowers with loans owned by the Department of Education are treated fairly and that the student loan repayment process sets these borrowers up to succeed. The Bureau continues to emphasize that no consistent, market-wide federal standards exist for conduct of student loan servicers. With this framework, the agencies have taken another step toward improving the delivery of service for millions of student loan borrowers.
Strengthening student loan credit reporting: The administration, in consultation with the Bureau, is working with the credit reporting industry to develop guidance for servicers, lenders, and others that furnish data to the credit reporting companies. This effort will help determine how best to report student loan data to ensure that credit reporting for student loans fairly, consistently, and accurately reflects repayment activity. The Department of Education will implement this effort in the months ahead.
Student loan borrowers can get more advice on student loan repayment options by using the CFPB’s Repay Student Debt tool. This interactive resource offers a step-by-step guide to navigate borrowers through their repayment options, especially when facing default. Student loan borrowers experiencing problems related to repaying student loans or debt collection can submit a complaint to the CFPB. More information is at http://www.consumerfinance.gov/students.
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
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CONSUMER FINANCIAL PROTECTION BUREAU TAKES ACTION TO HALT ILLEGAL DEBT COLLECTION PRACTICES BY LAWSUIT MILL AND DEBT BUYER CFPB Bars Law Firm, Debt Buyer from Churning Out Illegal Collections Lawsuits and Imposes $2.5 Million in Penalties
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today ordered the debt collection law firm Pressler & Pressler, LLP, two principal partners, and New Century Financial Services, Inc., a debt buyer, to stop churning out unfair and deceptive debt collection lawsuits based on flimsy or nonexistent evidence. The consent orders bar the companies and individuals from illegal practices that can deceive or intimidate consumers, such as filing lawsuits without determining if debts in question are valid. The orders also require the firm and the named partners to pay $1 million, and New Century to pay $1.5 million to the Bureau’s Civil Penalty Fund.
“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”
Pressler & Pressler is a New Jersey-based law firm that collects consumers’ debts for creditors through lawsuits and other means. New Century Financial Services, also based in New Jersey, buys and collects defaulted consumer debts and hands off those accounts to Pressler & Pressler for collection. To collect alleged debts on behalf of New Century and others, Pressler & Pressler filed hundreds of thousands of lawsuits against consumers. Sheldon H. Pressler and Gerard J. Felt, partners of the firm, each participated in the firm’s debt collection litigation practices.
The CFPB found that to mass-produce these lawsuits, Pressler & Pressler used an automated claim-preparation system and non-attorney support staff to determine which consumers to sue. Attorneys generally spent less than a few minutes, sometimes less than 30 seconds, reviewing each case before initiating a lawsuit. This process allowed the firm to generate and file hundreds of thousands of lawsuits against consumers in New Jersey, New York, and Pennsylvania between 2009 and 2014. The CFPB found that the respondents violated the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace. Specifically, the CFPB found that Pressler & Pressler, the firm’s named partners, and New Century Financial Services:
Made false or empty allegations about consumer debts: The CFPB found that the firm, the named partners, and New Century filed lawsuits against consumers without sufficient basis. Neither the firm nor New Century reviewed documents supporting the validity of debts.
Filed lawsuits based on unreliable or false information: Some consumers had previously challenged the validity or accuracy of the debts, but the firm or New Century did not obtain or review information to justify their claims. The firm and New Century also filed suits and collected debt knowing that some account portfolios targeted for lawsuits contained unreliable or false information.
Harassed consumers with unsubstantiated court filings: The CFPB found that the firm, the named partners, and New Century filed collection suits generated mainly by automated processes that relied on summary data. The firm won the vast majority of the lawsuits by default when consumers did not defend themselves, even though neither Pressler & Pressler nor New Century had verified that the debts were actually owed.
Enforcement Action Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals that engage in unfair, deceptive, or abusive acts or practices. The CFPB also has authority over debt collection practices under the Fair Debt Collection Practices Act. The CFPB orders require that Pressler & Pressler, the firm’s named partners, and New Century Financial Services must:
Stop filing lawsuits with unsubstantiated claims: Pressler & Pressler, the named partners, and New Century cannot file lawsuits or threaten to sue to collect debts unless they obtain and review specific account-level documents and information showing the debt is accurate and enforceable.
Ensure accurate court filings: The firm, the named partners, and New Century may not use affidavits as evidence to collect debts unless they accurately describe relevant facts including that the individual executing the affidavit has personal knowledge of the debt, or, if not, has reviewed documentation related to the debt. The firm must also keep an electronic record showing it is following proper procedures.
Pay civil penalties: The firm and the named partners must pay a penalty of $1 million to the CFPB’s Civil Penalty Fund. New Century must pay a penalty of $1.5 million.
Assistant Director, Division of Financial Practices, FTC
At the FTC, we sue abusive debt collectors and try to do right by people who’ve been harmed by unlawful practices. But we also try to protect people from being harmed in the first place. That’s exactly why I’m here: to warn you about debt collectors calling about debts that the FTC knows are bogus.
The bogus debts supposedly are payday loans from these companies: USFastCash, 500FastCash, OneClickCash, Ameriloan, United Cash Loans, AdvantageCashServices, or StarCashProcessing. The companies are real, but if you’re hearing from anyone other than those companies, the debts are fake and you don’t need to pay.
Sometimes, if they can’t collect money owed to them, companies sell lists of those debts to debt collectors. But, in this case, we know that didn’t happen. The company that processed and serviced loans from these companies told the FTC that it never sold any customer or account information to debt collectors. Their lawyer even filed alegal declaration saying that.
Even so, we’ve still heard about abusive calls from debt collectors claiming to be collecting money owed to the companies listed above – and we already know that’s not true. But we also know that many of the people who have been called never even had a loan with those lenders in the first place – so the debts themselves also are bogus.
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CONSUMER FINANCIAL PROTECTION BUREAU FINDS HALF OF ONLINE PAYDAY BORROWERS RACK UP AN AVERAGE OF $185 IN BANK PENALTIES Repeat Debit Attempts Add Steep, Hidden Cost for Borrowers Yet Typically Fail to Recover Payments
WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) issued a report that found that attempts by online lenders to debit payments from a consumer’s checking account add a steep, hidden cost to online payday loans. Half of online borrowers rack up an average of $185 in bank penalties because at least one debit attempt overdrafts or fails. And one third of those borrowers who get hit with a bank penalty wind up having their account closed involuntarily. The study also found that despite this high cost to consumers, lenders’ repeated debit attempts typically fail to collect payments.
“Taking out an online payday loan can result in collateral damage to a consumer’s bank account,” said CFPB Director Richard Cordray. “Bank penalty fees and account closures are a significant and hidden cost to these products. We are carefully considering this information as we continue to prepare new regulations in this market.”
Payday loans are typically marketed as a way to bridge a cash flow shortage between paychecks or other income. Also known as “cash advances” or “check loans,” they are usually high-cost loans that can offer quick access to money. Payment is usually due in full on the borrower’s next payday, although some lenders offer installment loans or longer-term loans with payments typically timed to coincide with the consumer’s next payday.
Today’s report is based on data from an 18-month period in 2011 and 2012 that looked at online payday and certain online installment loans made by more than 330 lenders. It is a continuation of the CFPB’s reports on payday loans and deposit advance products, some of the most comprehensive studies ever undertaken on the market. Previous reports have raised questions about the lending standards and loan structures that may contribute to the sustained use of these products.
Today’s report examines the ways that online lenders attempt to recover their money by debiting a consumer’s checking account. Online lenders often use an automated network to deposit the loan proceeds into borrowers’ checking accounts. They collect money by submitting a payment request to the borrower’s depository institution through the same system. Borrowers facing financial difficulties are often hit by multiple, costly debit attempts. If a debit attempt fails, lenders often follow up with repeated attempts against a consumer’s account. Many lenders also split a single payment into multiple smaller debits in the hopes that the consumer’s account will contain enough money to fulfill one of the attempts. They can do this, for example, by submitting three $100 requests on a day the borrower is due to pay $300.
When an account lacks sufficient funds, the bank or credit union may fulfill the debit and charge the consumer an overdraft fee or the debit attempt could fail and the bank or credit union will reject the payment request and charge a non-sufficient funds fee. The typical fee for both overdraft and non-sufficient funds was $34 in 2012. If the debit attempt is rejected, the lender may also charge the borrower a late fee, a returned payment fee, or both. Negative account balances are a significant contributor to involuntary account closures at many banks and credit unions.
Today’s study found that bank penalty fees and account closures are a significant, hidden cost of online payday and payday installment loans. The study further found that some lenders repeatedly submit payment requests to consumer accounts even though debit attempts typically do not generate more income. Specifically, the report found:
Half of online borrowers are charged an average of $185 in bank penalties: One half of online borrowers have at least one debit attempt that overdrafts or fails. These borrowers incur an average of $185 in bank penalty fees, in addition to any fees the lender might charge for failed debit attempts.
One third of online borrowers hit with a bank penalty wind up losing their account: A bank account may be closed by the depository institution for reasons such as having a negative balance for an extended period of time or racking up too many penalty fees. Over the 18-month period covered by the data, 36 percent of accounts with a failed debit attempt from an online lender ended up being closed by the depository institution. This happened usually within 90 days of the first non-sufficient funds transaction.
Repeated debit attempts typically fail to collect money from the consumer: After a failed debit attempt, three quarters of the time online lenders will make an additional attempt. Seventy percent of second payment requests to the same consumer’s account fail. Seventy-three percent of third payment requests fail. And, each repeated attempt after that is even less likely to succeed.
Today’s report will help educate regulators and the public about how the payday and installment lending markets work and about the behavior of borrowers in the market. The CFPB has authority over the payday loan and payday installment loan markets. It began its supervision of payday lenders in January 2012. In November 2013, the CFPB began accepting complaints from borrowers encountering problems with payday loans. Last month, it began accepting complaints about online marketplace lenders.
Last year the Bureau announced it was considering a proposal that would prohibit payday lenders and similar lenders from making more than two unsuccessful attempts in succession on a borrower’s checking or savings account. The Bureau is expecting to issue a proposed rule later this spring.
Thousands of U.S. consumers lost at least $3.8 million after a network of Westmont-based businesses coerced them into paying loan debts that they either didn’t owe or owed to others, state and federal agencies said Wednesday.
Illinois Attorney General Lisa Madigan, at a joint news conference with Todd Kossow, the Federal Trade Commission’s Midwest acting director, estimated that Illinois consumers were scammed out of about $1 million by six local companies, including Stark Recovery, Ashton Asset Management, HKM Funding and Capital Harris Miller & Associates.
The FTC and state of Illinois have filed a lawsuit in U.S. District Court in Chicago against the six companies from Westmont, in DuPage County, and their operators, Hirsh Mohindra, Gaurav Mohindra and Preetesh Patel. Neither the three nor their lawyer could be reached for immediate comment. The lawsuit alleges harassing and abusive conduct; false, deceptive or misleading representations to consumers; and violations of the Illinois Consumer Fraud Act, among other things.
Madigan and the FTC said a federal court has temporarily halted the businesses’ operations.
The complaint said that, since at least 2011, the defendants targeted consumers who had received, inquired about or applied for payday loans, typically online.
The defendants then allegedly called consumers, told them they were delinquent on payday loans or other short-term debt, and pressured them into paying debts they either did not owe or that the defendants had no authority to collect.
The FTC and Madigan’s office said they’re not certain how the Westmont parties got consumers’ detailed financial and personal information; possible theories are that the payday loan sites might have been bogus or the sites may have been lead generators that sold the information to unscrupulous parties.
The defendants allegedly used that detailed information, including Social Security numbers, to convince consumers that they immediately owed money to them when in fact they didn’t.
They also allegedly threatened them with lawsuits or arrest and falsely said they would be charged with “defrauding a financial institution” and “passing a bad check.”
Besides harassing consumers with phone calls, the defendants disclosed debts to the consumers’ relatives, friends and employers, the lawsuit said.
In response to the defendants’ repeated calls and alleged threats, the lawsuit said, many consumers paid the debts, even though they may not have owed them, because they believed the defendants would follow through on their threats or they simply wanted to end the harassment.
Tampa, Fla., resident Joshua Rozman, who was at the news conference, said he had taken out two payday loans to pay the rent when one roommate moved out and another lost his job.
In June 2015, he said he began receiving calls from Stark, which claimed that he had defaulted on a $300 payday loan that he took out a few months earlier. The callers said he now owed $800. They knew all of his personal information and threatened legal action.
Rozman said he paid Stark the $230 he had in his bank account and then became suspicious. He checked with his lender and found he didn’t owe anything. The company then got more aggressive and eventually began contacting his sister. He eventually filed a complaint with the FTC
At the request of the Federal Trade Commission and the Illinois Attorney General, a federal court has temporarily halted a Chicago-area operation that allegedly threatened and intimidated consumers to collect phantom payday loan “debts” they did not owe, or did not owe to the defendants. The defendants also allegedly illegally provided portfolios of fake debt to other debt collectors – this is the FTC’s first case alleging that practice.
“It’s illegal to harass people to pay debts they clearly don’t owe, and to sell phony debts to other debt collectors,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We’re proud to partner with the Illinois Attorney General to halt these egregious debt collection practices.”
“Phantom debt collection is one of the most brazen scams today,” Illinois Attorney General Lisa Madigan said. “With the FTC, we are working to protect consumers by shutting down these scam operations.”
According to the complaint, since at least 2011, the defendants used a host of business names to target consumers who obtained or applied for payday or other short-term loans, pressuring them into paying debts they either did not owe or that the defendants had no authority to collect.
The complaint charges that the defendants called consumers and demanded immediate payment for supposedly delinquent loans, often armed with consumers’ sensitive personal and financial information. Defendants also allegedly threatened consumers with lawsuits or arrest, and falsely said they would be charged with “defrauding a financial institution” and “passing a bad check” – even though failing to pay a private debt is not a crime. In addition, the complaint claims that since 2015, the defendants have held themselves out as a law firm with authority to sue and obtain substantial judgments against delinquent consumers.
The defendants also allegedly harassed consumers with improper phone calls, disclosed debts to relatives, friends and co-workers, failed to notify consumers of their right to receive verification of the purported debts, and failed to register as a debt collector in Illinois, as required by state law.
The complaint notes that in response to the defendants’ repeated calls and alleged threats, many consumers paid the debts, even though they may not have owed them, because they believed the defendants would follow through on their threats or they simply wanted to end the harassment.
In addition to illegal collection allegations, the defendants are charged with providing bogus payday loan debt portfolios to other debt buyers, who then tried to collect the fake debts. According to the complaint, the defendants represented that the portfolios included delinquent debts owed to specified lenders and that the defendants had the right to market those lenders’ debts. However, those lenders had not made loans to the consumers identified in the portfolios, or authorized the defendants to market any of their debts.
The defendants are Stark Law LLC, also doing business as Stark Recovery; Stark Legal LLC; Ashton Asset Management Inc.; CHM Capital Group LLC, also d/b/a Capital Harris Miller & Associates; HKM Funding Ltd.; Pacific Capital Holdings Inc., formerly known as Charles Hunter Miller & Associates Inc. and also d/b/a Pacific Capital; Hirsh Mohindra, also d/b/a Ashton Lending LLC; Gaurav Mohindra; and Preetesh Patel.
The FTC and the Illinois Attorney General’s Office thank the Village of Westmont Police Department and Better Business Bureau of Chicago and Northern Illinois for their valuable assistance with this matter.
The Minnesota Department of Commerce took eight actions. It imposed fines of up to $50,000 against Alliant Capital Management LLC, Premier Recovery Group JD and Associates, Mountain West Legal Solutions, Credence Resource Management LLC, Selene Finance, and Credit Protection Association for various violations, including failing to obtain a collection agency license, failing to properly register collectors, and using deceptive, abusive, or unlawful collection tactics. It also obtained a court order placing Weinerman and Associates into receivership for improperly handling client funds, failing to maintain a license, and other violations.
The Colorado Department of Law entered into a stipulated final order against Collecto Inc., d/b/a EOS CAA, imposing a $99,000 penalty for violating notice requirements for consumers and improper credit reporting.
The Pennsylvania Attorney General’s office filed an Assurance of Voluntary Compliance with Foot and Ankle Surgery Center LLC, providing for $7,000 in civil penalties plus costs of investigation for allegedly unlawful collection notices that falsely indicated that they were official court documents or legal papers.
The Indiana Attorney General’s Office entered into an Assurance of Voluntary Compliance with RoTech Holdings Ltd. to resolve allegations that the respondents unlawfully harassed and deceived consumers. The AVC prohibits RoTech from collecting debt from Indiana consumers, and orders it to pay nearly $5,000.
The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division. The court granted the FTC’s request for a temporary restraining order on March 22, 2016.
By: Christopher Koegel, Assistant Director, Division of Financial Practices | Mar 21, 2016 11:19AM
We’ve learned that portfolios of alleged payday loan debts serviced by AMG Services are circulating in the debt collection marketplace. The alleged lenders are USFastCash, 500FastCash, OneClickCash, Ameriloan, United Cash Loans, AdvantageCashServices, and StarCashProcessing. But these alleged debts are bogus. The consumers do not owe the alleged debts, and the lenders have never authorized, assigned, or sold any of their loans for third-party collection.
There can be no doubt that these loans are bogus. The former general counsel of AMG Services signed a declaration under penalty of perjury in the FTC’s lawsuit against Delaware Solutions, stating that USFastCash, 500FastCash, OneClickCash, Ameriloan, United Cash Loans, AdvantageCashServices, and StarCashProcessing loans have never been placed with, or sold to, any third party for collection.
So, what does all of that mean? If you are in possession of one of these portfolios, do not attempt to collect these debts, or try to sell the portfolio to anyone else. If someone tries to sell a portfolio of these debts to you, do not buy it.
If you do attempt to collect on these debts or sell them to someone else, you will likely be violating either the Fair Debt Collection Practices Act, the Federal Trade Commission Act, or both. Indeed, the FTC has already sued one debt collection business for, among other things, continuing to collect on one of these portfolios after being informed by AMG that the loans were bogus.
If you have any information about portfolios of purported USFastCash, 500FastCash, OneClickCash, Ameriloan, United Cash Loans, AdvantageCashServices, or StarCashProcessing payday loan debts being bought, sold, collected upon, or peddled, please contact Michael Goldstein at firstname.lastname@example.org(link sends e-mail) or 202.326.3673.
Defendants Bombarded Consumers with Millions of Unwanted Illegal Recorded Calls
The Federal Trade Commission has brought a federal court action to stop a telemarketing operation that allegedly made illegal robocalls promising consumers energy savings, in an effort to generate leads to sell to solar panel installation companies.
According to the complaint, defendants Francisco Salvat and his companies placed more than 1.3 million illegal pre-recorded telemarketing calls to consumers with phone numbers on the Do Not Call Registry. The defendants allegedly claimed to be attempting to help consumers with their energy costs.
“Mr. Salvat’s companies ignored the Do Not Call Registry and made illegal robocalls,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Breaking the law isn’t a great way for a company to introduce itself to potential customers.”
According to the complaint, the defendants’ prerecorded calls made statements such as: “This is an urgent call about your energy bill,” and “stop the 14% increase coming soon.” Consumers were told to “push one” to lower their electric bill. Those who did were transferred to a telemarketer who asked if the consumer was interested in solar panels.
If the consumer said yes, the telemarketer scheduled an appointment with a private solar installation company and sold the consumer’s information to that company as a customer lead. When consumers asked the defendants not to call them again, the FTC alleges their requests were often ignored.
Based on this conduct, the FTC charged the defendants with violating the Telemarketing Sales Rule by: 1) calling consumers whose numbers are on the DNC Registry; 2) continuing to call consumers who had previously asked not to be called; 3) failing to transmit accurate caller-ID information; and 4) making illegal robocalls. The FTC is seeking a federal court order permanently barring the defendants from the illegal conduct, as well as civil penalties for their telemarketing violations.
The Commission vote to authorize the staff to refer the civil penalty complaint to the U.S. Department of Justice was 4-0. The Department of Justice filed the complaint on behalf of the Commission in U.S. District Court for the Central District of California against defendants: KFJ Marketing, LLC; Sunlight Solar Leads, LLC; Go Green Education; and Francisco J. Salvat, individually and as an officer of each of the three businesses.
NOTE: The Commission refers a complaint for civil penalties to the DOJ for filing 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. The case will be decided by the court.
“These defendants bought sensitive personal information from data brokers and used it to steal people’s money,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Misusing sensitive data causes real harm to consumers, and I’m pleased that the court banned the defendants from this conduct.”
The court has imposed a $43,083,720 judgment against Ideal Financial Solutions and its subsidiaries, Steven Sunyich, Christopher Sunyich, Michael Sunyich, and Melissa Sunyich Gardner, and a $36,575,542 judgment against Jared Mosher. The court banned the ringleaders, Jared Mosher, Steven Sunyich and Christopher Sunyich, from marketing, selling and handling any credit-related products or services. It banned all of the defendants from collecting or disclosing consumer account numbers except for transactions expressly authorized by the consumer.
Settlements entered in June 2014 banned Kent Brown and Shawn Sunyich from placing unauthorized charges on consumer financial accounts and collecting and disclosing consumer financial information without the consumer’s express consent. The orders imposed suspended $25 million judgments against each defendant, and Brown was required to liquidate his assets and turn them over to the FTC.
The U. S. District Court for the District of Nevada entered the final judgment against the remaining defendants on February 23, 2016.
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