Banks, auto lenders, credit card companies, debt collectors, mortgage lenders, and more are singled out for “illegal practices” against consumers in a CFPB report summarizing the bureau’s recoveries in the first half of the year.
According to the bureau, through supervisory actions, it returned $14 million to more than 100,000 consumers from January through June of this year. The agency said it took the actions (and obtained the recoveries) after it found “companies deceiving consumers and violating the law.”
“Through supervision, the CFPB is putting an end to practices that harm consumers and taking proactive steps to prevent future violations,” said CFPB Director Richard Cordray in a release.
Among the key issues summarized by CFPB:
- Banks deceived consumers about checking account fees and overdraft coverage: One or more institutions deceived consumers by inaccurately describing when checking account service fees would be waived.
- Credit card companies deceived consumers about the cost and availability of pay-by-phone options: The Bureau’s examiners found that customer service representatives of at least one credit card company disclosed only costly pay-by-phone fees while omitting mention of much cheaper payment options.
- Auto lenders wrongly repossessed borrowers’ vehicles: CFPB said its examiners found that one or more auto loan servicers were repossessing vehicles after the repossession was supposed to be cancelled, even though many companies give borrowers options to avoid repossession of their vehicle if a loan is delinquent or in default.
- Debt collectors improperly communicated about debt: The bureau said it found that that one or more third-party collectors did not confirm they had contacted the right person before starting collections, or wrongly attempted to collect from consumers who were not responsible for the debt, even though collectors generally must obtain consent of the person owing the debt before discussing with other parties.
- Mortgage companies failed to follow Know Before You Owe mortgage disclosure rules: Examiners found that one or more companies overcharged closing fees to consumers and one or more companies wrongly charged application fees before consumers had agreed to the mortgage transaction (but also found that, in general, both banks and nonbanks were able to effectively implement and comply with the Know Before You Owe mortgage disclosure rule changes).
- Mortgage servicers failed to follow the Bureau’s servicing rules: One or more mortgage servicers offered a forbearance option to consumers to help them prevent foreclosure, but did not let the borrower know of their right to complete an application to be considered for other options. In addition, they did not exercise reasonable diligence in collecting information needed to complete the borrower’s application. Additionally, one or more servicers, through a vendor, also provided borrowers mortgage statements that failed to specifically list fees charged.
Other issues of concern named by the bureau in the report included remittances, service providers, short-term small-dollar lending, and fair lending.
LINK:
Supervisory Highlights: CFPB activities from January through June 2017