CFPB action has refunded $14 million to wronged consumers this year alone
Inside Subprime: September 18, 2017
By Caroline Thompson
The Consumer Financial Protection Bureau’s actions during the first half of 2017 have helped more than 100,000 consumers get back a total of $14 million after being wronged by predatory lenders, big banks, credit card companies, pay-by-phone schemes, and other illegal exploits.
“The Bureau’s recent supervision work has returned $14 million to more than 100,000 consumers, and found companies deceiving consumers and violating the law,” said CFPB Director Richard Cordray. “Through supervision, the CFPB is putting an end to practices that harm consumers and taking proactive steps to prevent future violations.”
A report released last week detailed the CFPB’s regulatory actions and its positive consequences for consumers, who have very little leverage or power when going up against huge corporations on their own. The CFPB is authorized under the Dodd-Frank Wall Street Reform and Consumer Protection Act to oversee the actions of banks and credit unions with more than $10 billion in assets, and other financial institutions like mortgage companies, student lenders and payday lenders.
The $14 million in consumer relief was a result of the CFPB holding these institutions accountable for shady, often illegal practices. Among the report’s findings in this area were:
- Banks deceiving consumers about fees on checking accounts and overdraft “protection.”
- Credit card companies lying about the cost and availability of pay-by-phone options.
- Car lenders erroneously repossessing borrower vehicles.
- Debt collectors breaking communication laws.
- Mortgage lenders ignoring “Know Before You Owe” disclosure rules, which prevent lenders from charging application fees before potential borrowers agreed to the mortgage transaction.
- Mortgage lenders breaking CFPB servicing laws.
“Today’s report shares information that companies can use to comply with federal consumer financial law,” wrote a spokesperson for the CFPB in a press release. “When CFPB examiners find problems, they alert the company and outline necessary remedies. These steps may include paying refunds or restitution, or taking actions to stop illegal practices and assure future compliance such as implementing new policies, or improving training or monitoring. When appropriate, the CFPB opens investigations for potential enforcement actions.”
To read more about the CFPB, check out these related articles:
- Percentage of student borrowers more than $20K in debt has doubled since 2002
- ‘Frequent overdrafters’ more likely to have subprime credit scores, study finds
- Credit repair scam threatened with shut-down and fined $150,000
- Californians will soon be able to legally sue their banks