FTC Sending More than $147,000 in Refunds to People Affected by Student Loan Debt Relief Scam

The Federal Trade Commission is sending more than $147,000 in full refunds to people affected by a student loan debt relief scam.

House Passes Comprehensive Debt Collection Improvement Act That Would Expand Multiple Consumer Finance Laws

Last week, the U.S. House of Representatives passed a bill, H.R. 2547, on a strict party-line vote. Titled "The Comprehensive Debt Collection Improvement Act, the bill would amend several consumer finance statutes for the first time in decades and impose new requirements and limitations on debt collectors, among others. Its fate now rests in the U.S. Senate.

The State of Household Debt in America

American households are becoming increasingly indebted. In 2003, total household debt was $7.23 trillion, but that figure has recently doubled to $14.56 trillion in 2020. With just under 130 million households in the country, this equates to an average of $118,000 of debt per household. Here’s how the various forms of U.S. household debt compare.

Hundreds of PPP Loans Went to Fake Farms in Absurd Places

The shoreline communities of Ocean County, New Jersey, are a summertime getaway for throngs of urbanites, lined with vacation homes and ice cream parlors. Not exactly pastoral — which is odd, considering dozens of Paycheck Protection Program loans to supposed farms that flowed into the beach towns last year.

FDIC Issues Request for Information on Digital Assets

WASHINGTON — The Federal Deposit Insurance Corporation (FDIC) today announced that it is gathering information and soliciting comments from interested parties about insured depository institution’ current and potential digital asset activities.

FCC Creates Public Database to Track Compliance with New Robocall-Killing Program

The Federal Communications Commission is moving ahead with a program requiring telephone service providers to verify the origins of phone calls—potentially eliminating spoof and robocalls—and is creating a new public database to track compliance among carriers. This summer, telephone service providers in the U.S. will be required to comply with the Secure Telephone Identity Revisited, or STIR, and Signature-based Handling of Asserted Information Using toKENs, or SHAKEN, which requires tracking and accurately displaying the true caller ID of incoming calls. Compliance with these standards will be tracked in a new Robocall Mitigation Database and posted publicly for all to see, according to a notice posted in the Federal Register.

TCPA Case Dismissed Because Agents Lacked Authority

Under the TCPA, liability attaches to the party who makes the call. Easy enough. But it goes further than that. The FCC has interpreted the TCPA to reach sellers who can be held liable for the acts of “a third-party marketer . . . under federal common law principles of agency.” In re Joint Petition Filed by Dish Network, LLC, et al., 28 F.C.C. Rcd. 6574 at par. 1 (2013). This agency principle includes “apparent authority and ratification.” Id., par. 28.

FTC Data Shows Huge Spike in Cryptocurrency Investment Scams

Since October 2020, consumers have reported losing more than $80 million to cryptocurrency investment scams, an increase of more than ten-fold year-over-year, according to a new data analysis from the Federal Trade Commission. In a new consumer protection data spotlight, the FTC breaks down the contents of nearly 7,000 reports received from consumers about these scams in the last quarter of 2020 and the first quarter of 2021. The median amount consumers reported losing to the scams was $1,900.

Cybersecurity: How talking about mistakes can make everyone safer

The healthiest way to approach keeping people safe from online threats is to talk about misjudgements and errors – and to do so in a way that lets them understand that almost everyone has made a cybersecurity mistake at some point. Encouraging discussion around the threats people have faced can go a long way to helping others becoming more aware of what to look out for – and to avoid falling victim to cyber criminals themselves.

Only 19% Spent Their $1,400 Stimulus Check, Most Paid Off Debt or Saved the Funds

A recent report shows that out of the American households that received the latest stimulus check of $1400, only 19 percent spent the money right away, as opposed to saving the funds or paying off existing debts.

After National Search, the DFPI Hires ‘Fintech’ Legal Expert to Lead New Financial Technology and Innovation Office

SACRAMENTO – After a nationwide search, the California Department of Financial Protection and Innovation (DFPI) announced today it has hired Christina Tetreault to lead the new Office of Financial Technology and Innovation, which will provide a national model for fostering responsible innovation by offering early guidance to entrepreneurs developing financial products and services in California.

U.S. Banks Could Shed 200,000 Jobs in Decade in Efficiency Drive

(Bloomberg) — U.S. banks could cut as many as 200,000 jobs in the next decade as they try to boost efficiency to compete with fintech and other upstarts encroaching on their territory, according to Wells Fargo & Co.

Agencies Extend Comment Period on Request for Information on Artificial Intelligence

WASHINGTON, D.C. – Five federal financial regulatory agencies announced today they will extend the comment period on the request for information on financial institutions’ use of artificial intelligence (AI) until July 1, 2021.

ATTORNEY GENERAL HERRING’S CONSUMER PROTECTION SECTION HAS RECOVERED MORE THAN $403 MILLION SINCE 2014

RICHMOND (May 14, 2021) – During Attorney General Mark R. Herring’s time in office, his enhanced Consumer Protection Section has recovered more than $403 million in relief for consumers and payments for violators. Attorney General Herring’s Consumer Protection Section protects Virginians from being exploited by abusive, deceptive, predatory, or illegal business practices. Following a major reorganization and enhancement in 2016, the OAG’s Consumer Protection Section has been even more effective in fighting for the rights of Virginians. Additionally, since 2014, Attorney General Herring’s Consumer Protection Section has transferred approximately $59 million to the General Fund.

CFPB Takes Action Against Debt-Settlement Company for Charging Consumers Unlawful Fees

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) requested today that a federal district court enter a final judgment and order that, if entered by the court, would require DMB Financial, LLC to pay consumers at least $5.4 million for charging unlawful fees and failing to provide required disclosures to its customers, and a civil penalty. The CFPB alleges that DMB’s actions violated the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act (CFPA).

Operators of Student Loan Debt Relief Scheme Banned From Providing Debt Relief Services as Part of Settlement with FTC

The operators of a student loan debt relief scheme are banned from providing debt relief services and have agreed to settle Federal Trade Commission charges that they collected illegal upfront fees and falsely promised to lower or even eliminate consumers’ loan payments or balances.

FTC Data Shows Huge Spike in Cryptocurrency Investment Scams

Since October 2020, consumers have reported losing more than $80 million to cryptocurrency investment scams, an increase of more than ten-fold year-over-year, according to a new data analysis from the Federal Trade Commission.

Small business owners missed out on thousands of dollars in loans when PPP funding ran out early

When the Paycheck Protection Program ran out of funding the first week of May – weeks ahead of its May 31 deadline – it was a huge surprise to the staff of El Museo del Barrio in New York. The Latino cultural institution in upper Manhattan was counting on a second-draw loan from the program to recover from the serious impact of the pandemic, which closed the museum for months and meant it had to cancel two major fundraising galas.

Senators urge CFPB to “reconsider” QM delay

Compliance attorneys and mortgage industry lobbyists aren’t the only ones wishing the Consumer Financial Protection Bureau (CFPB) would proceed with the General Qualified Mortgage Final Rule as it had initially planned. The same day the CFPB announced plans to delay the compliance date, Sens. Mark Warner (D-VA) and Tim Scott (R-SC) fired off a letter to CFPB Acting Director Dave Uejio, urging the agency to “reconsider” the move. “We urge the Bureau to allow the General QM Final Rule to proceed as intended and commit to a longer-term approach to monitoring the broader housing market implications of mortgage lending under the rule,” the pair wrote.

Bank of America reaches $75 mln settlement over excessive fees

May 14 (Reuters) - Bank of America Corp agreed to pay $75 million to settle a lawsuit accusing the second-largest U.S. bank of extracting overdraft fees it didn't earn from customers with savings and checking accounts, court papers show.

eBay takes significant step into financial services with embedded lending product

eBay launched a lending product for its 300,000 UK-based small and medium-sized business (SMBs) sellers on Wednesday, named Capital for eBay Business Sellers (CEBS), per Finextra. CEBS is being offered in partnership with embedded finance platform YouLend, which is backed by institutional investors like Allianz Global Investors. It allows SMBs to apply for loans through eBay UK's platform and access funding between £500 ($641.18) to £1 million ($1.3 million). The lending application process should take only minutes, and funds will often be distributed the same day as the application.

House bill aims to protect consumers from debt collector harassment

WASHINGTON — The House passed a bill Thursday to ease the economic consequences for service members, medical patients and others from rising consumer debts. The Comprehensive Debt Collection Improvement Act, which passed 215-207, would place new restrictions on debt collectors and credit bureaus. The legislation has been championed by consumer advocates and congressional Democrats but sharply criticized by Republicans and the banking industry.

Debt Collectors Spending Big to Block a Crackdown

Two months ago, debt collectors won a victory when congressional lawmakers allowed stimulus checks to be garnished by creditors and government agencies.

U.S. Households Borrow More Than Ever, Just Not on Credit Cards

(Bloomberg) -- Americans increased their borrowing to a record of $14.6 trillion in March, driven by home and auto loans. But the growth masked what Federal Reserve Bank of New York researchers called a “confounding” decline in credit-card balances during a quarter when retail sales soared and travel resumed.

Governor Cuomo Signs Legislation Protecting New Yorkers’ COVID-19 Stimulus Payments from Debt Collectors

Governor Andrew M. Cuomo today signed legislation (S.5923-A/A.6617-A) protecting New Yorkers' COVID-19 stimulus payments from being garnished by debt collectors. All relief payments to New Yorkers under these federal acts, including stimulus payments, tax refunds, rebates, and tax credits to support individuals and children qualified for or received prior to the effective date, will be protected. This legislation also creates a carve-out for claims brought by individuals who have an interest in the relief payments to ensure that these funds can be collected to pay child and spousal support and to collect payments in situations involving fraud. 

Household debt climbs to $14.64 trillion, due to jump in mortgages and car loans

Consumer debt edged higher during the first three months of 2021, due primarily to a jump in mortgages and auto loans, the Federal Reserve reported Wednesday. Total household debt balances rose by $85 billion in the first quarter, a 0.6% increase that brought the total level to $14.64 trillion. Fueled by low rates and a red-hot housing market, mortgage debt swelled in the period by $117 billion, or about 1.2%, to $10.16 trillion, according to the New York Fed’s quarterly Report on Household Debt and Credit. Auto loans increased by $8 billion, to $1.38 trillion, while student debt balances rose by $29 billion to $1.58 trillion, even though many loans are in forbearance granted during the coronavirus pandemic.

Interest rates on new federal student loans will rise by nearly 1% as of July. Here’s what borrowers need to know

The interest rate on new federal student loans is going up. The government sets annual interest rates on the debt once a year, and the percentage is based on the 10-year Treasury note. Despite the uptick, rates remain low by historical standards, said higher education expert Mark Kantrowitz. Although the U.S. Department of Education hasn’t formally announced the new rates for the 2021-2022 academic year, Kantrowitz has calculated what the new figures will likely be. By Kantrowitz’ estimations, the interest rate on federal student loans will climb by 0.98%.

Supreme Court Holds the FTC Act Gives No Authority to Bypass Administrative Cease-and-Desist Orders

In recent years, the Federal Trade Commission (FTC) has with increasing frequency sued in federal court under the purported authority of Section 13(b) of the Federal Trade Commission Act¹ (FTC Act) to obtain restitution of losses or disgorgement of profits resulting from “unfair methods of competition” or “unfair or deceptive acts or practices.” In doing so, the FTC has circumvented often time-consuming FTC administrative hearings that can produce nothing more than a cease-and-desist order.

Need a credit card or auto loan? Banks are making them easier to get

Banks are loosening the purse strings for consumer borrowers.

Credit cards, auto loans and other personal loans are all getting easier to come by, more than a year into a pandemic that spooked lenders and caused them to tighten lending standards significantly. The net share of banks that loosened underwriting standards for credit cards hit a high in roughly the first quarter, according to a survey of loan officers conducted by the Federal Reserve. The net share of banks relaxing underwriting on other consumer loans such as installment loans also notched a record. For auto loans, that share was the highest level in more than eight years.

State Street Corporation to pay $115M criminal penalty

BOSTON (AP) — State Street Corporation has agreed to pay a $115 million criminal penalty to resolve charges that it schemed to defraud clients by secretly overcharging some of its customers for as long as 17 years, federal investigators said Thursday.

American credit card balances see ‘remarkable’ drop while student loan debt keeps rising

American credit card balances saw a 'remarkable' drop in the first quarter of 2021, according to newly published New York Fed data, while student loan debt kept rising despite a payment and interest pause. 

TCPA 2.0: A Call For Congress to Get Serious About Robocalls While Protecting the First Amendment—Here’s How

Back in 1991 Congress passed the one and only federal law designed to prevent Robocalls—the Telephone Consumer Protection Act (TCPA). As any American can tell you, the statute has proven completely ineffective at preventing unwanted Robocalls from reaching our cell phones. This is true despite the fact that the law contains one of the richest private rights of action ever created by Congress—meaning that thousands of TCPA lawsuits are filed every year seeking to enforce the statute, but mostly against legitimate American businesses and not the real bad guys.

WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS ANNOUNCES LAUNCH OF THE CENTER FOR FINTECH INFORMATION (CFI)

Olympia – The Washington State Department of Financial Institutions (DFI) announces the creation of the Center for FinTech Information (CFI) within the agency to facilitate communication between DFI and entrepreneurs, start-ups, and fintech companies. Director Charlie Clark announced the comprehensive new site https://dfi.wa.gov/fintech and additional tools for innovative companies seeking further guidance at this morning’s Washington Technology Industry Association (WTIA) Town Hall.

PLAYING WITH FIRE: Court Confirms No Non-Delegable Duty to Control Telemarketers Under TCPA in Most Roundabout Way Possible

Ever since the fantastic decision of Smith v. State Farm Mut. Auto. Ins. Co., 30 F. Supp. 3d 765 (N.D. Ill. 2014) my TCPA practice guide has had a section providing “there is likely no non-delegable duty to control third-parties under the TCPA.”

Payment Card Rules v. PCI DSS: District Court Opens the Door to Potential Data Breach Tort Liability Based on Common Law Duties and Section 5 of the FTC Act

CPW has been covering data breach litigations for some time (as a reminder of recent rulings of significance, check out our prior posts here and here).  This includes In Re: Wawa, Inc. Data Security Litigation and key related cases back in November and January.  On Thursday, the U.S. District Court for the Eastern District of Pennsylvania issued its long awaited opinion, granting in part and denying in part a motion to dismiss filed by Wawa, a convenience store chain, stemming from a class action lawsuit filed against it by a group of credit unions following an alleged data breach.  Read on to learn how it went down and what it may mean for other data breach litigations.

TitleMax and State Argue Over Short-Term Loan Term Limits Before Supreme Court

Nevada law allows for businesses to extend short-term, high-interest loans of various types to individuals, but sets a generally strict 210-day time limit to avoid the massive accumulation of interest. The law allows lenders to give grace periods after the 210-day timeframe, but only under the terms that a lender does not offer any new loan agreement or charge the customer additional interest.

Unlike Dollar Loan Center or other well-known “payday lenders,” TitleMax offers what are called title loans, which are extended after a person exchanges the title of their vehicle for collateral. State law prohibits title loans from exceeding the value of a car, but state regulators argued in court that the company’s “refinancing” practices violated the intent of the law.

Telrock supports its rapid growth with the appointment of a dedicated Chief Information Security Officer to its senior management team

Atlanta, GA and London, UK – May 12, 2021 – Telrock is proud to announce and welcome Ray Jackson as the company’s newly appointed Chief Information Security Officer (CISO). Ray has more than 20 years of experience in IT and Information Security (InfoSec) including a prior position at Moneycorp, a global payment services Fintech. Ray has extensive payment card security knowledge, through prior delivery of IT Security consultancy and as a Payment Card Industry (PCI) Data Security Qualified Security Assessor. Some of his impressive accreditations include CESG Certified Professional, Certified Information Systems Security Professional, and ISO27001 Certified ISMS Lead.

Microsoft 365 email data breaches take center stage amid WFH in a new report

According to the software company Egress, 85% of organizations using Microsoft 365 have experienced an email data breach.

Over the last year, organizations worldwide have adopted remote work policies to mitigate the spread of COVID-19 in-house. During this time, companies have tapped virtual collaboration tools to enable remote operations with varying degrees of success. On Wednesday, software company Egress released a report titled "Outbound email: Microsoft 365's security blind spot" highlighting email data breaches and IT frustrations during the coronavirus pandemic.

CFPB Sends Notification Letters to Landlords Regarding COVID-19 Evictions

On May 3, 2021, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) sent notification letters reminding the nation’s largest apartment landlords of federal protections in place to keep tenants in their homes and stop the spread of COVID-19.   The Notification Letter points to the Centers for Disease Control and Prevention (CDC) eviction moratorium for non-payment of rent (CDC Moratorium), which the CDC extended through June 30, 2021, as well as recent guidance from the CFPB and FTC in support of the CDC Moratorium.

What’s your vaccination status? Key legal considerations before asking your employees about theirs

With 2019 novel coronavirus (COVID-19) vaccines available throughout the U.S., many employers are eager to normalize operations. For business planning purposes, surveying employees regarding their vaccination status may be a helpful tool in understanding if employee are, or plan to become, vaccinated.

If your business is considering surveying employees about their vaccination status, consider these four key legal areas before you act:

Alaska Court System starts bringing back some online services after cyberattack

The Alaska Court System restored some online services Tuesday after a cyberattack forced the court system to disconnect many of its operations from the internet at the beginning of May, but it was unclear how long a full recovery may take.

The court system disconnected applications from the internet on May 1 after a cybersecurity alert on April 29 pointed to unusual activity, it said in a statement Tuesday. Someone outside the network placed malware on the system, including four servers and two computers, according to the court system.

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