Rising from the ashes of the 2008 financial crisis, the Consumer Financial Protection Bureau (CFPB) has managed to change the landscape of consumer financial information and access. In 2010, the Dodd-Frank Wall Street Reform along with the Consumer Protection Act established the Consumer Financial Protection Bureau.
Some have criticized the CFPB as an unnecessary expensive bureaucracy but they cannot argue with the effectiveness it has exhibited in giving consumers the information they need to understand the terms of financial agreements, restricting deceptive and abusive practices, taking consumer complaints, monitoring financial markets and bringing legal action against financial institutions.
To that end, there have been several major settlements that actually put money back into consumers’ pockets. Here are 7 company settlements that might impact your bottom-line:
From Feb. 2010 to June 2013, Citibank broke the law by providing inaccurate and inflated APR information for almost 130,000 credit card accounts that were sold to 16 different debt buyers. The debt buyers then used the inflated APR in debt collection attempts. Citibank also failed to timely forward approximately 14,000 customer payments to the debt buyers. Citibank’s actions were so egregious in that Citibank claimed the APR was 29 percent when it was actually 0 percent. Consumers paid about $4.89 million to debt buyers who used an inflated APR. Citbank must refund an estimated $4.89 million to roughly 2,100 consumers for all payments made from Feb. 1, 2010 to Nov. 14, 2013 to debt buyers that referenced an inflated APR provided by Citibank.
2. Toyota Motor Credit
Minority borrowers who paid higher rates for auto loans will receive up to $21.9 million. Toyota Motor Credit violated the Equal Credit Opportunity Act by permitting and incentivizing markup policies that resulted in African-American and Asian and Pacific Islander borrowers paying higher interest rates for their auto loans than non-Hispanic white borrowers. These markups were without regard to the creditworthiness of the borrowers. Thousands of African-American borrowers were charged, on average, over $200 more for their auto loans, and thousands of Asian and Pacific Islander borrowers were charged, on average, over $100 more for their auto loans. Toyota Motor Credit will pay $19.9 million into a settlement fund that will go to affected African-American and Asian and Pacific Islander borrowers whose auto loans were financed by Toyota Motor Credit between January 2011 and Feb. 2, 2016. An additional $2 million will go into a fund to compensate affected African-American and Asian and Pacific Islander borrowers in the time period between Feb. 2, 2016 and when Toyota Motor Credit implements its new pricing and compensation structure.
3. Westlake Services and Wilshire Consumer Credit
Westlake Services, a non-direct auto finance company and Wilshire Consumer Credit, its auto title lending subsidiary pressured borrowers by using illegal debt collection tactics. The CFPB found that Westlake Services, LLC and Wilshire Consumer Credit, LLC deceived consumers by calling under false pretenses and using phony caller ID information, falsely threatened to refer borrowers for investigation or criminal prosecution, and illegally disclosed information about debts to borrowers’ employers, friends, and family. Borrowers were deceived into thinking they were being called by repossession companies, law enforcement, pizza delivery restaurants, flower shops, other third parties, or even the borrowers’ own family and friends by caller id spoofing. Since January 2010, Westlake and Wilshire debt collectors have used Skip Tracy to place or receive calls associated with over 137,000 loan accounts. These two companies falsely threatened to refer borrowers for investigation or criminal prosecution. Borrowers were also tricked into making payments under the pretense they could redeem their repossessed vehicles. The companies were ordered to provide consumers $44.1 million in cash relief and balance reductions.
EZCORP provided high-cost, short-term, unsecured loans, including payday and installment loans, in 15 states. Names it operated under included “EZMONEY Payday Loans,” “EZ Loan Services,” “EZ Payday Advance,” and “EZPAWN Payday Loans.” The CFPB found that EZCORP collected debts from consumers through unlawful in-person collection visits at their homes or workplaces, risked exposing consumers’ debts to third parties, falsely threatened consumers with litigation for non-payment of debts, and unfairly made multiple electronic withdrawal attempts from consumer accounts, causing mounting bank fees. EZCORP must refund $7.5 million to 93,000 consumers who made payments after illegal in-person collection visits or who paid fees to EZCORP or their banks because of unauthorized or excessive electronic withdrawal attempts covered by this order.
5. EOS CCA (EOS)
A Massachusetts debt collection firm, EOS CCA knowingly collected and reported old cellphone debt to the credit bureaus it could not verify as accurate. EOS provided inaccurate information to credit bureaus about the debt and failed to correct reported information that it had determined was inaccurate. EOS learned of significant problems with the debt portfolio a few months after acquiring it. The portfolio contained fraudulent, already paid, or already settled debts. Despite this, EOS continued to collect and report on the debts, including debts that consumers disputed, without verifying that those debts remained outstanding. EOS must reimburse at least $743,000 to consumers by providing full refunds of payments made on debts that were disputed but that EOS did not verify. In addition, EOS must cease collecting and reporting on disputed AT&T debt. If a consumer has disputed the debt and EOS is unable to substantiate it, EOS would be required to ask the credit bureau to remove any information about the debt from the consumer’s file.
July 21, 2015 the CFPB ordered Citibank and some of its subsidiaries to refund 700 million to customers for unfair and deceptive credit card practices. The settlement involves Citibank billing some customers for credit card add-on products, deceptively marketing those products, and deceptive collection practices. Citibank agreed to pay about $700 million in refunds on about 8.8 million accounts. Affected customers should have already received a statement credit or refund. If you think you were due a refund but did not receive it you can submit a complaint online.
7. Morgan Drexen
Morgan Drexen is a nationwide debt relief company the CFPB sued in 2013. Charges involved a violations of the Telemarketing Sales Rule and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Morgan Drexen allegedly charged illegal upfront fees for debt relief services and misrepresenting their services to consumers. The Telemarketing Sales Rule prohibits deception in telemarketing and generally prohibits debt relief providers from charging a fee for any debt relief service until they have actually settled, reduced, or changed the terms of at least one of the consumer’s debts. Part of the judgment orders Morgan Drexen to pay $132,882,488 in restitution. Borrowers who enrolled in the company’s program between Oct. 27, 2010, when the federal ban on upfront fees went into effect, and June 18, 2015, when Morgan Drexen stopped selling debt relief services. You don’t need to do anything to get that compensation—the Bureau will contact you if and when funds become available to compensate you.
To get more detail about the above settlements directly visit the Consumer Financial Protection Bureau’s website. Keep in mind that when a large number of consumers are owed a refund by big companies, the scammers crawl out of their holes. Watch out for anyone claiming they can help you get a refund. You don’t need an intermediary to get a refund. Contact the CFPB or the company itself for information on refunds due to you.