Catch up on the bureau’s recent actions related to the accounts receivable management industry.
07/27/2023 1:45 P.M.
2 minute read
The Consumer Financial Protection Bureau continues to issue enforcement actions, research reports and bulletins on a regular basis.
Here are a few of the bureau’s updates you should know about this week:
CFPB to Provide $3.5 Million in Refunds to Consumers Overcharged for Federal Student Loan Assistance
This month, over 7,100 individuals who were charged illegal advance fees by Timemark Inc. for renegotiating, settling, reducing, or altering the terms of their federal student loans will be receiving a check in the mail.
The bureau settled with Timemark in July 2020 for violating the Telemarketing Sales Rule by requesting and receiving payments from consumers before altering the terms of their debts.
The company used telemarketing campaigns between 2016 and October 2019 to convince people with federal student loans to pay substantial fees of up to $699 for services that aimed to reduce or eliminate their monthly payments through loan consolidation, forgiveness, or income-driven repayment plans. These services, however, were already offered for free by the U.S. Department of Education.
“Under the Telemarketing Sales Rule, it is illegal to request or receive any fees for debt-relief services sold through telemarketing before the terms of the debt are altered or settled and the consumer has made at least one payment pursuant to the new arrangement,” according to the bureau’s release.
CFPB Orders Bank of America to Pay $250 Million for Illegal Practices
The CFPB has taken action against Bank of America for engaging in illegal practices, resulting in the bank being ordered to pay more than $100 million to harmed consumers and $150 million in penalties to the CFPB and the Office of the Comptroller of the Currency.
The violations included a systematic double-dipping scheme, withholding credit card rewards promised to customers and opening unauthorized accounts without customer knowledge or consent.
The bank has been ordered to stop these practices, disclose material limitations on rewards cards bonuses, and provide bonuses as advertised. The bank will compensate consumers for unlawful fees and unauthorized credit card accounts, totaling approximately $80.4 million in redress. Additionally, Bank of America will pay $90 million in penalties to the CFPB and $60 million to the OCC, marking a significant enforcement action against the bank.
Do you have an item to submit for the Regulatory Recap? Share it with us at [email protected], Attn: Lori Bowes.