In a new lawsuit filed in a Missouri federal district court, the CFPB alleges that BounceBack, Inc. violated the FDCPA and CFPA in connection with its operation of bad-check pretrial-diversion programs on behalf of more than 90 district attorneys’ offices throughout the United States.  Such programs require the writer of a dishonored check to pay the debt and also enroll in, pay for, and complete a financial education course.… Continue Reading

In its second case against a Voice over Internet Protocol (VoIP) service provider, the FTC announced that it has reached a proposed settlement with Alcazar Networks Inc. and its owner Gavin Grabias concerning the FTC’s charges that they facilitated tens of millions of illegal telemarketing phone calls.  The proposed settlement bars Alcazar and Grabias from engaging in similar misconduct in the future, requires them to screen and monitor their customers, and imposes a monetary penalty of $105,562.… Continue Reading

A recent settlement between the U.S. Department of Justice and a media conglomerate underscores the importance of implementing robust Telephone Consumer Protection Act compliance measures, including for third-party vendors.  In 2017, a jury found DISH Network LLC liable for its vendors’ violations of the Telemarketing Sales Rule and the Telephone Consumer Protection Act, as well as several state statutes. … Continue Reading

The CFPB recently issued a new no-action letter (NAL) to Upstart Network, Inc. regarding its automated model for making underwriting and pricing decisions on applications by consumers for unsecured, closed-end loans.  Upstart uses artificial intelligence techniques and alternative data in its model.

The new NAL is essentially a renewal of the NAL issued to Upstart in September 2017, which was the first NAL issued by the CFPB. … Continue Reading

The CFPB Ombudsman’s Office recently released its FY2020 annual report.  The Ombudsman’s Office is intended to serve as an independent, impartial, and confidential resource that assists consumers, financial entities, consumer or trade groups, and others in informally resolving process issues with the CFPB.

In the annual report, the Ombudsman provides examples of the Office’s work in FY2020 and discusses the types of internal and external engagement in which the Office has participated during that period. … Continue Reading

After discussing what real-time payments are and how they differ from fast payments, we look at the benefits of RTPs and potential for fraud, issues arising from the Fed’s plans to launch a RTP service, the laws and rules applicable to RTPs and how they bear on loss allocation, the pandemic’s effect on RTPs, and our expectations for the use of RTPs and the impact on fast payments generally.… Continue Reading

On November 20, 2020, the CFPB filed a lawsuit against a student-loan debt-relief company, FDATR, Inc., and its owners, Dean Tucci and Kenneth Wayne Halverson. FDATR was an Illinois company that involuntarily dissolved in September 2020.  Through telemarketing and telephone sales, FDATR promised to provide student-loan debt-relief and credit-repair services to consumers.… Continue Reading

On Monday and Tuesday, PLI held its two-day 25th Annual Consumer Financial Services Institute, which I co-chaired.  During the morning session of the first day, I co-moderated two consecutive panel discussions titled “Federal Regulators Speak,” with the first panel featuring CFPB and FTC representatives and the second panel featuring OCC and FDIC representatives. … Continue Reading

The FTC has announced a settlement of its first enforcement action targeting the practice of “debt parking.”  As described in the FTC’s complaint filed in a Missouri federal district court against Midwest Recovery Systems, LLC and its owners, this practice, also referred to as “passive debt collection,” involves the placing of purported debts on consumers’ credit reports without first attempting to communicate with consumers about the debts.… Continue Reading

The CFPB has issued its final Advisory Opinions Policy, which allows stakeholders to request interpretive guidance “to resolve regulatory uncertainty.”  While advisory opinions (AO) may address uncertainty in both statutes and regulations, the Bureau states in the Policy that it “will focus primarily on clarifying ambiguities in its regulations.”  The Policy was accompanied by the release of two AOs, one dealing with earned wage access (EWA) products and the other dealing with certain education loan products that refinance or consolidate a borrower’s pre-existing federal, or federal and private, education loans.… Continue Reading