Dec 17, 2021 | Archive
The CFPB is concerned about accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology.
Buy now, pay later credit is a type of deferred payment option that generally allows the consumer to split a purchase into smaller installments, typically four or less, often with a down payment of 25 percent due at checkout. The application process is quick, involving relatively little information from the consumer, and the product often comes with no interest. Lenders have touted BNPL as a safer alternative to credit card debt, along with its ability to serve consumers with scant or subprime credit histories.
According to the CFPB, merchants are adopting BNPL programs and are willing to typically pay 3 percent to 6 percent of the purchase price to the companies, similar to credit card interchange fees, because consumers often buy more and spend more with BNPL. Indeed, BNPL’s use has spiked during the COVID-19 pandemic and throughout the holiday shopping season. More and more Americans are using it, and the most recent Black Friday and Cyber Monday shopping weekend saw massive growth in BNPL. This explosive growth has caught the eye of many investors, including significant venture capital money. Big tech companies are also entering the arena.
The law requires that the CFPB monitor consumer financial markets and enables the agency to require market players to submit information to inform this monitoring. The CFPB expects to publish aggregated findings on insights learned from this inquiry. The CFPB Bureau is concerned about the following:
Accumulating Debt
Whereas the old-style layaway installment loans were typically used for the occasional big purchase, people can quickly become regular users of BNPL for everyday discretionary buying, especially if they download the easy-to-use apps or install the web browser plugins. If a consumer has multiple purchases on multiple schedules with multiple companies, it may be hard to keep track of when payments are scheduled. And when there is not enough money in a consumer’s bank account, this can potentially result in charges by both the consumer’s bank and the BNPL provider. Because of the ease of getting these loans, consumers can end up spending more than anticipated.
Regulatory Arbitrage
Some BNPL companies may not be adequately evaluating what consumer protection laws apply to their products. For example, some BNPL products do not provide certain disclosures, which could be required by some laws. And while the BNPL application may look similar to a standard checkout with a credit card, protections that apply to credit cards may not apply to BNPL products. Many BNPL companies do not provide dispute resolution protections available to users of other forms of credit, like credit cards. And finally, depending on what rules the lender is following, different late fees and policies apply.
Data Harvesting
BNPL lenders have access to the valuable payment histories of their customers. Some have used this collected data to create closed loop shopping apps with partner merchants, pushing specific brands and products, often geared toward younger audiences. As competitive forces pressure the merchant discount, lenders will need to find other sources of revenue to maintain growth and profitability. The Bureau would like to better understand practices around data collection, behavioral targeting, data monetization and the risks they may create for consumers.
For more information about BNPL, please click: Know Before You Buy.
Source: Consumer Financial Protection Bureau.
Dec 15, 2021 | Archive
Subaru of America, Inc. Recalling Certain 2019-2020 Ascent, 2020 Legacy And Outback Vehicles – Drive Chain May Break Causing Loss Of Drive Power
Your vehicle MAY be involved in a safety recall which MAY create a safety risk for you or your passengers. If left unrepaired, a potential safety defect could lead to injury or even death. Safety defects must be repaired by a dealer at no cost to you. The following MAY APPLY to your vehicle if it is listed below. Please click on the National Highway Traffic Safety Administration (“NHTSA”) Recall ID Number below to learn more about the safety issue and the reason for the vehicle recall.
An improperly secured drive chain may slip and break, causing a loss of drive power and increasing the risk of a crash.
Manufacturer: Subaru of America, Inc. (“Subaru”)
Components: POWER TRAIN
Potential Number of Units Affected: 198,255
Summary & Remedy
Subaru is recalling certain 2019-2020 Ascent, 2020 Legacy and Outback vehicles. A programming error in the Transmission Control Unit (“TCU”) may allow the clutch to engage before the drive chain is completely clamped.
Dealers will reprogram the TCU, inspect TCU data for chain slip, and visually inspect the chain guide. If evidence of chain slippage or damage is found, the transmission will be replaced. Repairs will be performed free of charge. Interim owner notification letters are expected to be mailed February 7, 2022. The remedy is expected to be available in April 2022. This recall includes all vehicles previously recalled under 19V-855. Vehicles previously recalled under 19V-855 will need to have the new remedy performed for this recall once available. Owners may contact Subaru customer service at 1-844-373-6614. Subaru’s number for this recall is WRK-21.
Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-424-9153), or go to nhtsa.gov.
What Is A Vehicle Recall?
When a manufacturer or the NHTSA determines that a vehicle creates an unreasonable risk to safety or fails to meet minimum safety standards, the manufacturer is required to fix that vehicle at no cost to the owner. The fix, or repair, can be accomplished by repairing, replacing, offering a refund (for equipment) or, in rare cases, repurchasing the car/vehicle.
What Should I Do If My Vehicle Is Included In This Recall?
If your vehicle is included in a specific recall, it is very important that you get it fixed as soon as possible given the potential danger to you and your passengers if it is not addressed. You should receive a separate letter in the mail from the vehicle manufacturer, notifying you of the recall and explaining when the remedy will be available, whom to contact to repair your vehicle, and to remind you that the repair will be done at no charge to you. If you believe your vehicle is included in the recall, but you do not receive a letter in the mail from the vehicle manufacturer, please call NHTSA’s Vehicle Safety Hotline at 1-888-327-4236, or contact your vehicle manufacturer or dealership.
For additional recall information, please click Vehicle Recall FAQs.
Source: U.S. Department of Transportation, National Highway Traffic Safety Administration
VEHICLE OWNERS AND LESSEES AFFECTED BY AUTOMOTIVE DEFECTS OR SAFETY RECALLS ARE ENCOURAGED TO CONTACT KEHOE LAW FIRM, P.C., [email protected], FOR A FREE, NO-OBLIGATION EVALUATION OF POTENTIAL LEGAL CLAIMS.
Dec 15, 2021 | Archive
Nissan Pathfinder (2013-2016) & Nissan Pathfinder Hybrid (2014-2016) Subject Of NHTSA Office Of Defects Investigation
Components: LATCHES/LOCKS/LINKAGES
Summary
The Office of Defects Investigation (“ODI”) has identified fourteen Vehicle Owner Questionnaires (“VOQ”) alleging hood latch failures, while subject vehicles were being driven, resulting in the hood opening and obstructing the vision of the driver. The office has also received Early Warning Reports (“EWR”) on this issue. Sudden and unexpected opening of the hood can startle drivers, block their visibility, and could lead to a crash into other vehicles or objects.
Nissan is currently collecting field parts to asses the alleged failure of the hood latch. A root cause has not been identified at this time.
ODI has opened a Preliminary Evaluation to evaluate the scope and risk to motor vehicle safety.
The VOQs can be found with ID numbers:11436637, 11431131, 11427702, 11423321, 11406574, 11398825, 11389741, 11387952, 11375938, 11349105, 11306735, 11302647, 11190468, 11166607.
Source: U.S. Department of Transportation, National Highway Traffic Safety Administration
Dec 14, 2021 | Archive
The FDIC Reminds Consumers To Read Bank Financial Disclosures And Statements Provided With Banking Services To Ensure Consumers Know What Is Available To Them, Along With Any Associated Fees And Benefits
Bank Financial Disclosures
Federal and state laws require banks to provide documents to consumers about account and loan offerings. These documents, called disclosures, contain important information about the terms, fees, and interest rate applicable to your accounts. While some of the disclosures are lengthy, it is important that you read and understand them. If you don’t have a copy of the disclosures discussed below, contact your financial institution.
The following are some disclosures that are important to review:
Deposit Disclosures
Your deposit account disclosure, also known as a truth in savings disclosure, was given to you when you opened your checking and/or savings account. It tells you about the annual percentage yield (“APY”), interest rates, minimum-balance requirements, account-opening information, and fees. You may receive additional disclosures about your deposit account upon request, if certain terms of the account change, or if your bank sends a periodic statement. A review of these disclosures will allow you to better understand your account terms. You can find more information about deposit accounts and disclosures by clicking Choosing and Using the Right Bank Account.
Loan Disclosures
For your loans and credit cards, you will have received a truth in lending disclosure. It will tell you about the annual percentage rate or APR (the cost of credit expressed as a yearly rate as a percentage), the finance charge (the cost of credit, including interest and certain fees, expressed as a dollar amount), the amount financed (the dollar amount of credit provided to you); and the total of payments (the sum of all the payments that you will have made at the end of the loan). The disclosures for a mortgage loan will include additional information, including whether or not you have a prepayment penalty.
Privacy Disclosures
Another disclosure you will want to review is your bank’s privacy disclosure. This document will tell you with whom your bank can share your financial information and for what purpose. It will also tell you whether or not you can opt-out of any sharing, and if you can opt-out, how to do so. For more information about your privacy disclosure, please click Your Rights to Financial Privacy: How to Stay Informed.
Additional Resources
Consumer Financial Protection Bureau (CFPB), What is a Truth in Lending Disclosure?
National Credit Union Administration (NCUA), Why Reading Account Disclosures is Important
Federal Reserve Bank of St. Louis, A Closer Look at Credit Card Disclosures
Federal Reserve Bank of St. Louis, Credit Card Statements Explained
Source: FDIC.gov
Dec 11, 2021 | Archive
Chevrolet Malibu (2016-2019), Volt (2016-2019), Traverse (2018-2019), Blazer (2019) Vehicles Subject Of Class Action Suit
Consumers should be aware that on December 2, 2021, a class action lawsuit was filed against General Motors LLC (“GM”) in United States District Court, Northern District of California, on behalf of persons or entities who purchased or leased a Chevrolet Malibu (2016-2019), Chevrolet Volt (2016-2019), Chevrolet Traverse (2018-2019), Chevrolet Blazer (2019) in California.
Allegedly, the vehicles, contain a defect which fails to detect that the driver has placed the automobile in “Park,” thereby preventing the driver from shutting off and locking the vehicle. According to the lawsuit, the subject vehicles display a “Shift to Park” error message on the instrument cluster, even though the gear shift is already in “Park.”
As a result of the “Shifter Defect,” members of the Class, allegedly, cannot turn off their vehicles and, to avoid battery discharge, are forced to resort to try to trick their vehicles to detect that the shift lever is, in fact, in “Park.” The “Shifter Defect,” according to the complaint, prevents the vehicle from shifting into gear, leaving the driver stranded. Consequently, the driver must have the vehicle towed for repair.
GM, according to the suit, had knowledge of the defect, issuing the first in a series of service bulletins on January 9, 2017. Allegedly, despite these notices, GM, through its Chevrolet dealerships, has refused to acknowledge the defect. According to the complaint, when customers press the issue, GM, through its Chevrolet dealerships, refuses to honor its contractual promises to fix the defect, forcing owners and lessees of the subject vehicles to pay for the repairs at their own expense or forgo servicing the issue.
VEHICLE OWNERS AND LESSEES AFFECTED BY AUTOMOTIVE DEFECTS OR SAFETY RECALLS ARE ENCOURAGED TO CONTACT KEHOE LAW FIRM, P.C., [email protected], FOR A FREE, NO-OBLIGATION EVALUATION OF POTENTIAL LEGAL CLAIMS.
Dec 10, 2021 | Archive
Maker Of Fifth Avenue Children’s Robes Fails To Meet The Federal Flammability Standards For Children’s Sleepwear, Posing A Risk Of Burn Injuries To Children
Recall Details
The recall involves Star Art in Linen-branded children’s 100% polyester robes. The robes were sold in six children’s sizes 2, 3-4, 5-6, 6-7, 7-8, and 10-12 in the following seven colors: black, navy, blue plaid, red plaid, red, royal blue, and gray. The long-sleeved robes have two front pockets and two side seam belt loops with a matching belt. “Made in China” and “100% Polyester” are printed on a sewn-in label in the robes seam.
Remedy
Consumers should immediately take the recalled children’s robes away from children and contact Mark of Fifth Avenue. Consumers can receive a full refund of the purchase price of the garment by cutting the robes in half, taking a photo of the cut garment, and sending an e-mail to [email protected] with the photos. All known purchasers will be contacted.
Incidents/Injuries
None reported.
Sold At
Online at www.Amazon.com and www.Walmart.com from August 2019 through June 2021 for between $35 and $45.
Manufacturer
Mark of Fifth Avenue, Harriman, N.Y.
Source: United States Consumer Product Safety Commission, cpsc.gov/recalls.
