CFPB Finds Credit Card Companies Charged $12 Billion in Late Fee Penalties in 2020
The Consumer Financial Protection Bureau (CFPB) has issued a report showing that credit card issuers charged $12 billion in late fees in 2020.Late fee penalties are charged in addition to interest when a cardholder does not make the minimum payment by the due date.
Some Findings of the CFPB’s Report Included:
Many major issuers charge the maximum late fee allowed under the immunity provisions set by the Federal Reserve Board of Governors in 2010.Eighteen of the top 20 issuers set late fees at or near the established maximum level.
Subprime cards and private label cards are particularly susceptible to late fee charges. For example, the average deep subprime account gets charged $138 in late fees per year, and deep subprime accounts are more likely than super-prime accounts to carry smaller balances. As a result, deep subprime cardholders pay late fees that represent a higher percentage of their balances (11% compared to 0.8% for super-prime accounts). These late fees are in addition to accrued interest charges. For private label cards, late fees comprised the overwhelming majority—91%—of all consumer fees and 25% of total interest and fees (compared to 45% and 7%, respectively, for general purpose credit cards).
Charles Schwab Files “Notice of Data Breach” – Information potentially affected may include name and one or more of the following: Social Security number or tax identification number, driver’s license or other state identification number, passport number, or username/password.
According to Charles Schwab’s “Notice of Data Breach,” “[o]n December 16, 2021, Schwab discovered a potential issue regarding certain chat and email messages and immediately began an investigation. As a result of the investigation, [Charles Schwab] recently determined that between May 18, 2021, and December 16, 2021, certain chat and email messages sent through Schwab.com were inadvertently sent to external email systems.”
Have You Been Harmed As A Result Of A Data Breach Which Has Exposed Your Private Personal, Protected Health Or Personally Identifiable Information?
If you have experienced actual or attempted harm or been the victim of fraud due tothe illegal or unauthorized exposure of your private personal, protected health or personally identifiable information, please contact Kehoe Law Firm, P.C., [email protected], for a free, confidential consultation and no-obligation evaluation of potential legal claims.
BlockFi Lending Inc. Agrees To Pay $100 Million In Penalties And Pursue Registration Of Its Crypto Lending Product
On February 14, 2022, the SEC announced that it charged BlockFi Lending LLC (“BlockFi”) with failing to register the offers and sales of its retail crypto lending product.
The SEC also charged BlockFi with violating the registration provisions of the Investment Company Act of 1940. To settle the SEC’s charges, BlockFi agreed to pay a $50 million penalty, cease its unregistered offers and sales of the lending product, BlockFi Interest Accounts (“BIAs”), and attempt to bring its business within the provisions of the Investment Company Act within 60 days. BlockFi’s parent company also announced that it intends to register under the Securities Act of 1933 the offer and sale of a new lending product. In parallel actions, BlockFi agreed to pay an additional $50 million in fines to 32 states to settle similar charges.
According to the SEC’s order, from March 4, 2019 until today, BlockFi offered and sold BIAs to the public. Through BIAs, investors lent crypto assets to BlockFi in exchange for the company’s promise to provide a variable monthly interest payment. The order finds that BIAs are securities under applicable law, and the company therefore was required to register its offers and sales of BIAs but failed to do so or to qualify for an exemption from SEC registration. Additionally, the order finds that BlockFi operated for more than 18 months as an unregistered investment company because it issued securities and also held more than 40 percent of its total assets, excluding cash, in investment securities, including loans of crypto assets to institutional borrowers.
The order also found that BlockFi made a false and misleading statement for more than two years on its website concerning the level of risk in its loan portfolio and lending activity.
Without admitting or denying the SEC’s findings, BlockFi agreed to a cease-and-desist order prohibiting it from violating the registration and antifraud provisions of the Securities Act and the registration provisions of the Investment Company Act. BlockFi also agreed to cease offering or selling BIAs in the United States.
SEC Proposes New Rule To Enhance Private Fund Investor Protection
On February 9, 2022, the SEC announced that it voted to propose new rules and amendments under the Investment Advisers Act of 1940 (“Advisers Act”) to enhance the regulation of private fund advisers and to protect private fund investors by increasing transparency, competition, and efficiency in the $18-trillion marketplace.
Among other things, the proposed rules would increase transparency by requiring registered private fund advisers to provide investors with quarterly statements detailing certain information regarding fund fees, expenses, and performance.
SEC Proposes Cybersecurity Risk Management Rules And Amendments For Registered Investment Advisers And Funds
On February 9, 2022, the SEC announced that it voted to propose rules related to cybersecurity risk management for registered investment advisers, and registered investment companies and business development companies (funds), as well as amendments to certain rules that govern investment adviser and fund disclosures.
The proposed rules, among other things, would require advisers and funds to adopt and implement written cybersecurity policies and procedures designed to address cybersecurity risks that could harm advisory clients and fund investors. The proposed rules also would require advisers to report significant cybersecurity incidents affecting the adviser or its fund or private fund clients to the SEC on a new confidential form.
SEC Issues Proposal to Reduce Risks in Clearance and Settlement
On February 9, 2022, the SEC announced that it voted to propose rule changes to reduce risks in the clearance and settlement of securities, including by shortening the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one business day after the trade date (T+1). The proposed changes are designed to reduce the credit, market, and liquidity risks in securities transactions faced by market participants and U.S. investors.
In addition to shortening the standard settlement cycle, the proposal includes rules directed at broker-dealers and registered investment advisers to shorten the process of confirming and affirming the trade information necessary to prepare a transaction for settlement so that it can be completed by the end of trade date. Further, the proposal includes a new requirement to facilitate straight-through processing, which would apply to certain types of clearing agencies that provide central matching services. Central matching service providers help facilitate the processing of institutional trades between broker-dealers and their institutional customers. The proposed rule would require new policies and procedures directed to straight-through processing and require an annual report on progress with the process.
Guidance From The Consumer Financial Protection Bureau For Consumers Who Want To Dispute Errors On Their Credit Report
What is a credit report?
A credit report is a statement that has information about your credit activity and current credit situation, such as loan paying history and the status of your credit accounts.
Most people have more than one credit report.Credit reporting companies, also known as credit bureaus or consumer reporting agencies, collect and store financial data about you that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. Creditors are not required to report to every credit reporting company.
Lenders use these reports to help them decide if they will loan you money or what interest rates they will offer you.
Lenders also use your credit report to determine whether you continue to meet the terms of an existing credit account.
Other businesses might use your credit reports to determine whether to offer you insurance; rent a house or apartment to you; provide you with cable TV, internet, utility, or cell phone service. If you agree to let an employer look at your credit report, it may also be used to make employment decisions about you.
Credit reports often contain the following information:
Personal information (e.g., Your name and any name you may have used in the past in connection with a credit account, including nicknames; current and former addresses; birth date; Social Security Account Number; telephone numbers)
Credit accounts (e.g.,Current and historical credit accounts, including the type of account – mortgage, installment, revolving, etc.;credit limit or amount; account balance; account payment history; date the account was opened and closed; name of the creditor)
A credit report may include information on overdue child support provided by a state or local child support agency or verified by any local, state, or federal government agency.
What are common credit report errors that I should look for on my credit report?
Identity errors (e.g.,Errors made to your identity information, such as wrong name, phone number, address; accounts belonging to another person with the same or a similar name as yours; incorrect accounts resulting from identity theft)
Incorrect reporting of account status (e.g.,Closed accounts reported as open; you are reported as the owner of the account, when you are actually just an authorized user; accounts that are incorrectly reported as late or delinquent; incorrect date of last payment, date opened, or date of first delinquency; same debt listed more than once, possibly with different names)
Data management errors (e.g., Reinsertion of incorrect information after it was corrected; accounts that appear multiple times with different creditors listed, especially in the case of delinquent accounts or accounts in collections)
Balance Errors (e.g., Accounts with an incorrect current balance; accounts with an incorrect credit limit)
If you find errors, you should contact the credit reporting company who sent you the report, and the creditor or company that provided the information (known as the “furnisher” of the information).
If you identify an error on your credit report, you should start by disputing that information with the credit reportingcompany(Experian, Equifax, and/or Transunion). You should explain in writing what you think is wrong, why, and include copies of documents that support your dispute. You can also use the CFPB’sinstructions and template letter as a guide.
If you mail a dispute, your dispute letter should include:
Contact information for you including complete name, address, and telephone number
Report confirmation number, if available
Clearly identify each mistake, such as an account number for any account you may be disputing
Explain why you are disputing the information
Request that the information be removed or corrected
Enclose a copy of the portion of your credit reportthat contains the disputed items and circle or highlight the disputed items. You should include copies (not originals) of documents that support your position.
You may choose to send your letter of dispute to credit reporting companies by certified mail and ask for a return receipt, so that you will have a record that your letter was received.
Contact the nationwide credit reporting companies online, by mail, or by phone
Experian:Online at www.experian.com/disputes/main.html; mail to the address provided on your credit report or mail your letter to Experian, P.O. Box 4500, Allen, TX 75013; or contact the phone number provided on the credit report or (888) 397-3742.
TransUnion: Online at https://dispute.transunion.com; mail the dispute formwith your letter to TransUnion LLC, Consumer Dispute Center, P.O. Box 2000, Chester, PA 19016; or contact telephone (800) 916-8800.
Be sure to keep copies of your dispute letter and enclosures.
Dispute the information with the company who provided the information (also known as the furnisher)
If you would like to submit a dispute regarding the information a company provided to the credit reporting company, use our instructions, along with a template letter as a guide (examples of information furnishers are your bank, your apartment landlord, or your credit card company).
What happens after you dispute information on your credit report?
Credit reporting companies must investigate your dispute, forward all documents to the furnisher, and report the results back to you unless they determine your claim is frivolous. If the consumer reporting company or furnisher determines that your dispute is frivolous, it can choose not to investigate the dispute so long as it sends you a notice within five days saying that it has made such a determination.
If the furnisher corrects your information after your dispute, it must notify all of the credit reporting companies it sent the inaccurate information to, so they can update their reports with the correct information.
If the furnisher determines that the information is accurate and does not update or remove the information, you can request the credit reporting company to include a statement explaining the dispute in your credit file. This statement will be included in future reports and provided to whoever requests your credit report.
What if my dispute is ignored or I disagree with the results of a credit report dispute?
Consumers sometimes file multiple disputes, and even bring lawsuits, to get inaccurate information corrected in their credit reports. When consumers make a dispute, they often fail to get an adequate answer, or any answer at all, from the credit reporting company.You have rights under federal law if this happens to you.
The Fair Credit Reporting Act (“FCRA”)is the federal law that, among other rights, gives you the right to dispute incomplete or inaccurate information.The credit reporting company must take certain steps when you notify them of an error. Once notified of an error, FCRA requires the credit reporting companies to do a reinvestigation after you dispute the accuracy or completeness of the information, unless your dispute is “frivolous.”
If a credit reporting company does not respond to your dispute or does not respond adequately, you have certain rights.
You have the right to add a statement to your credit file.If an investigation does not resolve your dispute with the credit reporting company, you can ask that a brief statement of the dispute be included in your file and included or summarized in future credit reports. Your right to include a statement in your file only applies to disputes you have submitted to a credit reporting company, not to disputes that you have submitted directly to companies that provided the wrong information to the credit reporting company.
You have the right to bring a lawsuit.If the credit reporting company violates the FCRA, they can be held liable for actual damages and attorney fees. In the case of a willful failure to comply with FCRA requirements, the company can be liable for actual or statutory damages and punitive damages. There are time limits on when you would have to bring a lawsuit, so make sure you are aware of any deadlines by discussing your circumstances with a licensed attorney.
You can also submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372). A complaint can also be submitted to your state attorney general . Your state may have additional protections for consumers beyond the FCRA.
Many companies promise to “repair” or “fix” your credit for an upfront fee. Importantly, however, no one can remove negative information, such as late payments, from a credit report if it is accurate. You can only get your credit report fixed if it contains errors, and you can do that on your own at no cost.
How do I get a copy of my credit reports?
You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian and TransUnion).
You can request and review your free report through one of the following ways:
Mail: Download and complete the Annual Credit Report Request form . Mail the completed form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281
You can request all three reports at once or you can order one report at a time. By requesting the reports separately (for example, one every four months) you can monitor your credit report throughout the year. Once you have received your annual free credit report, you can still request additional reports. By law, a credit reporting company can charge no more than $13.50 for a credit report.
You are also eligible for reports fromspecialty consumer reporting companies. We put together a list of several of these companies, so you can see which ones might be important to you. You have to request the reports individually from each of these companies. Many of the companies in this list will provide a report for free every 12 months. Other companies may charge you a fee for your report.
You can get additional free reports, if any of the following apply to you:
You received a notice that you were denied credit, insurance, or employment or experienced another “adverse action” based on a credit report, you have a right to a free report from the credit reporting company identified in the notice. To get the free report you must request it within 60 days after you receive the notice. Other types of “adverse action” notices you might receive include notice of an unfavorable change in the terms or amount of your credit or insurance coverage, or unfavorable changes in the terms of your employment or of a license or other government benefit.
You believe your file is inaccurate due to fraud.
You have requested a credit report from a nationwide credit reporting company in connection with the placing of an initial fraud alert (you may request two free copies for an extended fraud alert).
You are unemployed and intend to apply for employment within 60 days from the date of your request.
You are a recipient of public welfare assistance.
Your state law provides for a free credit report.
Be cautious of websites that claim to offer free credit reports. Some of these websites will only give you a free report if you buy other products or services. Other websites give you a free report and then bill you for services you have to cancel. To get the free credit report authorized by law, go to AnnualCreditReport.com or call (877) 322-8228.
Will requesting my credit report hurt my credit score?
No, requesting your credit report will not hurt your credit score.
Checking your own credit report is not an inquiry about new credit, so it has no effect on your score. In fact, reviewing your credit report regularlycan help you to ensure that the information the credit reporting companies share with lenders is accurate and up-to-date.
How long does negative information remain on my credit report?
A credit reporting company generally can report most negative information for seven years.
Information about a lawsuit or a judgmentagainst you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Bankruptcies can stay on your report for up to ten years.
Even though the credit reporting companies usually won’t report this negative information after the seven year limit, they still may keep your information on file.
There are certain instances where they will report it. These time limits on reporting negative information do not apply if the credit report will be used in connection with:
Your application for a job that pays more than $75,000 a year
Your application for more than $150,000 worth of credit or life insurance
Have You Been A Victim Of Fair Credit Reporting Act Violations?
Individuals who believe they have been harmed by violations of the Fair Credit Reporting Act are encouraged to contact Kehoe Law Firm, P.C. for a free, no-obligation evaluation of potential legal claims by completing the form above on the right or via e-mail to [email protected]
CFPB Identifies Consumer Reporting Companies The Public Can Hold Accountable
The Consumer Financial Protection Bureau (“CFPB”) released its annual list of consumer reporting companies. The list identifies dozens of specialty reporting companies that collect and sell access to people’s data, including individuals’ finances, employment, check writing histories, or rental history records, often without their knowledge.
Using the list, individuals can exercise their right to see what information these firms have, dispute inaccuracies, and file lawsuits if the firms are violating the Fair Credit Reporting Act (“FCRA”).
Three nationwide consumer reporting companies, Equifax, TransUnion, and Experian, allow people to check their reports for free once a week through December 2022.
Many of the specialty companies, however, charge people a fee to access this data.The list published by the CFPB allows people to see which companies provide this information for free, as well as search for those that provide specialized reporting by specific markets, including employment, tenant, insurance, and medical.
PEOPLE ARE FREQUENTLY IN THE BEST POSITION TO KNOW IF THEIR INFORMATION IS ACCURATE. IF AN INDIVIDUAL FINDS INFORMATION IN THEIR CONSUMER REPORTS THAT APPEARS TO BE INACCURATE, THEY HAVE THE RIGHT TO FILE A DISPUTE AND THE CONSUMER REPORTING COMPANY IS REQUIRED TO CONDUCT A REASONABLE INVESTIGATION.
The CFPB also issued an advisory opinion in November 2021 affirming that all consumer reporting companies, including tenant and employment screening companies, have an obligation to use reasonable procedures to assure maximum possible accuracy.
People who have a problem with credit or consumer reporting, such as tenant screening or background checks, can submit a complaint to the CFPB onlineor by calling (855) 411-CFPB (2372).
The List Of Consumer Reporting Companies
Consumer reporting companies collect information and provide reports to other companies about you. These companies use these reports to inform decisions about providing you with credit, employment, residential rental housing, insurance, and in other decision-making situations.
You have a meaningful role to play to ensure the data about you maintained by consumer reporting companies is accurate and complete.
You know your credit report is important, but the three nationwide consumer reporting companies, Equifax, TransUnion, and Experian, are not the only companies that collect information about you.
Other companies collect information and prepare consumer reports about you, and you have a right to see those reports.
This list includes the three nationwide consumer reporting companies as well as other companies that focus on certain market areas and consumer segments. Use this list to help you take advantage of your right to review the information in your consumer reports, and dispute possible inaccuracies with companies as needed. The list includes the three nationwide consumer reporting companies, Equifax, TransUnion, and Experian, and several other reporting companies that focus on creating consumer reports for certain industries.
TO VIEW THE LIST OF CONSUMER REPORTING COMPANIES IN PDF FORMAT, PLEASE CLICKHERE.
Market Areas Included On The List
NATIONWIDE CONSUMER REPORTING COMPANIES- There are three big nationwide providers of consumer reports: Equifax, TransUnion, and Experian. Their reports contain information about your payment history, how much credit you have and use, and other inquiries and information.
EMPLOYMENT SCREENING – Employment screening companies provide verification information such as credit history, employment, salary and education and professional license verification to employers and others.
TENANT SCREENING –Tenant screening companies provide reports to landlords and residential real estate management companies. If you are applying as a tenant for a residential property a tenant screening report with negative information in it, such as past due rent, could result in a rejected lease application or a lease with tough conditions.
CHECK AND BANK SCREENING – Check and bank screening companies collect and report data on checking account applications, openings, and closures as well as check screening services like check verification.
PERSONAL PROPERTY INSURANCE – Personal property insurance reporting companies collect and report information on consumers’ home, auto, and personal property.
MEDICAL – Medical consumer reporting companies share information on your medical data if you authorized the release of your medical records to an insurance company.
LOW-INCOME AND SUBPRIME – Low-income and subprime reporting companies provide consumer information to companies that market and sell products and services specifically to lower-income consumers and credit applicants with impaired credit records.
SUPPLEMENTARY REPORTS –The information that some consumer reporting companies sell is used to supplement other data, such as the credit data the nationwide consumer reporting companies sell about you. This information can include public records and ID verification data to help firms manage credit and fraud risks.
UTILITIES –These companies collect information associated with telecommunications, pay TV, and utility (electric, gas, water) services to help companies in these industries manage customer relations.
RETAIL-These companies collect information related to retail product return and exchange fraud and abuse.
GAMING – These companies share consumer data associated with check cashing settlement services to assist gaming establishments such as casinos and racetracks with risk management.
Who Can See Your Consumer Reports?
Consumer reporting companies must follow legal restrictions, but can generally provide your consumer reportsand credit scores to an array of businesses, including:
Debt buyers and collectors
Lenders (including those that offer credit cards; home; payday; personal; title; auto – including auto leasing; student loans; security deposit financing and lease guarantees on home rentals; and buy-now-pay-later (“BNPL”) products)
Insurance companies
Employers, volunteer organizations, and government agencies to determine eligibility for government assistance
Landlords and residential real estate management companies
Banks, credit unions, payment processors, and retail stores that accept personal checks
Companies that market and sell products and services specifically to lower-income consumers and subprime credit applicants, such as short-term lending and rent-to-own businesses
Communications and utility companies
Retail stores for product return fraud and abuse screening, as well as retail stores that offer financing, such as appliance and rent-to-own businesses
Gaming casinos that extend credit to consumers and/or accept personal checks
When Should You Check A Consumer Report?
With the exception of employment screening, users of your reporting data generally DO NOT warn youin advance when they are about to take an adverse action against you based in whole or in part on your consumer report. Thus, the accuracy and completeness of your consumer reporting data is extremely important.
Check your reports regularly
It is important to review your credit reports from the three nationwide consumer reporting companies, Equifax, TransUnion, and Experian, every twelve months to ensure they are accurate and complete. This is especially important if you intend to purchase a home or car with credit, or otherwise intend to apply for credit in the future.
Check your reports before making financial decisions
If you are applying for a job, an insurance policy, or a lease, you should fact-check your background screening reports to ensure there are no errors.
Check your reports if you think you may be a victim of identity theft
Data breaches are an unfortunate reality. It is important to be aware of your options to take greater control of your consumer reporting data.
Fact-check your reports and consider blocking third-party access to your consumer reporting data through a security “freeze.”
Resources To Take Action
How to request a report
Under the federal Fair Credit Reporting Act (FCRA), ALL consumer reporting companies are required to provide you a copy of the information in your report if you request it.
You are also entitled to a free credit report every 12 months from each of the three nationwide consumer reporting companies, Equifax, TransUnion, and Experian. You can request a copy through AnnualCreditReport.com .
As a result of a 2019 settlement, ALL U.S. consumersmay also request up to six free copies of their Equifax credit report during any twelve-month period through December 2026. These free copies will be provided to you in addition to any free reports to which you are entitled under federal law.
You have the right to dispute the information in your reports
If you find information in your consumer reports that you believe is inaccurate or incomplete, you have the legal right to dispute the report’s content with the consumer reporting company and the company that shared the information with the consumer reporting company, such as your lender.
Under the FCRA, companies must conduct a reasonable investigation of your dispute, free of charge.
If you have complaints about your consumer reports
The CFPB handles consumer reporting complaints about report accuracy and completeness errors, credit repair services, and other consumer reporting topics. If you are dissatisfied with a company’s investigation of an earlier dispute, if you believe your consumer report was used improperly, or if you have problems getting access to your own consumer reports you may consider submitting a complaint.
Have Your Rights Under The Fair Credit Reporting Act Been Violated?
If you believe your rights under the FCRA have been violated, please contact Kehoe Law Firm, P.C. by completing the form above on the right or by sending an e-mail to [email protected] for a free, no-obligation evaluation of potential legal claims.
