The Consumer Financial Protection Bureau (“CFPB”) has released a bulletinreminding debt collectors and credit bureaus of their legal obligations in light of the “No Surprises Act,” which protects consumers from certain unexpected medical bills.
The CFPB’s bulletin advises credit bureaus that the accuracy and dispute obligations imposed by the FCRA apply with respect to debts stemming from charges that exceed the amount permitted by the No Surprises Act.
The bulletin released on January 13, 2022 by the CFPB includes the following reminders to debt collectors, information furnishers, and credit bureaus:
Consumer financial protection law prohibits debt collectors from misrepresenting the character, amount, or legal status of any debt. This prohibition includes misrepresenting that a consumer must pay a debt stemming from a charge that exceeds the amount permitted by the No Surprises Act. In addition, debt collectors are also prohibited from using unfair or unconscionable means to collect or attempt to collect any debt, including the collection of any amount unless such amount is expressly authorized by the agreement creating the debt or permitted by law. Courts have emphasized that collecting an amount that exceeds what is owed would violate the prohibition on unfair or unconscionable debt collection practices.
Many debt collectors furnish information about unpaid medical debts to credit bureaus. Furnishers must have reasonable written policies and procedures regarding the accuracy and integrity of consumer information provided to credit bureaus. Credit bureaus preparing a consumer report must follow reasonable procedures to assure the maximum possible accuracy of information contained in the consumer report. Both credit bureaus and furnishers must conduct reasonable and timely investigations of consumer disputes to verify the accuracy of consumer information.
For furnishers and credit bureaus, the accuracy and dispute obligations imposed by federal consumer financial protection law apply with respect to debts stemming from charges that exceed the amount permitted by the No Surprises Act.
Consumers who believe they are victims of illegal debt collection or credit reporting practices are encouraged to contact Kehoe Law Firm, P.C. by completing the form above on the right or via [email protected] for a free, no-obligation evaluation of potential legal claims.
FTC Report To Congress Finds There Is Little Evidence To Support Manufacturers’ Justifications For Repair Restrictions
In a new report to Congress, the Federal Trade Commission (“FTC”) identified numerous types of repair restrictions, such as using adhesives that make parts difficult to replace, limiting the availability of spare parts, and making diagnostic software unavailable.
The report’s findings, including that “there is scant evidence to support manufacturers’ justifications for repair restrictions,”are primarily based on responses to the FTC’s requests for public comments and empirical research issued in connection with its July 2019 workshop, “Nixing the Fix: A Workshop on Repair Restrictions.”
Congress directed the FTC to issue the report, noting that it “is aware of the FTC’s ongoing review of how manufacturers – in particular mobile phone and car manufacturers – may limit repairs by consumers and repair shops, and how those limitations may increase costs, limit choice, and impact consumers’ rights under the Magnuson-Moss Warranty Act.”
The Anti-Tying Provision Of The Magnuson-Moss Warranty Act (“MMWA”)
The MMWA is a consumer protection law passed in 1975 to clarify how written warranties may be used when marketing products to consumers.
The MMWA requires warrantors of consumer products to provide consumers with detailed information about warranty coverage.
Section 102(c) of the MMWA, known as the anti-tying provision, prohibits warrantors from conditioning warranty coverage on the consumer’s use of an article or service identified by brand, trade, or corporate name, unless the warrantor provides that article or service without charge or the warrantor has received a waiver from the FTC.
This provision, for example, bars an automobile manufacturer from voiding a warranty if a consumer has scheduled maintenance performed by someone other than the dealer, prohibits a printer manufacturer from conditioning its warranty on the purchaser’s use of the manufacturer’s branded ink, and forbids a smartphone manufacturer from voiding a warranty when a consumer has a new battery installed at a kiosk at the mall.
Essentially, the anti-tying provision bars manufacturers from using access to warranty coverage as a way of obstructing consumers’ ability to have their consumer products maintained or repaired using third-party replacement parts and independent repair shops.
Companies may seek a waiver of this prohibition if: (1) the warrantor satisfies the FTC that the manufacturers’ parts or services are necessary for the product to function, and (2) the waiver is in the public interest. Since 1975, only three waiver requests have been made to the FTC, all of which were denied.
Types Of Repair Restrictions
There are certain manufacturer practices that “right to repair” advocates assert have the effect of limiting consumer repair choices.
Repair restrictions discussed at the FTC’s July 2019 Workshop on Repair Restrictions generally fall into eight categories:
1) Physical restrictions; 2) Unavailability of parts, repair manuals, and diagnostic software and tools; 3) Designs that make independent repairs less safe; Telematics (i.e., information on the operation and status of a vehicle that is collected by a system contained in the vehicle and wirelessly relayed to a central location, often the manufacturer or dealer of the vehicle); 4) Application of patent rights and enforcement of trademarks; 5) Disparagement of non-OEM parts and independent repair; 6) Software locks; 7) Digital Rights Management and Technical Protection Measures; and 8) End User License Agreements.
If you feel that you have been prevented or obstructed from having a consumer product repaired using third-party replacement parts or independent repair shops or facilities, or that your warranty was voided, or will be voided, because of independent repair, please complete the form on the right or e-mail [email protected]for a free, no-obligation evaluation of potential legal claims.
Investors Should Be Aware Of Communications, Including Phone Calls, Voicemails, Emails, And Letters That May Falsely Appear To Be From The SEC
The SEC recently advised that it is aware that several individuals recently received phone calls or voicemail messages that appeared to be from an SEC phone number. The calls and messages raised purported concerns about unauthorized transactions or other suspicious activity in the recipients’ checking or cryptocurrency accounts. According to the SEC, these phone calls and voicemail messages are in no way connected to the SEC. If you receive a communication that appears to be from the SEC, do not provide any personal information unless you have verified that you are dealing with the SEC. The SEC does not seek money from any person or entity as a penalty or disgorgement for alleged wrongdoing outside of its formal Enforcement process.
SEC staff do not make unsolicited communications – including phone calls, voicemail messages, or emails – asking for payments related to enforcement actions, offering to confirm trades, or seeking detailed personal and financial information. Investors, you should be skeptical if you are contacted by someone claiming to be from the SEC and asking about your shareholdings, account numbers, PIN numbers, passwords, or other information that may be used to access your financial accounts. Again, the SEC cautions to never provide information to someone claiming to be from the SEC, until you have verified that the person actually works for the SEC.
How Can You Confirm That You Are Dealing With The SEC?
If you receive an unsolicited communication from someone claiming to be from the SEC, use the SEC’s personnel locator at (202) 551-6000 to reach the staff member directly and ask the person if the communication was from them. You can also call (800) SEC-0330 or e-mail [email protected] to check if a communication is from the SEC.
If you receive a communication that falsely appears to be from the SEC, submit a complaint at sec.gov/oig to the SEC’s Office of Inspector General (“OIG”) or call the OIG’s toll-free hotline at (833) SEC-OIG1 (732-6441).
Important Information For Consumers About Understanding Common Bank Deposit Account Fees, The Options Available, And Ways Consumers Can Minimize Or Avoid Bank Fees
Overdraft fees occur when you don’t have enough money in your account to cover your transactions. The cost for overdraft fees varies by bank, but they may cost around $35 per transaction. These fees can add up quickly and can have ripple effects that are costly. Some banks also may charge what are known as continuous overdraft fees, or daily overdraft fees. These are charges assessed every day the account remains overdrawn.
In general, for debit card transactions at ATMs or at merchants, consumers must opt-in, or agree up front, that the bank can charge you an overdraft fee for any debit card transaction that overdraws the account.If you do not opt-in, you cannot be charged a fee; however, your bank may refuse your purchase if it will overdraw your account.
If you do opt-in for overdraft protection or coverage, then your bank may pay a debit card purchase or ATM transaction, even if the transaction overdraws your account. You will be charged any overdraft fees that are incurred as a result. The opt-in form should be provided by your bank with the other account opening disclosures. If you change your mind at any time after opting-in, you can still opt-out by contacting your bank.
If you have a separate savings account, you might think about linking your savings account to your checking account when your bank provides this option. If you overdraw your checking account, the bank can pull funds from your savings to cover the shortage, as long as you have enough funds available. Your bank may still charge you a fee for transferring the funds automatically, but it is typically less than an overdraft charge.
“NSF” Fees
While you have a choice to opt-in or opt-out of overdraft coverage for debit card transactions, you may not have a choice when it comes to using paper checks or other ways of making payments or purchases from your account. Keeping track of your account balance will help you avoid charges for overdrawing your account in those situations, and also if you choose to opt-in for debit card transactions. Banks are not required to obtain your opt-in for Non-Sufficient Fund (“NSF”) fees. If you write a check for more money than you have in your account without any overdraft coverage, the check will not be paid but you will still be charged an NSF fee.
Also, Automated Clearing House (“ACH”) transactions, such as your direct payment or bill pay services, may be declined if you do not have enough funds in your account and be subject to an NSF fee.
Banks typically charge a NSF fee for each transaction, and these fees too can be costly as they can have ripple effects similar to overdraft fees. It is your responsibility to stay current with the checks and transactions you have made from your bank account. Make sure to look at your bank statements and try to use online banking and alerts to help you keep track of your bank account transactions.
Monthly Maintenance Fees
Banks can charge a monthly fee to maintain deposit accounts. These fees may be lower or waived in certain situations, such as when you have direct deposit, maintain a minimum balance, or make a certain number of transactions each month. You might consider a bank that allows you to avoid monthly maintenance fees by direct depositing your paycheck. Ask if other fees can be waived with direct deposit. Signing up for paperless statements and getting multiple products from one bank (instead of several banks) may be a way to eliminate some monthly maintenance fees.
Minimum Balance Fees
Some accounts may have a minimum balance requirement to avoid a fee. If you are required to have a minimum balance in your account, be sure to maintain that balance to avoid fees. Ask if your bank offers low balance alerts to notify you, so that you don’t unknowingly drop below the minimum balance requirement.
ATM Fees
Some banks charge for using ATMs not in their network. To avoid charges, use only the ATMs that are in your bank’s network, or those that allow you to use your ATM or debit card for free. Also, ask if your bank reimburses you for using any ATMs outside its network. Some banks will do that for a certain number of transactions per year.
Finding The Right Bank Account
The FDIC recommends comparison shopping at a number of banks before you open an account. To help you choose an account based on what is important to you, use the FDIC’s checklist: How to Pick a Bank Account. Choose the services you need and skip those that you don’t, especially if they come with a price tag. Get a copy of the bank’s deposit account disclosure and fee schedule, and read them carefully so you know the cost of the services you require. Choose the account that has the services you need at the lowest cost.
Today, there are more transaction account options than ever before. Some banks offer customers the option of a ‘checkless’ checking account. These card-based accounts may offer consumers the ability to avoid overdraft charges completely. There are also banks that offer accounts with low-fees, and no overdraft or NSF fees, such as Bank On certified accounts. These accounts may also provide other free services such as ATM withdrawals. To obtain additional information on these low-fee bank accounts, please click #GetBanked.
The FDIC also recommends to call your bank and ask if they can waive fees you have incurred, especially if you have not had a lot of fees in the past. If your bank cannot waive specific fees, ask if the bank has a different account that does not have fees for the services you need. If not, and you find the fee to be costly, consider shopping around for an account at a different bank.
FTC Has Created Three Videos To Help Consumers Prevent Unwanted Calls
Kehoe Law Firm, P.C. is making consumers aware that the FTC has created three videos to help you keep unwanted calls from reaching your phone. The FTC’s videos provide information about the technologies consumers can use to block unwanted calls from your cellular phone and landline, as well as guidance about how to stop receiving calls from fake numbers.
Do You Believe You Are a Victim of Illegal Robocalls, Text Messages, “Junk” Faxes or Telemarketing Sales Calls?
If you have received illegal robocalls, text messages, “junk” faxes or telemarketing sales calls, you may be able to recover at least $500 for each illegal call, text or fax you received and, possibly, as much as $1,500 for each illegal call, text message or facsimile that was made either willfully or knowingly in violation of the Telephone Consumer Protection Act.
To help evaluate your potential legal claims under the Telephone Consumer Protection Act, please complete KLF’s confidential Robocall Questionnaire or, if you prefer to speak with an attorney, please complete the form above on the right, e-mail [email protected] or contact Michael Yarnoff, Esq., [email protected], (215) 792-6676, Ext. 804, for a free, no-obligation evaluation of your potential legal rights.
Is it Illegal to Condition Warranty Coverage on the Use of Specified Parts or Services?
On April 10, 2018, the Federal Trade Commission announced that it sent warning letters to six major companies that market and sell automobiles, cellular devices, and video gaming systems in the United States.
The letters warn about the FTC’s concerns about the statements of the companies that consumers must use specified parts or service providers to keep their warranties intact. Unless warrantors provide the parts or services for free or receive a waiver from the FTC, such statements, generally, are prohibited by the Magnuson-Moss Warranty Act, a law that governs consumer product warranties. Similarly, such statements may be deceptive under the FTC Act.
FTC staff recently took a closer look at the warranties and promotional materials of the various companies and saw language that raised concerns that some businesses were telling consumers that their warranty would be void if they used unauthorized parts or service. The following are examples of the language of the questionable warranty provisions:
The use of [the company’s parts] is required to keep your . . . manufacturer’s warranties and any extended warranties intact.
This warranty shall not apply if this product . . . is used with products not sold or licensed by [company name].
This warranty does not apply if this product . . . had had the warranty seal on the [product] altered, defaced, or removed.
FTC staff suggested that the companies review the Magnuson-Moss Warranty Act and, if necessary, revise their practices accordingly. The letters put the companies on notice that after 30 days, the FTC will be taking another look at their written warranties and promotional materials. FTC staff has requested that each company review its promotional and warranty materials to ensure that such materials do not state or imply that warranty coverage is conditioned on the use of specific parts of services.
Warranties Under the Magnuson-Moss Warranty Act and Its Two Exceptions
No warrantor of a consumer product may condition his written or implied warranty of such product on the consumer’s using, in connection with such product, any article or service (other than article or service provided without charge under the terms of the warranty) which is identified by brand, trade, or corporate name.
Thus, according to the FTC, a company cannot void a consumer’s warranty or deny warranty coverage solely because the consumer uses a part made by someone else or gets someone not authorized by the company to perform service on the product.
There are only two exceptions:
1) If the company provides the article or service to consumers for free; or
2) If the company gets a waiver from the FTC. Under 15 U.S.C. § 2302(c), the FTC may grant a waiver only if the company proves that “the warranted product will function properly only if the article or service so identified is used in connection with the warranted product, and the waiver is in the public interest.” Companies, according to the FTC, may, however, disclaim warranty coverage for defects or damage caused by the use of unauthorized parts or service.
Section 5 of the FTC Act’s Prohibition on Deception Applies to Misleading Warranty Claims
A violation of the Magnuson-Moss Warranty Act, according to the FTC, is a violation of Section 5 of the FTC Act. But separate and apart from Magnuson-Moss, a claim that creates a false impression that a warranty would be void due to the use of unauthorized parts or service may be a stand-alone deceptive practice under the FTC Act.
