This week, we confirmed that scammers are using CFPB employees’ names to try to defraud members of the public. We’ve heard from people, specifically older adults, who received phone or video calls.
We can’t say it enough – the CFPB will NEVER contact you and ask you for sensitive information or to pay money. This includes never asking you to pay an upfront fee or taxes, or telling you that you’ve won a lottery, sweepstakes, or class-action lawsuit. We also won’t ask you for personal or sensitive information before you can cash a check we’ve issued.
The latest phone and video scams may include:
A phone or video call or an email from an imposter claiming to be a CFPB or other U.S. government official
Messages or calls notifying you of an opportunity to participate in a class-action lawsuit, or that you’ve won a lawsuit or owe money you didn’t expect.
Being told you must first pay taxes or another upfront fee to collect the money. They may continue to find “reasons” for you to pay more fees or taxes. It is all part of the scam.
If you’re contacted by someone from the CFPB and want to confirm whether it’s real or a scam, call our consumer call center at (855) 411-2372 between 8 a.m. and 8 p.m. ET, Monday through Friday.
Scammers could reach out to you by phone, mail, email, text message/SMS, social media, messaging apps, or through other online channels. Scams can also occur in person, at home, or at a business.
Here are some common signs of a scam:
You’re told you’ve won a sweepstakes or lottery you didn’t enter, or that you’re owed money from a class-action lawsuit.
You’re asked to pay upfront taxes or fees – either foreign or domestic.
You’re being pressured to act now. Scammers don’t want you to take the time to do research or to think too carefully before parting with your money.
A person claiming to be a government official contacts you to confirm your windfall. The emails sent may even appear to be from real government email addresses, but if you look further, the email is not from a “.gov” email.
Criminals and scam artists may try different tactics or ways of reaching you, but here are tips for how to protect yourself or your loved ones from scams:
Don’t share sensitive information – Avoid sharing Social Security numbers, account information, or credit card numbers with people you don’t know.
Never pay upfront for a promised prize – If you’re told you must pay fees or taxes to receive a prize, it’s a scam.
If it sounds too good to be true, it probably is – If someone is trying too hard or pressuring you, you can always walk away.
By some measures, credit cards have never been this expensive. For cardholders who carry a balance without paying it off in full each month, issuers generally charge interest based on annual percentage rates (APRs). In 2022 alone, major credit card companies charged over $105 billion in interest, the primary cost of credit cards to consumers. While the effects of increases to the target federal funds rate have received considerable attention, the average APR margin (the difference between the average APR and the prime rate) has reached an all-time high.
In this analysis, we show that higher APR margin drove about half of the increase in credit card rates over the last decade. In 2023, excess APR margin may have cost the average cardholder over $250. Major credit card companies earned an estimated $25 billion in additional interest revenue by raising APR margin. Increases to the average APR margin - despite lower charge-off rates and a relatively stable share of subprime borrowers - have fueled issuers’ profitability for the past decade. Higher APR margins have allowed credit card companies to generate returns that are significantly higher than other bank activities.
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Credit card average APR margin is the highest on record.
Over the last 10 years, average APR on credit cards assessed interest have almost doubled from 12.9 percent in late 2013 to 22.8 percent in 2023 — the highest level recorded since the Federal Reserve began collecting this data in 1994. The APR on most credit card accounts can be viewed as being composed of the prime rate and the APR margin. The prime rate (a benchmark most banks use to set rates) represents a good proxy for banks’ funding costs, which have increased in recent years. But credit card issuers have also sharply increased average APRs beyond changes in the prime rate.
Nearly half of the increase in average APR over the last 10 years has been driven by issuers raising their APR margin. APR margin for revolving accounts is now at 14.3 percent, the highest point in recent history. More than half of issuers sent offers by direct mail with a higher APR margin in the third quarter of 2023 than on the same product the year before, according to our analysis of Competiscan data.
Figure 1: Average APRs on Accounts Assessed Interest and Average Prime Rate at Year End
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Higher APR margin has fueled the profitability of revolving balances.
Typically, card issuers set an APR margin to generate a profit that is at least commensurate with the risk of lending money to consumers. In the eight years after the Great Recession, the average APR margin stayed around 10 percent, as issuers adapted to reforms in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) that restricted harmful back-end and hidden pricing practices. But issuers began to gradually increase APR margin in 2016. The trend accelerated in 2018, and it continued through the pandemic.
Over the past decade, card issuers increased APR margin despite lower charge-off rates and a relatively stable share of cardholders with subprime credit scores. The average APR margin increased 4.3 percentage points from 2013 to 2023 (while the prime rate was nearly 5 percentage points higher). As such, the profitability of revolving balances excluding loan loss provisions (the money that banks set aside for expected charge-offs) has been increasing over this time period.
Figure 2: Average APR Margin and Charge-Off Rate (Federal Reserve)
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Excess APR margin costs consumers billions of dollars a year.
In 2023, major credit card issuers, with around $590 billion in revolving balances, charged an estimated $25 billion in additional interest fees by raising the average APR margin by 4.3 percentage points over the last ten years. For an average consumer with a $5,300 balance across credit cards, the excess APR margin cost them over $250 in 2023. Since finance charges are typically part of the minimum amount due, this additional interest burden may push consumers into persistent debt, accruing more in interest and fees than they pay towards the principal each year — or even delinquency.
The increase in APR margin has occurred across all credit tiers. Even consumers with the highest credit scores are incurring higher costs. The average APR margin for accounts with credit scores at 800 or above grew 1.6 percentage points from 2015 to 2022 without a corresponding increase in late payments.
Credit card interest rates are a core driver of profits.
Credit card issuers are reliant on revenue from interest charged to borrowers who revolve on their balances to drive overall profits, as reflected in increasing APR margins. The return on assets on general purpose cards, one measure of profitability, was higher in 2022 (at 5.9 percent) than in 2019 (at 4.5 percent), and far greater than the returns banks received on other lines of business. Even when excluding the impact of loan loss provisions, the profitability of credit cards has been increasing.
CFPB research has found high levels of concentration in the consumer credit card market and evidence of practices that inhibit consumers’ ability to find alternatives to expensive credit card products. These practices may help explain why credit card issuers have been able to prop up high interest rates to fuel profits. Our recent research has shown that while the top credit card companies dominate the market, smaller issuers many times offer credit cards with significantly lower APRs. The CFPB will continue to take steps to ensure that the consumer credit card market is fair, competitive, and transparent and to help consumers avoid debt spirals that can be difficult to escape.
If you’re trying to correct inaccurate or incomplete information on your credit report, the process can feel overwhelming. The communications you receive from the companies involved can be confusing, and the CFPB has found some companies have not handled consumer disputes in compliance with the law.
The Fair Credit Reporting Act tells companies how credit reporting disputes should be handled. Some of the requirements apply to furnishers. Furnishers are the companies like banks, mortgage lenders, and credit card issuers that provide information that is included in credit reports.
According to federal law, if a consumer disputes directly with the furnisher the accuracy of information that’s been furnished to credit reporting companies, the furnisher is required to conduct a reasonable investigation about the dispute. After completing this reasonable investigation, the furnisher is required to “report the results of the investigation to the consumer” generally within 30 days.
We recently reported that CFPB examiners had found credit card furnishers were sending unclear notices to consumers at the end of dispute investigations. In some cases, these notices did not tell the consumer the result of the dispute investigation. Some of these notices didn’t even say whether the furnisher was going to correct the disputed information with the credit reporting companies. As a result, consumers were left in the dark about whether their problem was resolved.
After we conducted examinations of certain credit card furnishers and identified these problems, the credit card furnishers we examined revised their notices. The revised notices are more specific and clearly communicate whether changes were made to the consumer’s disputed account as a result of the dispute investigation.
If you have submitted a dispute directly to a furnisher, the response you receive should include the following information:
Identification of the account that you disputed;
A statement that the dispute has been investigated;
A statement that the dispute investigation has been completed; and
An explanation of the results of that dispute investigation.
If the furnisher’s investigation found that the information you disputed is accurate, the notice should clearly say this.
If the furnisher’s investigation found that the information you disputed is inaccurate or cannot be verified, the notice should say so and also state what corrections the furnisher is providing to credit reporting companies to fix the inaccuracy.
If you get a notice from a furnisher that doesn’t meet these minimum requirements, or if you remain confused about what the furnisher is going to do about your account, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).
And if you haven’t already, you should submit a dispute about the account to the credit reporting companies as well. You have certain additional rights that only apply when you submit your dispute to a credit reporting company. You can get more information about how to submit a dispute generally on the CFPB website. We provide detailed instructions, addresses, and phone numbers for submitting disputes. Elsewhere on our website, we have provided some suggestions for what to do if your credit dispute is ignored or if you disagree with the results of the dispute.
According to the Department of Justice, older people are losing millions of dollars to mass mailing fraud schemes, often by sending $20 or $30 at a time. These mail scammers use any means they can to convince victims to send them money, credit card details, and personal information like Social Security numbers. These offers often promise lottery winnings, gifts, good fortune, and other items for a fee, but never deliver anything of value.
To help warn older consumers, we’re working with Meals on Wheels America and other meal service providers to deliver new mail fraud alert placemats to seniors receiving meals nationwide. The placement gives consumers tips on how to spot suspicious mail and what to do to protect themselves.
In addition, this week we are partnering with several other federal agencies in a coordinated public education campaign to heighten awareness and educate potential victims and their families about mass mailing fraud schemes. It is our hope that this coordinated approach will create a lasting impact in the fight against financial exploitation.
To report suspicious mail, you can file a complaint online with the Federal Trade Commission (FTC). You can also call 1-877-FTC-HELP (1-877-382-4357) or 1-866-653-4261 (TTY). The FTC cannot resolve individual complaints, but your complaint could help law enforcement detect patterns of fraud and abuse. That may lead to investigations and eliminate unfair business practices.
For more information on identifying and preventing financial exploitation, you can download our Money Smart for Older Adults guide. To help financial caregivers protect family members and friends, we also offer easy-to-understand Managing Someone Else’s Money guides. For a variety of other useful financial information, visit our older Americans page.
Easy-to-remember guidelines help people reduce credit card debt
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Take a short
+guideline like “don’t swipe the small stuff” and make it your own. You might
+just find that you’re better able to control your own credit card debt.
Have you ever looked at your credit card bill and
+wondered where all those charges came from? Or found yourself swiping your
+credit card for a purchase before you’ve had a chance to think about whether
+you really wanted to borrow money to pay for it?
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Don’t feel discouraged – there are ways to get a
+better hold on your credit card use.
+
A recent study we commissioned found that following
+simple guidelines, or rules to live by, can help you lower your credit card
+debt, if you are a consumer carrying a month-to-month balance. The rules are
+designed to help you improve the choices you make with your credit cards –
+especially when you adjust the rule to live by to fit your personal financial
+situation.
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We’ve created a worksheet to help you create and follow your own money rules
+to live by. Use the worksheet to:
+
+
Find areas where you
+ might use your credit card less often
+
Decide on a goal for
+ managing your credit card use
+
Create a rule to live by
+ for how you want to use your credit cards
+
Make a commitment to
+ yourself to act on your goal
+
Taking a close look at your small credit card
+purchases is one place to start to help gain control over your credit card
+spending. Then, you can create your own money rule to live by, such as using cash
+for similar small purchases in the future, to help make credit choices that
+work for you.
+
Using the worksheet to write down your goal will also
+help you stick to it.
+
Just like lane markers on a highway, your money
+rules to live by are guidelines that keep you moving in the right direction.
+You might have to speed some things up, slow down others, or change lanes from
+time to time, but your rules to live by can help you reach your financial
+destination.
When a catastrophe like Hurricane Maria, Hurricane Irma, or Hurricane Harvey happens, your world can be turned upside down. During these tough times, it may be difficult to know who to trust and where to look for guidance and assistance, as well as what financial steps to take as you begin recovering. These are a few organizations that can help immediately after a natural disaster:
The Red Cross can help you find aid and shelters. Local organizations will establish shelters and provide vouchers for meals, clothing and a limited amount of personal goods.
Start thinking about your financial obligations once you have addressed your most urgent needs, especially if you have experienced damage to your home or property. We have five steps you can take to help you secure your home and finances:
Contact your insurance company. If the storm damaged your home, car, or property and you have insurance, you can start the claims process by calling your insurance company. If you plan to claim damages related to flooding or storm damage, you should verify that you have the right kind of coverage. If you don’t have a copy of your insurance policy, you can ask for one. Ask for an electronic copy of your policy—receiving physical mail may be difficult following the flood. That will help you verify your coverage. If possible, take photos and videos of your damaged property. Documenting damage will help you with your insurance claim.
Register for assistance. Registering online at www.DisasterAssistance.gov, is the quickest way to register for FEMA assistance. If you are unable to access the internet, you can also call at 1-800-621-3362.
Contact your mortgage servicer. Talk to your mortgage lender right away and tell them about your situation. Damage to your home does not eliminate your responsibility to pay your mortgage, however your lender may be willing to work with you given the circumstances. If you don’t have your lender’s contact information, your monthly mortgage statement, or coupon book with you, you can search the Mortgage Electronic Registration Systems (MERS) or call toll-free at (888) 679-6377 to find the company that services your mortgage.
Contact your credit card companies and other lenders. If your income is interrupted or your expenses go up, and you don’t think you will be able to pay your credit cards or other loans, be sure to contact your lenders as soon as possible. Ask your creditor to work with you. Explain your situation and when you think you might be able to resume normal payments. It is important to make those calls before your next payments are due.
Contact your utility companies. If your home is damaged to the point you can’t live in it, ask the utility companies to suspend your service. This could help free up money in your budget for other expenses.
After contacting the companies related to your most urgent financial needs, take a look at your bills and set priorities—including your mortgage, rent, and insurance payments. Given the countless people experiencing distress from the flooding, contacting your creditors may be difficult. Be persistent and make every effort to reach them.
Additional resources
Forbearance. Depending upon the type of loan you have, your lender may be willing to temporarily reduce or suspend your payments; this is referred to as forbearance. To learn more, visit the U.S. Department of Housing and Urban Development (HUD). If you have student loans, ask your servicer if you qualify for a temporary forbearance. Federal student loan borrowers may be eligible for up to three months of forbearance.
Insurance settlement. Typically, your mortgage servicer will release a portion of the settlement money before work begins so you can hire a contractor. When the work is halfway finished, the servicer will typically release more money. The rest will be released once the job is finished and the home passes inspection.
While many people pull together during times of crisis, there is also an increased risk for scams and fraud. To avoid scams, you need to ask questions—lots of them. Questions will help you determine if something is too good to be true. If the person trying to sell you a product or service can’t or won’t answer your questions, this is a red flag that you might want to look for someone else to do business with.
Watch out for:
People who want you to pay up-front fees to help you claim services, benefits, or get loans.
Contractorsselling repairs door-to-door, especially when they ask to receive payment up front or offer deep discounts.
Con artists posing as government employees, insurance adjusters, law enforcement officials, or bank employees. It is easy to fake credibility and uniforms, so do not give out personal information to people you don’t know. Government employees never charge to help you get a benefit or service and will never ask for payment or financial information.
Fake charities. Normally, legitimate organizations do not have similar names to government agencies or other charities; so if they do, it may be a scam. Never give out donations over the phone.
Limited time offers. Anyone who offers you something and tells you that it is for a very limited time may be trying to pressure you into something that you could later regret. You should never be pressured to make a decision on the spot or to sign anything without having enough time to review it. Take your time, read and understand anything presented to you, and ask a trusted friend, relative, or attorney before acting.
Starting over requires a lot of hard choices. If you have been affected by disaster and want to make sure your financial records are secure, here is a checklist to help you consolidate all the information you need—including account numbers, personal records and financial records. Being prepared and knowing how to protect yourself can help you avoid scams and get back on your feet faster.
Person-to-person payment services and mobile payment apps have become part of everyday life for millions of people. Payment services and apps let you send money to people without having to write a check, swipe a card, or hand them cash. These services are becoming increasingly popular for things like paying a friend back for lunch, splitting the cost of rent with a roommate, or collecting money for a youth sports coach’s thank you gift.
Mobile payment services advertise to consumers that they provide increased security, ease of use, and speed over more traditional payment methods. However, many different forms and brands of these services exist—your friend may have told you about one mobile app, you may have used another to receive money from your brother, and your bank might have emailed you about their own app. You might have also heard about a different kind of service called a "mobile" wallet that lets you pay merchants. While payment apps all may appear to do the same thing, each of these services operates somewhat differently, and your experience with them may vary.
With the development of new payment methods come new risks. Mobile payment apps should have strong built-in protections to detect and limit errors, unauthorized transactions, and fraud. The federal Electronic Fund Transfer Act (EFTA) applies to a bank, credit union, or other provider’s mobile payment services, just like it does to an electronic bill pay service. Among other protections, this federal law requires these institutions to investigate errors reported by consumers. Other federal and state protections may also apply. Whatever service you end up using, keep the tips below in mind to make sure your money goes where you want it to and you receive money you’re owed.
Use caution when sending money to or receiving money from someone you don’t know
Scammers use mobile payment services to trick people into sending money or merchandise without holding up their end of the deal. For example, a scammer may sell you concert or sports tickets but then never actually give them to you. Or a scammer might purchase an item from you, appear to send a payment, and then cancel it before it reaches your bank account. Using mobile payment services with family, friends, and others you know and trust is the safest way to protect your money. The Bureau has more tips on how to avoid scams, as does the Federal Trade Commission (“FTC”).
Consider having your friend send you a request for payment first
If you’re sending money to someone for the first time, ask that they send a "request" from their app if that service is available. This helps ensure that you’re sending funds to the right person for the right amount. If the payment app does not have a request for payment function, consider sending a small, test payment to the recipient to confirm it is the right person before sending larger amounts.
Double check before you press send
A simple mistype can send money to the wrong person or in the wrong amount. Always double check the amount you entered and the person you selected to pay. Most payment apps use a username, phone number, or email address to identify payment recipients. Ask your recipient to be sure he or she has registered in the app with the information you intend to use to send them money.
Know how quickly you will receive your money—and how quickly money comes out of your account when you pay someone
Depending upon which mobile app you use and who sends you money, you may or may not be able to use money you receive immediately. In some instances, you may have to wait a few days to spend money you receive, even if the money shows up instantly in your app balance and you intend to spend the money within the same app. Many services let you transfer money to your bank account, and some will charge you a fee for the money to become available faster. For each app you use, find out how soon transferred money becomes available and then decide if that timing works for you.
Regardless of how quickly you can spend money you receive, when you send money via mobile apps, most payments you make get deducted from your balance immediately. You can sometimes put a "stop payment" on a check you’ve written, dispute a credit card charge, or cancel a bill payment. But new mobile payment services generally don’t have a recall or retrieval feature. For these reasons, again, it’s important to be certain you want to make a payment, for how much, and to whom before pressing send.
Set up your app to require a passcode, PIN, or fingerprint before making a payment
Most mobile payment apps allow you to set up a passcode, PIN, or fingerprint that you can use to authenticate yourself before making a payment. Setting up this feature helps to prevent anyone else that gets access to your mobile phone from making mobile payments from your account. In the event that your mobile phone is actually lost or stolen, be sure to notify your bank or payment provider.
Contact your bank or payment provider if you suspect an error
Under the federal law called the EFTA, banks, credit unions, and other financial institutions must investigate errors. In addition, a new Bureau rule explicitly applies the EFTA to prepaid accounts (including some payment apps) beginning in April 2019. If an erroneous transaction appears on your statement, you should notify your financial institution right away.
Many existing forms of payment offer protections in addition to those required by the EFTA. New mobile apps and forms of payment may not provide these same protections. That means it might not always be easy to get your money back if something goes wrong. Make sure you understand the protections and assurances your payment services provider offers with their service.
Similarly, as with any mobile app and before using the app, review the app’s privacy policy to understand what information about you is collected as you use the app and with whom this information may be shared.
Contact us if you encounter an issue with a bank or payment provider
The Bureau enforces the EFTA, which requires banks, credit unions, and other financial institutions to investigate errors. Congress also gave the Bureau the authority to hold companies that provide consumer financial products or services accountable for committing unfair, deceptive, or abusive acts or practices.
If you're having trouble with a payment service, you can submit a complaint online or call us toll-free at (855) 411-2372. If you have a question, and not a complaint, about payment services or other financial services, you can get answers to common questions through our Ask web tool.
The Bureau’s commitment to promoting safe and innovative payments
While the Bureau offers the tips listed above to help ensure your safety in the financial marketplace, people should be able to use new payment services with peace of mind and without fear of getting scammed or making honest mistakes. In concert with other regulators and industry stakeholders, the Bureau promotes the development of innovative payment services that offer people improved quality of life and that earn people’s trust and confidence.
Editorial note: This blog was originally posted on April 8, 2022, and has been updated on May 11, 2023.
Flooding, fire, drought, and other weather-related risks have always been a danger to property and consumer wellbeing. However, with the changing climate, these risks are increasing in intensity and frequency, impacting the likelihood of damage, cost of utilities, price of insurance, and potential resale value of homes.
A 2021 report by the First Street Foundation found that nearly 4.3 million residential homes across the country had substantial flood risk. For these properties, annual losses per property were estimated at $4,694, growing to $7,563 by 2051. Insurance can help minimize losses, however many homeowners, such as those in high-risk coastal areas in Florida, are facing rising insurance costs. Flood damage is not covered under most homeowners’ or renters’ insurance policies. In July 2022, when deadly floods hit eastern Kentucky, only 2.3% of homes in the area had government flood insurance, leaving many homeowners with insufficient resources to rebuild.
In other states, fire risk is a major factor, with an estimated 4.5 million U.S. homes at high or extreme risk, according to Verisk Analytics. Every property faces climate risks, however historically disadvantaged areas are disproportionately affected by heat and flood risk. For these homeowners, understanding climate risks is even more essential in order to take steps towards mitigation and plan for the future. Individual climate risks will vary based on location thus it is important to focus on the relevant risks for your area.
You have many factors to consider when deciding on a home: price, location, commute time, and schools, among others. It is time to add climate risks to that list.
Some major real estate websites already include flood risk and other climate risks in their listings. However, past flood damage can be hidden, costly to repair, and a sign of future risk. Before making an offer, look up a property’s climate risks using the resources below and check if your state has disclosure requirements for past flooding.
If a property is located in a FEMA high risk flood zone and you have a mortgage, you will likely be required to purchase flood insurance from the National Flood Insurance Program (NFIP) at additional cost, but it’s important to note that properties not in flood zones can still be at risk of flooding or other climate risks. On average, 40% of the National Flood Insurance Program (NFIP) flood insurance claims occur outside the high-risk flood areas. And in 2017, during Hurricane Harvey, thousands of properties not in flood zones ended up flooded, many of which did not have insurance to help with repairs. When looking for a home, carefully consider the costs and future availability of flood and homeowners insurance as well as needed resiliency or energy efficiency upgrades.
Flood is only one climate-related risk, and risks can vary greatly between properties. Investigate a potential home’s climate risk with some of these tools:
As a homeowner, it is important for you to know your climate risk so you can be better prepared for future costs and climate events. Often climate risks are undisclosed and only reveal themselves over time. Start by assessing the overall climate risk to your property, focusing on the most severe risks.
Next, evaluate how these risks may impact future insurance and utility costs as well as resale value. Examine your current budget and how it would be impacted by rising utilities and insurance costs. If your home is in an area that will get hotter or has high climate risks, these costs are likely to rise more than average. Additionally, if your property is severely impacted by climate risks, that could make it expensive or impossible to insure in the future, causing potential buyers to be wary.
Lastly, investigate options to mitigate and adapt to your climate risk. FEMA has advice on how to protect your home from flooding and wildfire. These can help but are no guarantee, thus additional insurance may be needed. To save on utility costs, consider energy efficiency or other improvements such as solar panels, improved insulation, and energy efficient windows and home appliances. New tax credits from the Inflation Reduction Act of 2022 can help decrease the total cost of certain improvements but watch out for potential scams or companies that promise unrealistic cost savings.
For renters
As a renter, you are not responsible for damage to a property due to a climate event, but you can still be vulnerable to physical harm, displacement, and loss of belongings. In addition, rising utility payments will impact renters either directly, if they are responsible for paying utilities, or indirectly, through increased rent.
As a real estate professional, you will need to comply with state and local disclosure requirements on climate risks. In addition, by providing information to the consumer about potential risks early, you can avoid negative outcomes for both the buyer and seller. In February 2023, the Mortgage Industry Standards Maintenance Organization (MISMO), a private industry standards setting body, published a Flood Risk Disclosure Guide to serve as a resource for lenders to inform consumers about flood risk.
In order to help your customer understand better their climate risk, you may want to familiarize yourself with the various climate risk tools available including:
*Although this blog includes links to private websites measuring and discussing climate risks, the CFPB cannot attest to the accuracy of these sources and encourages consumers to look at many sources when making decisions on climate risks.
The Consumer Financial Protection Bureau is committed to ensuring a fair, transparent, and competitive auto lending market, and we are taking action against sloppy servicing practices that cause harm. Some of these practices involve optional, add-on products that consumers can purchase when they purchase a car. For example, guaranteed asset protection (GAP) products offer to help pay off an auto loan if the car is totaled or stolen and the consumer owes more than the car's depreciated value.
The add-on product’s potential benefits apply only for specific time periods, such as four years after purchase, and only under certain circumstances. Auto dealers and finance companies often charge consumers all payments for any add-on products as a lump sum at origination of the auto loan, and they generally include the lump sum cost as part of the total vehicle financing agreement. Consumers typically make payments on these add-on products throughout the loan term, even if the product expires years earlier.
Our examiners have focused on the way servicers handle these add-on product charges when the loan ends before the add-on product’s potential benefits end. Such early termination may happen because the consumer pays the loan off early, often through refinancing, or because the consumer was delinquent in making payments and the servicer repossessed the consumer’s car. As we describe in a report released today, examiners found that servicers engaged in unfair practices by failing to request refunds from the third-party administrators for “unearned” fees related to one such add-on product, GAP, and failing to apply the applicable refunds to the accounts after repossession and cancellation of the contracts. At that point, the consumers did not have the cars that had been subject to the GAP product, and the product no longer offered any possible benefit to consumers. Examiners found that servicers later sent deficiency notices to consumers and reported balances to third-party debt buyers that included these inaccurate amounts in the deficiency balances owed by consumers.
In response to these findings, the servicers remediated impacted consumers and implemented additional controls to ensure they process add-on product refunds after repossession.
Miscalculating Refunds
CFPB examiners have also cited servicers for engaging in unfair acts or practices for miscalculating ancillary auto product refunds after repossession and attempting to collect miscalculated deficiency balances. For example, servicers incorrectly calculated refunds for extended warranty products or other products that had been financed through the consumers’ auto loans. The miscalculations reduced the refunds available to certain borrowers and led to deficiency balances that were higher by hundreds of dollars. The servicers then attempted to collect the deficiency balances. In response to these findings, the servicers conducted reviews to identify and remediate affected borrowers.
The CFPB will continue to scrutinize servicer practices to make sure that borrowers aren’t overcharged when their loans end early.
Today, the CFPB announced that it has approved an application that marks the first step for piloting disclosures for construction loans. Under this program, the CFPB authorizes parameters for in-market testing of alternatives to required disclosures. Real-world disclosure testing is often more accurate than lab testing, and this effort can help the CFPB by informing the need for possible regulatory changes.
The Independent Community Bankers of America (ICBA) applied under the program for a template covering the CFPB’s Know Before You Owe Disclosures. In particular, the ICBA asked to test certain adjustments to the existing mortgage disclosures in the unique context of construction loans, for which the CFPB’s disclosures were not primarily designed. The application noted that, in particular, many first-time homebuyers in rural areas build their homes instead of buying existing homes, and consequently, the challenges of using the current disclosures in the construction loan context may impact rural areas more acutely. The CFPB solicited comments on the ICBA’s application in February and made a decision to approve the template after reviewing the public feedback.
Individual lenders can apply for approval to test the alternative disclosures for construction loans. In deciding whether to approve individual lender applications, the CFPB will carefully evaluate a lender’s plan to test the effectiveness of these disclosures. The CFPB looks forward to reviewing any lender applications.
If you take a drive down the main road leading to most military bases in the country, you’ll likely see car dealerships lining both sides of the street. The CFPB’s prior research has shown that young servicemembers tend to take out auto loans soon after joining the military and carry more auto debt than their civilian peers. This isn’t altogether surprising. When many servicemembers finish basic training, their first duty station is often in an area where a car is needed to get around or leave the base.
Access to credit can be an important and valuable tool for servicemembers. At the same time, if a servicemember becomes unable to keep up with financial obligations, it can lead to adverse personnel actions such as a lost security clearance or potential discharge. Many servicemembers are young, first-time car buyers with limited knowledge of credit products and terms. Accordingly, they may be more likely to agree to products they don’t need or understand or receive loan terms that are not in their best interest. While we expect that lenders will treat all borrowers fairly and responsibly, lenders need to pay particular attention to how they treat servicemembers and their families.
CFPB research shows that by the age of 24, around 20 percent of young servicemembers have at least $20,000 in auto debt, which is nearly two-thirds of a young enlisted soldier’s typical base salary at that age. In comparison, only seven percent of civilians at age 24 have the same amount of auto debt while 71 percent don’t have any. Young servicemembers also generally have higher rates of delinquency and repossession, especially those who serve fewer than five years. Those who remain in service longer than five years have rates of delinquency that are virtually indistinguishable from civilians.
To better protect those who serve in our military, Congress passed the Servicemembers Civil Relief Act (SCRA). Among other protections, the SCRA provides specific safeguards for active-duty military members facing repossession of their cars. While we know that many lenders take following the SCRA seriously, over the past five years the Department of Justice (DOJ) has sued multiple lenders for violating the law in their auto repossession practices.
The CFPB recently released a bulletin outlining some concerns about auto loan servicing and wrongful repossessions with respect to all consumers. Additionally, it’s less costly to repossess a car because many lenders now use certain technologies that make it easier to locate the vehicle, including starter-interrupt devices, GPS locators, and license plate recognition. We’re concerned that the use of these technologies may disproportionally impact certain communities and we’re taking steps to better understand their impact, including potential privacy concerns.
We expect servicers, lenders, and repossession agents to adhere to the requirements under the SCRA, particularly when using new repossession technologies to ensure that servicemembers are treated fairly and that all applicable laws and regulations are carefully followed.
If you’re a servicemember and believe your SCRA rights have been violated, we encourage you to reach out to your local legal assistance office and file a complaint directly with DOJ. If you have more general trouble with a financial product or service, you can submit a complaint to the CFPB. Servicemembers are responsible for keeping our country safe from harm, and we’re committed to protecting them from unfair or illegal financial services practices.
Earlier this month, the Bureau of Labor Statistics released data regarding changes to the Consumer Price Index (CPI), which is one measure of inflation. The increasing cost of automobiles continues to be a major component of inflation, as many manufacturers face difficulties procuring chips that are a key component in cars and are therefore producing fewer new cars. While the chip shortage has caused new cars to grow more expensive, the price increase of used cars has been sharper. Data show that the CPI for used cars and trucks increased 40 percent since January 2021 while the CPI for new cars increased 12 percent. As car prices continue to rise, loan amounts are rising, and loan lengths are growing to make those larger loans seem affordable.
As a result, we expect that both the total amount of debt and the average loan size will continue to increase and that larger car loans will put increased pressure on some consumers’ budgets for much of the next decade. Auto loans are already the third largest consumer credit market in the United States at over $1.4 trillion outstanding, double the amount from 10 years ago and expected to grow further. We are also concerned that current high auto prices, especially for used cars, might create incentives for lenders to repossess cars more quickly than would have occurred before.
For many, their car or truck is essential to get to work or to do their work. Therefore, as the economic recovery continues, we will focus on ensuring a fair, transparent, and competitive auto lending market in the following ways.
Ensuring affordable credit for auto loans
When loans are affordable, consumers can repay the loan and continue to use their car. When loans are made at the edge of (or beyond) a consumer’s ability to repay, any economic disruption in the consumer’s life can result in repossession. Given the increase in loan amounts, the rising length of loan terms, and the uncertainty around the ongoing economic recovery, we will be closely monitoring lender practices and consumer outcomes. In particular, we continue to evaluate lending structures where lenders seem to rely on high interest rates and fees to profit even when consumers fail.
We are also concerned about loan-to-value (LTV) ratios in the auto loan market. While LTV ratios have dropped in the past year for consumers who already had cars due to high used vehicle prices, LTVs were climbing prior to the global vehicle shortage. We expect that trend to resume once price pressures abate. We will continue to monitor the market as pricing issues persist.
Monitoring practices in auto loan servicing and collections
The current economic recovery is uneven, and some consumers have been hit harder economically due to the pandemic. We want to ensure that incentives are aligned between servicers and consumers, that servicers are making accommodations available to all consumers and that servicer practices treat consumers fairly. We will also continue to work with our federal agency partners to ensure that the special protections offered to our servicemembers are followed and enforced.
Technology continues to shape auto loan servicing and collections, but with that comes questions about the effect on consumers. It is now less costly to repossess a car because many lenders require the use of some of these technologies. For example, some lenders require access to GPS locators so that they always know where a car is physically located, require the installation of technology that blocks a borrower who has missed even one payment from starting the car, or use license plate recognition (LPR) technology to find cars on repossession “hot lists”.
We are concerned that the use of these technologies may disproportionally impact certain communities, and we are taking steps to better and fully understand their impact, including privacy concerns associated with them.
Fostering competition among subprime lenders
Consumers with prime credit scores typically have many financing options, including borrowing directly from lenders. This provides them more leverage to negotiate interest rates. On the other hand, consumers with subprime credit scores often get loans indirectly through a smaller pool of lenders that operate exclusively through dealers or from buy-here-pay-here (BHPH) dealers that specialize in subprime lending. The result is less comparison shopping, fewer options, and less leverage to negotiate the interest rate.
CFPB research shows that the average subprime auto loan interest rate is between about 9 percent and 20 percent annually, depending on the type of lender. This variation has a large impact on consumers. Our report estimates that typical “shallow subprime” small BHPH borrowers would save around $894 over the life of a loan if they could reduce the interest rate from 13 percent, which is typical for such BHPH borrowers, to 9 percent, which is typical for bank borrowers with similar default rates.
We are looking to better understand potential barriers to competition in the subprime auto lending market that may drive these and related outcomes. We will continue to research auto lending policies and practices that may hinder a fair, transparent, and competitive market. And, we will work with our counterparts at the Federal Trade Commission and the Federal Reserve Bank Board of Governors to use our collective authorities to address issues in the market.
Given the steep rise in costs to purchase an automobile, it is critical that America has a well-functioning auto lending market. We will keep the public updated on changes to the market and the actions we are taking to ensure the market is working fairly for all Americans.
The Your Money, Your Goals financial empowerment toolkit is designed for organizations that help people meet their financial goals by increasing their knowledge, skills, and resources.
The pandemic has created uncertainty and anxiety in our country and around the world. This can be especially true for those who are unemployed or furloughed due to the coronavirus pandemic.
The Your Money, Your Goals financial empowerment toolkit has resources to help you evaluate your current finances and make decisions about your budget.
In this blog we highlight a few tools and handouts to help you make these tough decisions.
Paying your bills
If you are having trouble making payments, contact the companies you owe money to. Discuss your situation and options. Many companies have implemented special payment flexibilities for consumers experiencing hardship at this time.
Here are a couple tools to help you manage your bills.
Prioritizing bills
When you can't pay all your bills on time, this tool can help you prioritize which bills to pay first and helps you think through the impact of your choices.
Note: For expenses like utilities, phone and internet, mortgages, or insurance, many providers offer flexibilities to customers facing financial strain, and many are offering additional assistance during the pandemic. Check with your service providers, including utilities, phone and internet providers, mortgage servicers, landlords, and insurance companies. You can dial 211 and 311 to identify resources in your community.
This tool can help you keep track of when your bills are due and avoid late fees. For some bills, like credit cards, you may be able to adjust the bill’s due date by contacting your credit card company. For others, like rent, you may be able to split a large monthly payment into two smaller payments.
Reducing your spending and expenses may be an effective way to cover daily necessities. Having a clear picture of your spending helps you identify where you can reduce or better manage your money.
Spending tracker
Get an accurate picture of your finances. In normal circumstances, this includes getting a good sense of where your money is coming from (income) and where it’s going (expenses).While some of your expenses, like childcare or entertainment, may have stopped for the time being, you still need to make sure you can cover your basic necessities – food, housing, utilities, and phone.
This tool may spark ideas about how to cut costs and reduce expenses, so you can cover daily necessities. Some tips are commonly known, while others may be unfamiliar to people suddenly needing assistance.
It is important to understand that debt can represent a very real barrier to achieving goals and can be hard to face. But there are tools you can use to help you take control of your debt. Even small steps toward paying down debt can make a big difference in making it feel more manageable.
Debt log
This tool can help you to keep track of the debt you owe. After you get a clear picture of your debts, you may want to use the debt action plan to decide which debts to focus on first.
If a debt collector calls you, use this tool to make sure you’re asking the right questions. This tool will help you verify if the claim is valid, know how to dispute the claim if you do not owe the debt, and know what to do next if you do owe the debt.
Get prepared and read about your rights. This will help you avoid scammers who may pose as debt collectors to get you to pay on debts that you don’t owe.
While you’re working hard to make ends meet, scammers are working overtime to try to steal your money, your identity, or both.
You are the first line of defense when it comes to protecting your financial information from fraud or theft. The Spotting red flags and Protecting your identity handouts can help you be proactive about keeping your information safe.
It’s important to make time after you’ve figured out how you will be able to pay your bills and worked out repayment options to check your credit reports. Your credit reports and scores play an important role in your future financial opportunities.
Requesting your free credit reports
This tool walks you through the steps of requesting your free credit reports. Once you have them, use the Reviewing your credit reports tool to make sure your credit information is correct.
This tool can help you find incorrect information in your credit report. Errors can appear due to a mistake in the information provided about you or as the result of fraud or identity theft.
Sign up for the latest financial tips and information right to your inbox.
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Find more information regarding COVID-19 from CFPB
We’re working to continuously update information for consumers during this rapidly evolving situation.
We will publish all COVID-19-related information and blogs to our resource page. Information should be considered accurate as of the blog publish date.
Whether or not you are among the millions of people affected by the recent Equifax data breach, there are several steps you can take to respond when your personal information is exposed in a data breach.
We outlined several identity theft tips for you last week. Since then, people have been asking many questions and we will continue to work to provide answers—or point people to other resources that may help make the situation clearer.
Free credit monitoring offered by Equifax
Equifax is offering a free monitoring service to anyone—not only those who are affected by this breach. Since this is a free service, you should consider signing up for this service, if it makes sense for you, by visiting equifaxsecurity2017.com.
Any time you are offered free credit monitoring, make sure you check for:
Trial periods
Fees
Cancellation requirements
Other restrictions, such as automatic renewals
Whether you are being asked to give your credit card, debit card, or bank account information
If you don’t give your credit card, debit card, or bank account information, that helps to avoid getting automatically renewed and charged for something that you expected to be free. This will also help to make sure you don’t face unexpected fees, charges, or other limitations.
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Credit monitoring and arbitration
In the initial response to the data breach, people were concerned over an arbitration clause to enroll in Equifax’s TrustedID program for credit monitoring. Originally, this clause stated that claims and disputes against the company would be settled by arbitration, as opposed to in a court of law.
In an update for consumers, Equifax announced that it has removed the arbitration clause language from its terms of use for the credit monitoring product, called TrustedID Premier. With this change, the company has stated that anyone who enrolls in the company’s free credit file monitoring and identity theft protection will not waive their right to pursue legal action or join a class-action lawsuit concerning the cybersecurity incident or the TrustedID Premier product provided in response to that incident, should you choose.
Top 10 ways to protect your personal information from being misused
1.Review your credit report. 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 a copy from AnnualCreditReport.com.
2.Consider a security freeze. A security freeze or credit freeze on your credit report restricts access to your credit file. Creditors typically won’t offer you credit if they can’t access your credit reporting file, so a freeze prevents you and others from opening new accounts in your name. In almost all states, a freeze lasts until you remove it. In some states, it expires after seven years.
3.Set up a fraud alert. Fraud alerts require that a financial institution verifies your identity before opening a new account, issuing an additional card, or increasing the credit limit on an existing account. A fraud alert won’t prevent lenders from opening new accounts in your name, but it will require that the lenders take additional identification verification steps to make sure that you’re making the request. An initial fraud alert only lasts for 90 days, so you may want to watch for when to renew it. You can also set up an extended alert for identity theft victims, which is good for seven years.
4. Read your credit card and bank statements carefully. Look closely for charges you did not make. Even a small charge can be a danger sign. Thieves sometimes will take a small amount from your checking account and then return to take much more if the small debit goes unnoticed.
5. Don’t ignore bills from people you don’t know. A bill on an account you don’t recognize may be an indication that someone else has opened an account in your name. Contact the creditor to find out.
6. Shred any documents with personal or sensitive information. Be sure to keep hard copies of financial information in a safe place and be sure to shred them before getting rid of them.
7. Change your passwords for all of your financial accounts and consider changing the passwords for your other accounts as well. Be sure to create strong passwords and do not use the same password for all accounts. Don’t use information such as addresses and birthdays in your passwords. For more tips on how to create strong passwords read more from the Federal Trade Commission (FTC).
8. File your taxes as soon as you can. A scammer can use your Social Security number to get a tax refund. You can try to prevent a scammer from using your tax information to file and steal your tax refund by making sure you file before they do. Be sure not to ignore any official letters from the IRS and reply as soon as possible. The IRS will contact you by mail; don’t provide any information or account numbers in response to calls or emails.
10. If you are the parent or guardian of a minor and you think your child’s information has been compromised, here are some steps from the FTC you can take to protect their information from fraudulent use. If you think you or your child’s identity has already been stolen you can follow checklists and additional steps provided by the FTC to begin recovering from a case of identity theft.
If you have a debt in collection, it’s often a challenging time. You may be having a difficult time financially and that can be frightening. And if a debt collector contacts you about your debts, you may have concerns about whether the debt collector is legitimate, whether the debt is yours, or if the amount the collector is seeking to collect is accurate.
The Fair Debt Collection Practices Act makes it illegal for debt collectors to harass or threaten you when trying to collect on a debt. In addition, on November 30, 2021, the CFPB’s new Debt Collection Rule became effective. This rule clarifies how debt collectors can communicate with you, including what information they’re required to provide at the outset of collection about the debt, your rights in debt collection, and how you can exercise those rights.
Here are five key things to know about the new debt collection rule.
What is a debt collection validation notice?
When a debt collector first communicates with you, or shortly thereafter, they’re generally required to provide certain information about the debt. When the information is provided in writing or electronically, it is called a validation notice, and it will generally include information like:
Name and mailing information of the debt collector
Name of the creditor to whom the debt is owed
Account number (if any) associated with the debt
An itemization of the current amount of the debt that reflects interest, fees, payments, and credits since a particular date that you may be able to recognize or verify with records
The current amount of the debt as of when the validation notice is provided
Information about your debt collection rights including how to dispute the debt
This notice is meant to help you identify whether you owe the debt and whether the collector’s information about the debt is accurate. The notice must include a “tear-off” form that you can send back to the debt collector to dispute the debt or take other actions.
How often can a debt collector call me?
The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from repeatedly or continuously calling you with the intent to harass, oppress, or abuse you.
Under the Debt Collection Rule, collectors are presumed to violate the law if they place a telephone call to you about a particular debt:
More than seven times within a seven-day period, or
Within seven days after engaging in a phone conversation with you about a particular debt
These call frequency presumptions only apply to calls placed by the collector to you. They don’t apply to text messages, emails, and other types of media. Those media have other limitations.
When can a debt collector report my debt to a credit reporting company?
There are certain steps debt collectors must take before they can report a debt to a credit reporting company. They must do any of the following:
Speak to you by telephone or in person about the debt
Mail a letter or send an electronic communication about the debt and wait for a reasonable amount of time, generally 14 days, in case it is returned as undeliverable
If the debt collector sends you a validation notice, it means that they’ve satisfied their requirement to contact you and, in general, can begin reporting the debt to credit reporting companies, provided they follow other laws about credit reporting.
Can a debt collector contact me on social media about a debt?
Debt collectors must follow certain rules if they contact you through social media, including:
Keeping the messages private – Their messages to you must be private and not viewable by the general public or by your friends, contacts, or followers.
Identifying themselves as a debt collector – If a debt collector attempts to send you a private message requesting to add you as a friend or contact, the debt collector must identify themself as a debt collector.
Providing a way for you to opt out of their communications – They must also provide you, in each message, a simple way to opt out of receiving further communications from them on that social media platform.
A “limited-content message” is a type of voicemail that a debt collector may leave for you that must include specific information. Limited-content messages must include:
A business name that does not indicate the caller is a debt collector
Telephone number(s) you can use to return the call
A request that you reply and the name(s) of who you can contact to reply
There’s also some optional information they can include, including suggested dates and time for you to reply. Voicemails that don’t follow these rules are not considered limited-content messages.
If you have a checking account, you might have to deal with an overdraft fee. An overdraft occurs when you don’t have enough money in your account to cover a transaction, and the bank or credit union pays for it anyway. Transactions include ATM withdrawals and debit card purchases as well as checks and ACH payments (such as online bill payments). Many banks and credit unions offer overdraft programs, and these can vary by institution.
Generally, if you overdraw your checking account by a check or ACH, your bank or credit union’s overdraft program will pay for the transaction and charge you a fee. By allowing your account balance to fall below $0, your bank or credit union will also effectively take the repayment right out of your next deposit. At most institutions, the overdraft fee is a fixed amount regardless of the transaction amount, and you can incur several overdraft fees in a single day.
Overdraft fees work a little differently for debit cards. Your bank or credit union cannot charge you fees for overdrafts on ATM and most debit card transactions unless you have agreed (“opted in”) to these fees. If you choose to opt in to debit card and ATM overdraft, you are usually allowed to make ATM withdrawals and debit card purchases even if you do not have enough funds at the time of the transaction. However, you will generally incur fees on transactions that settle against a negative balance later.
If you have not opted in to ATM and debit card overdraft, debit card purchases and ATM withdrawals will generally be declined if your account doesn’t have enough funds at the time you attempt the transaction. If you have not opted in, you will still be able to make ATM withdrawals and debit card purchases when you have enough funds at the time you attempt your transaction, and you will not incur an overdraft fee regardless of whether you have the funds to cover the transaction in your account when the transaction later settles.
Since opted-in consumers allow their bank or credit union to charge them fees in the event of an ATM or debit card overdraft, they generally pay more in overdraft fees than consumers who do not opt in. For example, in 2014 the CFPB reported that opted-in accounts are three times as likely to have more than 10 overdrafts per year as accounts that are not opted in. The CFPB also found that opted-in accounts have seven times as many overdraft fees as accounts that are not opted in. Take a closer look at how consumers are impacted by opting in to checking account overdraft.
Whether or not you opt in, you may still be charged fees for overdrafts on checks or ACH transactions. Still, deciding whether or not to opt in can be one of the most important decisions you make that affects the cost of your checking account.
Here are six steps you can take to reduce or eliminate overdraft fees:
Track your balance as carefully as you can to reduce the chance you’ll overdraft. Also, sign up for low balance alerts to let you know when you’re at risk of overdrawing your account. If you have regular electronic transfers, such as rent, mortgage payments or utility bills, make sure you know how much they will be and on what day they occur. Track the checks that you write and note when the funds are deducted from your account, so that you do not accidentally spend money you have already paid from your account. You also need to know when the funds you have deposited become available for your use.
Check your account balance before making a debit card purchase (or ATM withdrawal), and then pause to ask yourself if you any other payments coming up. Just because your account has enough funds when you’re at the checkout counter doesn’t mean you’ll have the funds later when the transaction finally settles. If you’ve recently written checks or made online bill payments that have yet to be deducted from your account, these could draw down your funds in the meantime, leaving you without enough funds to cover your purchase. Debit card overdraft fees can occur on transactions that were first authorized when there were sufficient funds to cover them, but took the account negative when the transaction settled.
Don’t opt-in. You can avoid paying overdraft fees when using your debit card for purchases and at ATMs by not opting-in, or by opting-out if you are currently opted in. This means that your debit or ATM card may be declined if you don’t have enough money in your account to cover a purchase or ATM withdrawal at the time you attempt a transaction. However, it also means you won’t be charged an overdraft fee for these transactions.
Link your checking account to a savings account. If you overdraw your checking account, your institution will take money from your linked savings account to cover the difference. You may be charged a transfer fee when this happens, but it’s usually much lower than the fee for an overdraft.
Ask your financial institution if you are eligible for a line of credit or linked credit card to cover overdrafts. You may have to pay a fee when the credit line is tapped, and you will owe interest on the amount you borrowed, but this is usually a much cheaper way to cover a brief cash shortfall.
Shop around for a different account. Find out about your bank or credit union’s list of account fees, or ask about them, then compare them with account fees at other banks or credit unions. Assess your own habits and what fees you may face. Consider penalty fees, such as overdraft and non-sufficient funds charges, as well as monthly maintenance, ATM surcharge, and other service fees. When comparing banks or credit unions, you might also want to consider factors such as the hours of operation, locations, access to public transportation, available products and services, and reputation for customer service.
Questions about overdraft fees or checking accounts?
Check out Ask CFPB, our database of common financial questions and answers.
Submit a complaint
If you have a problem with overdraft fees or any other financial products, you can submit a complaint online or by calling (855)411-2372
Prepaid accounts are one of the newer ways to store and spend your money. These include prepaid cards that you buy in stores or digital wallet accounts that you get online. With most prepaid accounts, you can spend the money you’ve loaded in advance for daily expenses or withdraw cash from an ATM. You can also have your income directly deposited into most types of prepaid accounts.
Not all prepaid accounts are the same. Each account has its own set of features, functions, and fees. To decide which prepaid account is right for you, it’s important to learn about your choices and compare the fees that will apply depending on how you use the account. Right now, it can be hard to compare accounts because each card displays fee information differently.
With our new rule you will get clear, upfront information about these fees so you can know before you owe and shop for the best deal. These comprehensive consumer protections included in the new rule take effect on Oct. 1, 2017.
The rule will also make sure prepaid accounts are safer to use -- whether you’re swiping at the register, shopping online, or scanning your smartphone.
Right now, if someone accesses your prepaid account and steals your money, your protections depend on the type of account you have and your cardholder agreement. Under our new rule, your money will generally be protected if your card is lost, stolen, or your account is wrongly charged. You’ll also be able to easily monitor your account for free.
If you’re a current prepaid card user, we have information and tips. You may have the right to choose how your employer pays you if offered a payroll card, or to choose how you get payments for some government benefits.
Today we are updating our mortgage
+servicing rules and expanding foreclosure protections for struggling borrowers
+and other homeowners.
+
Our mortgage servicing rules that
+became effective in 2014 require that the companies that collect and process
+mortgage payments, known as servicers, give troubled borrowers direct
+and ongoing access to servicing personnel, promptly credit payments, and
+correct errors on request. The rules also include strong protections for
+struggling homeowners, including those facing foreclosure.
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Since we issued those rules, we have
+seen how they are working in the market, talked to those implementing and
+affected by the rules, and proposed updates to make these rules more effective. Today, we’re finalizing those proposed updates
+with some changes based on the comments we received. We’re giving servicers a
+full year (and for some changes longer) to implement these rules, but we want
+you to see now how they will help consumers, like you.
+
The rules include many changes, but below
+are several we want to highlight:
+
Help for struggling borrowers
+
Our rule updates the way servicers
+have to communicate with borrowers who have applied for loss mitigation. Loss
+mitigation is a process where the servicer works with a struggling borrower to try and
+find alternatives to foreclosure. For example, the updates require servicers to
+let borrowers know when their application for loss mitigation is complete. This
+is important because certain protections don’t begin until an application is
+complete. Servicers are often prohibited from conducting a foreclosure sale while
+they are in the process of reviewing a complete application.
+
These updates also require servicers to
+give the protections of the loss mitigation rules to certain borrowers more
+than once during the life of the loan. Currently, a servicer is only required
+to give those protections under the rule once to a struggling borrower. When
+the new rule goes into effect, certain borrowers who received help under the
+rule before may be eligible to get help again. Receiving the protections more
+than once is important for people who may experience an unexpected hardship, like
+the loss of a job or a debilitating illness.
+
Protecting successors in interest
+
The rule also provides
+more protections for successors in interest, individuals who didn't borrow the money originally but who acquire ownership rights to a home, often when the borrower dies or as
+a result of a divorce. The rule defines successors in interest broadly. It includes
+someone receiving the ownership interest when a property is transferred upon
+the death of a relative, as a result of a divorce or legal separation, through certain
+trusts, between spouses, from a parent to a child, or when a borrower who is a
+joint tenant dies.
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The new protections require servicers
+to provide information to potential successors in interest about the documents
+that are needed to confirm their status. The rule also ensures that confirmed successors
+in interest are given access to many of the same notices and documents that
+the original borrower would receive.
+
Providing
+more information to borrowers in bankruptcy
+
Under our existing mortgage
+rules, servicers do not have to provide periodic statements or early
+intervention loss mitigation information to borrowers in bankruptcy. The new
+rules require servicers to provide statements to these borrowers in certain
+circumstances, with specific information tailored for bankruptcy, as
+well as a modified early intervention notice to let them know about loss
+mitigation options.
+
Our updates are finalized, but they won’t
+be in effect for a while in order to give servicers and others in the mortgage
+industry time to update their systems and to implement the new protections. If
+you are having issues with your mortgage, you can submit a complaint online or by calling (855) 411-2372.
Customers of Wells Fargo or any other bank or credit union should always closely monitor their accounts to make sure they don’t see unauthorized products or account activity. If you suspect that you had an unauthorized account opened, you should visit your local bank branch or call your financial institution. If you’re still having an issue, you can submit a complaint to the CFPB, either online or by calling toll-free (855) 411-2372.
The CFPB is requiring Wells Fargo to provide full refunds to consumers for the fees they incurred as a result of the bank’s illegal conduct, and affected customers are not required to take action to get a full refund.
The historic $100 million fine we imposed on Wells Fargo is in addition to the money the bank must pay back to harmed consumers. There were also fines from other government agencies. The CFPB’s large fine reflects the seriousness of these violations and sends the message to the bank and other financial institutions that this type of misconduct carries serious consequences.
It is also a good idea to periodically check your credit report. Get a free copy of your credit report at AnnualCreditReport.com. You can receive a free credit report from each nationwide credit reporting company once every 12 months.
In 2015, we published a report finding that 26 million Americans are “credit invisible.” This figure indicates that one in every ten adults does not have any credit history with one of the three nationwide credit reporting companies. The report also found that Black consumers, Hispanic consumers, and consumers in low-income neighborhoods are more likely to have no credit history or not enough current credit history to produce a credit score.
Today, we’re releasing a brief of the most significant findings, as well as a checklist of action items to help consumers who are new to credit or looking to rebuild.
Credit reports and credit scores play a crucial role in the lives of consumers in America. Fortunately, there are actions you can take to build credit.
Know what matters
Paying your bills on time, every time, is one critical step in building a good credit score. Also, don’t get too close to your credit limit. Experts advise keeping your use at no more than 30 percent of your total credit limit.
Find products that will help you to build your credit history responsibly
There are a number of existing products considered helpful in establishing or rebuilding credit histories, and provide you with the opportunity to practice making on-time payments that are reported to the credit reporting companies. Below is a list of common credit-building products to explore:
Secured credit cards: You can apply for this card like a traditional credit card and after approval, deposit an amount of money –which can range from $50 to $300 depending on the credit card company – into a separate account. The bank holds onto this deposit and extends you a credit line matching the deposit amount that you made. Banks typically report to the credit reporting companies about card activity – so you build credit with its use, but be sure to ask your card issuer. Many secured cards also include a “graduation” component, so you are able to move from a secured card to a traditional credit card seamlessly after establishing a pattern of consistent payments.
Credit builder loans: Financial institutions, typically credit unions, deposit a small “loan” (often $300-$1000) into a locked savings account and you pay the institution back with small-dollar payments over 6 to 24 months. These payments are reported to the credit reporting companies. Once you come to the end of the loan term, you receive the accumulated money back in total. These loans often have the dual benefit of building credit and savings. The savings could be used for an emergency (in lieu of a more costly financial products) or as the deposit for a secured credit card. This can help you establish a credit history for the first time.
Retail store credit cards: Many gas stations, department stores or retail chains offer credit cards. These cards tend to be easier to obtain and typically offer lower credit lines. This combination makes them an option when you’re looking to build up a thin or nonexistent credit record.
Reporting rent and other, less traditional payment data to the credit reporting companies
There are a number of payments you make that credit reporting companies don’t currently receive information about, but could be captured to record on-time payment history. This data could include monthly rent or cell phone payments. You can also leverage this opportunity by opting into self-reported payments through a company that offers this service. Fees and conditions may apply for such services, so be sure to do your homework before enrolling.
Know how to access credit reports
You have the right to request your credit report from each of the three nationwide credit reporting companies once every twelve months free of charge at annualcreditreport.com. Having this information on-hand is the most important first step to building or rebuilding credit.
Take steps to correct errors
You should actively take steps to correct any accuracy issues with your credit reports. In fact, accuracy issues are the top cited issues in credit reporting complaints we handle. We have forms you can use to dispute errors on your credit report.
You have the legal right to dispute errors on report with the credit reporting company and the company that furnished the information to the reporting company such as your lender. Companies are obligated to conduct – free of charge – a reasonable investigation of your dispute. The company that has provided the incorrect information must correct the error, and notify all of the credit reporting companies to whom it provided the inaccurate information.
We have other tools to help you get the information you need. If you have questions about credit reporting and building your credit, visit Ask CFPB. If you are facing an issue with credit reporting, or other financial products or services, you can submit a complaint at consumerfinance.gov/complaint or by phone at 855-411-2372.
Agency representatives will discuss their agencies’ roles as Financial Institution Regulatory and Enforcement Agencies (FIREAs) and as partners in elder financial exploitation prevention and response. They will also share free resources for older consumers, account holders, and financial caregivers.
Speakers
Louisa Quittman, Office of the Comptroller of the Currency
Peggi Gill, Federal Deposit Insurance Corporation
Lisa Schifferle, Consumer Financial Protection Bureau
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+ Public Service Loan Forgiveness Demystified | Consumer Financial Protection Bureau
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If you were unable to join us last week for PSLF Demystified, we are hosting the webinar again, on Friday November 12th at 1:00pm EST.
Join Consumer Financial Protection Bureau (CFPB), Office of Federal Student Aid (FSA), and The Institute of Student Loan Advisors (TILSA) as we layout the steps to qualify and apply for Public Service Loan Forgiveness (PSLF). We will be hosting a webinar designed to help you understand the requirements and give you practical tips to help you get on track to achieve loan forgiveness.
Speakers include:
Tanika Mangum, Outreach Specialist, Department of Education, Office of Federal Student Aid
Betsy Mayotte, President and Founder, The Institute of Student Loan Advisors
WASHINGTON, D.C. — Today a federal district court in the Western District of Missouri entered an Order effectuating a settlement between the Bureau of Consumer Financial Protection (Bureau) and Richard Moseley, Sr., Richard Moseley, Jr., and 20 interrelated corporate entities controlled by Moseley, Sr. and Moseley, Jr., in the Bureau’s lawsuit regarding the unlawful origination and servicing of short-term, small-dollar online loans to consumers nationwide.
The Bureau’s Complaint alleged violations of the Consumer Financial Protection Act and other federal consumer financial laws. The Bureau alleged that the defendants obtained consumers’ sensitive personal and financial information from third-party data brokers, and used that information to access consumers’ bank accounts without authorization. According to the Bureau’s complaint, the Hydra Group deposited loans in consumers’ bank accounts, then debited biweekly “finance charges” indefinitely. In many cases, the Bureau alleged, consumers never saw loan agreements and were not aware of the account activity until after the loan was deposited and finance charges were withdrawn. Additionally, the Bureau alleged that, even when consumers did receive loan documents, the written disclosures misrepresented the price terms and repayment obligations of the purported loan.
In November 2017, a jury in New York found Moseley, Sr. guilty of: conspiracy to collect unlawful debts; collection of unlawful debts; conspiracy to commit wire fraud; wire fraud; aggravated identity theft; and making false disclosures under the Truth in Lending Act. Moseley, Sr. has appealed that conviction.
Under the terms of the consent order, the defendants will be banned from the industry, forfeit approximately $14 million in assets, and pay a $1 civil money penalty. The civil penalty amount is based in part on the defendants’ limited ability to pay. The order imposes a judgment for $69 million for purposes of paying consumer redress, but, in light of the defendants’ limited ability to pay, the judgment will be suspended upon compliance with other requirements.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ CFPB and Financial Regulators Issue Guidance on How Banks Handle Consumer Deposit Account Discrepancies | Consumer Financial Protection Bureau
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WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) and four federal financial regulatory agencies issued guidance providing supervisory expectations on how financial institutions should handle consumer deposit discrepancies. The interagency guidance states that banks should avoid or reconcile, or resolve discrepancies between the amount they credit to a consumer’s account and how much was actually deposited. The guidance calls on banks to adopt policies that treat consumers fairly when they make deposits and do not violate law.
“Consumers should not be denied timely access to the full amount of their deposits,” said CFPB Director Richard Cordray. “Today’s guidance should make it clear that we expect financial institutions to take steps to handle and resolve deposit discrepancies and avoid consumer harm.”
When a consumer makes a deposit, in some instances, the sum the bank credits to the account may be different from the total amount deposited. These deposit discrepancies can occur for several reasons, such as the amount written on a deposit slip does not match the cash transferred into the bank. In other instances, there might be encoding errors or a poor image capture by the bank when it scans or reads a deposit slip. Financial institutions use a variety of approaches to fully reconcile deposit discrepancies, including technology solutions.
Today’s interagency guidance outlines the laws and regulations that apply to deposit discrepancy practices. If a financial institution fails to comply with applicable laws and regulations, including prohibitions against unfair, deceptive, and abusive practices, it could open it up to liability and possible action by an agency.
The interagency guidance is being issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration, the Office of the Comptroller (OCC) of the Currency, and the CFPB.
On August 12, 2015, the CFPB, OCC, and FDIC took action against Citizens Bank, N.A., for failing to credit consumers the full amounts of the their deposited funds. The CFPB’s consent order requires the bank to provide approximately $11 million in refunds to consumers and pay a $7.5 million penalty for the violations.
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The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ CFPB and New York Attorney General File Lawsuit Against Illegal Nationwide Debt Collection Scheme | Consumer Financial Protection Bureau
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Washington, D.C. – Today the Consumer Financial Protection Bureau (CFPB), in partnership with the New York Attorney General, filed a lawsuit in a federal district court against the leaders of a massive debt collection scheme based out of Buffalo, N.Y. The lawsuit alleges Douglas MacKinnon and Mark Gray operate a network of companies that harass, threaten, and deceive millions of consumers across the nation into paying inflated debts or amounts they may not owe. The Bureau is seeking to shut down this illegal operation and to obtain compensation for victims and a civil penalty against the companies and partners.
“Our lawsuit asserts that millions of consumers were harassed, threatened, and deceived as part of a massive scheme to collect inflated debts,” said CFPB Director Richard Cordray. “Today we are taking action against the ringleaders of this operation so they can no longer prey upon vulnerable consumers. We are pleased to be working in partnership with New York Attorney General Schneiderman to hold these companies accountable.”
“Living with debt is difficult enough as it is, without the added stress of being harassed and threatened by debt collectors,” Attorney General Schneiderman said. “These collection shops inflated debts of their victims. This suit sends the message that debt collectors that employ abusive tactics will be held accountable.”
The CFPB and the New York Attorney General allege that Northern Resolution Group LLC, Enhanced Acquisitions LLC, and Delray Capital LLC are interrelated collections companies based in Buffalo, N.Y. Together, the companies have purchased millions of dollars’ worth of consumer debt and collected some of those debts directly. The companies were created, operated, and are overseen by Douglas MacKinnon and Mark Gray.
The complaint alleges that since at least 2009, Northern Resolution Group, Enhanced Acquisitions, and Delray Capital, operating under the supervision of MacKinnon and Gray, have served as the lynchpin of a massive collections scheme. The operation routinely inflates consumer debts and relies on illegal tactics to extract as much money as possible from consumers for debts. MacKinnon also set up a network of at least 60 additional fly-by-night debt-collection firms to collect on the large debt portfolios purchased by Northern Resolution Group, Enhanced Acquisitions, and Delray Capital. This elaborate network also served as “window dressing,” or a workaround, when other debt sellers would no longer do business with the defendants.
The CFPB alleges that the defendants violated the Fair Debt Collection Practices Act. The CFPB and the New York Attorney General also allege that the defendants violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, which prohibits unfair and deceptive acts or practices in the consumer financial marketplace. Specifically, the CFPB and the New York Attorney General allege that MacKinnon, Gray, and their network of debt collection companies:
Inflated consumer debts and misrepresented amounts consumers owed: The defendants misrepresented to consumers that they owed sums they did not owe, were not obligated to pay, or that the companies did not have a legal right to collect. Specifically, Northern Resolution Group, Enhanced Acquisitions, and Delray Capital illegally added $200 to each consumer debt account they acquired, regardless of whether applicable state law or the underlying contract between the consumer and the original issuer permitted such fees or charges. In some cases, the scheme further inflated the amounts owed by tacking on additional unauthorized fees and charges to the debts. At times, some collectors quoted consumers balances that exceeded 600 percent of the debt amount.
Falsely threatened legal action: The companies falsely threatened consumer with legal action that the collectors had no intention of taking. In reality, they never referred a case for prosecution. In some cases the companies falsely accused consumers of committing crimes. Further, the companies lied to some consumers, claiming that they would be arrested to pressure them to pay debts. In one case, the companies instructed a consumer that she did not even have time to get a lawyer because she would be arrested the next day. These deceptive practices could also have affected the relative priority consumers gave to competing financial commitments.
Impersonated law-enforcement officials, government agencies, and court officers: The companies faked calls and emails to make it appear the communications were coming from government or court officials. The companies used call-spoofing technologies to make it appear that collectors were calling from government agencies. The collection agents would barrage consumers and relatives with calls, claiming to be a government official who could arrest the consumer for non-payment of the debt. The companies also used emails to pretend they were contacting consumers and their family from a court.
The complaint also alleges repeated fraudulent acts and deceptive acts or practices in violation of New York law, as well as violations of New York state debt-collection law.
According to the complaint, MacKinnon and Gray have known about, directed, and encouraged these illegal collections practices and have profited significantly—amounting to tens of millions of dollars annually. These illegal profits have been funneled back to MacKinnon, his relatives, and Gray through payments to various sham companies that MacKinnon, Gray, and MacKinnon’s relatives controlled.
Through this lawsuit, the Bureau seeks to stop the alleged unlawful practices of MacKinnon, Gray, Northern Resolution Group LLC, Enhanced Acquisitions LLC, and Delray Capital LLC. The Bureau has also requested that the court impose penalties on the company and its partners for their conduct and require that compensation be paid to consumers who have been harmed. The CFPB’s complaint is not a finding or ruling that the defendants have actually violated the law.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ CFPB Launches Inquiry into Junk Fees in Mortgage Closing Costs | Consumer Financial Protection Bureau
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WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today launched a public inquiry into junk fees that are increasing mortgage closing costs. The CFPB wants to understand why closing costs are increasing, who is benefiting, and how costs for borrowers and lenders could be lowered. According to a CFPB analysis, the closing costs borrowers pay in connection with a mortgage have risen steeply in recent years. From 2021 to 2023, median total loan costs for home mortgages increased by over 36%. The unavoidable fees borrowers must pay at closing can strain household budgets and families’ ability to afford a down payment. The fees may also limit the ability of lenders to offer competitive mortgages because they have to absorb the higher costs or pass them on to borrowers.
“Junk fees and excessive closing costs can drain down payments and push up monthly mortgage costs,” said CFPB Director Rohit Chopra. “The CFPB is looking for ways to reduce anticompetitive fees that harm both homebuyers and lenders.”
People rely on mortgage loans to buy their homes and to access home equity. When people purchase a home with a mortgage, they pay a number of fees, such as charges for credit reporting and title insurance. Even if disclosed, borrowers are compelled to pay the fees and may have no control over cost. In 2022, median closing costs were $6,000, and these fees can quickly erode home equity and undercut homeownership.
Mortgage lenders also pay a price when it comes to junk fees and excessive closing costs. For example, in recent years the cost of a credit report has risen substantially. Rising costs can prevent lenders from competing for every potential mortgage because these fees drive up the cost of considering an applicant.
Title insurance is another major fee paid at closing. Most commonly, lender’s title insurance is paid by the borrower to protect the lender against problems with the property. Consumers typically have limited options to shop around for title insurance.
The CFPB’s request for information seeks input from the public, including borrowers and lenders, about how mortgage closing costs may be inflated and constraining the mortgage lending market. Specifically, the CFPB asks for information about:
Which fees are subject to competition: The CFPB is interested in the extent to which consumers or lenders currently apply competitive pressure on third-party closing costs. The CFPB also wants to learn about market barriers that limit competition.
How fees are set and who profits from them: The CFPB wants to learn about who benefits from required services and whether lenders have oversight or leverage over third-party costs that are passed onto consumers.
How fees are changing and how they affect consumers: The CFPB wants information about which costs have increased most in recent years and the reasons for such increases, including the rise in cost for credit reports and credit scores. The CFPB is also interested in data on the impact of closing costs on housing affordability, access to homeownership, or home equity.
The CFPB encourages comments and data from the public and all interested stakeholders. Comments must be received within 60 days of the request for information being published in the Federal Register.
The CFPB administers many laws and regulations related to mortgage lending and real estate settlement, including the Truth in Lending Act, the Fair Credit Reporting Act, and the Real Estate Settlement Procedures Act. The findings from this inquiry will help inform rulemaking, guidance, and other policy initiatives.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ CFPB Orders Navy Federal Credit Union to Pay $28.5 Million for Improper Debt Collection Actions | Consumer Financial Protection Bureau
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WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) took action against Navy Federal Credit Union for making false threats about debt collection to its members, which include active-duty military, retired servicemembers, and their families. The credit union also unfairly restricted account access when members had a delinquent loan. Navy Federal Credit Union is correcting its debt collection practices and will pay roughly $23 million in redress to victims along with a civil money penalty of $5.5 million.
“Navy Federal Credit Union misled its members about its debt collection practices and froze consumers out from their own accounts,” said CFPB Director Richard Cordray. “Financial institutions have a right to collect money that is due to them, but they must comply with federal laws as they do so.”
Navy Federal Credit Union is a federal credit union based in Vienna, Va. As a credit union, it offers a wide range of consumer financial products and services, including deposit accounts and loans. Membership in the credit union is limited to consumers who are, or have been, U.S. military servicemembers, Department of Defense civilian employees or contractors, government employees assigned to Department of Defense installations, and their immediate family members. It is the largest credit union in the country, with more than $73 billion in assets as of December 2015.
The CFPB investigation found that Navy Federal Credit Union deceived consumers to get them to pay delinquent accounts. The credit union falsely threatened severe actions when, in fact, it seldom took such actions or did not have authorization to take them. The credit union also cut off members’ electronic access to their accounts and bank cards if they did not pay overdue loans. Hundreds of thousands of consumers were affected by these practices, which occurred between January 2013 and July 2015. The practices violated the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, the CFPB found that Navy Federal Credit Union:
Falsely threatened legal action and wage garnishment: The credit union sent letters to members threatening to take legal action unless they made a payment. But in reality, it seldom took any such actions. The CFPB found that the credit union’s message to consumers of “pay or be sued” was inaccurate about 97 percent of the time, even among consumers who did not make a payment in response to the letters. The credit union’s representatives also called members with similar verbal threats of legal action. And the credit union threatened to garnish wages when it had no intention or authority to do so.
Falsely threatened to contact commanding officers to pressure servicemembers to repay: The credit union sent letters to dozens of servicemembers threatening that the credit union would contact their commanding officers if they did not promptly make a payment. The credit union’s representatives also communicated these threats by telephone. For members of the military, consumer credit problems can result in disciplinary proceedings or lead to revocation of a security clearance. The credit union was not authorized and did not intend to contact the servicemembers’ chains of command about the debts it was attempting to collect.
Misrepresented credit consequences of falling behind on a loan: The credit union sent about 68,000 letters to members misrepresenting the credit consequences of falling behind on a Navy Federal Credit Union loan. Many of the letters said that consumers would find it “difficult, if not impossible” to obtain additional credit because they were behind on their loan. But the credit union had no basis for that claim, as it did not review consumer credit files before sending the letters. The credit union also misrepresented its influence on a consumer’s credit rating, implying that it could raise or lower the rating or affect a consumer’s access to credit. As a furnisher, the credit union could supply information to the credit reporting companies but it could not determine a consumer’s credit score.
Illegally froze members’ access to their accounts: The credit union froze electronic account access and disabled electronic services for about 700,000 accounts after consumers became delinquent on a Navy Federal Credit Union credit product. This meant delinquency on a loan could shut down a consumer’s debit card, ATM, and online access to the consumer’s checking account. The only account actions consumers could take online would be to make payments on delinquent or overdrawn accounts.
Enforcement Action
Pursuant to the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals engaging in unfair or deceptive acts or practices or that otherwise violate federal consumer financial laws. Under the terms of the order, Navy Federal Credit Union is required to:
Pay victims $23 million: The credit union is required to pay roughly $23 million in compensation to consumers who received threatening letters. Most will be eligible for redress if they received one of the deceptive debt collection letters and they made a payment to the credit union within 60 days of that letter. In addition, all consumers who received the letter threatening to contact their commanding officer will receive at least $1,000 in compensation. The credit union will contact consumers who are eligible for compensation.
Correct debt collection practices: The credit union must create a comprehensive plan to address how it communicates with its members about overdue debt. This includes refraining from any misleading, false, or unsubstantiated threats to contact a consumer’s commanding officer, threats to initiate legal action, or misrepresentations about the credit consequences of falling behind on a Navy Federal Credit Union loan.
Ensure consumer account access: Navy Federal Credit Union cannot block its members from accessing all their accounts if they are delinquent on one or more accounts. The credit union must implement proper procedures for electronic account restrictions.
Pay a $5.5 million civil money penalty: Navy Federal Credit Union is required to pay a penalty of $5.5 million to the CFPB’s Civil Penalty Fund.
The CFPB advises all servicemembers to know their rights when a debt collector calls. They should know that a debt collector can't tell their chain of command that they owe a debt, threaten them with prosecution under the Uniform Code of Military Justice, or threaten to revoke their security clearance. More information, including how to access sample letters to respond to a debt collector, is available at: https://files.consumerfinance.gov/f/CFPB-Servicemembers-Know-Your-Rights-Handout-Debt-Collection.pdf
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The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ CFPB, State Authorities Order Ocwen to Provide $2 Billion in Relief to Homeowners for Servicing Wrongs | Consumer Financial Protection Bureau
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Largest Nonbank Servicer Will Also Refund $125 Million to Foreclosure Victims and Adhere to Significant New Homeowner Protections
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WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB), authorities in 49 states, and the District of Columbia filed a proposed court order requiring the country’s largest nonbank mortgage loan servicer, Ocwen Financial Corporation, and its subsidiary, Ocwen Loan Servicing, to provide $2 billion in principal reduction to underwater borrowers. The consent order addresses Ocwen’s systemic misconduct at every stage of the mortgage servicing process. Ocwen must also refund $125 million to the nearly 185,000 borrowers who have already been foreclosed upon and it must adhere to significant new homeowner protections.
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“Deceptions and shortcuts in mortgage servicing will not be tolerated,” said CFPB Director Richard Cordray. “Ocwen took advantage of borrowers at every stage of the process. Today’s action sends a clear message that we will be vigilant about making sure that consumers are treated with the respect, dignity, and fairness they deserve.”
Ocwen, a publicly traded Florida corporation headquartered in Atlanta, Ga., is the largest nonbank mortgage servicer and the fourth-largest servicer overall in the United States. As a mortgage servicer, it is responsible for collecting payments from the mortgage borrower and forwarding those payments to the owner of the loan. It handles customer service, collections, loan modifications, and foreclosures.
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Ocwen specializes in servicing subprime or delinquent loans and places a major emphasis on resolving delinquency through loss mitigation or foreclosure. In recent years, it has acquired competitors – including Homeward Residential Holdings LLC (formerly American Home Mortgage Servicing Inc.) and Litton Loan Servicing LP. It has also acquired the mortgage servicing rights from the portfolios of some of the country’s largest banks.
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The CFPB is charged with enforcing the Dodd-Frank Wall Street Reform and Consumer Protection Act which protects consumers from unfair, deceptive, or abusive acts or practices by mortgage servicers – whether they are a bank or nonbank. State financial regulators, state attorneys general, and the CFPB uncovered substantial evidence that Ocwen violated state laws and the Dodd-Frank Act.
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In early 2012, examinations by the Multistate Mortgage Committee, which is comprised of state financial regulators, identified potential violations at Ocwen. In addition, the Federal Trade Commission referred its investigation of Ocwen to the CFPB after the Bureau opened in July 2011. The Bureau then teamed with state attorneys general and state regulators to investigate and resolve the issues identified. Today’s settlement is a multi-jurisdictional collaborative effort.
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Borrowers Pushed into Foreclosure by Servicing Errors
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The CFPB and its partner states believe that Ocwen was engaged in significant and systemic misconduct that occurred at every stage of the mortgage servicing process. According to the complaint filed in the federal district court in the District of Columbia, Ocwen’s violations of consumer financial protections put thousands of people across the country at risk of losing their homes. Specifically, the complaint says that Ocwen:
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Took advantage of homeowners with servicing shortcuts and unauthorized fees: Customers relied on Ocwen to, among other things, treat them fairly, give them accurate information, and appropriately charge for services. According to the complaint, Ocwen violated the law in a number of ways, including:
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Failing to timely and accurately apply payments made by borrowers and failing to maintain accurate account statements;
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Charging borrowers unauthorized fees for default-related services;
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Imposing force-placed insurance on consumers when Ocwen knew or should have known that they already had adequate home-insurance coverage; and
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Providing false or misleading information in response to consumer complaints.
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Deceived consumers about foreclosure alternatives and improperly denied loan modifications: Struggling homeowners generally turn to mortgage servicers, the link to the owners of the loans, as their only means of developing a plan for payment. Ocwen failed to effectively assist, and in fact impeded, struggling homeowners trying to save their homes. This included:
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Failing to provide accurate information about loan modifications and other loss mitigation services;
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Failing to properly process borrowers’ applications and calculate their eligibility for loan modifications;
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Providing false or misleading reasons for denying loan modifications;
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Failing to honor previously agreed upon trial modifications with prior servicers; and
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Deceptively seeking to collect payments under the mortgage’s original unmodified terms after the consumer had already begun a loan modification with the prior servicer.
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Engaged in illegal foreclosure practices: One of the most important jobs of a mortgage servicer is managing the foreclosure process. But Ocwen mishandled foreclosures and provided consumers with false information. Specifically, Ocwen is accused of:
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Providing false or misleading information to consumers about the status of foreclosure proceedings where the borrower was in good faith actively pursuing a loss mitigation alternative also offered by Ocwen; and
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Robo-signing foreclosure documents, including preparing, executing, notarizing, and filing affidavits in foreclosure proceedings with courts and government agencies without verifying the information.
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Remedies: Consumer Protections
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Today’s proposed court order will bar Ocwen from committing such violations in the future. It requires Ocwen to provide $125 million in refunds to foreclosed-upon consumers and $2 billion in loan modification relief to its customers through principal reduction. The refunds and relief also apply to consumers whose loans were previously serviced by Homeward Residential Holdings and Litton Loan Servicing. According to the proposed order, Ocwen must:
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Provide $2 billion in relief to underwater borrowers: Over a three-year period, Ocwen must complete sustainable loan modifications that result in principal reductions totaling $2 billion. For loan modification options, eligible borrowers may be contacted directly by Ocwen. Or borrowers may contact Ocwen to obtain more information about specific loan modification programs and to find out whether they may be impacted by this settlement. Ocwen can be reached at 1-800-337-6695 or ConsumerRelief@Ocwen.com. If Ocwen fails to meet this commitment, it must pay a cash penalty in the amount of any shortfall to the CFPB and the states.
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Provide $125 million in refunds to foreclosure victims: Ocwen must refund $125 million to consumers whose loans were being serviced by Ocwen, Homeward Residential Holdings, or Litton Loan Servicing, and who lost their homes to foreclosure between Jan. 1, 2009 and Dec. 31, 2012. All eligible consumers who submit valid claims will receive an equal share of the $125 million. Borrowers who receive payments will not have to release any claims and will be free to seek additional relief in the courts. Ocwen will also pay $2.3 million to administer the refund process. Eligible consumers can expect to hear from the settlement administrator about potential payments.
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Stop robo-signing official documents: Ocwen must ensure that facts asserted in its documents about borrowers’ loans used in foreclosure and bankruptcy proceedings are accurate and supported by reliable evidence. Affidavits and sworn statements must be based on personal knowledge.
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Adhere to significant new homeowner protections: Ocwen must change the way it services mortgages to ensure that borrowers are protected from the illegal behavior that puts them in danger of losing their homes. To ensure this, the CFPB and the states are proposing that Ocwen follow the servicing standards set up by the 2012 National Mortgage Settlement with the five largest banks. Because of Ocwen’s track record of problems handling the large volume of mortgage servicing rights it has quickly acquired in recent years, Ocwen is also being ordered to adhere to additional consumer protections, including how it manages transferred lans. Among other things, Ocwen must:
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Properly process pending requests: For loans that are transferred to Ocwen, the company must determine the status of in-process loss mitigation requests pending within 60 days of transfer. Until then, Ocwen cannot start, refer to, or proceed with foreclosure.
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Honor previous loan modification agreements: If the borrower has a loan modification agreement, Ocwen must honor it under the terms of the company that transferred the loan.
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Ensure continuity of contact for consumers: Ocwen will have to ensure that consumers get regular and dependable assistance when they call for help. This includes requiring more than just a single point of contact assigned to each borrower, but also that other Ocwen employees with access to the borrower’s information be available if the borrower wants to speak to someone immediately.
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Restrict servicing fees: All servicing fees must be reasonable, bona fide, and disclosed in detail to borrowers. For example, Ocwen cannot collect any late fees if a loan modification application is under review or if the borrower is making timely trial modification payments.
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Notify consumers of loss mitigation options and restrict dual tracking: Ocwen generally cannot refer a borrower’s account to foreclosure while the borrower’s application for a loan modification is still pending. If the loan-modification request is denied, the borrower can appeal that decision and Ocwen cannot proceed to foreclosure until that appeal has been resolved.
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In January 2013, the CFPB released new rules on mortgage servicing that will apply to every mortgage servicer. The standards that Ocwen must adhere to according to this court order are in addition to the protections offered to consumers under the new rules that take effect on Jan. 10, 2014. More information about the CFPB’s new mortgage rules can be found at: consumerfinance.gov/mortgage.
The complaint is not a finding or ruling that the defendants have actually violated the law. The proposed federal court order will have the full force of law only when signed by the presiding judge.
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Updated on June 24, 2014:
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The National Ocwen Settlement Administrator will mail claim forms to borrowers who lost their home to foreclosure between Jan. 1, 2009 and Dec. 31, 2012 and whose loans were serviced by Ocwen, Litton Loan Servicing LP, and Homeward Residential Holdings LLC (also known as American Home Mortgage Servicing, Inc., or AHMSI). Borrowers may submit claim forms online using their personalized claimant ID number, which is located on the claim form they receive. More information can be found at: nationalocwensettlement.com
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ CFPB Takes Action Against Mortgage Payment Company And Servicer For Deceptive Ads | Consumer Financial Protection Bureau
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Consumers Deceived by “Equity Accelerator” Claims to Receive $33.4 Million
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Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) took action today against Paymap Inc. and LoanCare, LLC for deceiving consumers with advertisements for a mortgage payment program that promised tens of thousands of dollars in interest savings from more frequent mortgage payments. Under the terms of the orders announced today, Paymap will return $33.4 million in fees to consumers and pay a $5 million civil penalty to the CFPB, and LoanCare will pay a $100,000 civil penalty.
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“Deceptive advertising has no place in the financial marketplace,” said CFPB Director Richard Cordray. “Today’s action is delivering relief for consumers deceived by Paymap and LoanCare, and sending a clear message that these practices will not be tolerated.”
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Paymap Inc. is a Colorado-based payment processing company, and LoanCare Servicing is a Virginia-based residential mortgage servicer. Together, they marketed and provided the “Equity Accelerator Program” – an electronic payment system that enables consumers to make automatic mortgage payments via electronic debits from their bank accounts. Consumers are typically charged an enrollment fee of $295 when signing up for the Equity Accelerator Program, and a transaction fee for each automatic debit that Paymap makes, typically $2.50. Since July 21, 2011, approximately 125,000 consumers enrolled in the Equity Accelerator Program and paid Paymap $33.4 million in fees.
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Paymap partnered with many mortgage servicers, including LoanCare, to market the Equity Accelerator to the mortgage servicers’ customers. LoanCare and Paymap marketed the Equity Accelerator to LoanCare’s customers in 2012 by sending them solicitations on LoanCare’s letterhead. Like the other servicers it partnered with, Paymap shared a portion of consumers’ fees with LoanCare.
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Paymap and LoanCare advertised that consumers who enrolled in the Equity Accelerator Program would have a new, biweekly payoff schedule that would lead to significant interest savings because of the more frequent payments. In fact, the Equity Accelerator Program did not make more frequent payments on consumers’ mortgages, and, Paymap’s prominent claims of tens of thousands of dollars in interest savings were made without any supporting evidence.
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The CFPB found that Paymap and LoanCare violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition against deceptive acts and practices. Specifically, the Bureau found that consumers were:
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Lured with deceptive promises of savings: Paymap made claims on its website such as, “The average customer will achieve over $33,000 in interest savings” using the Equity Accelerator Program. However, Paymap had no factual basis to support this claim. Moreover, only a tiny percentage, if any, of its customers achieved that amount of interest savings.
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Misled about when their payments would be applied: Paymap and LoanCare told consumers in their direct mail solicitations that enrolling in the Equity Accelerator Program would change the consumers’ payoff schedule to “every 2 weeks.” Although Paymap makes more frequent withdrawals from consumers’ accounts in the Equity Accelerator Program, it does not actually make more frequent payments on consumers’ mortgages. Instead, Paymap holds the collected payments in custodial accounts, and then pays consumers’ mortgages on their original monthly schedule. Consumers are charged a transaction fee with every withdrawal. Any interest savings that consumers may achieve through the Equity Accelerator Program is because they make a higher annual mortgage payment in the Program, using the same payment schedule as before enrollment.
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Enforcement Actions
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Pursuant to the Dodd-Frank Act, the CFPB has the authority to take action against companies engaging in unfair, deceptive, or abusive practices in the consumer financial marketplace.
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Under the terms of the consent order filed today, Paymap is required to:
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Pay $33.4 million to consumers: Paymap will return $33.4 million to consumers, which represents all fees paid by every consumer who enrolled in the Equity Accelerator Program since July 21, 2011. Approximately 125,000 consumers will receive refunds.
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Cease its unlawful advertising and marketing practices: Paymap must ensure that its marketing practices comply with federal law. Paymap is prohibited from advertising any benefits of the Equity Accelerator Program without credible evidence to support its claims, and from implying that the program will change a consumer’s regular mortgage payment schedule. Paymap must disclose that the source of any projected interest savings through the program is the higher annual mortgage payment a consumer will make in such a program.
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Pay a $5 million civil penalty: Paymap will pay $5 million to the CFPB’s Civil Penalty Fund.
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Under the terms of the consent order filed today, LoanCare is required to:
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Cease its unlawful advertising and marketing practices: LoanCare must ensure that its marketing practices comply with federal law. LoanCare is prohibited from advertising any benefits of the Equity Accelerator Program without credible evidence to support its claims, and from implying that the program will change a consumer’s regular mortgage payment schedule. LoanCare must disclose that the source of any projected interest savings is the higher annual mortgage payment a consumer will make in such a program.
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Pay a $100,000 civil penalty: LoanCare will pay $100,000 to the CFPB’s Civil Penalty Fund.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
CFPB Concerned that Screening Inaccuracies and Lack of Account Options are Keeping Consumers Out of the Banking System
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WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) is taking steps to improve checking account access amidst Bureau concerns that consumers are being sidelined by the lack of account options and by inaccurate information used to screen potential customers. Today the CFPB sent a letter to the 25 largest retail banks encouraging them to make available and widely market lower-risk deposit accounts that help consumers avoid overdrafting. The CFPB also issued a bulletin warning banks and credit unions that failure to meet accuracy obligations when they report negative account histories to credit reporting companies could result in Bureau action. And finally, the CFPB is providing consumers with resources to help navigate the deposit account system.
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“Consumers should not be sidelined out of the basic banking services they need because of the flaws and limitations in a murky system,” said CFPB Director Richard Cordray. “People deserve to have more options for access to lower-risk deposit accounts that can better fit their needs.”
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Almost nine out of 10 American households have at least one checking account, and many also maintain a savings account. In recent decades, technology has made it possible for consumers to access funds in their accounts in a variety of ways. More and more banks have also introduced automated overdraft programs. As these changes have occurred, banks have placed greater emphasis on screening new applicants for potential risks that may arise if a consumer exceeds his or her account balance.
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One way that banks and credit unions screen account applicants for risk is to use information provided by checking account reporting companies, which have databases of information on involuntary closures of consumer checking accounts supplied by banks and credit unions. In October 2014, the CFPB laid out concerns about the information accuracy of these reports, people’s ability to access the reports and dispute incorrect information, and the ways in which the reports were being used.
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Today, the CFPB is warning banks and credit unions of their obligations when reporting. And while some banks and credit unions currently offer products that help consumers avoid overdrafts and other risks, the CFPB is also encouraging the industry more broadly to provide account options for consumers so they are less likely to overspend their funds.
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Lower-Risk Deposit Accounts
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Today the CFPB sent a letter to the nation’s top 25 retail banking companies urging them to do more to create or promote deposit accounts designed to meet consumers’ financial needs. The CFPB is urging banks and credit unions to offer consumers accounts that do not authorize them to spend money they don’t have. Separately, the CFPB is weighing what additional consumer protections are necessary for overdraft and related services. Among today’s CFPB recommendations:
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Offer lower-risk products: Today the CFPB is encouraging banks and credit unions to offer products that are designed not to authorize overdrafts and that do not charge overdraft fees. A number of institutions have introduced “no-overdraft” accounts and offer them alongside more common checking account products. However, in a recent CFPB review of the top retail banking websites, the CFPB found nearly half do not appear to offer any deposit account that ensures consumers can’t overspend. Such a product would give consumers an opportunity to choose an account that helps them avoid overdrafting.
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Advertise the lower-risk products: The CFPB is concerned that even when companies have these accounts available, consumers don’t know about them. So the CFPB is also urging banks and credit unions to feature such products prominently in their marketing efforts, their online and in-store checking account menus, and during sales consultations.
The bulletin issued by the CFPB today warns banks and credit unions that they must have systems in place regarding accuracy when they pass on information, such as negative account histories, to checking account reporting or other credit reporting companies. The consumer reporting companies focused on checking accounts typically generate reports on charge-off amounts, past non-sufficient funds activity, unpaid or outstanding bounced checks, overdrafts, involuntary account closures, and fraud.
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The CFPB is concerned about inaccuracies and inconsistent information provided by the financial institutions to the reporting companies. In a recent Supervisory Highlights, the CFPB noted that examiners found that one or more financial institutions failed to “establish and implement reasonable written policies and procedures regarding the accuracy of the deposit account information provided to the consumer reporting companies.” Examiners also found that at least one entity violated its federal obligation to handle consumer disputes about these issues.
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Banks and credit unions should expect accurate information from checking account reporting companies to make fair assessments of deposit account applicants. If the system is tainted with incomplete, inconsistent, and inaccurate information, banks and credit unions cannot make informed decisions.
The CFPB is also releasing resources to encourage consumers to shop for lower-risk checking and prepaid accounts that will not authorize them to exceed their account balances. These products can help consumers maintain their accounts longer, and the banks and credit unions that offer them are often more accepting in their screening practices. The resources include tips and information about choosing an account and managing an account.
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The CFPB also released a consumer advisory to help people know what to do if they have been denied a deposit account or have an involuntary account closure. The CFPB is concerned that most consumers are unaware of what to do if they are rejected by a bank; and most are probably unaware of the screening system that provided the information to the bank about their checking-account profile. A consumer who had an account closed and goes to open a new account at another institution may be equally unaware of how this screening information will be used to judge his or her account application. Today’s advisory tells consumers:
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How to obtain a copy of their checking account history: If a bank or credit union makes its decision to deny a new account based on negative reporting, the bank or credit union is required to provide the consumer with the source. The consumer should contact that source and has the right to obtain a free copy of his or her consumer report.
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How to dispute items with the consumer reporting company: If the consumer thinks the information provided by the checking account reporting company is inaccurate, he or she should file a dispute with the company. The company is required to conduct a reasonable investigation. The CFPB is providing a sample letter to help consumers dispute the inaccurate information with the checking account reporting company.
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How to dispute items with a bank or credit union that reported inaccurate information: If the consumer thinks some of the information on the consumer report is inaccurate, then he or she also should contact the financial institution that reported it, such as his or her old bank. The consumer can then request a correction. Federal law requires financial institutions to promptly correct inaccurate information. The CFPB is releasing a sample letter that consumers can use to contact a financial institution to dispute inaccurate information.
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To shop around for lower-risk products: Consumers can shop around to find banks or credit unions that offer accounts without features like overdraft, many of which are available despite prior negative account history. Prepaid products are also a viable option for consumers looking to ensure they only spend the money they have.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ CFPB Warns Against Deception in Contract Fine Print | Consumer Financial Protection Bureau
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WASHINGTON, D.C. - The Consumer Financial Protection Bureau (CFPB) today issued a circular warning against the use of unlawful or unenforceable terms and conditions in contracts for consumer financial products or services. Companies use this fine print tactic to try to trick consumers into believing they have given up certain legal rights or protections. When financial institutions take these types of actions, they risk violating the Consumer Financial Protection Act. Today’s warning is part of the CFPB’s broader efforts to ensure freedom and fairness in people’s interactions with financial institutions.
“Federal and state laws ban a host of coercive contract clauses that censor and restrict individual freedoms and rights,” said CFPB Director Rohit Chopra. “The CFPB will take action against companies and individuals that deceptively slip these terms into their fine print.”
Many consumer contracts include terms and conditions that claim to limit consumer rights and protections. This fine print may just be an attempt to confuse people about their rights. A common example is the general liability waiver, which purports to fully insulate companies from suits even though most states have laws that create hosts of exemptions to these waivers.
Similarly, several federal consumer financial protection laws offer protections that cannot be taken away from people, no matter what a contract says. For example, the Military Lending Act generally prohibits terms in certain consumer credit contracts that require servicemembers and their dependents to waive their right to legal recourse. Another example is mortgage rules, implementing the Truth in Lending Act, which prohibit fine print that forces homeowners into arbitration or other nonjudicial procedures to resolve problems with a mortgage transaction.
Today’s circular explains how and when fine print tricks and intimidation in contracts for consumer financial products and services may violate the Consumer Financial Protection Act’s prohibition on deceptive acts and practices. Companies may be liable even if the unenforceable terms are borrowed from form templates or widely available contracts.
The CFPB has taken action with respect to this unlawful conduct on many occasions over the past several years, including on deceptive behavior toward:
Mortgage borrowers: CFPB examiners have repeatedlyfound examples of deceptive contract terms purporting to waive mortgage borrowers’ rights that cannot be waived.
Bank accountholders: The CFPB found that a bank deceived consumers through contract terms that it claimed waived consumers’ right to hold the bank liable for improperly responding to garnishment orders when, in fact, this right could not be waived. The bank inserted these terms into deposit agreements with broad fine print language.
Remittance transfer consumers: The CFPB found that a remittance transfer provider violated the Consumer Financial Protection Act’s deception prohibition when it included misleading statements in disclosures purporting to limit consumers’ error resolution rights, which would be unenforceable under the Electronic Fund Transfer Act and the Remittance Rule.
Auto loan borrowers: The CFPB found an auto loan servicer deceptively included language in contracts that indicated that consumers could not exercise bankruptcy rights, when in fact, waivers of bankruptcy rights generally are void as a matter of public policy.
Today’s circular builds on previous initiatives and guidance provided by the CFPB that are intended to ensure freedom and fairness in people’s interactions with financial institutions. Last year, the CFPB proposed a rule to require certain supervised nonbank companies to register with the CFPB information about their use of contractual terms that claim to waive or limit consumer rights. The CFPB also has explained that banks and financial companies attempting to silence consumers from posting honest online reviews through contract terms undermine fair competition and may be breaking the law. The CFPB additionally has highlighted that certain tuition payment plans include terms and conditions that are likely unenforceable. And the CFPB recently filed an amicus brief with the Justice Department to help ensure that servicemembers can file lawsuits to enforce the Servicemembers Civil Relief Act notwithstanding unenforceable fine print in contracts.
Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov.
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The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ Consumer Financial Protection Bureau Settles with Cash Tyme | Consumer Financial Protection Bureau
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Washington, D.C. — The Consumer Financial Protection Bureau (Bureau) today announced a settlement with Cash Tyme, a payday retail lender with outlets in Alabama, Florida, Indiana, Kentucky, Louisiana, Mississippi, and Tennessee. Cash Tyme is the operating name for CMM, LLC, and its wholly owned subsidiaries in those states.
According to the consent order, the Bureau found that Cash Tyme violated the Consumer Financial Protection Act of 2010 by:
Failing to take adequate steps to prevent unauthorized charges;
Failing to promptly monitor, identify, correct, and refund overpayments by consumers;
Making collection calls to third parties named as references on borrowers’ loan applications that disclosed or risked disclosing the debts to those third parties, including to borrowers’ places of employment as well as to third parties who were themselves harassed by such calls;
Misrepresenting that it collected third-party references from borrowers on loan applications for verification purposes, when in fact it was using that information to make marketing calls to the references; and
Advertising unavailable services, including check cashing, phone reconnections, and home telephone connections, on the storefronts’ outdoor signage where such advertisements contained information that was likely to be deemed important by consumers and likely to affect their conduct or decision regarding visiting a Cash Tyme store.
Also, the Bureau found that Cash Tyme violated the Gramm-Leach-Bliley Act and Regulation P by failing to provide initial privacy notices to borrowers. The Bureau also found that Cash Tyme violated the Truth in Lending Act and Regulation Z when it failed to include a payday loan fee charged to Kentucky customers in the annual percentage rate (APR) in loan contracts and advertisements, and rounded APRs to whole numbers in advertisements; and when it published advertisements that included an example APR and payment amount that was based on an example term of repayment, without disclosing the corresponding repayment terms it had used to calculate that APR.
Under the terms of the consent order, Cash Tyme must, among other provisions, pay a civil money penalty of $100,000.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ Consumer Financial Protection Bureau Settles with NDG Financial Corp. | Consumer Financial Protection Bureau
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Consumer Financial Protection Bureau Settles with NDG Financial Corp.
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Canadian and Maltese-based Payday Lenders Alleged to Have Deceptively and Unfairly Marketed and Collected on Loans, Barred From Lending to U.S. Residents
Washington, D.C. — The Consumer Financial Protection Bureau (Bureau) today filed a proposed settlement with NDG Financial Corp., E-Care Contact Centers, Ltd., Blizzard Interactive Corp., New World Consolidated Lending Corp., New World Lenders Corp., Payroll Loans First Lenders Corp., New World RRSP Lenders Corp., Northway Financial Corp., Ltd., and Northway Broker, Ltd. Also named are corporate officials Kimberly DeThomas, Jeremy Sabourin, and William Wrixon. The entities and individuals are payday lenders and corporate officials based in Canada and Malta.
In its amended complaint, the Bureau alleges that the defendants violated the Consumer Financial Protection Act of 2010 by misrepresenting to consumers in states where loans offered by the defendants violated state licensing or usury laws that they were obligated to repay loan amounts when such an obligation did not exist because state law voided the loan.
Defendants also:
Misrepresented that the loan agreements were not subject to United States federal or state law;
Misrepresented that non-payment of debt would result in lawsuits, arrests, imprisonment, or wage garnishment; and
Conditioned loan agreements upon irrevocable wage assignment clauses, which the Bureau alleges violated the Credit Practices Act.
Under the terms of the proposed consent order, the defendants are permanently barred from advertising, marketing, promoting, offering, originating, servicing, or collecting any consumer loan issued to any consumer residing in the United States, including assisting others and receiving remuneration from providing service to assist others in this conduct. The defendants are also permanently barred from collecting on any of their existing loans to United States consumers, including any efforts to assign, sell or transfer such loans or any other action that would allow anyone to collect on such loans. Additionally, the defendants are permanently barred from disclosing, using, or benefitting from customer information associated with their existing loans to consumers in the United States.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visitwww.consumerfinance.gov.
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+ The CFPB | Consumer Financial Protection Bureau
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We aim to make consumer financial markets work for consumers, responsible providers, and the economy as a whole. We protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law. We arm people with the information, steps, and tools that they need to make smart financial decisions.
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In a market that works, the prices, risks, and terms of the deal are clear upfront so that consumers can understand their options and comparison shop. Companies all play by the same consumer protection rules and compete fairly on providing quality and service.
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Our core functions
The CFPB was created to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace. Before, that responsibility was divided among several agencies. Today, it’s our primary focus.
Our work includes:
Rooting out unfair, deceptive, or abusive acts or practices by writing rules, supervising companies, and enforcing the law
Enforcing laws that outlaw discrimination in consumer finance
Taking consumer complaints
Enhancing financial education
Researching the consumer experience of using financial products
Monitoring financial markets for new risks to consumers
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Fast Facts: CFPB by the Numbers
Last updated: May 23, 2024
$20.7 billion+: Amount of monetary compensation, principal reductions, canceled debts, and other consumer relief resulting from CFPB enforcement ($19 billion) and supervisory ($1.7 billion) work.
205 million+: Estimated number of consumers or consumer accounts eligible to receive relief from the CFPB’s enforcement and supervisory work.
$4.8 billion+: Civil money penalties imposed by the CFPB on companies and individuals that violate the law. Civil money penalties are deposited into the CFPB’s victims relief fund (also known as the civil penalty fund), which provides compensation to consumers who have been harmed by violations of federal consumer financial protection law.
$6.1 billion: Estimated amount consumers will save every year due to recent changes in banks’ overdraft and non-sufficient funds (NSF) fee policies. The CFPB's most recent analysis found that the decision of most large banks to eliminate NSF fees will save consumers nearly $2 billion annually.
$183 million: Monetary relief resulting from 39 public enforcement actions that involved harm to servicemembers and veterans, including six enforcement actions for violations of the Military Lending Act.
22.8 million: The estimated number of people expected to have had at least one medical collection removed from their credit reports after the three nationwide consumer reporting companies announced the removal of medical collections under $500 from consumer credit reports in April 2023. In March 2022, the CFPB released a report drawing attention to the complicated and burdensome nature of the medical billing system in the United States.
5.6 million+: Consumer complaints sent to companies for response,1 including 3.6 million+ complaints about credit reporting, 80,000+ complaints about medical debt collection, and 90,000+ complaints about student loans.
61.5 million+: Approximate number of users who have accessed answers to hundreds of common financial questions via the CFPB’s “Ask CFPB” database.
33: Number of Supervisory Highlights issued. These reports include key examination findings, communicate operational changes to the CFPB’s supervision program, and provide a resource for information on our recent guidance documents.
8: Number of languages that CFPB provides translated consumer-facing materials in, including: Arabic, Chinese, Haitian Creole, Korean, Spanish, Tagalog, and Vietnamese. Consumers can also submit a complaint on the phone in more than 180 languages.
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References
Note: the CFPB does not immediately publish every consumer complaint sent to companies for response on its public-facing consumer complaint database. As such, the total number of complaints publicly available on the CFPB website is fewer than the number of complaints sent to companies for response. Details on the criteria used by the CFPB for publishing consumer complaints on its consumer complaint database can be found here: https://www.consumerfinance.gov/data-research/consumer-complaints/.
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+ A telemarketer took money from my checking account even though I did not agree to buy anything. Can I get the money back? | Consumer Financial Protection Bureau
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Contact your bank or credit union immediately. You should tell your bank or credit union you never authorized this payment. You should also ask the bank or credit union to reverse the debit.
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If the check was processed as an electronic transfer such as an ACH payment, you have additional protections under federal law.
In addition, the FTC Telemarketing Sales Rule requires any seller to get verifiable authorization (unless you pay by credit card or debit card), which means the telemarketer must get either a written authorization from you or a tape-recorded oral authorization. If the telemarketer chooses written authorization, it must send you a written confirmation of the transaction by first class mail and let you know of the procedures to receive a refund.
If you report a lost or stolen credit card before it is used, you can’t be held responsible for any unauthorized charges.
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If there is unauthorized use of your card before you report it missing, the most you will owe for unauthorized charges on the card is $50. Many cardholder agreements say you are not responsible for any charges in this circumstance.
Before a debt collector can take Social Security or VA benefits, they must sue you and win a judgment against you for the amount you owe. Then, the debt collector must get a court order that tells your bank or credit union to turn over money from your account or prepaid card. This is called garnishment.
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The key to making sure your federal benefits are legally protected from being frozen or garnished is to use direct deposit to put the money into your account or prepaid card. You can sign up anytime to have federal benefits direct deposited to your bank account or loaded onto a prepaid card.
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As long as I am using direct deposit, which federal benefits are protected?
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Money you receive and direct deposit to your account or card from the following government programs is protected:
Social Security benefits
Supplemental Security Income (SSI) benefits
Veteran’s benefits
Civil service and federal retirement and disability benefits
Servicemember pay
Military annuities and survivor benefits
Federal student aid
Railroad retirement benefits
Financial assistance from the Federal Emergency Management Agency (FEMA)
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Doesn’t my bank or credit union have to protect two months’ worth of direct deposited benefits automatically?
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When your bank receives a court order to garnish money in your account, your bank must look at your account history to see if you received federal benefits by direct deposit in the last two months. Two months’ worth of benefits are protected and remain in your account for you to use.
For example: If you receive $1,000 in Social Security each month, your bank has records showing $2,000 in Social Security was direct deposited in the last two months. The bank must allow you to use up to $2,000 in the account.
However, if you receive Social Security or VA benefits by check and then deposit the check into your bank account, the bank does not have to protect two months’ worth of benefits in the account. This means that your entire account balance could be frozen and you’ll need to go to court to prove that it comes from protected federal benefits and should not be garnished.
The debt collector is permitted to garnish money in your account that is over two months’ worth of benefits. If your account has more than two months’ worth of benefits, your bank can garnish or freeze the extra money.
For example: If you receive $1,000 in Social Security benefits by direct deposit each month, and you have $3,000 in your account, the bank can turn over $1,000 of the $3,000 to a debt collector. The bank must give you access to the remaining $2,000 so you can continue to pay bills and withdraw cash as usual.
The bank is allowed to charge you a processing fee for the garnishment in this situation.
However, if the extra money is also exempt from garnishment under federal or state law, you may be able to go to court to have your money released.
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Can my benefits be garnished to pay my government debts, child support, or spousal support?
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Social Security and Social Security Disability Insurance (SSDI) can sometimes be garnished to pay money you owe to the government, such as back taxes or federal student loans, and money you owe for child or spousal support.
Some benefits, such as Supplemental Security Income (SSI), are protected from garnishment – even to pay a government debt or child or spousal support.
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Using the courts to release money after garnishment
If your bank garnishes or freezes money in your account, you must be sent a notice of garnishment. The notice explains the court procedures for claiming exemptions from garnishment and getting your money released.
A judge decides whether your money should be turned over to the debt collector, based on factors such as the source of your income and any federal or state exemptions.
It is very important for the judge to know that your money comes from Social Security, SSI, VA, or other federal or state benefits before the judge decides whether your money should be turned over to the debt collector. You should notify the court, the bank, and the person or business that is garnishing your account immediately in writing, and seek help from a lawyer.
The Eldercare Locator connects older Americans and their caregivers with trustworthy local support resources, including free legal aid for many older adults. You can use the Eldercare Locator to find services in your area or call 1-800-677-1116.
A payday lender can only garnish your wages if it has a court order resulting from a lawsuit against you. There may be other restrictions on a payday lender’s ability to garnish your wages. But it’s important not to ignore any legal notices or orders.
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If you don’t repay your payday loan, the payday lender or a debt collector generally can sue you to collect the money you owe. If they win, or if you do not dispute the lawsuit or claim, the court will enter an order or judgment against you. The order or judgment will state the amount of money you owe. The lender or collector can then get a garnishment order against you.
What is agarnishment?
Wage garnishment happens when your employer holds back a legally required portion of your wages for your debts. Bank garnishment occurs when your bank or credit union is served with a garnishment order. The bank or credit union then holds an amount for the payday lender or collector as allowed by your state law. Each state will have different procedures, as well as exemptions from garnishment, that apply to both the wage and bank garnishment process. Almost all states permit wage garnishment although there are a few states that do not permit wage garnishment for the collection of this type of consumer debt. Contact your state’s attorney general office for information about your state. Under federal law, certain benefits or payments are generally exempt from garnishment.
Be aware that some payday lenders may threaten garnishment to get borrowers to pay, even though they do not have a court order or judgment. If this happens, you may want to seek legal assistance. Contact your state's regulator or attorney general office for more information. You may also contact a legal aid attorney or private attorney for assistance. You can submit a complaint about payday lending with the CFPB online or by calling (855) 411-2372.
No. Home Equity Conversion Mortgages (HECMs), the most common type of reverse mortgage loan, are a special type of home loan available only to homeowners who are 62 and older.
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Age is one requirement for a HECM. The other requirements include:
Your home must be your principal residence, meaning you live there the majority of the year.
You must either own your home outright or have a low mortgage balance. Owning your home outright means you do not have a mortgage on it anymore. If you have a mortgage balance, you must be able to pay it off when you close on the reverse mortgage. You can use your own funds or money from the reverse mortgage to pay off your existing mortgage balance.
You cannot owe any federal debt, such as federal income taxes or federal student loans. You may, however, use money from the reverse mortgage loan to pay off this debt.
You must have enough of your own money or agree to set aside part of the reverse mortgage funds at your loan closing to pay ongoing property charges, including taxes and insurance, as well as maintenance and repair costs.
Your home must be in good shape. If your house does not meet the required property standards, the lender will tell you what repairs need to be made before you can get a reverse mortgage loan.
Before taking out a reverse mortgage, make sure you understand this type of loan. You may want to look at other ways to make the most of your home and budget, such as waiting a while, using a home equity loan or line of credit, refinancing, downsizing, and lowering your expenses.
Waiting
If you take out a reverse mortgage loan when you are too young, you may run out of money when you’re older and more likely to have less income and higher health care bills.
Using a home equity loan or line of credit
A home equity loan or a home equity line of credit might be a cheaper way to borrow cash against your equity. However, these loans carry their own risks and usually have monthly payments. Qualifying for these loans also depends on your income and credit.
Refinancing
Depending on interest rates, refinancing your current mortgage with a new traditional mortgage could lower your monthly mortgage payments. Pay attention to the length of time you’ll have to repay your new mortgage, because this might affect your budget in retirement. For example, taking on a new 30-year mortgage when you are nearing retirement can become a hardship later. Consider choosing a shorter-term mortgage, such as a 10- or 15-year loan.
Downsizing
Consider selling your home. Moving to a more affordable home may be your best option to reduce your overall expenses.
Lowering your expenses
State and local programs can help with utilities and fuel payments, as well as home repairs. Many localities also have programs to help with property taxes: check with your county or town tax office. Information about these and other benefit programs is available through benefitscheckup.org.
You may be able to cancel a money transfer but it depends on the circumstances. If you would like to cancel a transfer, review your contract and receipt, and contact the company immediately.
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If you sent money internationally, you have the right to cancel the transfer at no cost if it meets certain conditions:
You used a remittance transfer provider to send a remittance transfer, as defined under federal law.
The money hasn’t been deposited or picked up by the recipient, and you paid for the transfer less than 30 minutes ago. Or, if you scheduled the transfer in advance, you can cancel the transfer up to three business days before it is made.
In some cases, state law or the transfer provider’s own rules may give you more time to cancel a transaction.
If you received a receipt for your transfer, it should generally state what your cancellation period is.
No, a bank or credit union is not obligated to cash the check. If you go to a bank or credit union where neither you nor the person writing the check has an account, the bank or credit union will often refuse to cash the check.
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However, many banks or credit unions will cash a check if:
It is written by one of their account holders,
There is money in the account to cover the check,
The check is not more than 6 months old,
You are the payee shown on the face of the check, and
You show proper ID.
The bank or credit union might charge a fee if you don’t have an account with them.
The bank or credit union where you have your checking account may allow you to cash a check from another bank or credit union. However, it might require you to first deposit the check into your own account. If you deposit the check in your checking account, the funds will usually be available in one or two business days.
Some banks and credit unions do provide fee-based check cashing services, including to consumers that do not have an account with the bank or credit union and who are presenting third-party checks.
You are not required to have a social security number to open a checking or savings account.
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To open a checking or savings account, the bank or credit union will need to verify your name, date of birth, address, and ID number. An ID number can be a social security number or an Individual Taxpayer Identification Number (ITIN). To get an ITIN, you will need to fill out a form with the Internal Revenue Service (IRS).
If you don’t have a U.S. government-issued SSN or ITIN, some banks and credit unions will accept a passport number and country of issuance, an alien identification card number, or other government-issued ID number.
Visit different banks and credit unions to find out what types of accounts they offer, and what types of ID numbers they accept.
The credit card company has the right to change the terms of your credit card agreement. For significant changes, the card issuer generally must give you notice 45 days in advance.
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Significant changes generally include increases in certain interest rates and fees, increases to the minimum amount due, or changes to the grace period or the way interest is calculated. You might not receive notice 45 days in advance about changes to the benefits you get from your credit card, such as points or cash rewards, or changes in the brand (for example, changing from Visa to MasterCard or vice versa) because these changes are generally not considered to be significant.
There are restrictions on what changes the card company can make. For example, card companies generally cannot increase the interest rate you pay on existing balances, except in certain circumstances.
For many changes, you have the right to opt out of the newly changed terms. However, if you opt out, the card company might close your account. If your account is closed, you do not have to pay the balance in full immediately after the account is closed, but you are still responsible for making payments until the balance is paid in full. Depending on the card company’s policies, your minimum payment may increase. The amount of the new payment cannot be more than the amount needed to pay the balance off in five years or double your prior minimum periodic payment, whichever is higher.
Note: Closing your account may negatively affect your credit score because closing the account will lower the amount of available credit you have and increase the percentage of available credit you are using.
No, you cannot be arrested for defaulting on a payday loan. However, if you are sued or a court judgment has been entered against you and you ignore a court order to appear, a judge may issue a warrant for your arrest.
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You should never ignore a court order. If you get a court order to appear, you should go to court and provide any required information. You may want to consult with an attorney to help you with your court appearance. If a lender threatens to have you arrested, you should report the lender’s threat to your state attorney general and to your state regulator. You can also submit a complaint with the CFPB online or by calling 1-855-411-CFPB (2372).
If you’ve missed payments on your mortgage loan, your mortgage servicer generally must:
Try to contact you directly within the first 36 calendar days after you become delinquent.
Send you a written notice with both a description of examples of loss mitigation options that may be available to help you avoid foreclosure and also application instructions or information about how to get more information about those options, if applicable. Your servicer has to send this no later than 45 calendar days after you become delinquent on your loan.
Your servicer also must have policies and procedures in place so that they can assign people to be your point of contact within 45 calendar days after you become delinquent on your loan. The people assigned to help you should:
Be reachable by phone
Respond to your inquiries
Give you accurate information about available loss mitigation options to avoid foreclosure and how to pursue those options, including actions you must take to submit a loss mitigation application
Have information about any loss mitigation application you have submitted
If you have a problem with your mortgage, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).
No, requesting your credit report does not hurt your credit score.
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You can check your credit at no charge at annualcreditreport.com. You can review your credit report online for free once a week, from each of the three nationwide consumer reporting companies (Equifax, Experian, and TransUnion). You can request a copy of your credit report by mail once every 12 months from each of the three companies. And, until December 2026, you can use annualcreditreport.com to request as many as six free copies of your Equifax credit report during any twelve-month period.
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What are the consequences of checking my credit report?
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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 regularly can help you make sure the information the credit reporting companies share with lenders is accurate and up-to-date.
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+ How can I get a refund on a product or service I purchased with my credit card? | Consumer Financial Protection Bureau
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First, reach out to the company that sold the product or service to you. Explain the issue—for example, the product you received was defective or wasn’t what you ordered. Ask the company to refund the money or undo the charge.
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The seller might fix the problem. If not, you have a few ways to proceed.
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When should I dispute a charge for something I bought with my credit card?
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Contact your credit card company to see whether you can dispute a charge. In some cases, the credit card company can reverse the charge. This is sometimes called a chargeback.
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When should I claim a billing error for something I bought with my credit card?
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Billing errors can happen for a number of reasons. It can be considered a billing error to be charged for a purchase when you did not receive what you ordered or did not accept delivery of the purchased items. You should send a notice about a billing error to your credit card company within 60 days of the charge appearing on your credit card statement. You can look up your credit card agreement to see if your company provides more details about handing billing errors.
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When is it okay to refuse to pay the rest of the amount of my purchase?
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If you’ve only paid part of the cost of a service or product purchased with a credit card—including through an option from your credit card to split your payments—you may have the right to not pay the remaining amount. In general, the requirements are:
You tried in good faith to resolve the issue with the seller
You made your purchase in your home state or within 100 miles of your home address
The price of the service or product was more than $50
You used your credit card—including the card’s own service for splitting your payments—to pay for the purchase
You have not yet fully paid for the product or service
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If you purchased the item through a “buy now, pay later” service that is not offered by your credit card, your rights are different.
If you’re having trouble with a credit card, you can submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).
Keep an eye out for identity theft by reading your statements from credit card companies or banks and credit unions and checking your credit reports for suspicious activity.
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Financial accounts and billing statements
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Look closely for charges or withdrawals you did not make. Even a small charge or withdrawal can be a danger sign. Thieves sometimes will take a small amount from your checking account and then return to take much more if the small debit goes unnoticed.
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Credit reports
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Review your free credit reports from each of the three major credit bureaus. If an identity thief is opening financial accounts in your name, these accounts may show up on your credit report. Look for:
Inquiries from companies you’ve never contacted
Accounts you didn’t open
Wrong amounts on your accounts
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Warning: Don’t ignore calls from debt collectors about debts that aren’t yours, or bills from people you don’t know. A collection or bill on a debt you never borrowed may be an indication that someone else has opened an account in your name. Contact the creditor to find out.
If you have a problem with credit reporting or debt collection, you can submit a complaint.
You can stop electronic debits to your account by revoking the payment authorization, sometimes called an “ACH authorization."
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You have the right to stop a payday lender from taking automatic electronic payments from your account, even if you previously allowed them. You may have signed a payment authorization, which is sometimes called an “ACH Authorization.” This gives the payday lender the ability to debit your account when your payment is due. If you decide you want to stop automatic debit payments from your account, here is what you can do.
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+ How to stop automatic electronic debits
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+ Call and write the company
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Tell the company that you are taking away your permission for the company to take automatic payments out of your bank or credit union account. This is called “revoking authorization.” You can use this sample letter.
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+ Call and write your bank or credit union
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Tell your bank that you have “revoked authorization” for the company to take automatic payments from your account. You can use this sample letter. Some banks and credit unions may offer you an online form.
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+ Stop payment
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Even if you have not revoked your authorization with the company, you can stop an automatic payment from being charged to your account by giving your bank a “stop payment order.” This instructs your bank to stop the company from taking payments from your account. You can use this sample letter to submit a “stop payment order.” Here are the steps:
To stop the next scheduled payment, give your bank the stop payment order at least three business days before the payment is scheduled. You can give the order in person, over the phone or in writing.
To stop future payments, you might have to send your bank the stop payment order in writing. If your bank asks for a written order, make sure to provide it within 14 days of your oral notification.
Be aware that banks commonly charge a fee for stop payment orders.
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Tell your bank or credit union right away if you see a payment that you did not allow (authorize) or a payment that was made after you revoked authorization. Federal law gives you the right to dispute and get your money back for any unauthorized transfers from your account, as long as you tell your bank in time. You can use our sample letter.
Revoking or cancelling your automatic payment does not cancel your contract with the payday lender. If you revoke or cancel an automatic payment on a loan, you still owe the balance on that loan.
There are counselors who can help you with your credit report, and others who take your money but don’t help you. Warning signs for credit repair scams include companies that ask you to pay before providing services. The company may claim that it can guarantee a specific increase in your credit score or get rid of negative credit information in your credit report, even though the information is accurate and current.
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Recognizing a credit repair scam
Warning signs for credit repair scams include companies that ask you to pay before providing services. A credit repair scam company may also tell you it can guarantee a specific increase in your credit score or get rid of negative credit information in your credit report, even though the information is accurate and current.
If you see ads or receive offers to repair or fix your credit, it could be a warning sign if the company:
Pressures you to pay up-front fees. The company wants you to pay before it provides any services. A simple rule to follow is “Don’t pay upfront.” Under the federal Credit Repair Organizations Act, credit repair companies can’t request or receive payment until they’ve completed the services they’ve promised. Some companies will structure monthly payment plans to try to avoid this requirement. You should know that all forms of upfront payment before services are completed are illegal.
If the company is telemarketing, the federal Telemarketing Sales Rule may apply. When telemarketing, credit repair services must meet certain requirements before they can charge for their services. First, the company cannot request a fee until after the date that the company said it would provide the goods or services. Also, the company must give you a consumer report showing the results, and the report must be generated more than six months after the results were claimed to have been achieved. Only then can the company charge you fees or accept your payment. If a credit repair organization violates this law, you may have a right to sue.
Promises to remove negative information from your credit report. The company tells you it can get rid of negative credit information, even if that information is accurate and current. No one can do this.
Requests you dispute accurate information in your credit report. The company advises you to dispute all the information in your credit report, even if it is correct and timely.
Refuses or avoids explaining your rights to you. The company doesn’t tell you your rights and what you can do for yourself for free. Disputing errors in your credit reports is a free legal right available to you under the Fair Credit Reporting Act. You don’t need to pay a credit repair organization to do it for you. Also, if you have just signed up for a credit repair service, you have the right to cancel your contract with the company for any reason within three business days at no charge to you.
Tells you to not contact credit reporting companies. The company recommends that you don’t contact any of the nationwide credit reporting companies directly.
Credit repair companies are subject to numerous federal laws, including the Credit Repair Organizations Act and often the Telemarketing Sales Rule, both of which forbid credit repair organizations from using deceptive practices and from accepting up-front fees. These laws prohibit many deceptive practices by credit repair organizations.
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How do I find a reputable credit counselor?
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Most credit counselors offer services through local offices, online, or on the telephone. You can find a list of approved credit counselors online.
Once you've developed a list of potential counseling agencies, check them out with your State Attorney General’s office, and local consumer protection agency.
Finally, ask the credit counseling agency for free information about their services and what they provide. A reputable credit counseling agency should be willing to send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a service doesn’t do that, consider it a red flag and go elsewhere for help.
Look out for common signs of financial exploitation.
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Common signs include:
Money is missing from your loved one's account.
The person you care for says some money or property is missing.
The person is afraid or seems afraid of a relative, caregiver, or friend.
A relative, caregiver, friend, or someone else keeps your loved one from having visitors or phone calls, does not let her speak for herself, or seems to be controlling her decisions.
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You notice sudden changes in your loved one’s spending or savings. For example, your loved one is:
Withdrawing money from accounts without explanation
Wiring large amounts of money
Using the ATM a lot
Not paying bills that are usually paid
Buying things or services she doesn’t usually buy
Adding names on bank or other accounts that you do not recognize or that the account holder is unwilling or unable to explain
Not receiving account statements or bills
Giving new or unusual gifts to family members or others, such as a “new best friend"
Changing beneficiaries of a will, life insurance policy, or retirement funds
Allowing a caregiver, friend, or relative to begin handling her money
Learn more about what to do if you suspect financial exploitation.
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+ How can I tell if a payday lender is licensed to do business in my state? | Consumer Financial Protection Bureau
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If you want to know whether a payday lender is licensed to do business in your state, verify the information with your state regulator or attorney general.
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Not all states allow payday lending. Some states allow payday lending and require lenders to be licensed. In some states, if a payday loan is made by a business that is not licensed in that state, the payday loan may be void. In that circumstance, the lender may not have the right to collect or require the consumer to repay the payday loan.
You can usually add money to your prepaid card in several ways. You may be able to:
Arrange for a paycheck or other regular payment to be directly deposited onto the card
Transfer money from a checking account or another prepaid card
Buy a “reload pack” to add a certain amount to your card
Add funds at certain retail locations or at the financial institution that provides the card
You may be charged a fee for some ways of adding money to your card and not for other ways. When choosing a prepaid card, think carefully about your needs and about how you will reload your card.
To avoid scams ask questions, verify the identity of anyone trying to sell you something or asking for money, and make sure written contracts match the verbal promises that were made.
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Scammers often try to take advantage of you during a crisis—when you may be vulnerable and looking for help, particularly when you don’t have phone or Internet service to do research. Be on the lookout for scams by fake government employees, bogus charities, dishonest contractors, and others trying to take advantage of your situation. Recognizing the tricks that scammers use can help you spot scams more easily.
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How to spot scammers
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Ask questions
Be alert to warning signs: If the person trying to sell you a product or service can’t or won’t answer your questions, or if the paperwork doesn’t match the promises made to you, these are warning signs.
Example questions:
Can I see your identification and contractor’s license?
Can you provide three recent recommendations from the area?
How long have you been in business?
Confirm identities
Con artists may pose as government employees, insurance adjusters, law enforcement officials, bank employees, or whoever it takes to get to your money. Scammers can easily fake titles and uniforms.
Always ask for identification, and call the organization the person claims to work for to confirm that the person does work there.
Never give personal information to anyone you don’t know.
Remember that government employees will not generally ask you for payment or financial information such as your bank account number.
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How to avoid scams after a disaster
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Don’t make a decision under pressure
After a disaster, contractors and others may arrive at your door offering to help with home repair, debris removal, and other disaster-related assistance. Beware of contractors going door-to-door and people offering unsolicited “opportunities” or high-pressure tactics to force you to make a snap decision. Take your time, stop, think, and investigate, and never sign anything without fully reading and understanding it first.
Don’t pay too much in times of crisis (price gouging)
During periods of crisis people may offer “limited time only” deals or say the price of materials will rise if you don’t act now. These are also called “scarcity tactics.” Be suspicious of anyone offering to move you to the front of the line. Never pay by wire transfer, gift card, virtual currency, or cash, because it can be harder to get your money back. And wait to or make the final payment until the work is done to your satisfaction.
Stay up-to-date on possible scams happening in your area
After major disasters, the Federal Emergency Management Agency (FEMA) creates “Rumor Control” pages to dispel misinformation and help you protect yourself against scams. Find your local rumor control page on FEMA’s website by searching the name of the disaster you were in and ‘rumors.’ FEMA also has a “Current Disasters” page that lists recent disaster declarations and includes a tool you can use to search by location. Your state attorney general may also have specific information about scams and what to do about them for your state.
After a disaster you may be asked to give people sensitive information, like your Social Security number. Scammers can see this as an opportunity to steal your identity. Even if you’re careful to avoid scams, you may want to protect your identity, bank account, and credit record. A federal law allows you to freeze and unfreeze your credit record for free at the three nationwide credit reporting companies -Equifax, TransUnion, and Experian- no matter what state you live in. Freezing your credit restricts access to your credit file by potential new creditors. This makes it harder for identity thieves to open new accounts in your name.
You can also put a fraud alert on your credit record for one year and you can renew it at the end of the year. A fraud alert means lenders should call you to verify your identity before extending new credit, like opening up a new credit card, or giving out a loan. If you have been a victim of identity theft, then you can place an extended fraud alert for seven years.
If you’re unsure about any offer you receive, contractor you encounter, or action you’re asked to take, ask a trusted relative, friend, or an attorney for a second opinion before acting.
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Watch out for these common disaster scams
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Fake charities
After disasters, charitable giving spikes. Scammers may create fake charities to scam people who want to help. Sometimes these scams use names that are similar to organizations you may be familiar with to get you to make a “donation.” Scammers are also using live streaming features on social media platforms and artificial intelligence (AI) generated or altered images to get you to donate, and often request payment by virtual currency so they can get your money quickly. The Federal Trade Commission has more information about donating wisely and avoiding charity scams.
All FEMA representatives, including home inspectors, have a laminated photo ID. Don’t trust someone with just a FEMA jacket or shirt and no ID. Call FEMA at (800) 621-3362 if you’re unsure if someone is truly a FEMA representative. No FEMA, federal, or state workers will ask for or accept money. FEMA doesn’t charge for home inspections, disaster assistance, or help filling out applications. If you have any doubt that a person is a legitimate FEMA worker, don’t give them any personal information.
Mortgage repayment/modification scams
After a disaster, scammers may offer homeowners assistance with negotiating or delaying your mortgage payments through foreclosure relief scams. Generally, lenders or mortgage servicers will work with you, the homeowner, after a natural disaster and offer forbearance or other hardship options to help you avoid going into default or ending up in foreclosure. Your options should ALWAYS be discussed directly with your mortgage servicer. Contact your mortgage servicer for payment assistance and never pay a company to negotiate with your servicer on your behalf. If you need help working with your servicer you may want to contact a housing counselor or a lawyer for assistance.
Robocalls
You may receive a recorded call promising government grants, flood insurance, or help with applications for assistance. Don’t respond or provide personal information or payment to these callers. They may be scams trying to get your credit card or checking account information. Go to FEMA’s disaster assistance site for information on what help is really available.
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How to/Where to report a scam
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If you or someone you know has been a victim of a scam or fraud related to a natural disaster, the National Center for Disaster Fraud will investigate and prosecute fraud as well as advocate for disaster victims. You can call the Disaster Fraud Hotline at (866) 720-5721.
There may be several ways to check your prepaid card account balance. Your cardholder agreement may tell you how to check your balance and whether there is a fee to use a particular method to check your balance.
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Most cards offer one or more of these ways to check your prepaid card balance
Automated customer service
You can contact customer service to check your balance. You usually won’t be charged a fee if you get your balance through the automated phone system.
Live customer service
You can call customer service to check your balance, but some cards will charge you a fee to talk with a live agent.
Online/Mobile App
Some prepaid cards allow you to check your balance on the internet if you set up an online account. Usually this service is free.
Text message
Some prepaid cards give you the option to receive your account balance through text message free of charge, but you may pay a fee to your cell phone provider for the text messages.
ATM
Some prepaid cards allow you to check your balance at an ATM, but you may pay a fee.
To dispute a charge on your credit card bill, you should call the card company and let them know about the problem right away.
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To protect your rights you must also send a written billing error notice to the card company within 60 calendar days after the charge appeared on your statement. After receiving the notice, the company has 30 days to send you a letter confirming they received your billing dispute, unless they’ve completed required billing error resolution procedures within that time. Be sure to keep copies for your records. Write down the dates you make follow-up calls and keep this information together in a file.
If you already paid the charge that you’re disputing, you can still dispute it. But you probably won’t get the money back until the credit card company has decided that you were right.
If the card company finds you are correct, the charge must be removed from your bill. If the card company says that you are incorrect and the bill is correct, the card company must tell you why in writing. It must also tell you how much you owe and when your payment is due.
Note: You may have to go through a different dispute process if you use a credit card to pay for goods or services that turn out to be defective.
You have the right to dispute errors on your credit report. Fixing an error generally means contacting both the credit reporting company and the company that provided the information.
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+ How to dispute an error on your credit report
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+ First, dispute the information with the credit reporting company or companies
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If you identify an error on your credit report, you should start by disputing that information with the credit reporting company (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 our instructions and template letter as a guide.
If you mail a dispute, your dispute letter should include:
Contact information for you, including your complete name, address, and telephone number
Credit report confirmation number, if available
Each error you want fixed, including the account number for any account you may be disputing
Clear explanation of why you are disputing the information
Request that the information be removed or corrected
A copy of the portion of your credit report that contains the disputed items, with the disputed items circled or highlighted
Copies (not originals) of documents that support your position
You can choose to send your dispute letter by certified mail and ask for a return receipt, so that you have a record that your letter was received.
You can contact the nationwide credit reporting companies online, by mail, or by phone:
TransUnion Consumer Solutions P.O. Box 2000 Chester, PA 19016-2000
By phone: (800) 916-8800, Monday – Friday 8 a.m. 11 p.m. ET, Saturday and Sunday 8 a.m. – 5 p.m. ET.
Keep copies of your dispute letter and the documents you send with it.
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+ Then, dispute the information with the company that provided it to the credit reporting companies
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Credit reporting companies gather information about you from other companies (called furnishers). Examples of furnishers include your bank, your landlord, and your credit card company. To dispute the information a company provided to the credit reporting company, you can use our sample letter as a guide.
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+ What happens after you send in your dispute
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The credit reporting company investigates
The credit reporting company you sent the dispute letter to must investigate your dispute, forward copies of relevant documents to the company that provided the information about you, and report the results back to you.
A credit reporting company is not required to take action about disputes that are frivolous. The company must send you a notice explaining that it has decided the dispute is frivolous, and the notice must be sent within five business days after it made the decision.
The information furnisher makes corrections and notifies all the credit reporting companies
After correcting information about you, the information furnisher is responsible for notifying all the credit reporting companies about the corrected information. Then, the credit reporting companies update your credit reports.
The information furnisher might determine the information about you is accurate and should not be updated or removed. In that case, you can contact the credit reporting companies again and ask them to include a statement explaining the dispute in your credit reports. The statement is then added to your file and provided to whomever requests your credit report in future.
If you think your mortgage servicer has made an error or you need information about your mortgage loan, you can call or write a letter to your servicer. You may get more protections if you write a letter.
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Your servicer may be able to help you over the phone. See your monthly mortgage statement or coupon book for the phone number. However, to guarantee yourself a timely written response, you should write to your servicer and send it to the address provided by the servicer for such requests.
Sample Letters
Sample letter to help you write your mortgage servicer to explain an error. This document also provides some additional information about disputing an error with your servicer.
Sample letter to help you write your mortgage servicer to request information. This document also provides some additional information about requesting information from your servicer.
If you submit a letter, remember:
To include your name, home address, and mortgage account number. Use the name that is on your mortgage.
To identify the error or information. Tell your servicer exactly what error you believe occurred, or what information you’re requesting.
Not to write your letter on your payment coupon or other payment form. You might not get the same protections.
To mail the letter to the right address. A mortgage servicer may use a special address for borrowers to send requests to correct errors or request information. You generally should be able to find this address in a notice from your servicer, on your monthly mortgage statement or coupon book, on your servicer’s website, or by calling your servicer. If your servicer uses a special address, you must send the letter to that address.
Tip: While you’re waiting for a response, you should continue making your mortgage payments as scheduled.
Your mortgage servicer’s response
Your mortgage servicer must send you a letter informing you that it received your letter within five days (not including weekends and legal public holidays) of receiving your letter. Generally, your mortgage servicer must respond with an answer to the error or information request within 30 days (not including weekends and legal public holidays).
If you’re disputing an error, your servicer can:
Correct the error and confirm the correction in writing
Investigate the error and provide you a written notice explaining why it has found that no error occurred and how you can find out more
Ask for additional information
Inform you in writing that it will seek an additional 15 days (not including weekends and legal public holidays) to investigate and respond to your notice of error
If the error you are writing about has to do with the servicer improperly starting the foreclosure process, moving for a foreclosure judgement or order of sale, or conducting a foreclosure sale, then generally the servicer must respond to your notice of error before the foreclosure sale.
If you’re requesting information, your servicer can:
Provide the requested information in writing
Search for the information and provide you a written notice explaining that the requested information is not available, and give you contact information for more help
Inform you in writing that it will seek an additional 15 days (not including weekends and legal public holidays) to respond to your request
If you have a problem with your mortgage, you can submit a complaint online or by calling (855) 411-CFPB (2372).
You can also reach out to a housing counselor. Use the CFPB's "Find a Counselor" tool to get a list of counseling agencies approved by the Department of Housing and Urban Development (HUD). You can also call the HOPE™ Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673)
If you’re facing imminent foreclosure or have been served with legal papers, you may also need to consult an attorney.
You have the right to tell a debt collector to stop contacting you. If you ask a debt collector to stop all contact – regardless of the communications channel – the collector must stop. Keep in mind, though, that you could still owe the debt.
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If you don't want a debt collector to contact you again, write a letter to the debt collector saying so. We have sample letters that you can use to respond to a debt collector who is trying to collect a debt.
The CFPB’s Debt Collection Rule requires debt collectors to provide certain information when they first communicate with you, or shortly after, which is often in a letter called a validation notice. The notice includes information about the debt and the debt collector, as well as a “tear-off” form with checkboxes you can fill out to dispute or request more information about the debt. If the debt collector provides a way for you to submit the letter electronically, you can do that instead of sending a letter by mail.
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After I tell the debt collector to stop contacting me, what can I expect?
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Once a debt collector receives your letter requesting they stop contacting you, they’re not allowed to communicate with you again except to:
Tell you there will be no further contact
Advise you that they or the creditor may take other actions they’re legally allowed to take, such as filing a lawsuit against you
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Keep in mind that it’s important that you respond to the debt collector in writing, even if they provide the validation information over the phone or through email. If you’re disputing the debt, it’s also important to do it immediately, even before you insist that they stop contacting you.
Debt collectors can still collect even if they can’t contact you
Stopping communication with a debt collector doesn’t make the debt go away. In fact, they may find alternative ways to collect it from you. For example, they can file a lawsuit against you or report negative information to a credit reporting company, although that won’t always happen.
If you believe you don’t owe the debt or it isn’t accurate, you can write to the debt collector to ask for their evidence. Once you notify the debt collector in writing that you dispute the debt, as long as it is within 30 days of receiving a validation notice, the debt collector must stop trying to collect the debt until they’ve provided you with verification in response to your dispute.
You may also have questions about whether they are collecting a debt that isn’t yours or trying to collect an improper amount, and you can consider consulting an attorney that specializes in these types of cases to learn more about your rights and options.
Keep good records of your communications with a debt collector
If you’re being contacted by a debt collector, it’s important to keep a record of any letters, documents, or communications they send to you. Write down dates and times of conversations, along with notes about what you discussed. These records can help you if you’re disputing the debt, meeting with a lawyer, or going to court.
If you send the debt collector a letter, make a copy and send the original to the debt collector. It’s also generally a good idea to send the letter by certified mail. If you pay for a "return receipt," that gives you proof the debt collector received your letter. You may also send the letter electronically. Just be sure to keep a copy.
Also, be careful what you say to a debt collector because they keep records as well. They can track any information you provide, including personal information or if you apologize or admit to owing the debt. Those statements could be used against you.
What to do if a debt collector is violating the law
If the collector continues to contact you after receiving a written notice to stop or after you’ve told them you have a lawyer and have provided the lawyer’s contact information, they are likely violating the Fair Debt Collection Practices Act (FDCPA).
You can sue the debt collector for violating the FDCPA. If you sue under the FDCPA and win, the debt collector must generally pay your attorney's fees and might also have to pay you damages.
You have the right to request one free copy of your credit report each year from each of the three major consumer reporting companies (Equifax, Experian and TransUnion) by visiting AnnualCreditReport.com. You may also be able to view free reports more frequently online.
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Where can I get a credit report?
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You can request and review your free report through one of the following ways:
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’ve received your annual free credit report, you can still request additional reports. By law, a credit reporting company can charge no more than $14.50 for a credit report.
You may be able to view free credit reports more frequently online. When you visit AnnualCreditReport.com , you may see steps to view your updated credit reports at no cost, online. This gives you a greater ability to monitor changes in your credit. If needed, you can also ask whether your credit report is available in your preferred language.
You are also eligible for reports fromspecialty consumer reporting companies. We put together a list that includes 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. Most of the companies in this list provide a report for free every 12 months. Other companies may charge you a fee for your report.
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How can I get additional free credit reports?
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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. In this case, 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 placing of an initial fraud alert on your credit file (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.
+ There is no secret formula to building a strong credit score, but there are some guidelines that can help.
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+ Pay your loans on time, every time
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One way to make sure your payments are on time is to set up automatic payments, or set up electronic reminders. If you’ve missed payments, get current and stay current.
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+ Don’t get close to your credit limit
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Credit scoring models look at how close you are to being “maxed out,” so try to keep your balances low compared to your total credit limit. If you close some credit card accounts and put most or all of your credit card balances onto one card, it may hurt your credit score if this means that you are using a high percentage of your total credit limit. Experts advise keeping your use of credit at no more than 30 percent of your total credit limit. You don’t need to revolve on credit cards to get a good score. Paying off the balance each month helps get you the best scores.
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+ A long credit history will help your score
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Credit scores are based on experience over time. The more experience your credit report shows with paying your loans on time, the more information there is to determine whether you are a good credit recipient.
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+ Only apply for credit that you need
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Credit scoring formulas look at your recent credit activity as a signal of your need for credit. If you apply for a lot of credit over a short period of time, it may appear to lenders that your economic circumstances have changed negatively.
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+ Fact-check your credit reports
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If you spot suspected errors, dispute them. If you have old credit card accounts you are not using, keep an eye on them to make sure that an identity thief is not using them.
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Tip: If you are new to credit, consider getting a product designed to help you establish and build credit. Financial institutions have developed an array of products and services, such as secured credit cards and credit builder loans, tailored to helping consumers new to credit to establish and build credit.
To receive certain information about the mortgage account, you should contact the mortgage servicer. You may need to show the mortgage servicer proof of your right to the home.
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You should inform the loan servicer if you’ve inherited a home from someone. The mortgage servicer is the company that sends the monthly mortgage statement, responds to borrower inquiries and keeps track of principal and interest paid.
To receive certain information about the mortgage account, you may need to show the mortgage servicer proof of your right to the home. In the case of inheritance from someone who has died, that proof might include a copy of the executed will and the death certificate or a letter from the executor of the deceased person’s estate. The mortgage servicer should tell you what kind of proof it needs. The proof that you can get may vary from state to state.
You also may want to ask the servicer for further information about your rights and obligations with respect to the house and the mortgage. For example, you might ask the servicer how you can continue making payments on the loan or how you can seek a loan modification.
You may also want to consult an attorney or a housing counselor. You can use the CFPB's "Find a Counselor" tool to get a list of Department of Housing and Urban Development (HUD)-approved counseling agencies in your area. You can also call the HOPE™ Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673).
If you’re facing imminent foreclosure or have been served with legal papers, you may also need to consult an attorney.
If you have a problem with the mortgage, you can submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).
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Once you notify your bank or credit union about an unauthorized transaction (that is, a charge or withdrawal you didn’t make or allow), it generally has ten business days to investigate the issue. The bank or credit union must correct an error within one business day after determining that an error has occurred. Your bank or credit union then has three business days to report its findings to you.
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If the unauthorized transaction was made using a debit card or other electronic fund transfer, you might have additional protections under federal law. Electronic fund transfers include ATM transactions, purchases using your debit card, some online bill payments, and payments you’ve set up to be deducted from your account automatically.
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What if I lose my debit card?
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Let’s say you lost your debit card or it was stolen. If you notify your bank or credit union within two business days of discovering the loss or theft of the card, the bank or credit union can’t hold you responsible for more than the amount of any unauthorized transactions or $50, whichever is less. If you notify your bank or credit union after two business days, you could be responsible for up to $500 in unauthorized transactions.
Also, if your bank or credit union sends your statement that shows an unauthorized withdrawal, you should notify them within 60 days. If you wait longer, you could also have to pay the full amount of any transactions that occurred after the 60-day period and before you notify your bank or credit union. To hold you responsible for those transactions, your bank or credit union has to show that if you notified them before the end of the 60-day period, the transactions would not have occurred.
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What if my security code or PIN to my debit card or bank account is stolen?
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You should notify your bank or credit union within two business days of discovering the loss or theft of your security code or PIN. By reporting the theft within two business days, you’re protected from paying for transactions over $50 charged by someone who steals and uses your security code or PIN. Never write your PIN on your debit card or keep it written down in your wallet, in case your card or wallet is lost or stolen.
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What if someone charges my account but I have my physical debit card?
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If an unauthorized withdrawal appears on your bank statement, but you did not lose your card, security code, or PIN or had any of them stolen, you should notify your bank or credit union right away. At the latest, you must notify your bank within 60 days after your bank or credit union sends your statement showing the unauthorized transaction. If you wait longer, you could have to pay the full amount of any transactions that occurred after the 60-day period and before you notify your bank. To hold you responsible for those transactions, your bank would have to show that if you notified them before the end of the 60-day period, the transactions would not have occurred.
In unusual circumstances, like lengthy travel or hospitalization that keeps you from notifying the bank within the time allowed, the notification periods above must be extended.
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How do banks investigate unauthorized transactions and how long does it take to get my money back?
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Once you notify your bank or credit union, it generally has ten business days to investigate the issue (20 business days if the account has been open less than 30 days). The bank or credit union must correct an error within one business day after determining that an error has occurred. Your bank or credit union then has three business days to report its findings to you. After that, you have the right to request the information it used to make their decision, and the bank or credit union has to send it to you promptly.
If the bank or credit union can’t complete its investigation within ten (or 20) business days as applicable, it must generally issue a temporary credit to your account for the amount of the disputed transaction, minus a maximum of $50, while it continues to investigate.
In some situations, however, your bank or credit union does not have to issue a temporary credit. For example, it can require you to provide written confirmation of the error if you initially provided the information by telephone. If you are asked to follow up in writing and you do not do so within ten business days, the bank or credit union is not required to temporarily credit your account during its investigation.
The bank or credit union must then resolve the issue in 45 days, unless the disputed transactions were conducted in a foreign country, were conducted within 30 days of account opening, or were debit card point-of-sale purchases. In those cases, you may have to wait as long as 90 days for the issue to be fully resolved.
If the bank or credit union determines that the transactions were in fact authorized, it must provide you with written notice before taking the money that was credited to you during the investigation out of your account.
Information about any past due payment, late fees, and how much you must pay to bring the account current if you are delinquent on your loan for more than 45 days
Review your statement each time it arrives. This can help you spot problems quickly. If you don’t understand something on the statement, contact your mortgage servicer using the contact information on the statement. You can also send a written request for information.
Consider setting up automatic payments with your mortgage servicer or through your bank or credit union. This can help you stay on track.
What to do if you get a coupon book
Not everyone receives a periodic mortgage statement. Some people may receive a coupon book. Servicers usually send out coupon books in the mail once a year. Coupon books usually have payment slips (“coupons”) that you tear out and return with your payment. If you receive a coupon book, it might only include the servicer’s contact information, your account information, and the amount due. You may need to contact the servicer to request other information, for example, an explanation of amount due or past payment information.
Some servicers may not send mortgage statements or coupon books but instead may send you an email or other type of notice telling you what to pay. If you aren’t sure, contact your mortgage servicer. You can also send a written request for information.
When negotiating with a debt collector, you should confirm whether you owe the debt, calculate a realistic payment plan, and make a repayment proposal to the debt collector.
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If you’re thinking about negotiating a settlement or repayment agreement with a debt collector, consider the following three steps:
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When debt collectors contact you, they must give you certain information about the debt they say you owe or they should provide it within five days of first communicating with you. Generally, debt collectors must provide this information in writing, either in the mail or electronically.
Once you confirm that you owe a debt, you can pay in full or propose a repayment plan to the debt collector. If you want to make a proposal to repay this debt, here are some questions you should ask yourself:
How much can I realistically afford to pay each month?
First, review your current financial obligations. Write down your monthly take-home pay and your monthly expenses, including the amount you want to repay each month. Try to allow some income left over to cover unexpected expenses and emergencies. Keep in mind that falling behind on other bills, even if you’re paying off this debt, could cause you more problems. If you’re struggling, a non-profit credit counselor can help you create a budget and work with the collectors.
What is the total amount I’m willing to pay to settle the entire debt?
This could be one payment or a series of smaller payments. Don’t pay more than you can afford. If you have more than one debt with a debt collector, you can direct the debt collector to apply your payments to a specific debt. Debt collectors are not allowed to apply a single payment for multiple debts that you’re disputing.
Avoid companies that charge money in advance to settle your debts for you
Dealing with debt settlement companies can be risky. Some debt settlement companies promise more than they can deliver. Certain creditors may also refuse to work with the debt settlement company you choose. In many cases, the debt settlement company won’t be able to settle the debt for you anyway.
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Explain your plan
When you talk to the debt collector, explain your financial situation. You may have more room to negotiate with a debt collector than you did with the original creditor. It can also help to work through a credit counselor or attorney.
Record your agreement
If you agree to a repayment or settlement plan, get the plan and the debt collector’s promises in writing before you make a payment. Those promises may include stopping collection efforts and ending or forgiving the debt once you have completed the plan.
Know your rights
There are certain rules around how and when debt collectors can communicate with you. The FDCPA prohibits debt collectors from placing repeated or continuous telephone calls or conversations with the intent to harass, oppress, or abuse you.
In order to obtain a payday loan, you typically must either provide a personal check to the lender or an ACH (Automated Clearing House) authorization to electronically withdraw money from your bank, credit union, or prepaid card account. Carefully read your loan documents so you know exactly how repayment works.
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Although you are generally required when obtaining a loan to provide a post-dated check or authorization for an electronic debit of your account, some lenders strongly encourage, or in some cases, require consumers to return to the store when the loan is due to “redeem” the check. Encouraging or requiring borrowers to return to the store on the due date provides lenders an opportunity to offer borrowers the option to roll over the loan or, where rollovers are prohibited by state law, to reborrow following repayment or after the expiration of any cooling off period.
If you do not return, your lender might repay itself by depositing your check to your bank or credit union or withdrawing funds electronically from your account.
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If you have taken out a loan online, you likely provided an ACH authorization for the lender to electronically access your checking account for repayment on the loan due date. So, while the way you repay a loan may depend on whether you took out a loan in a storefront or online, usually you provide the lender a way to repay itself the full amount as part of the loan application process.
Some lenders might set up payments assuming you only want to pay a renewal fee on the loan’s due date and require you to take action several days before your loan comes due to pay it in full. This could result in you paying several rounds of renewal fees while still owing the entire original loan amount.
Make sure you understand how your loan will be repaid and how much the loan could ultimately cost you before agreeing to get any type of loan.
If you have problems with a payment authorization, such as the ACH was unauthorized or revoked, you may want to contact your state regulator or state attorney general. You can also submit a complaint to the CFPB online or by calling (855) 411-2372.
When you shop for a prepaid card, compare the features and fees among different cards to find the one that will work best for you. You can buy a prepaid card online or in person at a retail store. When you buy a prepaid card, be sure to register it for protection in case your card or funds are lost or stolen.
Make sure the prepaid card can be used at the locations where you plan to use the card. Prepaid cards that feature a major network brand (like Visa, MasterCard, American Express, or Discover) can be used at any location that accepts that network brand. Other types of cards may have limitations on where or how they can be used, such as only at ATMs or at specific kinds of stores. Remember, prepaid cards may look like debit cards, credit cards, or gift cards, but they are often quite different.
The card packaging lists key fees and other information about the prepaid account, so you can comparison shop between cards at the store. You may want to visit the website listed on the card to review additional information about the program. Learn more about the fees you will have to pay.
How to buy a prepaid card
You can buy prepaid cards at retail locations (such as grocery stores and drug stores), online, over the phone, or from some banks and credit unions. If you buy the card online, you may be issued a virtual card, or they may send you a physical card in the mail.
When you buy the card, you will pay for the cost of the card plus the amount that you want to load onto it, often termed the “initial load.” Some cards require a minimum initial load.
How to register your reloadable prepaid card
It’s important to register your card so it is protected in case of loss or theft. When you register your card, you may be asked for personal information, such as:
Full name
Street address (no P.O. boxes)
Date of birth
Email
Phone number
Social Security number, taxpayer identification number, or other identifying number if you are not a U.S. citizen
This personal information is used to verify your identity, which may be necessary before you can use certain card features, such as reloading money onto the card or using the card online or at an ATM. Also, you generally need to register your prepaid card to become eligible for deposit insurance.
You have the right to stop a company from taking automatic payments from your account, even if you previously allowed them. For example, you might decide to cancel a membership or monthly service, or you might want to switch to a different payment method.
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To stop automatic payments from your account, here are the steps you can take.
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Call the company and tell them you are taking away your permission for the company to take automatic payments out of your bank account. The company’s customer service should be able to help you, and there might be an online form you can use. Then, follow up by writing a letter or an e-mail. When you contact the company, you can explain whether you are canceling your ongoing contract or subscription, or only changing the way you are paying them. For example, you might cancel automatic payments and decide to pay invoices when they arrive. Click here for a sample letter.
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Next, call your bank or credit union and say you have revoked authorization for the company to take automatic payments from your account. Customer service should be able to help you, and your bank or credit union might have a form for this online. Follow up by writing a letter or an e-mail. Click here for a sample letter.
After you contact your bank and the company to clarify that you have revoked authorization from the company, any additional payments initiated by that company would be errors, and you can contact your bank for a refund.
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Some banks or credit unions might recommend you send them a stop payment order, too. A stop payment order is an instruction to your bank or credit union that tells them not to make a payment to a specified company from your account. Click here for a sample stop payment order.
Banks and credit unions generally charge fees for stop payment orders.
A good idea is to follow your bank’s or credit union’s suggested process, and keep close track of your requests and the dates you made them. That way, if something goes wrong and a payment goes through after you have given your instructions, you can work with the bank or credit union to refund your account.
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Tell your bank or credit union right away if you see a payment that you did not allow or a payment that was made after you revoked authorization. Federal law gives you the right to dispute and get your money back for unauthorized transfers from your account, as long as you tell your bank in time. Click here for a sample letter.
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To cancel an ongoing contract for a service, like cable or a gym, be sure to cancel your contract with the company as well as telling it to stop automatic payments. If you cancel an automatic payment on a loan, you still have to make payments on the loan using another payment method.
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+ How does foreclosure work? | Consumer Financial Protection Bureau
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Foreclosure processes differ by state. They are generally done in two ways. If done by filing a lawsuit, it is called "judicial foreclosure." In some states, the lender can foreclose without going to court, and that is called "non-judicial foreclosure." State foreclosure processes require that the borrower(s) be notified regarding the foreclosure proceedings. There are also other federal rules that may apply.
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Foreclosure is when the lender takes action to satisfy the homeowner’s debt out of the sale of collateral (the homeowner’s property) when the homeowner fails to make payments on a mortgage. Foreclosure processes differ by state.
Typically, if you fall a few months behind on your mortgage payments, the foreclosure process may begin (although the process can begin earlier or later). Don't wait for the foreclosure process to begin. Reach out for help as soon as you think you might have trouble paying your mortgage.
The foreclosure process generally may proceed in one of these ways depending on your state:
Judicial foreclosure. This requires that the process go through a court where the borrower can raise defenses.
Non-judicial foreclosure. This is done without filing a court action and is carried out by a series of steps, including required written notices under a "power of sale" clause in the mortgage or deed of trust.
The laws generally provide that certain notices and procedures will be followed. After that occurs, a public auction of your property generally will be held. Prospective buyers, including your lender, will appear at the sale, and the property will be sold to the highest bidder. Additional state laws generally will set forth the process for consummating and conveying your property to the bidder (which would be the lender if it was the highest bidder) and describe additional steps and procedures that must be followed. Some states may also provide you with the right to mediation prior to foreclosure. Be sure to read your mail and any legal notices carefully and act promptly on notices you receive.
You can use the CFPB's "Find a Counselor" tool to get a list of counseling agencies in your area that are approved by the Department of Housing and Urban Development (HUD). You can also call the HOPE™ Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673).
If you’re facing foreclosure or have been served with legal papers, you may also need to consult an attorney.
Many credit card companies calculate the interest you owe daily, based on your average daily account balance.
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Often card companies charge one interest rate for purchases and different interest rates if you use your credit card to get cash, to write a check using your credit card account, or for other transactions. If your card has a grace period, you can avoid paying interest on purchases if you pay off your balance in full by the due date each month.
How does the daily interest calculation work?
Many issuers calculate the interest you owe daily, based on the average daily balance. The interest charged daily is called the daily periodic rate. Since interest is accruing daily, not monthly, this means that if you don’t have a grace period, the sooner you pay off all or some of your balance, the less interest you will pay.
How do I know what APR applies to different types of balances?
Your statement must show each category with a different APR and the amount of the balance that falls in each category. If your card has a grace period , the grace period usually applies only to the category of new purchases and only if you were not already carrying a balance.
How do my payments affect the amount of interest I owe?
If your card has a grace period, you can avoid paying interest on purchases if you pay off your card balance in full each month by the due date. When you pay less than the full balance but more than the minimum required, the card issuer must generally apply the amount you pay over the minimum first to the balance with the highest interest rate and any remaining portion to the other balances in descending order based on the applicable interest rate. It is generally up to the card issuer to decide to which balance it will apply the minimum amount portion of your total payment.
The card issuer must send you a letter stating that it has received your billing dispute within 30 days of receiving it and complete its investigation within two complete billing cycles which generally means it cannot take longer than 90 days.
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If you’ve noticed a billing error on your credit card statement and sent a written letter disputing the charge to your credit card company, they must acknowledge your dispute by sending you a billing error notice within 30 days of when they received your letter.
They have two billing cycles – generally two months or 60 days – to investigate the error, but they can’t take more than 90 days. In the meantime, they’re not allowed to charge you interest on the amount being disputed.
If the card issuer determines no billing error occurred, they must mail or deliver an explanation of the reasons why they’ve rejected your dispute.
If the card issuer determines a billing error has occurred, then they must correct the billing error, credit your account with any disputed amount and any related finance or other charges, and send a correction notice to you.
There are laws to prohibit debt collectors from placing repeated or continuous telephone calls to annoy, abuse, or harass you or others who share your phone number. They’re also prohibited from communicating with you at times or places that are inconvenient for you.
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When can a debt collector call me?
Generally, debt collectors can’t call you at an unusual time or place, or at a time or place they know is inconvenient to you. They are generally prohibited from contacting you before 8 a.m. or after 9 p.m. The law also requires debt collectors to follow instructions you give them about when and where you don’t want to be contacted.
If you don’t want to receive calls from a debt collector at a particular time or place, such as on the weekends or at work, you should tell the debt collector. If they’re aware you don’t want or are not allowed to receive personal calls at work, for example, they’re not allowed to contact you there.
The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from placing repeated or continuous telephone calls to you or having telephone conversations with you with the intent to annoy, abuse, or harass you. “Placing a telephone call” includes telephone calls that the debt collector makes and that go into voicemail.
In addition, the Debt Collection Rule creates certain “presumptions” to help determine whether debt collectors have violated this law. The debt collector is presumed to violate the law if they place a telephone call to you about a particular debt:
More than seven times within a seven-day period, or
Within seven days after engaging in a telephone conversation with you about the particular debt.
Factors such as the frequency and pattern of phone calls and voicemails may also be used to assess whether a debt collector complied with or violated the law. For example, if the debt collector placed seven calls to you about a debt within a seven-day period, but all seven calls were made on the same day, they could be violating the law. There may be some exceptions to this, including if you gave them consent to call more frequently.
The limits generally apply per debt but in the case of student loan debt – depending on the facts – multiple debts could be counted together as one “particular debt,” so the limits would apply to those debts as a group.
Keep in mind that these presumptions only apply to telephone calls placed by the debt collector to you and don’t apply to other forms of communication, including text messages, emails, in-person interactions, or social media messages, which have other protections.
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Each bank or credit union has its own rules as to when it will let you access money after you deposit a check, but federal law establishes the maximum length of time a bank or credit union can make you wait.
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How quickly can I get money after I deposit a check?
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Generally, if you deposit a check or checks for $200 or less in person to a bank employee, you can access the full amount the next business day. If you deposit checks totaling more than $200, you can access $200 the next business day, and the rest of the money the second business day.
If your deposit is a certified check, a check from another account at your bank or credit union, or a check from the government, you can withdraw or use the full amount on the next business day if you make the deposit in person to a bank employee.
If you make a check deposit at an ATM at your bank, you can withdraw or use the full amount on the second business day.
Your bank or credit union has a cut-off time for what it considers the end of the business day. If you make a deposit after the cut-off time, the bank or credit union can treat your deposit as if it was made on the next business day. A bank or credit union’s cut-off time for receiving deposits can be no earlier than 2:00 p.m. at physical locations and no earlier than noon at an ATM or elsewhere.
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What is a deposit hold?
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The amount of time a bank or credit union holds funds you deposit by check is sometimes referred to as a “deposit hold” or “check hold”. Some banks or credit unions may make funds available more quickly than the law requires, and some may expedite funds availability for a fee. If you need the money from a particular check, you can ask the teller when the funds will become available. A receipt showing your deposit does not mean that the money is available for you to use.
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Why is it taking longer to see a deposit in a bank account?
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It may take longer for you to access your deposit for a few reasons:
If you have a new account or if your account has been overdrawn too many times in the past six months;
If you make a deposit over $5,000;
If you make a deposit at an ATM owned by someone other than your bank or credit union; or
If the bank or credit union reasonably believes the deposited check may be uncollectible.
If you or your bank redeposit a check that has been returned unpaid
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+ I sent money to someone in a foreign country, but the amount received was less than what I sent. What can I do? | Consumer Financial Protection Bureau
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When you send a remittance transfer, sometimes fees or taxes are charged or deducted from the total amount sent. When you use a remittance transfer provider, federal law gives you the right to dispute any errors.
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The amount that was received may be less than what was sent because certain fees or taxes may be deducted by a third-party company, separate of the remittance transfer provider, that processed the transfer.
If you used a remittance transfer provider, they must tell you about certain fees charged by persons other than the provider before you pay for the transfer. In most cases, remittance transfer providers must provide you with the exact amount of those fees, but sometimes federal law allows them to provide you with estimates.
There may be additional fees taken out by the recipient’s bank and foreign taxes that apply. If these deductions apply to your transfer, the remittance transfer provider must let you know, but federal law doesn’t require them to provide you with exact or estimated amounts of these deductions. If you’re unsure about whether you have sent enough money to cover the fees, contact the person or business receiving the money. They can tell you whether they have priced in the additional fees and taxes for you.
If you believe a mistake was made, or if you have questions, contact the money transfer service right away. If you sent a money transfer through a remittance transfer provider, federal law gives you the right to have errors investigated. The provider also must tell you the results of the investigation. For certain types of errors, such as if the money doesn’t arrive by the date it’s supposed to arrive, you may be able to get a refund or have the transfer sent again.
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+ I sent money to someone and she couldn't get the money because her information didn't match what I provided. What can I do? | Consumer Financial Protection Bureau
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If you believe you gave wrong information, contact the provider and ask if you can correct it.
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When you send money to someone else, the company you use may require the recipient’s information, such as name and address, or account number, to match certain information that you provide in order to get the money you’ve sent.
Verify account numbers before you send a transfer. You could lose your money if you mistakenly provide wrong account or routing numbers. If the money does not go to the account you intended, you may not be able to get it back.
In general, you should be able to close your account by calling the credit card company and following up with a written notice. If you still have a balance when you close your account, you are required to pay off any balance on schedule. The card company is allowed to charge interest on the amount you still owe.
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Your cardholder agreement may give you any other details on how to close your account. You should be able to find a copy of the agreement on your card company’s website, and you can request a copy from your card company if it is not there. If you have any questions, you should contact your card company.
If you think there was a mistake with your remittance transfer, contact the company that sent the money right away. The sooner you notify the company, the sooner your issue can be resolved.
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Federal law requires remittance transfer providers to correct certain errors when making a money transfer, such as a failure to deliver the correct amount of money or to deliver the funds by the date the money is supposed to be available. You have 180 days from the date the money is supposed to be available to contact the provider and report the error. This date of availability is printed on your money transfer receipt, but don’t delay. Usually, the sooner you start the process, the sooner the error can get fixed.
The remittance provider must investigate and determine whether an error occurred within 90 days after it receives your notice of error, and then tell you about their findings within three business days after completing the investigation.
Mistakes a remittance transfer provider is responsible for correcting
Generally, mistakes a remittance transfer provider is responsible for correcting include:
An incorrect amount paid by the sender
Computational or bookkeeping errors
Delivery of an incorrect amount of money
Failure to deliver funds by the date that the money is supposed to be available or to deliver the funds at all
Delivery of funds to the wrong recipient
Information to include when submitting your error notice
When submitting your error notice, give the remittance transfer provider as much information about the money transfer as you can, in addition to explaining why you believe a mistake was made. There is information you must include, such as:
Your name and telephone number or address
The name and telephone number or address of the person to whom you sent the transfer
The dollar amount of the transfer
Why you believe an error occurred
There is other information you should give to the provider if you know it, but is not mandatory. This includes:
Your email address and other identifying information used in sending the transfer
Any email address or other identifying information of the person you sent the transfer to
The confirmation code if you have one
The date the transfer was requested
The destination of the transfer
Any other information that could help the provider identify the transfer
Requirements for receiving a refund or resending the money
For many types of mistakes, such as if the money never arrives, you may be able to get a refund or have the remittance transfer sent again. If the mistake occurred because you gave the remittance transfer provider an incorrect account number or routing number and the provider took certain actions, then they’re not required to refund or resend the money. These certain actions include using reasonably available means to verify that the routing number corresponded to the recipient institution name you provided before sending the transfer and using reasonable efforts to retrieve the funds from the wrong recipient in a quick manner.
If you’re not satisfied with the company’s response, you can submit a complaint to the CFPB. In addition, a remittance transfer receipt must list the transfer provider’s phone number, a phone number for the CFPB, and, in some cases, a phone number for a state regulator for questions or complaints about the remittance transfer provider.
Separate state law protections may be available to you, depending on how you send the money (for example, through wire transfer, electronic payment, etc.). Contact your state attorney general or state financial regulator for more information about your state’s laws.
If you’d like a family member or friend to help you manage your money, you can explore options like opening a convenience bank account, adding trusted contacts to your accounts, or getting a power of attorney (POA).
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Receive informal help with money management
If you are still able to handle your banking and bill-paying but would like some help going through the bills and budgeting, a friend or family member can review your bills with you and help you figure out which ones to pay and when. Under this arrangement, you still sign your checks, and no one else is authorized to make account transactions.
If you have no friends or family members to help you with informal money management, there are organized programs that provide trained staff members or volunteers to help. To locate a money management program in your area, try contacting your local Area Agency on Aging. You may also be able to find a money management program along with other resources for older Americans by contacting the Eldercare Locator at eldercare.acl.gov or by calling 1-800-677-1116.
If you get help from a money management program, though, check on whether the program has insurance or bonding so your money is protected in a worst-case scenario, including mismanagement or theft by the person assisting you.
Open a convenience account
A “convenience account” or “agency account” enables you to designate a family member or friend to help you with depositing or withdrawing money and writing checks.
A convenience account doesn’t change the ownership of the money in the account or give your helper the right to keep the money when you die. However, any friend or family member you designate to help you can both deposit and withdraw money from your account, which exposes you to the risk that they might withdraw your money for their own use.
If you’re interested in a convenience or agency account, ask your bank
Often bank employees don’t mention these options or know they exist. You may need to speak with a manager. Explain that you want an account in which the money remains yours but that someone else’s name will be on the account to help you with bill paying and other transactions. If you don’t intend for your money to become your helper’s money upon your death, be sure to say that you don’t want a joint account where the other person has the “right of survivorship.”
Add a trusted contact person to your accounts
Some banks may also offer the option to add a “trusted contact person” to your brokerage accounts. This allows your financial institution to contact the trusted person in certain circumstances, like if they believe you’re getting scammed. Trusted contacts don’t have access to your money – they simply get notified if the financial institution sees signs of financial exploitation. Learn more about how choosing a trusted contact person could help you safeguard your finances.
Set up a power of attorney for finances
You can also choose a friend or family member to act on your behalf by creating and signing a document called a power of attorney (POA) or “durable” power of attorney. If you have a POA, your bank account can remain in your name only, but the person you name as your power of attorney – or your “agent” – can help you with banking. If you or your agent shares a copy of the power of attorney document with bank employees, they should honor the document and allow your agent to handle your bank transactions on your behalf.
Again, give considerable thought before granting anyone power of attorney, as they could withdraw money from your account without your permission.
If you can’t pay your mortgage or are worried about missing a mortgage payment, call your mortgage servicer right away. You should also contact a HUD-approved housing counseling agency to get free, expert assistance on avoiding foreclosure.
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First, call your mortgage servicer. You can find the telephone number for your mortgage servicer on your monthly mortgage loan statement. If you don’t get a monthly mortgage statement, look in the mortgage loan coupon book your lender gave you. You can also look on your mortgage servicer’s website. If you don’t know the name of your mortgage servicer, contact a HUD-approved housing counseling agency for help.
When you call your mortgage servicer, be prepared to explain:
Why you are unable to make your payment
Whether the problem is temporary or permanent
Details about your income, expenses and other assets like cash in the bank
If you are a servicemember and have received permanent change of station (PCS) orders. (This is important to mention, because you may qualify for loss mitigation options because of your military move.)
Many mortgage servicers have programs to help people avoid foreclosure. Your mortgage servicer will look at your situation to consider the options that may be available to you. The servicer may ask you to fill out a mortgage assistance application. After the servicer reviews the completed application, it will let you know what loss mitigation options, if any, it will offer to you.
Discuss your situation and whether you qualify for any programs or additional help
Help you understand the loss mitigation options your servicer offers and which options might work best for you
Guide you through the process of working with your servicer and any other programs and paperwork you may need
Help you at little or no cost with budgeting, credit card debt, or other financial problems that may be making it hard to pay your mortgage
You can use the CFPB's "Find a Counselor" tool to get a list of housing counseling agencies in your area that are HUD-approved. You can also call the HOPE™ Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673).
If you are facing imminent foreclosure or have been served with legal papers, you may also need to consult an attorney.
What options might be available?
Some options that your servicer might make available include:
A HUD-approved housing counseling agency can help you figure out which available options may work best for you. You don’t have to pay anyone to help you avoid foreclosure. The help you need is available at no cost to you from your servicer, or through a HUD-approved housing counseling agency.
Foreclosure scammers might tell you they’ll save your home from foreclosure, when they’re really just taking your money.
Watch for these scam warning signs:
You’re asked to pay upfront for help.
The company guarantees it will get the terms of your mortgage changed.
The company guarantees you won’t lose your home.
You’re asked to sign over title to your home or to sign other documents you don’t understand.
You’re instructed to send your payment to someone other than your mortgage company or servicer.
The company offers to do a “forensic audit.”
You’re told to stop paying your mortgage.
The company says they’re affiliated with the government, or uses a logo that looks like a government seal but is slightly different.
Tip: Use our checklist for more information on how to avoid foreclosure.
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+ If I pay off my credit card balance when it is due, is the company allowed to charge me interest for that month? | Consumer Financial Protection Bureau
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When you carry a balance on your credit card, most card companies charge you interest from your billing date until the time they receive your payment.
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Different credit card companies have different rules for when they charge interest. In general, once a credit card company starts to charge interest, it keeps charging interest until it receives your payment.
Your cardholder agreement should tell you the rules for your credit card. You should be able to find a copy of the agreement on the credit card company’s website, or you can look it up by the company’s name. You can also request a copy from your credit card company.
In some cases, when your prepaid card expires, you might have to pay a fee so that you do not lose your money. Check your cardholder agreement to see if there are actions you need to take to prevent this loss.
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If your prepaid card expires while you still have money on it, you may be able to request a replacement card to access the funds. You may also try to close out your account by requesting that your balance be mailed to you in the form of a check. The provider might charge you a fee for this. Be sure to check your cardholder agreement to see if you can get back the money that may still be on the card when it expires.
The rules for gift cards are different. Gift card funds must be good for at least five years under federal law, and some states laws give you more time. Under federal law, inactivity fees can only be charged after 12 months of inactivity and if other conditions are met.
If you were turned down for a loan or a line of credit, the lender is required to give you a list of the main reasons for its decision or a notice telling you how to get the main reasons.
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First, find out what caused the lender to turn you down. If a lender rejects your application, it’s required under the Equal Credit Opportunity Act (ECOA) to tell you the specific reasons your application was rejected or tell you that you have the right to learn the reasons if you ask within 60 days.
If a lender rejects your application based on your credit report, the lender is also required to:
Provide you the numerical credit score it used in taking the adverse action and the key factors that affected your score
Give you the name, address, and telephone number of the credit reporting company that provided the report
Tell you about your right to get a free copy of your credit report from the credit reporting company that provided it within 60 days of your adverse action notice
Explain the process for fixing mistakes on your report or adding information to make your report more complete
If you find information in your credit report that you believe is inaccurate, you can dispute what is in the report with the credit reporting company and the company that provided the information. The credit reporting company is required to conduct an investigation and correct any errors it finds. If after the investigation you still believe that the report is wrong, you generally have the right to have a statement added to the report stating that you dispute the information.
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+ My payday lender said my loan would cost 15 percent but my loan documents say the annual percentage rate (APR) is almost 400 percent. What is an APR on a payday loan and how should I use it? | Consumer Financial Protection Bureau
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+ My payday lender said my loan would cost 15 percent but my loan documents say the annual percentage rate (APR) is almost 400 percent. What is an APR on a payday loan and how should I use it?
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The APR, or annual percentage rate, is the standard way to compare how much loans cost. It lets you compare the cost of loan products on an “apples-to-apples” basis. Your lender must disclose the APR before you agree to the loan.
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To calculate the APR, the interest rate and fees are compared to the amount you borrow and calculated over a one-year period. This allows you to compare the costs of a credit card to a six-month installment loan, or a two-week payday loan. It is also why APRs are often different from simple interest rates.
For example, if your payday lender is charging you a $15 fee for every $100 borrowed, that would be a simple interest rate of 15 percent. But if you have to repay the loan in two weeks, that 15 percent finance charge equates to an APR of almost 400 percent because of the very short term.
Here’s why: Consider the daily interest cost, $1.07 (or $15 divided by 14 days), then multiply that out for a full year (365 days, so $390.55). So, borrowing $100 would cost you $391 if the term were extended to one year – that’s 391 percent of the borrowed amount.
By comparison, the cost of borrowing the same $100 on a credit card with a 15 percent APR is $15 for one year, or about 57 cents for two weeks.
You don’t need to worry about the math. Just keep in mind that the APR does matter because it provides a shorthand way for you to compare the cost of two or more loans. Remember, your lender must disclose the annual percentage rate (APR) and other costs before you agree to the loan. If you were not given this information, your lender violated the law. You can file a complaint with your state regulator and attorney general. You can also submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).
Tip: Focus on APRs. If you want to compare the cost of a payday loan to the cost of an installment loan or a credit card, focus on the APRs.
Before choosing to take out a payday loan, think about the costs you will pay, whether you want to borrow, and how you will pay back the loan.
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Cost
If you take out a payday loan, you will likely be charged a fee of between $10 and $30 for every $100 borrowed. A $15 per $100 fee is typical. So, if you have an emergency and need $300 today, you would have to pay back $345 in a couple of weeks, assuming a fee of $15 per $100 borrowed. If your budget is already tight, that may be hard to do. In those states that do not ban or limit renewals or rollovers,the payday lender may encourage you to pay just the fee and extend the loan another few weeks. In that case, you would spend $45 and still owe $345 when the extension is over – that means you’re spending $90 to borrow $300 for one month.
Choices
First, there may be alternative strategies available, including those that don’t involve taking out a loan. Some employers, nonprofit organizations, and community groups offer advances or emergency credit. And don’t forget about help from family or friends.
Second, if you have an account at a bank or credit union, there may be less expensive alternatives available to you, especially if you have a stable credit history. A credit card may also be another option.
Third, another option might be to negotiate with the creditor or debt collector about the debt or bill you owe. A smaller repayment amount may help make repayment easier.
Finally, if you are expecting a tax refund or an increase in income, think about using that money to start saving some money for the next emergency.
If you have a balance on your loan, find out how much you still owe and what the trade-in value is so you can decide whether to pay off your loan, wait before you buy again, or add your current amount to a new loan.
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Trading in a car generally helps you reduce how much you’ll need to borrow when buying another vehicle, but if you have a balance on your current auto loan, you may be encouraged to roll your existing balance into a new loan, which will increase your total loan costs and the interest you’ll pay over the life of your loan.
To make the best decision for you, find out the following information first:
Find out the “payoff amount” on your existing auto loan. This is the amount remaining on your existing loan, and it might be different from the outstanding balance listed on your statement or coupon book because of the way interest is calculated, any outstanding late fees or charges, or for another reason.
Research the potential trade-in or actual cash value of your current vehicle. You can find estimated trade-in values through Consumer Reports, Edmunds, Kelley Blue Book, and NADA Guides. You can also look at online classified ads for similar vehicles in your area. Like shopping for an auto loan, you can get trade-in estimates from multiple dealerships and negotiate your trade-in value to get the best price.
If you oweless than your estimated trade-in value, make sure you fully repay your existing auto loan before getting a new loan. In some cases, there may be a prepayment penalty for paying off your loan early.
If you owemore thanyour trade-in value – often referred to as “negative equity” – a dealer or lender may offer to roll the balance of your existing auto loan into a new auto loan, but this will make your new auto loan more expensive.
With this information, you can better decide if you want to pay off your existing loan now, wait until you pay off your loan, or include the amount that you still owe on your current vehicle in your new auto loan.
Rolling your existing auto loan balance into a new loan
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If you move forward with trading in your vehicle and rolling your existing auto loan balance into a new loan, ensure your original loan has been completely paid off and you don’t have any outstanding payments:
Dealers occasionally have vehicle trade-in offers, and if the dealer promises to pay off your negative equity, make sure it’s not included in your new financing or your final loan contract. Before finalizing a loan, read the contract carefully, and don’t sign anything until you understand and are comfortable with the terms.
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Know before you shop
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There are several important financial decisions to make before you shop for a car. Learn what questions to ask so you can make the best choice for you.
The Military Lending Act (MLA) says that you can’t be charged an interest rate higher than 36% on most types of consumer loans and provides other significant rights.
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The MLA applies to active-duty servicemembers (including those on active Guard or active Reserve duty) and covered dependents.
Your rights under the MLA include:
A 36% interest cap. You can’t be charged more than a 36% Military Annual Percentage Rate (MAPR), which includes the following costs in calculating your interest rate (with some exceptions):
Finance charges,
Credit insurance premiums or fees,
Add-on products sold in connection with the credit, and
Other fees like application or participation fees, with some exceptions.
No mandatory waivers of consumer protection laws. A creditor can’t require you to submit to mandatory arbitration or give up certain rights you have under State or Federal laws like the Servicemembers Civil Relief Act.
No mandatory allotments. A creditor can’t require you to create a voluntary military allotment in order to get the loan. An allotment is an automatic amount of money taken from your paycheck to pay back your loan.
No prepayment penalty. A creditor can’t charge a penalty if you pay back part – or all – of the loan early.
Tip: If you have an issue with a consumer loan, you can visit the JAG Legal Assistance Office locator to find help. You can also ask your installation financial readiness office for information.
There are several signs that indicate you might be dealing with a scammer, and several steps you can take to protect yourself and others.
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Criminals and con artists use many scams to target unsuspecting people—of all ages—who have access to money. Consumer scams happen on the phone, through the mail, e-mail, or over the internet. They can occur in person, at home, or at a business.
Warning signs include contact from someone:
Claiming to be from the government, a bank, a business, or a family member, and asking you to pay money.
Asking you to pay money or taxes upfront to receive a prize or a gift.
Asking you to wire them money, send cryptocurrency, send money by courier, send money over a payment app, or put money on a prepaid card or gift card and send it to them or give them the numbers on the card.
Asking for access to your money-such as your ATM cards, bank accounts, credit cards, cryptocurrency wallet keys or access codes, or investment accounts.
Pressuring you to "act now" or else the deal will go away, or trying hard to give you a "great deal" without time to answer your questions.
Creating a sense of urgency or emergency to play on your emotions.
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Here are some tips to protect yourself from scams:
Don’t share numbers or passwords for accounts, credit cards, or Social Security.
Never pay up front for a promised prize. It’s a scam if you are told that you must pay fees or taxes to receive a prize or other financial windfall.
After hearing a sales pitch, take time to compare prices. Ask for information in writing and read it carefully.
Too good to be true? Ask yourself why someone is trying so hard to give you a “great deal.” If it sounds too good to be true, it probably is.
Watch out for deals that are only “good today” and that pressure you to act quickly. Walk away from high-pressure sales tactics that don’t allow you time to read a contract or get legal advice before signing. Also, don’t fall for the sales pitch that says you need to pay immediately, for example by wiring the money, sending it by courier or over a payment app, or by sending cryptocurrency.
Beware when someone plays on your emotions or claims there’s an urgent situation. Advances in artificial intelligence make it easier for scammers to clone voices and alter images to make it seem like someone you know needs help. Contact the person yourself to verify the story. Use contact information you know is theirs. If you can’t reach them, try to get in touch with them through another trusted person, like a family member or their friends.
Don’t click on links or scan QR codes. These can take you to scammers’ malicious websites or give them access to your device.
Put your number on the National Do Not Call Registry. Go to www.donotcall.gov or call (888) 382-1222.
Scammers are constantly finding new ways to steal your money, from blackmail to romance scams to selling nonexistent items. Learn about the warning signs of common fraud and scams so you can protect yourself and others.
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Common types of fraud and scams
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Here are some of the most common types of fraud and scams. Learn what to watch for and what steps to take to keep yourself, your loved ones, and your money safe.
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Blackmail scams
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A blackmailer’s mission is to scare you into sending them money by threatening to distribute private content—from your computer or phone, or shared with them over an email, text, or social media—that could embarrass you. They might ask you to wire them money, or send it using a mobile app, a gift card, or cryptocurrency. Sometimes these scammers are complete strangers and other times they might be someone you met online and thought you could trust.
What to do: Try to stay calm in spite of blackmailers’ intimidation and high-pressure tactics. Stop communicating with them and don’t pay them. Keep all messages as evidence to help law enforcement. Keep in mind that you don’t need to deal with this alone.
If you’re a minor, let an adult you trust know what’s happening and report the threat to the National Center for Missing and Exploited Children’s CyberTipline.
Report blackmail to the police and to your local Federal Bureau of Investigation (FBI) field office, by calling 1-800-CALL-FBI, or online at tips.fbi.gov. You can also report threats involving the internet, such as when a mobile payment app is involved, to the FBI’s Internet Crime Complaint Center at www.ic3.gov. If the threat involves social media, consider reporting it to the social media company.
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Charity scams
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A charity scam is when a thief poses as a real charity or makes up the name of a charity that sounds real to get money from you.
These scams often increase during the holiday season as well as after natural disasters and emergencies, such as storms, wildfires, or earthquakes. Be careful when a charity calls to ask for donations, especially ones that suggest they’re following up on a donation pledge you don’t remember making. Also watch for scammers that try to get you to donate by using live streaming on social media platforms, altered images, or images or voices generated by artificial intelligence (AI). They typically ask you to send money online, often using cryptocurrency, so they can get your money quickly.
What to do: Ask for detailed information about the charity, including address and phone number. Look up the charity through their website or a trusted third-party source to confirm that the charity is real. See more steps to take to avoid a charity scam.
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Debt collection scams
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Debt collectors might contact you to collect on legitimate debts you owe. But there are scammers who pose as debt collectors to get you to pay for debts you don't owe.
What to do: Ask the debt collector for their company name and mailing address and information about the debt they say you owe. Be on the lookout for threats of criminal charges or other warning signs. Read more about warning signs of a debt collection scam.
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Debt settlement and debt relief scams
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Debt settlement or debt relief companies often promise to renegotiate, settle, or in some way change the terms of a debt you owe to a creditor or debt collector. Dealing with debt settlement companies, though, can be risky and could leave you even further in debt.
The Federal Deposit Insurance Corporation (FDIC) logo is displayed on buildings, websites, advertisements, and other materials from its member banks. Sometimes, a scammer displays the FDIC logo, or says its accounts are insured or regulated by the FDIC, to try to assure you that your money is safe when it isn’t. Some of these scams could be related to cryptocurrencies.
What to do: Double-check whether the business is an FDIC-insured bank by using the lookup page on the FDIC’s BankFind site.
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Foreclosure relief or mortgage loan modification scams
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Foreclosure relief or mortgage loan modification scams are schemes to take your money or your house, often by making a false promise of saving you from foreclosure. Scammers might ask you to pay upfront fees for their service, guarantee a loan modification, ask you to sign over the title of your property, or ask you to sign paperwork you don’t understand.
If you get a call from someone who sounds like a grandchild or relative asking you to wire or transfer money or send gift cards to help them out of trouble, it could be a scam. Artificial intelligence has made it easier for scammers to clone voices and alter images to make it seem like someone you know needs help. Meant to play on your emotions, this scam is among those commonly used to target older adults, especially during the holidays.
Impostor scammers try to convince you to send money or share account details by pretending to be someone you know or trust, like a government employee. Some people, specifically older adults, have received phone or video calls from scammers using CFPB employees’ names.
The CFPB does NOT get in touch with people to tell them to pay fees or taxes related to a class-action lawsuit or lottery. You won’t need to send us personal information so that you can cash a check we send you.
Scammers might pose as law enforcement and threaten you with legal consequences if you don’t send money, or they may pretend to be a charity organization seeking donations. Other messages might look like they are coming from a bank or another company, claiming there’s been a hack, potentially fraudulent activity, or other problem, in a scam meant to get your account or personal information.
What to do: Remember, caller ID and emails can be faked, voices can be cloned, and images can be altered. Call the bank, company, organization, or government agency directly and ask if the person works for them and if there really is a problem. Read more about impostor scams.
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Lottery or prize scams
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In a lottery or prize scam, the scammers may call, text, or email to tell you that you’ve won a prize through a lottery or sweepstakes and then ask you to pay an upfront payment for fees and taxes. In some cases, they may claim to be from a federal government agency like the CFPB.
What to do: Avoid providing any personal or financial information, including credit cards or Social Security numbers, to anyone you don’t know. Also, never make an upfront payment for a promised prize, especially if they demand immediate payment. Learn more about lottery or prize scam red flags.
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Mail fraud
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Mail fraud letters look real but the promises are fake. A common warning sign is a letter asking you to send money or personal information now in order to receive something of value later. Examples of mail fraud might include notices of prizes, sweepstakes winnings, vacations, and other offers to claim valuable items.
Man-in-the-middle scams are a type of cyberattack where a scammer tricks you into connecting to a fake network or website, or clicking on a fake QR code, text or email link, or attachment. Once you do, the scammer can see your every move and steal information like account logins and passwords, financial data, or other sensitive personal information. These scammers can also impersonate another person you’re communicating with—like your real estate or settlement agent in a mortgage closing scam—so that you think you’re sending payment to the person you know, when it’s really going to the scammer.
What to do: Avoid public wireless networks and free charging stations in public places. Don’t click on QR codes or links, or download attachments, in unsolicited texts or emails. Carefully examine email addresses and website URLs, even if they appear to be from someone you know. Before you send money, verify that the person you know is the one requesting it and that you have the correct payment information. If you think you’ve been impacted by a man-in the-middle scam, you can also file a complaint with the Federal Bureau of Investigation’s Internet Crime Complaint Center at www.ic3.gov.
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Money mule scams
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A money mule is someone who receives and moves fraudulently obtained money. While some money mules know they’re assisting with criminal activity, others are unaware that their actions are helping fraudsters.
Money mules may be recruited through online job or social media posts that promise easy money for little effort. They may also agree to help a love interest who they’ve met online or over the phone, by sending or receiving money, as part of a romance scam.
Con artists use money and wire transfers to steal people’s money. If someone you don’t know asks you to send money to them—even if they say they are from a government agency—it should be a red flag.
Using mobile payment services only with family, friends, and others you know and trust is the safest way to protect your money as you use the services. You should still be cautious when people you do know ask you to send them money. Before you send money, verify that they are really the ones requesting it.
What to do: Never send money to someone you don’t know. If you think you made a money transfer or mobile app payment to a scammer, contact your bank or the company you used to send the money immediately and alert them that there may have been an unauthorized transaction. You can also file a complaint with the FBI’s Internet Crime Complaint Center at www.ic3.gov.
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Mortgage closing scams
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Mortgage closing scams target homebuyers who are nearing the closing date on their mortgage loan. The scammer attempts to steal your closing funds—for example, your down payment and closing costs—by sending you an email posing as your real estate agent or settlement agent (such as your title company, escrow officer, or attorney).
What to do: These schemes—a common type of man-in-the-middle scam—are often complex and appear as legitimate conversations with your real estate or settlement agent. When you’re about to close on your home, identify trusted individuals who can confirm the process and payment instructions, and write down their names and contact information so you can reach out to them directly. Learn more about what steps you should take to help protect your closing funds.
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Romance scams
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A romance scam is when a new love interest tricks you into falling for them when they really just want your money. Romance scams start in a few different ways, usually online. Scammers may spend time getting to know you and developing trust to fool you into thinking the relationship is real before asking you for money, a loan, or access to your finances.
What to do: Be careful about who you connect with and what information you share online, or over texts or social media. Don’t send money or share sensitive personal information, such as bank account or credit card numbers or a Social Security number, with a new love connection. Learn more about how to avoid romance scams.
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Sale of nonexistent goods or services scams
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Scammers use mobile payment apps to trick people into sending money or merchandise without holding up their end of the deal. For example, a scammer may offer to sell you concert or sports tickets, or a puppy or other pet, but then never actually give them to you. Or a scammer might purchase an item from you, appear to send a payment, and then cancel it before it reaches your bank account.
What to do: Never send money to someone you don’t know. If you think you made a payment to a scammer, contact your bank or the company you used to send the money immediately and alert them that there may have been an unauthorized transaction. You can also file a complaint with the Federal Bureau of Investigation’s Internet Crime Complaint Center at www.ic3.gov.
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Common payment methods used by scammers
Never send money to someone you don’t know. Scammers use a variety of ways to collect money from you, including:
Wire transfers
Money transfers
P2P (peer-to-peer or person-to-person) payment services and mobile payment apps
You can also report scams involving the internet, such as scams involving mobile payment apps, to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
Specialty consumer reporting companies collect and share information about your employment history, transaction history with a business or repayment history for a specific product or service.
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The information specialty consumer reporting companies collect depends on the reporting company and its specialty industry.
Reports may be compiled from your history of:
Opening or using bank accounts (including bounced checks or overdrafts)
You might not know these reports exist unless you run into a problem, such as not getting a job, lease, insurance, or checking account, or when a utility or cell phone company asks you to put down a deposit before starting service with you.
Just like with the big three consumer reporting companies, you can get free copies of your reports every 12 months from many of the specialty consumer reporting companies. Other specialty consumer reporting companies may be able to charge you a fee for your report. Keep in mind that not every consumer reporting company will have information on everyone. You have to request the reports individually from each company.
Payday loans generally charge a percentage or dollar amount per $100 borrowed.
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The amount of this fee might range from $10 to $30 for every $100 borrowed, depending on your state law and the maximum amount your state permits you to borrow. A fee of $15 per $100 is common. This equates to an annual percentage rate of almost 400% for a two-week loan. So, for example, if you need to borrow $300 before your next payday, it would cost you $345 to pay it back, assuming a fee of $15 per $100.
Rollovers. If you are unable to pay when your loan is due and your state law permits rollovers, the payday lender may allow you to pay only the fees due and then the lender extends the due date of your loan. You will then be charged another fee and still owe the entire original balance. Using the above example, if you pay a renewal or rollover fee of $45 you would still owe the original $300 loan and another $45 fee when the extension is over. That’s a $90 charge for borrowing $300 for just four weeks.
Repayment Plans. Some state laws require payday lenders to offer extended repayment plans to borrowers who experience difficulty in repaying payday loans. These laws vary by state, and may or may not permit or require a fee for using a repayment plan.
If your state requires a lender to offer an extended repayment plan, you may be able to get additional time to repay your loan without any additional costs or fees. This means that you can pay off your loan rather than borrowing again, incurring more fees, and getting further behind in debt.
Late fees. In addition, if you don’t repay the loan on time, the lender might charge a late or returned check fee, depending on state law. Your bank or credit union may also impose an “NSF” or non-sufficient funds charge if your check or electronic authorization is not paid due to a lack of funds in your account.
Prepaid debit card. If your loan funds are loaded onto one of these cards, there might be other fees. There could be fees to add the money to the card, fees for checking your balance or calling customer service, fees each time you use the card and/or regular monthly fees.
Be sure to read the loan agreement carefully to spot all of the fees and costs before you take out a loan. If you have questions about your state law, you might find more information on the website of your state regulator or state attorney general.
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+ What can I do if a debt collector contacts me about a debt I already paid or don't think I owe? | Consumer Financial Protection Bureau
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If you believe you already paid the debt, do not owe the debt, the amount is incorrect, or that it's not even your debt, you may send a written request to the debt collector to dispute the debt or receive more information.
That you can dispute the debt and that if you don’t dispute the debt within 30 days the debt collector will assume the debt is valid
That if you dispute the debt in writing within 30 days the debt collector will provide verification of the debt
That if you request the name and address of the original creditor within 30 days (if different from the current creditor), the debt collector will provide you that information.
The CFPB also has sample letters to help you know how best to respond to a debt collector based on your situation. Note: The CFPB’s sample letters are not legal advice.
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If you don’t think you owe the debt
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Once you receive the validation information or notice from the debt collector during or after your initial communication with them, you have 30 days to dispute all or part of the debt, if you don’t believe that you owe it. If you receive a validation notice, the end date of the 30-day period will be specified.
Once you’ve disputed the debt, the collector can’t call or contact you to collect the debt until they’ve responded with verification of the debt.
You can also request that the debt collector give you the name and address of the original creditor, if different from the current creditor. If you make that request in writing within 30 days, the debt collector has to stop all debt collection activities until it provides you that information.
If you’re sure that you’re talking with a legitimate debt collector, you can send copies of documents that prove you made the payments, including cancelled checks or credit card statements. You may also include copies of any correspondence about settling the debt. Don’t send original documents – only copies – so you can keep the originals as proof.
If you don't have documentation of your payments or letters saying you've paid off the debt, you can contact the creditor who you originally paid to get this information.
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Keep good records of your communications with a debt collector
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It is a good idea to keep a file of all letters or documents a debt collector sends you and copies of anything you send to a debt collector. Also, write down dates and times of conversations, along with notes about what you discussed. These records can help you if you have a dispute with a debt collector, meet with a lawyer, or go to court.
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Keep proof that you sent your dispute to the debt collector
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If you dispute the debt, make a copy of your written dispute and send the original to the debt collector. It's also generally a good idea to send the dispute by certified mail. If you pay for a "return receipt," you'll have proof the debt collector received your mail.
If you’re having trouble repaying your payday loan, you might be able to ask your lender for an extended repayment plan.
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An extended repayment plan lets you repay the loan in smaller installments over a longer period of time. Whether you can get an extended repayment plan will depend on your state law or on the payday lender’s policy. This repayment plan may be offered for free or it might carry an additional fee.
If you still have trouble making payments, or are not given the option of an extended repayment plan, there are other resources that may be able to help you. For example, you may wish to speak with a credit counselor in your area or contact a legal aid attorney to discuss your options. If you are a servicemember, contact your local Judge Advocate General’s (JAG) office to learn more. You can use the JAG Legal Assistance Office locator to find help. You can also ask your installation financial readiness office for information.
If you are a victim of identity theft, place fraud alerts or security freezes on your credit reports, file a report at IdentityTheft.gov, and take steps to protect your credit history and finances.
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Closing accounts and contacting the police
If you are currently dealing with identity theft, there are important steps you can take right away—including closing your accounts and reporting the identity theft to the police. Visit the Department of Justice and IdentityTheft.gov to learn more.
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Protecting your credit
Contact any one of these three nationwide credit reporting companies Equifax, Experian, or Transunion to place fraud alerts and security freezes on your credit reports:
A fraud alert requires creditors, who check your credit report, to take steps to verify your identity before they open a new account, issue an additional card, or increase the credit limit on an existing account based on a consumer's request. When you place a fraud alert on your credit report at one of the nationwide credit reporting companies, it must notify the others.
There are two main types of fraud alerts: initial fraud alerts and extended alerts. Servicemembers also have the option of an active-duty alert.
Initial fraud alerts
You can place an initial fraud alert on your credit report if you believe you are, or are about to become, a victim of fraud or identity theft. Credit reporting companies will keep that alert on your file for one year. After one year, the initial fraud alert will expire and be removed. You have the option to place another fraud alert at that time.
When you place an initial fraud alert, creditors must take reasonable steps to make sure the person making a new credit request in your name is you before granting that request. If you provide a telephone number, the creditor must call you or take reasonable steps to verify whether you are the person making the credit request before granting the credit.
When you place an initial fraud alert on your file, you're entitled to order one free copy of your credit report from each of the nationwide credit reporting companies. These free reports do not count as your free annual report from each credit reporting company.
Extended alerts
If your identity has been stolen and you have filed an identity theft report at IdentityTheft.gov, you can place an extended alert on your credit report.
An extended alert is good for seven years. If you have an extended alert, a creditor must contact you in person, on the telephone, or through another contact method you choose to verify if you are the person making the credit request before extending new credit.
When you place an extended fraud alert on your file, you're entitled to order two free copies of your credit report from each nationwide credit reporting company over a 12- month period. Your name will also be removed for five years from the nationwide credit reporting companies' pre-screen marketing lists for credit offers and insurance.
Active-duty alerts
Servicemembers in the armed forces have an additional option available to them: active-duty alerts, which protect servicemembers while they are on active duty and assigned away from their usual duty station. This alert requires businesses to take reasonable steps to verify your identity before issuing credit in your name. These alerts last for 12 months, unless you request that the alert be removed sooner. If your deployment lasts longer than 12 months, you may place another alert on your credit file.
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When you place an active-duty alert on your credit report, creditors must take reasonable steps to make sure the person making the request is you before they open an account, issue an additional credit card on an existing account, or increase the credit limit on your existing account. Your name will also be removed for two years from the nationwide credit reporting companies' pre-screen marketing lists for credit offers and insurance.
Since it may be very difficult to contact you directly if you are deployed, you can assign a personal representative to answer for you, or to place or remove an active-duty alert.
Security freezes
Under federal law, you can freeze and unfreeze your credit record for free at the three nationwide credit reporting companies – Experian, TransUnion, and Equifax. A security freeze, also called a credit freeze, stops new creditors from accessing your credit file until you lift the freeze. The federal law requiring free security freezes does not apply to someone who requests your credit report for employment, tenant-screening, or insurance purposes.
Unlike fraud alerts, if you place a security freeze with one credit reporting company, they will not notify the other credit reporting companies. You must contact each credit reporting company individually if you would like to place a security freeze with all three nationwide credit reporting companies.
Because most businesses will not open credit accounts without checking your credit report, a freeze can stop identity thieves from opening new accounts in your name. Be mindful that a freeze doesn't prevent identity thieves from taking over existing accounts.
Blocking or removing fraudulent information from your consumer report
If you’ve been a victim of identity theft, you can also get credit reporting companies to remove fraudulent information and debts from your credit report, which is called blocking. To do this, you must send the credit reporting companies:
An identity theft report, which can be done through IdentityTheft.gov
Proof of your identity
A letter identifying the fraudulent debts and information on your credit report
Through IdentityTheft.gov, you can also get a sample letter to send to the credit reporting companies. Remember that you can use identity theft reports only for debts that are the result of identity theft. Credit reporting companies may decline to block or rescind a block if you make a material misrepresentation of fact about being a victim of identity theft or if you got goods, services, or money as a result of the blocked transaction.
Within four business days after receiving your request, the credit reporting company must block that information from your credit report. In addition, they must tell the companies that provided the information that someone stole your identity. Once notified, creditors can’t turn identity theft-related debts over to debt collectors.
You have certain rights and protections if you’re at risk of or have had your car repossessed.
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Losing a car to repossession can be financially and emotionally difficult. However, you do have certain rights and protections if your car has been repossessed because you were unable to make your car payments.
Auto loan servicers must ensure that every repossession is lawful. If you believe your repossession is an error, contact your lender or servicer immediately, and if you’re not able to resolve it, you can submit a complaint and/or pursue a legal action in court.
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Being notified before your car is repossessed
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In many states, a lender can repossess a vehicle – without a warning or a court order – after you’ve missed payment, but other states require lenders or servicers to send you a notice before repossession, alerting you to what payments have been missed and allowing you time to make them up.
If you’re an active-duty servicemember, the Servicemember Civil Relief Act (SCRA) prohibits repossessions without a court order for any auto loan contracts or agreements you entered into before your military service.
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“Breaching the peace” during repossession
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Under some state laws, a lender can’t repossess a vehicle unless they can do it without “breaching the peace,” which generally means:
Threatening or using physical force
Removing a vehicle from a closed garage without permission
Continuing with repossession after you have resisted or refused to allow the repossession
If the lender commits a breach of the peace, you can contact law enforcement. A breach of the peace may also give you a claim for damages or a defense, which may lessen the amount you eventually owe after the sale of the vehicle.
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Getting access to your belongings
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It’s not unusual for people to have belongings stored in their cars when they’re repossessed. Contact your lender right away to arrange a time to retrieve your property.
It is important to document what items you left in the vehicle and their estimated value. If the lender or repossessing company demands payment for return of your property, you should consult an attorney. In a public enforcement action, the Bureau found that an entity engaged in an unfair act or practice by withholding consumers’ personal property unless the consumers paid an upfront fee to recover the property. You can also file a complaint with your state attorney general or consumer protection office.
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How a repossession affects your credit
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Falling behind on car payments affects your credit, and this can make it harder or more expensive to get loans in the future. A repossession could also stay on your credit reports for up to seven years. Repossession can also mean paying higher insurance rates.
In some states, laws grant you the right to pay to get your vehicle back after it’s been repossessed. These laws usually provide a time period when you can make up any overdue payments, as well as pay the additional costs associated with repossession. This process is referred to as curing or reinstating your loan.
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Your rights if your vehicle is being sold
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Even if you don’t live in a state with laws that allow you to cure or reinstate your loan, you have certain rights after your vehicle has been repossessed. You have the right to be notified before your vehicle is sold or kept as compensation for your debt. This gives you the opportunity to buy it back.
For a public sale, your lender must notify you of the date, time, and place of the sale so you can have a chance to bid on the vehicle. For a private sale, the lender must notify you of the date when your vehicle could be sold. Regardless of whether it’s a public or private sale, you may be entitled to buy back the vehicle by paying the full loan amount, plus the repossession costs, before the sale. This is sometimes referred to as redemption.
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Additional protections and costs around repossession
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Even though you no longer have the vehicle, you may still be responsible for certain costs. Here’s what you need to know.
Paying for repossession
If your car has been repossessed, your lender generally charges a fee for picking it up. This fee, however, must be reasonable.
What constitutes reasonable is generally determined by a court and depends on the type of vehicle taken, how it was taken, and where it was taken. You can ask your lender to provide a list of the repossession costs.
Paying the deficiency balance or receiving the surplus
If your vehicle is repossessed and sold, you may be responsible for paying the difference between the amount left on your loan, plus repossession fees, and the sale price. This is known as a “deficiency balance.” Similarly, if the car is sold for more than what you owe, you’re entitled to receive the surplus.
Lenders must sell the car in a commercially reasonable manner, and it can be important for you to know how much it’s sold for. You can consult an attorney if you think the sale price in repossession was unreasonable.
For example, if you owe $10,000 on the vehicle and your lender sells it for $7,500, you owe the deficiency of $2,500, plus any other fees for repossession. If you don’t pay the balance, the lender is allowed to hire a debt collector to collect it.
Alternatively, in this example, if the car is sold for $12,000, you are entitled to receive the money above the amount you owe (after fees are paid).
The company that you send your monthly mortgage payments to is your mortgage servicer. Your servicer can change.
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Your mortgage servicer may transfer the mortgage servicing rights for your loan to another company to service your loan.
If your mortgage servicing rights are transferred to a new servicer, you will need to start sending your monthly payments to the new servicer after a certain date. You will also need to direct any questions about your loan to the new servicer.
You should be notified of the transfer before it happens
Your old and new servicers generally must send you a notice telling you about the transfer of the servicing rights to your loan. Your old servicer generally should send this notice at least 15 days before your loan’s servicing rights are transferred to the new servicer. Your new servicer generally should send a notice to you within 15 days after the servicing rights for your loan are transferred unless it was combined with the first notice. The notice(s) should tell you:
The date on which your old servicer will stop accepting payments
The date on which your new servicer will begin to accept payments
The new servicer’s name and their contact information
The specific date the right to service your loan transferred to the new servicer
Make sure to send your payments to the new servicer
If you send your payments to the wrong servicer after you’ve been notified of the servicing transfer, your payments may not be credited properly. Here’s what to do:
Pay attention to the date you need to start sending your payments to the new servicer. Be sure to account for additional time if you send your mortgage payments by mail.
If you authorize your bank’s or credit union’s online bill payment system to automatically pay your mortgage payment, you will need to tell your bank or credit union to make those payments to the new servicer. Learn more in our blog about automatic debit payments.
Carefully review your monthly mortgage statement to confirm that your payments are being credited accurately.
Additionally, for 60 days from the date your loan servicing transfers, your new servicer cannot charge you a late fee or treat the payment as late if you sent it to your previous servicer on time or within the applicable grace period.
Issues related to servicing transfers
If you’re having issues with your mortgage because your servicer has changed, you may want to send both your old and new servicers an information request or a notice of error. For example, you should send a notice if:
You never received a notice of transfer
You think your payments are not being applied correctly
You had an application for loss mitigation with your old servicer and your new servicer isn’t working with you on that application
A debt collector is generally a person or company that regularly collects debts owed to others or who has the primary purpose of collecting debts. They’re likely contacting you because they’re trying to reach a person who may owe a specific debt.
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Debt collectors can include collection agencies or lawyers who collect debts as part of their business. There are also companies that buy past-due debts from creditors or other businesses and then try to collect them. These companies are also often called debt collection agencies, debt collection companies, or debt buyers.
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Why is a debt collector calling me?
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A debt collector may be trying to contact you because:
A creditor believes you are past due on a debt. Creditors may use their own in-house debt collectors or may refer or sell your debt to an outside debt collector.
A debt buyer has bought the debt and is now collecting that debt themselves or by using other debt collectors.
If the debt collector is contacting you for payment on a debt, there is certain information they usually must give you in the initial communication or within five days of that initial communication.
If you don’t believe you owe the debt or believe the amount is wrong, you can dispute it with the debt collector and the credit reporting company, if the debt appears on your credit report. If you dispute the debt in writing within 30 days of receiving the required information about the debt from the collector, then the debt collector must send you verification of the debt. You can also ask the debt collector for additional information.
You can ask a debt collector to stop contacting you. Asking them to stop contacting you will not necessarily stop them from suing you or reporting the debt to a credit reporting company, which can affect your credit report and credit scores. If you don’t owe the debt or have already paid the debt, it is important to take action to contest the attempt to collect the debt.
A fiduciary is someone who manages money or property for someone else. When you’re named a fiduciary and accept the role, you must – by law – manage the person’s money and property for their benefit, not yours.
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If a family member or friend wants to name you their fiduciary to help them manage their money or property in case they’re unable to, they could do so through a power of attorney (POA). If you choose to accept this role and act on their behalf, you are required to follow the instructions and perform in accordance with the terms of the POA.
Act only in their best interest. Because you are dealing with someone else’s money and property, your duty is to make decisions that are best for them, not you.
Manage their money and property carefully. You will have important financial responsibilities and must carry them out with care. You might pay bills, oversee bank accounts, and pay for things they need. You might also make investments, pay taxes, collect rent or unpaid debts, and get insurance for them, if needed.
Keep their money and property separate. Never mix their money or property with your own or someone else’s. Confused records can get you in trouble with government agencies, like adult protective services, and the police.
Keep good records. You must keep true and complete records of their money and property, or you could face legal consequences.
A housing counselor though a HUD-approved agency is specially trained and certified by the government to help you assess your financial situation, evaluate options if you are having trouble paying your mortgage loan, and make a plan to get you help with your mortgage.
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HUD stands for the Department of Housing and Urban Development. It’s a government agency that helps people get and maintain quality affordable housing. They train and sponsor housing counselors all over the country. Because of this, you can have confidence that a trained housing counselor is well equipped to help you understand and evaluate your options.
HUD-approved housing counseling agencies provide foreclosure prevention counseling free of charge. They can also help you talk to your mortgage servicer and understand any options your servicer has offered. A housing counselor can also help you learn about the homebuying process.
How to find a HUD-approved housing counseling agency
There are different ways to find a trained housing counselor:
Use the CFPB's Find a Counselor tool to get a list of HUD-approved counseling agencies in your area.
Call the HOPE Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673).
Call the CFPB at (855) 411-CFPB (2372) to be connected to a housing counselor over the phone.
What happens when you call a housing counselor
If you’re calling because you’re having trouble paying your mortgage, the housing counselor will ask you for information about your mortgage loan, such as the amount you owe and the date of your last payment. This information is generally on your last mortgage loan statement. The housing counselor may also ask for information about your pay stubs, tax returns, recent bank statements, and other bills you pay each month, such as car loans and credit cards. The counselor is asking for this information to understand your financial situation and how much you can afford for a monthly mortgage payment.
If you’re having trouble paying your mortgage
A housing counselor at a HUD-approved agency can't promise that you will get to keep your home. They will help you look at your options and make a decision that’s right for you.
If you are facing imminent foreclosure or have been served with legal papers, you may also need to consult an attorney.
While there is no set definition of a payday loan, it is usually a short-term, high cost loan, generally for $500 or less, that is typically due on your next payday. Depending on your state law, payday loans may be available through storefront payday lenders or online.
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Some common features of a payday loan:
The loans are for small amounts, and many states set a limit on payday loan size. $500 is a common loan limit although limits range above and below this amount.
A payday loan is usually repaid in a single payment on the borrower’s next payday, or when income is received from another source such as a pension or Social Security. The due date is typically two to four weeks from the date the loan was made. The specific due date is set in the payday loan agreement.
To repay the loan, you generally write a post-dated check for the full balance, including fees, or you provide the lender with authorization to electronically debit the funds from your bank, credit union, or prepaid card account. If you don’t repay the loan on or before the due date, the lender can cash the check or electronically withdraw money from your account.
Your ability to repay the loan while meeting your other financial obligations is generally not considered by a payday lender.
The loan proceeds may be provided to you by cash or check, electronically deposited into your account, or loaded on a prepaid debit card.
Other loan features can vary. For example, payday loans are often structured to be paid off in one lump-sum payment. Some state laws permit lenders to “rollover” or “renew” a loan when it becomes due so that the consumer pays only the fees due and the lender extends the due date of the loan. In some cases, payday loans may be structured so that they are repayable in installments over a longer period of time.
Cost of a payday loan
Many state laws set a maximum amount for payday loan fees ranging from $10 to $30 for every $100 borrowed. A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent. By comparison, APRs on credit cards can range from about 12 percent to about 30 percent. In many states that permit payday lending, the cost of the loan, fees, and the maximum loan amount are capped.
The laws in your state may permit, regulate, or prohibit these loans
Some states do not have payday lending because these loans are not permitted by the state’s law or because payday lenders have decided not do to business at the interest rate and fees permitted in those states. In states that do permit or regulate payday lending, you may be able to find more information from your state regulator or state attorney general.
Protections for servicemembers
There are special protections through the federal Military Lending Act (MLA) for active duty servicemembers and their dependents. Those protections include a cap of 36 percent on the Military Annual Percentage Rate (MAPR) as well as other limitations on what lenders can charge for payday and other consumer loans. Contact your local Judge Advocate General’s (JAG) office to learn more about lending restrictions. You can use the JAG Legal Assistance Office locator to find help.
Federal law defines “remittance transfers” as most electronic money transfers from people in the United States who used “remittance transfer providers” to send money to recipients abroad.
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Under federal law, remittance transfers generally describe electronic transfers of more than $15, sent by consumers in the United States to people or companies in foreign countries through a remittance transfer provider. Common terms for remittance transfers include “international wires,” “international money transfers,” and “remittances.”
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Certain federal protections apply if you send money abroad
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Under federal law, many money transmitters, a number of banks and credit unions, and possibly other types of financial services companies qualify as “remittance transfer providers.” According to the law, a remittance transfer provider is any entity that provides remittance transfers for a consumer in the normal course of its business.
A company is not a remittance transfer provider if it provided 500 or fewer remittance transfers in the prior calendar year and provides 500 or fewer transfers in the current calendar year. If you use such a company to send a money transfer, then federal law does not require them to provide you with the following protections.
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The right to receive certain information about your remittance transfer
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Remittance transfer providers must generally provide you with certain information before and after you pay for a remittance transfer. This includes information about:
Fees and taxes they collect from you.
The exchange rate that applies to the transfer, if applicable.
Fees charged by the company’s agents abroad and certain other institutions involved in the transfer process.
The amount of money expected to be delivered, not including foreign taxes or certain fees charged to you by your financial institution.
If applicable, a statement that additional foreign taxes and fees may be deducted from the remittance transfer.
You also must receive information about when the money will be available, instructions on your right to cancel transfers, what to do in case of an error, and how to submit a complaint.
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The right to cancel a money transfer
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After paying, you will typically have up to 30 minutes to cancel the remittance transfer at no charge, unless the transfer has already been picked up or deposited into the recipient’s account.
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The right to resolve mistakes
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You have 180 days to notify the remittance provider of a mistake, starting from the date disclosed by the remittance transfer provider as the date when the money will be available. Remittance transfer providers must investigate notices of error. Even though you have up to 180 days to report the mistake, if you think a mistake was made promptly contact the company. Remittance transfer providers generally have 90 days to investigate the matter and they must notify you of the investigation’s results. For certain types of errors, such as if the money never arrives, you may be able to get a refund or have the transfer resent.
Other protections may be available to you, depending on how you send the money and the laws in your state.
A Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage, is a special type of home loan only for homeowners who are 62 and older.
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This information only applies to Home Equity Conversion Mortgages (HECMs), which are the most common type of reverse mortgage loans.
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A reverse mortgage loan, like a traditional mortgage, allows homeowners to borrow money using their home as security for the loan. Also like a traditional mortgage, when you take out a reverse mortgage loan, the title to your home remains in your name. However, unlike a traditional mortgage, with a reverse mortgage loan, borrowers don’t make monthly mortgage payments. The loan is repaid when the borrower no longer lives in the home. Interest and fees are added to the loan balance each month and the balance grows. With a reverse mortgage loan, homeowners are required to pay property taxes and homeowners insurance, use the property as their principal residence, and keep their house in good condition.
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How does a reverse mortgage get paid back?
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With a reverse mortgage loan, the amount the homeowner owes to the lender goes up–not down–over time. This is because interest and fees are added to the loan balance each month. As your loan balance increases, your home equity decreases.
A reverse mortgage loan is not free money. It is a loan where borrowed money + interest + fees each month = rising loan balance. The homeowners or their heirs will eventually have to pay back the loan, usually by selling the home.
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How do I watch out for scams related to reverse mortgages?
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Contractor scams
Beware of contractors who approach you about getting a reverse mortgage loan to pay for repairs to your homes. It may be a scam. Don’t let yourself be pressured into getting a reverse mortgage loan.
Scams targeting veterans
The Department of Veterans Affairs (VA) does not offer any reverse mortgage loans. Some mortgage ads falsely promise veterans special deals, imply VA approval, or offer a “no-payment” reverse mortgage loan to attract older Americans desperate to stay in their homes.
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How do I cancel a reverse mortgage using the right of rescission?
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With most reverse mortgages, you have a three-day right to cancel a reverse mortgage. Within three business days after the loan is closed, you can cancel the deal for any reason, without penalty. This is known as your right of “rescission.”
To cancel, you must notify the lender in writing. Send your letter by certified mail, and ask for a return receipt so that you have documentation of when you sent and when the lender received your cancellation notice. Keep copies of any communications between you and your lender. After you cancel, the lender has 20 days to return any money you’ve paid for the financing of the reverse mortgage loan. If you believe there is a reason to cancel the loan after the three-day period, seek legal help to see if you have the right to cancel.
Misrepresenting the nature of the debt, including the amount owed
Falsely claiming that the person contacting you is an attorney
Threatening to have you arrested
Threatening to do things that can’t legally be done or threatening to do things that the debt collector has no intention of doing.
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Examples of unfair practices
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Here are a few examples of what the FDCPA would consider a prohibited practice used to collect on a debt. Debt collectors are not allowed to:
Try to collect charges in addition to the debt unless they are allowed by the contract or law
Communicate or attempt to communicate with you in connection with the collection of a debt through a social media platform if the communication or attempt to communicate is viewable by the general public or the person’s social media contacts
Communicate with you by sending an email that the debt collector knows is provided to you by your employer, unless an exception applies
Use any language or symbol on an envelope for correspondence with you that indicates it is a debt collector, other than the debt collector’s address or business name that doesn’t indicate it’s in the debt collection business
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Examples of false or deceptive statements
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Debt collectors are not allowed to falsely claim or imply that:
They are attorneys or government representatives
You have committed a crime by not paying a debt
They operate or work for a credit reporting company
You will be arrested or imprisoned if you don’t pay
They will garnish or seize your wages, bank account, or property
Documents that they send you are legal documents if they aren’t
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Examples of harassment by a debt collector
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A debt collector is also not allowed to harass, oppress, or abuse you or anyone else they contact. This includes repetitious phone calls with the intent to harass, use of obscene or profane language, and threats of violence or harm.
There are also state and other federal laws that generally prohibit practices that might be considered unfair, deceptive, or abusive acts or practices. You can report the incidents to your state's attorney general.
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+ What is the best way to move my checking account to another bank or credit union? | Consumer Financial Protection Bureau
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+ When moving your checking account to a new bank or credit union, open the new account first and update any automatic transactions, direct deposit, or payment paperwork.
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If you decide to move your checking account to another bank or credit union, here’s how to make the transition a little smoother:
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Open the new account first.
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List all the automatic deposits and withdrawals scheduled to go in and out of your old account each month. Be sure to include any bills you have authorized to be paid directly from your checking account, such as utility bills or credit card bills.
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If you have direct deposit, fill out the papers directing your employer to reroute your paychecks to your new account. Do the same for any other direct deposit, such as Social Security payments.
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Find out the date your direct deposits will transfer. Once you know the date of the first direct deposit, arrange for your automatic debits and withdrawals to be made from your new account and be sure to cancel them from your old account.
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Leave enough money in your old checking account to cover any checks that haven’t cleared or automatic payments that haven’t been made to avoid any fees.
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Once you’re certain all direct deposits and automatic payments are coming in to and going out of your new account, transfer the remaining funds from your old checking account into your new account. You can do this fastest electronically or by using a cashier’s check. Using a personal check may be cheaper than using a cashier’s check, but there may be a longer wait before it is available in your new account.
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Once the transfer clears your new account, close the old account. Get written confirmation that the account has been closed.
Your credit reports and your credit scores are two different things. 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. Your credit scores are calculated based on the information in your credit report.
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Your credit score, as well as the information on your credit report, are important for determining whether you’ll be able to get a mortgage, credit card, auto loan, or other credit product, and the rate you’ll pay. Your credit scores are calculated based on the information in your credit report.
You have many different credit scores, and there are many ways to get a credit score. Your score can differ depending on which credit reporting agency provided the information, the scoring model, the type of loan product, and even the day when it was calculated. Higher scores reflect a better loan paying history and make you eligible for lower interest rates.
Errors on your credit report can reduce your score artificially - which could mean a higher interest rate and less money in your pocket - so it is important to check your credit report and correct any errors well before you apply for a loan.
The difference between a fixed APR and a variable APR, is that a fixed APR does not fluctuate with changes to an index. A variable-rate APR, or variable APR, changes with the index interest rate.
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A fixed-rate APR or fixed APR sets an APRthat does not fluctuate with changes to an index. This does not mean that the interest rate will never change, but the issuer generally must notify you before the change occurs, and in most circumstances can apply the higher rate only to purchases and other transactions you make after you get the notice.
A variable-rate APR or variable APR changes with the index interest rate, such as the prime rate published in the Wall Street Journal. The cardholder agreement will say how a card’s APR can change over time.
You should be able to find a copy of the agreement on your card issuer’s website, and you can request a copy from your card issuer if it is not there. If you have any questions, you should contact your card issuer.
Credit counseling organizations are usually nonprofits that advise and educate you on managing your money and debts. Debt settlement companies, debt consolidation lenders, and credit repair companies are typically for-profit companies that promise to fix your credit and debts and charge you money for taking actions you can do yourself for free.
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Credit counseling
Credit counseling organizations are usually nonprofit organizations that advise you on managing your money and debts. They usually offer free educational materials and workshops. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
Credit counselors can work with you to set up a debt management plan (also called a payment plan) for all your debts. They can’t erase your debts. Under a debt management plan, you make a single payment to the credit counseling organization each month or pay period. The credit counseling organization then makes monthly payments to your creditors. Credit counseling organizations are permitted to charge you fees for their services.
Under debt management plans, credit counselors do not always negotiate reductions in the amounts you owe. Instead, they work to lower your overall monthly payment. They might get the creditor to lengthen the time you have to repay a loan. They might also get the creditor to lower the interest rates. The arrangement usually does not affect your taxes.
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How do I recognize a credit counselor?
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Usually works for a nonprofit organization
Advises you on managing your money and debts
Helps you set a up budget for your repayments
Sets up a payment plan with your creditors, including getting the creditors to agree not to pursue collection efforts or charge late fees while on the plan
Works to lower your overall monthly payment, rather than trying to negotiate reductions in the amounts you owe
Never advises you to stop paying your debt
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Debt settlement
Debt settlement companies offer to remove your debts to lenders or debt collectors for a fee. They typically offer to pay off your debts with lump sum payments that you have to save up before a settlement. Under the law, money you save up in an account for use by a debt settlement company still belongs to you. The account must be administered by an independent third party and must be under your control. You are entitled to withdraw funds held in that account at any time without penalty. In practice, many debt settlement companies collect money from you and consider it fees you paid to them, instead of money they should be using to settle your debts.
Before you start working with a debt settlement company
Many lenders do not negotiate with debt settlement companies.
Many lenders and debt collectors do not negotiate a settlement amount for your individual situation—instead, they have standard policies about how much loan principal can be forgiven when you haven't made payments for a certain amount of time.
Debt settlement companies cannot guarantee the amount of money or percentage of debt that you might save by using their services, and they cannot guarantee how long the process takes.
Debt settlement companies cannot erase all your debts.
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How do I recognize a debt settlement company?
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Usually a for-profit company that charges a fee for their services
Offers to arrange settlements of your debts with lenders or debt collectors
Generally has no up-front agreements with lenders
Typically offers to pay off your debts with a lump sum payment
Usually advises you to stop paying your creditors until a debt settlement is negotiated with creditors, even though this can mean fees and interest charges keep adding up, your credit is further damaged, and you are left open to more debt collection efforts and lawsuits
Tries to get some of your debts forgiven, which could mean you owe taxes on the amount forgiven
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Beware of debt settlement companies that charge upfront fees. A debt settlement company could be breaking laws if they charge you a fee before three things happen:
A successful result is reached. The debt settlement company must have renegotiated, settled, reduced, or otherwise changed the terms of at least one of your debts.
An agreement is made between you and the creditor or debt collector. You must agree to the settlement agreement, debt management plan, or other result reached by the debt settlement company with your creditor or debt collector.
You have made a payment to the creditor. You must have made at least one payment to the creditor or debt collector as a result of the agreement negotiated by the debt settlement company.
If you simply cannot afford to pay what you owe, you could consider filing for bankruptcy. Consult a bankruptcy attorney to find out more about how this process works.
Debt consolidation lenders
Debt consolidation loans can be offered by banks, credit unions, and other lenders. A debt consolidation loan is money you borrow to repay all your separate loans and pay back just one amount. You pay back the debt consolidation loan over time. This simplifies the number of payments you have to make. The debt consolidation loan might have a lower interest rate than what you’re paying on your debts.
Before you take out a debt consolidation loan
Keep in mind that a low interest rate could be a “teaser rate” that applies only for a limited time.
After the teaser rate expires, your payments could go up because your lender can increase the interest rate.
Although your monthly debt payment might be lower, it could be because you’re paying over a longer time.
Taking the loan’s length of time, fees, and costs into account, overall you might pay more for the convenience of a consolidated loan than you would have had to pay for your original debt payments.
Credit repair
Credit repair companies make promises to fix your credit or improve your scores, typically by doing things you can do yourself for free. They often use advertising and social media promotions. They operate usually by noting negative items on your credit report and then sending disputes to consumer reporting companies, including the three nationwide credit reporting companies (Equifax, Experian, and TransUnion). The reporting company has an obligation to contact the creditor to verify the negative item. If the creditor does not respond within 30 days, the information is removed from your credit report.
There is a catch, however. If the reporting company decides that the dispute is “frivolous,” it does not have to investigate. This can happen if the reporting company gets multiple requests or requests that seem formulaic, which sometimes fits the profile of a credit repair company.
The only time you should dispute information is when it’s inaccurate. But credit repair companies typically dispute accurate items on your report, too. This could mean accurate items disappear temporarily while the credit reporting company verifies the information. After the item is verified, it reappears on your credit report. Your credit scores could change—and then change back—because of these actions.
Negative items that are accurate remain on your credit report for the appointed timeline. Negative information such as collections, charge-offs, judgments, and accounts reported late during the loan’s term remain on the credit report for seven years from the last activity or first delinquency date. Items are removed from the credit report once the seven years are up.
Before you start working with a credit repair company
Keep in mind that there are no shortcuts to achieving a strong credit history or high credit scores.
Consumer reporting companies, including the three nationwide credit reporting companies, remove negative items on your reports once they are found to be inaccurate or incomplete, or if they cannot be verified—whether the negative items are disputed by you or a credit repair company.
Errors on your reports can be investigated and resolved, but credit repair companies cannot legally get information removed if it is accurate and timely.
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How do I recognize a credit repair company?
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Usually a for-profit company that charges a fee for their services
Often promises a quick increase in your credit scores
Offers to remove negative items from your consumer reports, including credit reports generated by the three nationwide reporting companies (Experian, Equifax, and TransUnion)
Often charges a monthly fee, which they justify by disputing the same negative items on your credit reports over and over
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Beware of monthly subscription fees. Many credit repair companies use telemarketing to sell their services. By law, a credit repair company that signed you up for services through telemarketing is not allowed to send you a bill or receive payment until two things happen:
The timeframe ends when they told you they would provide you their services. This means they cannot charge you an upfront fee or ongoing monthly service fee, so sometimes the company calls it a “subscription fee” instead.
They have sent you a report from a consumer reporting company. The report must show that they achieved the promised results, and it must be created six months after the results were achieved.
The most common ways to get an auto loan are through your car dealer or a bank or credit union. Learn the differences and how to compare offers to get the best loan.
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Most buyers need to get an auto loan to pay for a car or vehicle. While it may be convenient to get a loan through your dealership, it’s not your only option – and you’ll generally get better interest rates and loan terms by comparing offers between different lenders.
The car shopping process often begins at the dealership. If you need an auto loan, a dealer may offer to arrange financing for you. This is also called indirect auto financing because the dealer is between you and the lender.
What to consider Once you’ve agreed to buy a car through that dealership, the salesperson will refer you to their finance and insurance department, where they’ll collect your information and forward it to one or more prospective auto loan lenders, which could include banks, credit unions, and nonbank auto finance companies. If a lender agrees to finance your loan, they’ll provide a quote to the dealer, which is known as a “buy rate.” Interest rates through a dealer are generally higher because the rate they offer you is their “buy rate” plus additional interest that compensates them for handling your financing.
Most dealers will generally reach out to roughly five lenders and then choose one loan to present to you. You can ask if there were other offers and whether those had lower interest rates or better terms.
Bank or credit union
You can also go directly through a bank or credit union to finance your car or auto loan. You don’t have to work with the financial institution you bank with or are a member of, so it’s possible to shop around for different interest rates and loan terms. This tends to be the cheaper option because you avoid paying the additional markup to the dealer.
What to consider The first step is to get preapproved by a bank or other lender. This will give you a loan quote, which will include an interest rate, loan length, and maximum loan amount based on a number of factors, including creditworthiness and terms of the loan. This quote allows you to shop around and compare different offers, including with what a dealer may provide.
Buy Here, Pay Here dealership financing
There are other types of dealers known as “Buy Here, Pay Here” where they finance loans to borrowers with no or poor credit histories. They may also advertise, “No Credit, No Problem.”
What to consider The interest rate at these types of dealerships tends to be higher. You may want to consider whether the cost of the loan – including the costs you’ll pay over the life of the loan – outweighs the benefits of the vehicle.
Even without a strong credit score or history, it may be worth checking with a bank or credit union to see if you could get a loan with better terms.
Regardless of who finances your auto loan, they’ll present you with a proposed interest rate – or how much you’ll pay each year to borrow money – and an APR – or the cost you’ll pay each year in interest as well as fees charged by the lender. Both are expressed as percentages and serve as important measures of the price you’ll pay for financing your auto loan.
You can check and compare auto loan interest rates by getting quotes from different banks and credit unions. You can also research interest rates through online consumer marketplaces or comparison sites, but be aware that your information may be sent to prospective lenders.
Understanding how loan shopping impacts your credit Shopping early for interest rates allows you to comparison shop so you can get the best rate. This generally has a limited impact on your credit, unless you’re applying for multiple loans over a long period of time. When lenders check your credit, it’s a credit inquiry. If credit inquiries take place within 14 and 45 days, they’re considered one credit inquiry, and they won’t impact your credit.
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Know your rights
The Equal Credit Opportunity Act makes it illegal for lenders to consider a number of factors – including race, color, religion, sex, marital status – when deciding whether to offer you a loan or what the terms of that loan will be.
Before you agree to a loan with a lender, they’re also required to provide you with written disclosures that list all of the important terms you’ll be legally bound to pay. These Truth-in-Lending or TILA disclosures provide important information on the costs you’ll pay over the life of the loan, including:
The Fair Debt Collection Practices Act (FDCPA) is a federal law that limits what debt collectors can do when attempting to collect certain types of debt. The federal Fair Credit Reporting Act (FCRA) covers how debts are reported in credit reports. In addition, there are state laws that provide protections against unfair and deceptive practices.
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The Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act (FDCPA) is the main federal law that governs debt collection practices. The FDCPA prohibits debt collection companies from using abusive, unfair, or deceptive practices to collect debts from you.
The FDCPA covers the collection of debts that are primarily for personal, family, or household purposes. It doesn’t cover business debts, and it also doesn’t generally cover collection by the original creditor or business you owed money to.
Under the FDCPA, debt collectors can include collection agencies, debt buyers, and lawyers. Any FDCPA-covered debt collector who contacts you about a debt is required to tell you certain information about it.
Limits on how debt collectors can communicate with you about a debt
Time and place. Generally, debt collectors may not contact you at an unusual time or place, or at a time or place they know or should know is inconvenient to you. They are generally prohibited from contacting you before 8 a.m. or after 9 p.m. Also, if a debt collector knows or has reason to know that you're not allowed to receive personal communications at work, they’re not allowed to contact you there. If they call you when it’s inconvenient for you to speak with them, you can tell them that and they’re required to terminate the call.
Social media and other electronic communications. A debt collector may not use social media to publicly post about a debt that they claim you owe. However, they can contact you privately on social media, unless you request that they not contact you that way. If the debt collector communicates with you using an email address, telephone text number or other electronic medium, they must offer you a reasonable and simple method for you to opt out.
Harassment. Debt collectors may not harass you or anyone else over the phone or through any other form of contact, including text or email.
Representation by attorney. If a debt collector knows that an attorney is representing you about the debt, the debt collector generally must stop contacting you and must contact the attorney instead. This is only true if the debt collector knows, or can easily find out, the name and contact information of your attorney. If an attorney is representing you and a debt collector calls, give them your attorney’s name and contact information and tell them that they should contact your attorney directly, instead of you. It’s also a good idea to keep all documents sent by a debt collector and write down dates and times of conversations, along with notes about what you discussed. These records can help you if you meet with a lawyer or go to court.
The federal Fair Credit Reporting Act covers how financial matters, including debts, can be reported in your credit report.
For example, if a debt collector provides or furnishes information to a consumer reporting companies that you believe is inaccurate, you have the right to dispute that information and the credit reporting companies must:
Note on your credit report that you are disputing the information
Investigate your dispute
Forward all documents you provide in support of your dispute to the company that provided that information
Most states have laws about debt collection practices, many of which are similar to the FDCPA. Some of those state laws cover the original creditor, while others don't. States also have unfair and deceptive acts and practices laws that may apply to debt collection. Contact your state attorney general's office to learn more about the laws in your state.
If you're having an issue with debt collection, you can submit a complaint with the CFPB.
There are federal protections to prohibit harassment or abusive communications by a debt collector. Ignoring or avoiding a debt collector, though, is unlikely to make the debt collector stop contacting you. They may find other ways to contact you, including filing a lawsuit.
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While being contacted by a debt collector might feel overwhelming, talking with them can help you get more information about the debt. Ignoring or avoiding the debt collector is also unlikely to make them stop contacting you, and they may use other methods to try to collect the debt, including filing a lawsuit against you.
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What to do when a debt collector contacts you
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There’s certain information that debt collectors are generally required to provide to help you determine whether or not the debt is yours and to inform you how you can dispute the debt, if you don’t believe you owe it or the amount is incorrect. If they refuse to provide this information, it’s a warning sign that it may be a scam.
If you ignore a debt collector’s attempts to contact you and they file a lawsuit to collect the debt, it’s important to take it seriously. Not responding to a properly served lawsuit – even if you’re unsure whether you owe the debt – can result in the court issuing a judgment against you, which could limit your ability to dispute the debt, even if it’s already been paid or you don’t owe it.
If you’re having problems making payments on an auto loan or lease, contact your lender or servicer as soon as possible to ask what options are available to you.
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If you’re experiencing financial difficulties, it may be difficult to know where to start, but there may be a number of options to help you address short or longer-term financial challenges. You also have rights and protections if you’re at risk of having your car or vehicle repossessed.
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How to get your auto loan back on track
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Contact your lender or servicer as soon as possible. As soon as you know you’re unable to make your monthly payment, contact your lender or servicer – whoever you make your payments to – to find out the options available to you, which may include affordable payment plans, changing your due date, or pausing your payments through forbearance. Learn how to find your lender or servicer
Get the agreement in writing. To avoid miscommunications, get the agreement with your lender or servicer in writing. You also want to ask how this new agreement would impact your credit report. If you’re told it won’t have an impact but it then appears on your credit reports, a written agreement provides evidence you can use to dispute the error with the lender or the credit reporting companies.
Refinance your auto loan. You can also talk with different lenders about refinancing your existing loan to get a lower interest rate or to spread out your payments over more time. Keep in mind, though, a longer loan term may mean cheaper monthly payments but more interest over the life of your loan. Learn what questions to ask when shopping for an auto loan.
Sell your vehicle. Another option is to sell your vehicle, but first, find out how much you owe on the auto loan and the approximate market value of your vehicle. If you owe less than the value of the vehicle, you can sell it and use the proceeds to pay off the loan. Check your auto loan contract to also see if you have a prepayment penalty for paying off early. In some cases, your lender may also be willing to buy back your vehicle.
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How to get your auto lease back on track
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Contact your lessor as soon as possible. The dealership or company you leased your vehicle through – your lessor – may be willing to work with you on an affordable payment plan, especially if you have made timely payments in the past. If you do reach an agreement, get it in writing in case you need to dispute it later.
“Cure” or reinstate your lease. Within your contract or under state law, you might have the right to “cure” or reinstate your lease after missing a payment. If you have this protection, you have the right to make up missed payments before your car is repossessed. You would generally receive a notice after a missed payment and have one to two weeks to make it up. If it’s not in your contract, check with your state attorney general or consumer protection office as to whether it’s a protection under state law. Some states also allow you to reinstate your lease after your vehicle is repossessed, but this is rare.
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Knowing your rights and protections around repossession
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If you’re not able to make your payments and you haven’t been able to work out an alternative with the lender or loan servicer, you could be at risk of having your vehicle repossessed. In some cases, lenders can repossess vehicles without warning or court order after you’ve missed a payment.
Losing a car to repossession can be financially and emotionally difficult, but it’s important to know that you have certain rights and protections. Auto loan servicers also need to ensure that every repossession is lawful.
If you’re having problems with your escrow or impound account, contact your mortgage servicer right away. You may need to send an information request or notice of error.
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An escrow account is an account set up by your mortgage lender to pay certain property-related expenses on your behalf, like property taxes and homeowners insurance. It’s set up to help you pay these expenses through your lender or servicer, little by little every month, instead of you getting a big bill once or twice a year. An escrow account is sometimes called an impound account. Learn more about how escrow accounts work.
Your property taxes and insurance premiums can change from year to year. If your property taxes and/or insurance premiums change, your total monthly payment will change.
It’s important to monitor your mortgage statements, and tax and insurance bills, so you can quickly identify issues with your escrow account if they arise.
Signs that there could be an issue with your escrow account include:
Changes in your total monthly payment without being notified that your taxes or insurance premiums are going to change
A notice from your local government that your property taxes haven’t been paid
If your mortgage servicer did not pay your taxes, you should send a copy of the bill along with a notice of error, which is a letter disputing the error, to your mortgage servicer.
If the servicer has failed to make timely tax and insurance payments from your escrow account on your behalf, you should contact your tax authority or insurance carrier as soon as possible. If you don’t or your servicer doesn’t pay the property taxes, a tax lien may be put on your property.
If you notice any of the changes above, the first thing you should do is contact your servicer to verify that these changes aren’t due to a mistake on their end.
If you have an escrow account and your mortgage servicer fails to pay your property taxes, or if you are facing imminent foreclosure or have been served with legal papers, you may need to consult an attorney or a housing counselor.
You can use the CFPB's "Find a Counselor" tool to get a list of housing counseling agencies in your area that are approved by the Department of Housing and Urban Development (HUD). You can also call the HOPE™ Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673).
If you have a problem with your mortgage, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).
If you’re sued for an unpaid debt, you should respond to the lawsuit, either personally or through a lawyer by the date specified in the court papers.
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If you have been sued or “served” by a creditor or debt collector for an overdue debt, read the lawsuit carefully and respond by the required deadlines. By taking this step, you can protect yourself and help avoid additional financial difficulties.
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Why it’s important to respond when sued by a debt collector
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When you respond to the lawsuit, a debt collector has to prove to the court that the debt is valid. If you owe the debt, you may be able to work out a settlement or other resolution with the collector. Responding doesn’t mean you’re agreeing that you owe the debt or that it is valid.
If you don’t respond, the court could issue a judgment or court action against you, sometimes called a “default judgment.” For example, if you refuse to accept delivery or “service” of the lawsuit, the court could view this as ignoring a properly served lawsuit, and it’s unlikely that this tactic will be effective at defending yourself against the lawsuit.
As a result, it's likely that a judgment will be entered against you for the amount the creditor or debt collector claims you owe, as well as lawful additional fees to cover collections costs, interest, and attorney fees as allowed by the judgment.
Judgments also give debt collectors much stronger tools to collect the debt from you. You may lose the ability to dispute the debt, if you believe you don’t owe it or that the amount is wrong, and depending on your situation and your state’s laws, the creditor may be able to:
A judgment is a court order, so it can be very difficult to get it changed or set aside once the case is over. You have a much better chance to fight a collection in court if you defend the case than if you wait until a judgment is entered against you. You may also be able to work out a compromise or settlement by negotiating with the debt collector before a court makes a judgment.
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Consult an attorney to learn more about your debt collection rights
Some attorneys may offer free services or charge a reduced fee. You may also wish to find an attorney who has experience in the Fair Debt Collection Practices Act (FDCPA) and debt collection issues. There may also be legal aid offices or legal clinics in your area who will offer their services for free if you meet their criteria.
When a debt collector can’t sue or threaten to sue
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You have certain rights and protections when being contacted by a debt collector who is subject to the FDCPA. A debt collector can’t use the threat of a lawsuit to collect a debt if they do not intend to file a lawsuit. They also can’t sue or threaten to sue when the statute of limitations – or the period of time they have to file a lawsuit to collect a debt – has expired.
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Contact the card provider right away if your card or your PIN is lost or stolen or if you see unauthorized charges.
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If you have registered your prepaid card, or if your card is a payroll card or a certain type of government benefit card, you have certain error resolution rights that protect you from unauthorized transactions under federal law. Some prepaid card providers give some additional protections for loss or theft, but you should check your card provider’s website or your cardholder agreement to find out the specifics.
Call your card issuer right away if your card or PIN is lost or stolen or if you see unauthorized charges. If you wait too long to report, you could be responsible for more or all of the unauthorized or incorrect charges. Prompt reporting of a card’s loss or an erroneous charge can also prevent additional losses from your account balance.
Federal law requires a landlord who denies your tenant application, due to information in a tenant screening report, to inform you of that fact.
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The Fair Credit Reporting Act provides you with rights as both a rental applicant and a tenant. This federal law requires a landlord, who rejects or denies your tenant application due to information in a tenant screening report, to inform you of that fact. This notification is called an “adverse action” notice, and it must:
Be given in writing, orally, or electronically
Provide the name, address, and phone number of the company that provided the report
Notify you of your right to a free copy of the report if you request it within 60 days of the adverse action
Explain your right to dispute inaccurate information
An adverse action not only includes being denied a rental, it could also include:
Requiring a co-signer on the rental agreement or lease
Requiring a larger deposit or a higher rent payment than other applicants
Steps to take if your rental application is denied
If you’re denied a rental due to a tenant screening report, you can:
Try to find out from the landlord what information in the report was a problem to see if you can explain the situation.
Ask the landlord for a copy of the tenant screening report. The landlord must give you the name, address, and phone number of the tenant screening company, so you can get a copy from that company.
Review your tenant screening report, check for inaccurate or outdated information, and dispute any errors. If your tenant screening report contains a credit report from one of the nationwide credit reporting agencies, you can dispute that error with the credit reporting company or the company that provided the erroneous information or both.
What you can do if your rights were violated
If you believe that your rights have been violated, you may want to contact a lawyer. You may be able to sue for violations of the federal Fair Credit Reporting Act and any state law violations. If you sue under this federal law and win, you may be able to recover damages and your attorney fees. There will be applicable statutes of limitation or deadlines for bringing a lawsuit.
If you have a problem with credit or consumer reporting, such as tenant screening, you can submit a complaint online or by calling (855) 411-CFPB (2372).
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If a debt collector contacts you, use the opportunity to find out about the debt, which will help determine if they’re legitimate and if you really owe it.
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When a debt collector first contacts you about a debt, they are, in general, legally required to provide you with certain information about the debt during that initial communication or within five days of the initial communication. This validation information includes the name of the creditor, the amount you owe, and how to dispute the debt. If the debt collector doesn’t or can’t provide this information, it could be a scam. Never give sensitive financial information to the caller, at least not until you’ve confirmed they’re legitimate.
Also, if the debt collector is collecting a valid debt, avoiding or ignoring their call usually won’t make them go away – they may instead find other ways to collect the money from you, including by filing a lawsuit. A debt collector can also help you understand if the debt is yours and what your options are, even if you can’t pay right now.
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Communicating with debt collectors
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In addition to using the validation information to follow up with the debt collector, you can use these sample letters to communicate with them:
If you use any of these letters, it’s important to do so as soon as possible after the debt collector first contacts you, and to keep copies of any letters you send and any other communications. In certain situations, you only have 30 days after you’re contacted to ask for certain information, but even if more than 30 days pass, it’s still a good idea to ask for what you need. Note: These sample letters are not legal advice.
While talking with a debt collector can be helpful, it’s also important to know that you have protections against repetitious, excessive and threatening communications. Under the Fair Debt Collection Practices Act, debt collectors violate the law when they harass, oppress, or abuse you.
For example, if the debt collector is calling you at an inconvenient time or place, you have the right to ask the debt collector to call you at a more convenient time or place you specify.
Once you’ve finished negotiating with your lender or dealer, make sure to review all aspects of your loan agreement before you sign your paperwork and drive off the lot.
The federal Truth in Lending Act (TILA) requires lenders to provide you with written disclosures with all of the important details of your loan terms fully filled out before you sign the paperwork. Note: while TILA disclosures are typically presented to you just before you sign your loan contract, you can insist on receiving them earlier so you have time to review. You can also take those forms home with you to compare with other offers or to fully consider your options.
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Check everything to ensure it’s what you agreed to
Under TILA, lenders must provide specific information that helps to ensure your loan terms align with what you agreed to. The form must include:
Annual Percentage Rate (APR) – This is the cost you’ll pay each year to borrow money, which is your interest rate plus fees. Similar to an interest rate, it’s written as a percentage.
Finance Charges – The total amount of interest and certain fees that you’ll pay over the life of your loan, if you make every payment when it’s due.
Amount Financed – The amount of money you’re borrowing.
Total of Payments – The sum of all of the payments you’ll have made by the end of your loan.
Total Sale Price – The total cost of your purchase on credit, taking into consideration your down payment.
The TILA disclosures will also include other important terms such as the number of payments, the monthly payment, late fees, whether you can prepay your loan without a penalty, and other important terms.
Take time to review each detail of your contract. If you don’t understand any aspect of your loan, ask questions. And if you’re not comfortable with any aspect or process, walk away. No one can pressure you into a loan or vehicle you’re not comfortable with.
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Finish your paperwork
Before you leave the lot, make sure you’ve finished all of the paperwork:
All of the blanks have been filled in – some by you but most by the dealer
The paperwork has been signed by you and the dealer
You’ve received copies of all of your documents
If the dealer asks you to sign a blank or partially filled in form, you should decline. Also, you may receive printed or electronic copies of your documents. If you receive them electronically, make sure they’re in a format that’s easy to access and can be saved or printed.
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Watch for these details after you drive away
After you’ve taken out a car loan, you should receive an introductory message from your lender. These communications will include information on where to send your payments and when they’re due.
Make sure your monthly payments are on time in order to avoid late fees or possible repossession, as well as negative impacts on your credit score.
By making several important financial decisions before you shop for a car, you can ensure you’re getting the best interest rates and loan terms for your budget.
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There are several important questions to ask before you purchase a car or vehicle:
By answering these questions, you’ll make an informed choice before entering into a new auto loan.
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How much can I afford?
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It’s often tempting when shopping for a car to calculate a monthly payment by simply looking at the price of the vehicle, but this doesn’t take into account other factors that impact your monthly payments and what you’ll pay over the life of your loan.
Factors that impact your monthly and overall loan costs:
While you can negotiate many of these items with your lender or dealer, they still play a significant role in your loan terms and the overall cost of borrowing money.
Factors that may reduce your monthly and overall loan costs:
Your credit report and scores are some of the most important factors in determining the rates a lender will offer you for an auto loan. In general, the lower your credit score, the more likely you’ll receive a higher interest rate, which would cost you more over the life of your loan.
Every 12 months, you’re entitled to a free credit report from each of the three nationwide credit reporting companies – Equifax, Experian, and TransUnion – as well as many of the specialty credit reporting companies, and until the end of 2026, you can get an additional six free credit reports every 12 months from Equifax. Before shopping, review your credit reports to spot and dispute any errors or inaccuracies that may be impacting your credit score and preventing you from getting the best interest rates possible.
Also, keep in mind that getting multiple credit checks from lenders can impact your credit score. While it’s important to get loan comparisons, keep these credit inquiries within 14 to 45 days of each other so they’re counted as only one inquiry. If you’re working through a dealer, they may reach out to roughly five potential lenders with your credit information, so you want to aim to keep the car-buying process to a few weeks.
A co-signer is a person who would also sign onto your loan, contractually obligating them to pay it back if you’re unable to. If you have a limited or poor credit history, a co-signer with good or excellent credit could significantly lower your interest rate because the lender will use their credit history and score when calculating your rate.
Keep in mind that co-signing a loan can be a significant obligation. If you’re considering asking a parent, friend, or family member to co-sign, it’s important to have a conversation beforehand about what happens if you’re unable to make your payments.
If you have a car or vehicle you’ll be trading in, you can research its approximate value using a number of reputable third-party websites, including Consumer Reports, Edmunds, Kelley Blue Book and NADA Guides.
Once you know how much its worth, you can consider using it as a trade-in – where you and your dealer negotiate the value that will be credited to your purchase of another car – or sell it yourself and use the money as a down payment. Both options decrease the amount you’ll need to borrow, so your decision to do a trade-in vs. selling it yourself should depend on which option offers you the greatest savings.
When getting an auto loan, negotiating certain terms and features, including interest rates and add-ons, can save you hundreds or even thousands of dollars.
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In addition to the price of the vehicle, there are the terms and costs of the auto loan that you may be able to negotiate or control. Together, these amounts can impact your monthly payments and lower your total costs, which could allow you to save a significant amount over the life of the loan.
What auto loan features and add-ons you can negotiate
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Annual Percentage Rate (APR) and interest rate
Getting a lower interest rate and APR means you will pay less to borrow money and the amount you’ll pay over the life of your loan will be lower. Lenders base your interest rate and APR on a number of different factors, but to get the lowest APR and interest rate, compare quotes from multiple lenders before you go into the dealership.
For example, getting preapproved by a bank or credit union allows you to show other lenders or your potential dealership the rates you’ve been offered, with the goal of getting competitive offers.
Length of the loan
A shorter loan term, where you make a fewer number of monthly payments, will reduce your loan cost overall. While a longer loan can reduce your monthly payment, you’ll end up paying more interest over the life of your loan.
A longer loan also puts you at risk of having negative equity for a longer period of time, meaning you owe more than the vehicle is worth. For example, if you try to sell or trade-in your car before it’s paid off, you’d still owe money on your loan. The risk of negative equity also depends, in part, on the resale value of used vehicles, which can fluctuate.
Keep in mind that if you agree to include add-on features or credit products in your auto loan, it’ll increase both your monthly payments and the total amount you’ll need to borrow and pay back.
Vehicle trade-in value
If you’re looking at trading in your current vehicle, a good first step is to get an approximate value for your trade-in by using online resources, including Consumer Reports, Edmunds, Kelley Blue Book and NADA Guides. Again, the market for used vehicle, which can fluctuate, can also impact your trade-in value. Compare the value you’d get at different dealers vs. selling it to another person directly and putting that money towards a down payment on a new car.
Additional fees associated with purchasing a vehicle or your loan
This may include fees charged by the dealer, such as preparation fees, origination fees, document fees, delivery charges, and market adjustments or fees that increase the price over MSRP.
What you can’t negotiate
You can’t negotiate taxes, title, or registration fees set by your local and state government.
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Other factors that affect the amount you’ll borrow
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Down payment – The larger the down payment, the less you need to pay back. In fact, increasing your down payment may also decrease your interest rate.
Manufacturer incentives – Manufacturers offer special deals to advertise certain vehicle models, such as cash rebates or special financing offers, but make sure to read the fine print because these offers may not be available to everyone.
Car insurance – While auto insurance is separate of your loan, it’s something that should factor into what you’re paying each month for your car. All lenders require that you have insurance, and if you don’t, they may take out “force-placed” insurance, which is more expensive than what you can get on your own.
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How to look at your total loan costs vs. monthly payments
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Many people think about a loan in terms of their monthly payment. Instead, the total cost of the loan matters. For example, if you reduce your monthly payment by taking out a longer loan, you will pay more in interest over the life of your loan.
Sample loan amount: $20,000. Interest rate: 4.75%. The numbers have been rounded to the nearest dollar.
When thinking about your overall financial costs and monthly expenses, it’s also important to keep in mind the monthly cost of insurance as well as the routine and unexpected.
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How to keep track of multiple factors when negotiating
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Because there are several factors to keep track of as you’re negotiating the best auto loan for your new car or vehicle, you want to make sure you’re writing down or capturing the key details in order to better compare and negotiate.
You may also want to negotiate some of the details separately in order to get the best price. For example, while a dealer may quote you the value of your trade in, you may get a better interest rate and loan terms through a bank or credit union.
When talking with any dealer or lender, ask them to provide:
Trade-in value of your current vehicle (if applicable)
Interest rate
Term of the loan
Estimated monthly payment
It’s important to get these numbers early in the process. The first quote you receive – whether from a dealership or a bank or credit union – may not be the lowest rate you qualify for. When negotiating, you can also ask for a better rate or more favorable terms.
If a bank or credit union denied your application for a checking account, it may be because a checking account reporting company has negative information in its files about your checking history.
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You may have negative information in your file if you had a checking account before and you:
Have an unpaid negative balance on that account, such as from an overdraft, that you have not repaid and the account was closed by the bank or credit union (this is called an “involuntary closure”).
Were suspected of fraud related to a checking account.
Had a joint account with someone else who had these types of problems.
Banks and credit unions supply this type of negative information to checking account reporting companies, such as Chex Systems and Early Warning Services. These companies compile and use the information to create reports of an individual’s prior checking account history. Banks and credit unions may use these reports to help determine whether to offer you a checking account and the type of checking account to offer you. (Retailers may use a similar report to decide if they will accept your checks.
What are my rights?
Accuracy
Checking account reporting companies must comply with the federal Fair Credit Reporting Act (FCRA). This means they must follow reasonable procedures to assure maximum possible accuracy of the information in the reports, and they can’t include most negative information that’s more than seven years old. In practice, some checking account reporting companies disregard information that is more than five years old.
You also have the right to request a free report if you have received an “adverse action” notice. For example, let’s say a bank turns you down for a checking account based on a checking account report. This is an example of an “adverse action”. The bank must provide you with an “adverse action” notice that includes the name and contact information of the checking account reporting agency from which the bank got the report. You can contact the reporting company and request a free copy of the report.
Investigate and correct errors
All checking account reporting companies must investigate consumers’ disputes of inaccurate information on their reports and correct any inaccurate information. Banks and credit unions that report information to checking account reporting companies also have an obligation to investigate and correct disputed information.
Here are some steps you can take if you’ve been denied an account:
Get a copy of your checking account report and review it for any errors
Ask the bank or credit union to provide you with the name of the checking account reporting company that provided the negative information. Contact the company to obtain a free copy of your report and review it for any errors. If you spot any errors, file a dispute.
Check your other credit reports. Some banks and credit unions will use your traditional credit reports, in addition to, or instead of a checking account report, to decide whether to give you a checking account. Get more information about requesting copies of your credit reports.
Find out if the bank or credit union has steps you can take to open an account, or offers lower-risk accounts
If not, consider trying another financial institution. Each bank or credit union has its own policies about the way the information in your checking account report impacts your ability to open an account. Some banks and credit unions require you to pay any old, unpaid charges and fees before you are allowed to open a new account. Many banks and credit unions offer checking accounts and prepaid cards that are designed to reduce risks for both you and financial institution, by preventing overdraft and overdraft fees. Because these products are considered less risky, many banks and credit unions may be less reliant on checking account reports when making a decision about a potential customer. As a result, you may be able to qualify for one of these products even if you were denied for another product recently.
For more information, see our consumer guides on choosing and managing checking accounts:
You have the right to remove PMI for many mortgages, once you have paid down your mortgage to a specified point. Ending PMI reduces your monthly costs.
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Some lenders and servicers may allow removal of PMI under their own standards. The information below describes the legal requirements that apply to mortgages for single-family principal residences that closed on or after July 29, 1999.
Mortgages through the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) have different requirements. For answers to questions about mortgage insurance on an FHA or VA loan, contact your servicer. If your lender is paying for your mortgage insurance, different rules apply.
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Can I request cancellation of my PMI when my principal balance is 80 percent of the home’s original value?
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Yes. You have the right to ask your servicer to cancel PMI on the date the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. The first date you can make the request should appear on your PMI disclosure form, which you received along with your mortgage. If you can't find the disclosure form, contact your servicer.
You can ask to cancel PMI ahead of the scheduled date, if you have made additional payments that reduce the principal balance of your mortgage to 80 percent of the original value of your home.
For this purpose, “original value” generally means either the contract sales price or the appraised value of your home at the time you purchased it, whichever is lower. But, if you have refinanced, the “original value” is the appraised value at the time you refinanced.
Your servicer is legally required to grant your request to cancel your PMI as long as you meet the criteria below:
You make your request in writing
You have a good payment history and are current on your payments
You can certify that there are no junior liens (such as a second mortgage) on your home
You can provide evidence (for example, an appraisal) that the value of your property hasn’t declined below the original value of the home—if it has, you may not be able to cancel PMI on schedule
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Is my PMI automatically canceled once my principal balance is 78 percent of the home’s original value?
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Yes. Even if you don’t ask your servicer to cancel PMI, in general, your servicer must automatically terminate PMI on the date when your principal balance is scheduled to reach 78 percent of the original value of your home. For your PMI to be cancelled on that date, you need to be current on your payments. Otherwise, PMI will not be terminated until shortly after your payments are brought up to date.
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Is my PMI automatically canceled once I am halfway through my loan’s term?
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Yes. Your lender or servicer must end the PMI the month after you reach the midpoint of your loan’s amortization schedule. (This is true even if the principal balance has not reached 78 percent of the original value of your home.) The midpoint of your loan’s amortization schedule is halfway through the original full term of your loan. For 30-year loans, the midpoint is after 15 years have passed.
This standard for ending the PMI halfway through the loan’s original term is more likely to occur for people who have a mortgage with an interest-only period, principal forbearance, or a balloon payment. Keep in mind that you must be current on your monthly payments for termination to occur.
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Can my PMI be canceled earlier if I have a loan backed by Freddie Mac or Fannie Mae?
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Yes. Loan investors, including Fannie Mae and Freddie Mac, often create their own PMI cancellation guidelines. But these guidelines cannot be less favorable to the borrower than the ones above.
Credit card companies can usually increase your interest rate if they give you 45 days of advanced notice, but there may be steps you can take to lower your credit card interest rate.
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Your card issuer generally must give you 45 days of advanced notice before it raises your credit card interest rate for new purchases you make with that card. Card companies are generally restricted from raising the interest rate for your existing balance, but there are certain exceptions.
Interest rate changes for new credit card purchases
A credit card company is generally not permitted to increase your interest rate on new transactions during the first year of your credit card account.
After that initial year, they’re required to provide 45 days of notice before an interest rate change, and any purchases you make with the card more than 14 days after the advanced notice are considered new transactions.
Interest rate changes for an existing credit card balance
A card company is not permitted to increase your interest rate on your existing purchases, except under the following circumstances:
A temporary rate – such as a low rate on a balance transfer – expires. That temporary rate must last for at least 6 months.
You have a variable interest rate and the index to which your rate is tied (for example, the U.S. Prime Rate) has increased.
Your minimum payment has not been received within 60 days after the due date.
You successfully complete or fail to comply with the terms of an arrangement with your card issuer to lower your interest rate. · Your protections under the Servicemembers Civil Relief Act (SCRA), if applicable, expire.
Lowering your credit card interest rate
If your credit card company increased your interest rate after giving you a 45-day advanced notice, it generally must review and re-evaluate the interest rate for your account at least every six months.
The card issuer may – and in some circumstances must – compare the rate you’re being charged with the rate the card issuer would charge you today if you applied for a new card. If your rate is higher than what you would be charged as a new customer, the card issuer must reduce your rate. However, this rate will not necessarily be as low as your original rate.
If your rate increased because of certain factors, including being late on a payment, the card issuer may consider whether the factors that led the increase still apply.
For example, you may also be able to lower your interest rate by consistently making your payments on time. If your rate increased because you were more than 60 days late in making a payment, the card issuer must reinstate your old interest rate if you make six consecutive on-time payments of your minimum balance after the effective date of the increase.
Contact your card issuer if you believe your interest rate was increased in error.
Reverse mortgage loans typically must be repaid either when you move out of the home or when you die. However, the loan may need to be paid back sooner if the home is no longer your principal residence, you fail to pay your property taxes or homeowners insurance, or do not keep the home in good repair.
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Most reverse mortgage loans are Home Equity Conversion Mortgages (HECMs). A HECM must be paid off when the last surviving borrower or Eligible Non-Borrowing Spouse:
Dies
Sells their home, or
No longer lives in the home as their principal residence, meaning where they live for a majority of the year.
If the you are away for more than 12 consecutive months in a healthcare facility such as a hospital, rehabilitation center, nursing home, or assisted living facility and there is no co-borrower living in the home, anyone living with you will have to move out unless they are able to pay back the loan or qualify as an Eligible Non-Borrowing Spouse.
An “Eligible Non-Borrowing Spouse” is a term used for your spouse when they are not a co-borrower, but qualify under the U.S. Department of Housing and Urban Development’s (HUD) rules to stay in your home after you have died.
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+ When I went to use my credit card the store told me the charge was not "authorized". What does that mean? What can I do? | Consumer Financial Protection Bureau
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If a charge is not authorized, it usually means that there is a problem with the account or that you are at, near, or over your credit limit.
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Usually, when you use your credit card at a store the merchant obtains authorization from the card issuer. This authorization tells the merchant that your account is valid and that sufficient credit is available to cover the purchase.
However, sometimes the merchant is unable to connect with your card issuer because of a technological glitch. You should call the card issuer to find out the reason the charge was not authorized.
There are a variety of reasons you may have been offered a credit card with a low credit limit. To understand why, you can examine your credit report or, in some circumstances, request more information about the decision from the lender.
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Credit card companies usually determine your credit limit only after you’ve applied for a credit card. To make this assessment, they generally review your credit report and history as well as the income information you provided on your application.
If you’re issued a credit card with a low credit limit, it could be for a number of reasons, including:
Poor credit history
High balances with other credit cards
Low income
Small credit limit for that specific card
There are some circumstances in which it is possible to find out more about the factors that went into that determination, including:
If you were turned down for one card and offered a different card with different terms that you do not expressly accept, the credit card company has to tell you the reasons it denied your application. If the credit card company says you can apply for a different card with different terms than the card you applied for, the card issuer must provide key disclosures about the new offer on or with the application.
If a card issuer decreases your credit limit on an existing card, the credit card company generally must give you an “adverse action notice.” While card issuers can increase or decrease your credit limit without giving you notice, this adverse action notice must provide specific reasons for the action taken or allow you to request a statement of specific reasons.
In order to better understand the factors related to your financial situation that may have contributed to your low credit limit offer, you can examine your credit report. You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian, and TransUnion).
Several things can cause your mortgage payment to change. Check your mortgage statement or contact your servicer and ask them to explain.
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There are several reasons why your monthly mortgage payment may have changed. Some examples include:
You have anadjustable rate mortgage (ARM) and the interest rate changed. Check the type of mortgage you have. Some homeowners believe that they have a fixed-rate mortgage loan, when their loan actually includes an adjustable-rate or some other feature that can cause their interest rate and payment to change.
You have an interest-only or pay-option loan and you are starting to pay principal. With these loans, you can postpone making principal payments for a while. That means that for a period of time you are only paying off the interest that’s accumulating on the amount you borrowed to pay for your home. Eventually, you have to start paying principal, or the actual amount you owe on the home, and that will make the monthly payments go up.
You have an escrow account to pay for property taxes orhomeowners insurance premiums, and your property taxes or homeowners insurance premiums went up. Check your monthly mortgage statement. If your monthly mortgage payment includes the amount you have to pay into your escrow account, then your payment will also go up if your taxes or premiums go up. Learn more about escrow payments.
You have a decrease in your interest rate or your escrow payments. It could also be because you stopped paying for private mortgage insurance. If you have private mortgage insurance, your payments may change once you are able to and do cancel the insurance.
You were charged new fees. Your servicer may have charged you fees that increased your monthly payment. Check your monthly mortgage statement or any correspondence you recently received from your lender or servicer.
It’s also possible that your mortgage servicer simply made a mistake. If you think your servicer made a mistake, first call your servicer to check. While on the phone, explain the situation to the servicer. Ask for a corrected statement. Also, ask for a reference number and the name of the person you are talking to, and take detailed notes on what you talked about and the date of the call, so you can keep track for your records. If your servicer doesn’t fix the problem over the phone, send a notice of error to your servicer explaining why you think it made a mistake in calculating your loan payment. Make sure you send the notice to the address your servicer uses for errors and information requests. This address should be listed on your statement or the servicer’s website – it might be different from the address where you send your payments.
If you still don’t understand why your payment changed, you should call your mortgage servicer, and you may also want to send an information request.
Tip: Use this checklist to see what steps you can take to make sure your mortgage is on the right track.
If you have a problem with your mortgage, you can submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).
If you do not have enough money in your account when the lender attempts to repay itself, there could be additional fees.
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Depending on your state law and your loan agreement, you might be charged a late fee as well as a returned payment fee by the lender and a non-sufficient funds (NSF) fee by your bank or credit union. Review your loan agreement closely to see what fees are included in the terms of your loan.
When you took out your payday loan, you probably gave a check to the lender or gave the lender permission to take money from your account when the loan was due.
If you do not have enough money in your account when the lender attempts to repay itself, your bank or credit union may cover the payment and charge you an overdraft fee. If your bank or credit union does not cover the payment, the loan will not be paid and you might be charged a “bounced check” or NSF fee by your bank or credit union and a late fee and a returned payment fee by the lender.
State laws vary on the fees that can be charged. Some states specify the number of times and the maximum amount a lender can charge for these types of fees. For more information on your state law, check the website of your state regulator or attorney general.
Tip: If you have questions about any fees, charges, or how your payments have been allocated, you can request a payment history, amortization schedule, and look at your loan file.
Your complaint goes through several steps that help you get a response and help us identify problems in the marketplace.
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1. Complaint submitted
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You submit a complaint, or another government agency forwards your complaint to us. You will receive email updates and can check the status of your complaint.
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2. Route
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We'll send your complaint directly to the company so it can review the issues in your complaint. If we find that another government agency would be better able to assist, we will send your complaint to them and let you know.
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3. Company response
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The company will communicate with you as needed and respond to the issues in your complaint. Companies generally respond in 15 days. In some cases, the company will let you know their response is in progress and provide a final response in 60 days.
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4. Complaint published
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We publish information about your complaint (without information that directly identifies you) in our public Consumer Complaint Database. With your consent we also publish your description of what happened, after taking steps to remove personal information. Learn more about how we share complaint data.
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5. Consumer review
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We will let you know when the company responds. You’ll be able to review the company’s response and will have 60 days to provide feedback about the company's response.
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Ready to start your complaint?
You can submit a complaint online now. It usually takes less than 10 minutes.
The Advisory Opinion program provides a mechanism through which the Bureau can carry out its statutory purposes and objectives by better enabling compliance.
The Advisory Opinion program provides a mechanism through which the Bureau can carry out its statutory purposes and objectives by better enabling compliance.
Understand your company's role in the complaint process
Each consumer complaint goes through a five-step process. Learn about each step so you know what to expect, how to respond, and how complaints are reviewed, shared, and published.
We send consumers’ complaints about consumer financial products and services—including complaints referred to the CFPB by prudential regulators and other government agencies—to the CFPB-supervised bank or credit union or to the nonbank identified by the consumer.
By statute, a primary function of the CFPB is to collect, investigate and respond to consumer complaints. Companies receive and respond to these complaints through the Company Portal, a secure online environment that protects consumer privacy and the confidentiality of company responses.
CFPB-supervised banks and credit unions
The CFPB sends complaints to banks or credit unions supervised by the CFPB. We refer complaints about banks and credit unions that are not supervised by the CFPB to the appropriate prudential federal regulator.
If you are a nonbank that provides consumer financial products and services, respond to complaints submitted to the CFPB by your customers by first getting access to your Company Portal.
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Learn about the complaint process
Understand your company's role in the complaint process
Each consumer complaint goes through a five-step process. Learn about each step so you know what to expect, how to respond, and how complaints are reviewed, shared, and published.
We send consumers’ complaints about consumer financial products and services—including complaints referred to the CFPB by prudential regulators and other government agencies—to the CFPB-supervised bank or credit union or to the nonbank identified by the consumer.
By statute, a primary function of the CFPB is to collect, investigate and respond to consumer complaints. Companies receive and respond to these complaints through the Company Portal, a secure online environment that protects consumer privacy and the confidentiality of company responses.
CFPB-supervised banks and credit unions
The CFPB sends complaints to banks or credit unions supervised by the CFPB. We refer complaints about banks and credit unions that are not supervised by the CFPB to the appropriate prudential federal regulator.
If you are a nonbank that provides consumer financial products and services, respond to complaints submitted to the CFPB by your customers by first getting access to your Company Portal.