When the FTC conducts an investigation to see if a company has violated the law, it’s important that the process is efficient and not unduly burdensome on those involved. The FTC’s Rules of Practice lay out the procedures the Commission follows.
Blog Posts Tagged with Debt
In the market for a $430 case of shower caps or some “dolphin shaped craft embellishments”? Have they got a deal for you! But for people who thought they were paying $99 up front and $19 a month for a credit card, all they got was access to the defendants’ online store, which sold bulk quantities of off-brand, overpriced items.
Of course, people are responsible for their debts. However, at a certain point, how much time has passed becomes an affirmative defense under state law and creditors can’t prevail in court. But what happens if a payment is made on a time-barred debt? A consumer can really get clocked — because in many states the debt can be revived if a person makes a payment or says in writing that they intend to. The FTC has announced a $2.5 million settlement with Asset Acceptance, LLC, for allegedly breaking the law in how it tried to collect
Last Friday, the FTC and the Consumer Financial Protection Bureau signed a memorandum of understanding outlining how the agencies will work together. The CFPB — born out of the recent financial system overhaul — and the FTC now share responsibility for protecting consumers in the non-bank financial sector.
In celebration of Halloween — and with apologies to Edgar Allen Poe — here’s our take on what companies can do to make sure spooky business practices don’t come back to haunt them.
Once upon a midnight lawful
Pondering practices, good and awful,
Reading through the U.S. Code
For dos and don’ts I parse and claw.
I came upon the Trade Commission’s
Section 5 with all revisions.
FTC watchers will remember Phillip A. Flora. In the first case of its kind, the FTC alleged that Mr. Flora was a One-Man Message Machine, churning out a “mind-boggling” number of unsolicited commercial text messages pitching mortgage modification services. How many did he send? According to the FTC, <Carl Sagan voice> millions and millions </Carl Sagan voice>.
According to the Consumer Services Protection Commission’s website, it’s a “National consumer protection agency and works For the Consumer to help avoid fraud, deception, and/or unfair business practices in the financial assistance marketplace.” The site went on to talk about the agency’s role in enforcing the law and educating consumers about how to “spot and avoid fraud and deception.” On the right was a blue and gold logo with the scales of justice and the winged wheel of commerce.
The FTC just announced more settlements with companies that falsely promised to help homeowners facing foreclosure. “Not relevant to our business,” you say? Think again.
“You can settle your credit card debt for pennies on the dollar without filing for bankruptcy.”
For people struggling to stay afloat, Debt Relief USA’s national TV ads must have seemed like a lifeline. When consumers called the company, representatives assured them that low monthly payments to Debt Relief USA would cover both the settlement of their reduced debts and the company’s fees. For the service to work, said the reps, people had to stop making payments to their creditors — and stop talking to them at all.
Savvy executives like to stay in the loop on FTC activities that could affect their industry. They make it a habit to scan the headlines or check for relevant workshops or reports. But there’s a third category of information a bit less understood: closing letters from BCP staff.
In the spirit of transparency, the agency posts them online. Here in the BCP Business Center, recent letters appear in the Compliance Documents section of each topic area.
Thinking about using a pre-checked box to obligate buyers in an online transaction? Maybe you’re considering a negative option arrangement without clearly and conspicuously disclosing the details of the deal. Or perhaps you’re an affiliate marketer who’s concluded that legal compliance is somebody else’s responsibility. A $4.8 million judgment entered by a federal court in California suggests you might want to reconsider those strategies.
Perhaps you see cops on the beat when they pass by your office. Maybe you serve on a committee with the Chief of Police or have a relative in the Sheriff’s Department. However you cross paths with local law enforcement, do them — and yourself — a favor by telling them about Consumer Sentinel.
Is your briefcase feeling lighter? That’s because your dog-eared copy of Volume 16 of the Code of Federal Regulations (where most FTC rules and guides live) is decidedly thinner these days. For the past two decades, the agency has undertaken a systematic review of its rules and guides to make sure they’re up to date, effective, and not overly burdensome. As each rule comes up for review, we ask ourselves — and you — four questions:
Incessant phone calls to consumers, often about accounts that weren't theirs.
Repeated autocalls to wrong numbers.
Illegal disclosures to other people that a consumer owes money.
In place since 1977, the Fair Debt Collection Practices Act gives consumers rights in the debt collection process and sets standards for members of the industry.
Consumers have found their voice. And last year they raised it more than 1.3 million times to complain about identity theft, fraud, and products that didn’t live up to the advertising hype.
Break out the bubbly and raise a toast: It's National Consumer Protection Week. NCPW is an annual campaign sponsored by the FTC and nearly 30 other federal agencies, consumer groups, and advocacy organizations, in conjunction with state, county, and local government offices that are sponsoring events nationwide. The goal? To encourage consumers to take full advantage of their rights and make better-informed decisions.
The FTC has gone to court in an effort to shut down an operation that allegedly blasted consumers with more than five million illegal spam text messages, including many pitching loan modification help, debt relief, and other services. The agency also has charged that the defendant marketed his text message services with email that violated the CAN-SPAM Act.
America’s homeowners just gained new protections. While parts of the Mortgage Assistance Relief Service (MARS) Rule requiring disclosures in advertising and other communications went into effect on December 29, 2010, the ban on upfront fees kicked in on January 31st. Now, companies that claim to help consumers avoid foreclosure or modify their loans can’t collect a penny until they get their customers what they want.
As a recent FTC action against three companies and their owner proves, ads promising quick and easy relief from credit card debt are likely to attract law enforcement attention. But this case featured an interesting twist because what the company really was up to was generating leads it turned around and sold to other companies.