CFPB Audit Examines Credit Reporting Failures, Chargebacks, and COVID-19 Prevention Management | Consumer Protection Agency

WASHINGTON, DC – Today, the Consumer Financial Protection Bureau (CFPB) released a new Supervisory Highlights report on the violations identified during the CFPB’s inspections in the first half of 2022. The report details important factors on consumer financial products and services, including the use of reporting companies. and reporting providers continue to violate the Fair Credit Reporting Act (FCRA) by failing to promptly contact and update incorrect information on credit reports. Today’s report also shows cases where mortgage brokers charged unauthorized fees or forced homeowners to pay their mortgages.

“The CFPB’s efforts are to limit the spread of illegal practices and harm consumers,” said CFPB Director Rohit Chopra. “The CFPB’s audit program continues to identify problematic practices and stop them before they spread.”

Inaccurate information on credit report

CFPB investigators found that one or more of the nation’s consumer reporting companies failed to report to the CFPB the results of their investigations of complaints about non-compliance. of consumer reports. In response to these findings, the reporting company changed its policies, procedures, and practices to be more transparent in handling such complaints. In addition, CFPB investigators found violations of the FCRA’s fairness obligations by mortgage lenders, including findings reported by the auto loan lenders provide inaccurate information about consumer loans even though they know the information is incorrect. In response to these investigations, the providers corrected inaccurate information for affected customers and made it easier for users to Disputes should be referred directly to the seller.

The CFPB brought it up recently an enforcement action against inaccurate credit reporting and emphasized the general issues inaccurate information on credit reports. Incorrect medical debt information This opportunity is affected, and customers are often forced to pay debts they do not owe.

Illegal “pay-to-pay” payments in mortgage servicing

CFPB investigators found that mortgage brokers violated federal law by charging huge payment phone fees — even though consumers didn’t know about it. these pay-by-phone penalties. During the phone calls with the borrowers, the company representatives did not disclose the existence or cost of the fees for the payment over the phone, but the borrowers are paying the fees. Following these investigations, the CFPB required the service to refund all borrowers who paid their phone bills if they did not. to clearly identify those bills.

The CFPB is targeting the traditional “pay-to-pay” payment system. bad pay. Earlier this year, a CFPB advisory opinion affirm that federal bankruptcy protection law generally prohibits debt collection companies under the Fair Debt Collection Practices Act from paying “facilitation fees” to pay down a balance.

Unfair and fraudulent practices in auto loans

CFPB investigators found violations related to overcharges, loan modifications, double billing, electronic device interference vehicles, and debt collection methods. In most studies, researchers have focused on negative pay. For example, the researchers reviewed how service providers handle additional product costs when individuals pay the total amount for some additional products as a deposit at the beginning of the loan and make payments on these additional products throughout the loan period. Investigators identified instances where borrowers paid off their loans early, but servicers acted unfairly by not issuing refunds for fees that not found related to additional products. Borrowers are entitled to a refund of unpaid bills due to early payment, the loan and additional products are terminated and the benefit is no longer offered.

Mishandling of COVID-19 aid

The CFPB conducted inspections evaluation to assess how financial institutions handle medical assistance benefits deposited into consumer accounts. They identified policies and procedures that could cause people to lose their disability benefits due to adjustments or exclusions. In response to these findings, the CFPB ordered institutions to issue refunds and make process changes to ensure they are in compliance. appropriate state and territory protections regarding processing and processing.

Some of the CFPB’s investigations also focused on the actions of mortgage lenders as homeowners faced financial difficulties related to the COVID pandemic. -19. CFPB investigators identified violations related to the failure to provide homeowners with CARES Act permits. Investigators also found that providers unfairly billed some people while they were in CARES Act forbearance, as well as failing to maintain policies and procedures. necessary to properly plan to properly assess homeowners in reducing the loss when the CARES Act expires.

Under the Consumer Financial Protection Act, the CFPB has the authority to supervise large banks, brokerages, and credit unions with assets of more than $10 billion and their affiliates, as well as certain banks. non-banks, including mortgage companies, private student lenders, and payday lenders. The CFPB’s regulatory oversight also includes consumer reporting, student loan servicing, debt collection, auto finance, money transfers sovereigns, and other non-banking institutions that may pose a risk to consumers.

Audits examine whether companies are complying with federal consumer protection laws. When CFPB investigators identify problems, they share their findings with companies to help them fix the violations. Usually, companies take actions to fix problems identified in tests. For more serious violations or when companies fail to make corrections, the CFPB opens investigations for enforcement action.

Read the Supervisory Highlights report.

Customers can submit complaints about financial products and services, by visiting the CFPB website or by phone (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer protection laws are encouraged to submit information about what they know. whistleblower@cfpb.gov.

###

The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps the consumer financial market work by making the rules more effective, by consistently and fairly enforcing those rules. , and by empowering consumers to take more control of their financial lives. For more information, visit www.consumerfinance.gov.

Leave a Comment