Month: September 2017

CFPB is Fighting the Good Fight

/ September 12, 2017

The Consumer Financial Protection Bureau (CFPB) today announced that its recent work resulted in $14 million in relief to more than 104,000 harmed consumers from January through June 2017. The Press release read in part:

“Today’s report, the 16th edition of Supervisory Highlights, covers CFPB supervision activities from January through June 2017, and shares observations in the areas of auto loan servicing, credit card account management, debt collection, deposits, mortgage origination, mortgage servicing, remittances, service providers, short-term small-dollar lending, and fair lending. Among the findings:

  • Banks deceived consumers about checking account fees and overdraft coverage: One or more institutions deceived consumers by inaccurately describing when checking account service fees would be waived. One institution told consumers it would waive the fee if the customer met certain qualifications, including making 10 or more payments from the checking account during a statement cycle. In fact, only debit card purchases and debit card payments qualified toward the fee waiver. One or more institutions also misrepresented opt-in deposit overdraft services as extending to consumer payments by check, electronic funds transfers through the Automated Clearing House payment network, or recurring payments, when those transactions were not actually covered.
  • Credit card companies deceived consumers about the cost and availability of pay-by-phone options: The Bureau’s examiners found that customer service representatives of at least one credit card company disclosed only costly pay-by-phone fees while omitting mention of much cheaper payment options. Failing to disclose less costly options can result in consumers being charged for services they don’t need.
  • Auto lenders wrongly repossessed borrowers’ vehicles: Many auto loan servicers give borrowers options to avoid repossession of their vehicle if a loan is delinquent or in default. But the CFPB’s examiners found that one or more companies were repossessing vehicles after the repossession was supposed to be cancelled. Some lenders wrongfully listed the account as delinquent. In other instances, customer service representatives did not cancel the repossession order when feasible after borrowers made sufficient payments. Also, some repossession agents did not check the documentation beforehand to see if the repossession had been cancelled.
  • Debt collectors improperly communicated about debt: Generally, debt collectors must get consent of the person owing the debt before discussing it with other parties. The Bureau’s examiners found that one or more third-party collectors did not confirm they had contacted the right person before starting collections, or wrongly attempted to collect from consumers who were not responsible for the debt. Also, one or more payday lenders, in collecting a debt, repeatedly called third parties, including personal and work references listed on the borrowers’ loan application. In some instances, even after being told to stop, these collectors called borrowers at work or asked third parties to relay messages to them. Such calls can lead to negative job consequences for the borrower, and risk improperly disclosing the default or delinquency to third parties.
  • Mortgage companies failed to follow Know Before You Owe mortgage disclosure rules: CFPB examiners found that one or more companies overcharged closing fees to consumers and one or more companies wrongly charged application fees before consumers had agreed to the mortgage transaction. Examiners did find that in general, both banks and nonbanks were able to effectively implement and comply with the Know Before You Owe mortgage disclosure rule changes.
  • Mortgage servicers failed to follow the Bureau’s servicing rules: Servicers are responsible for reviewing borrowers’ initial loss mitigation applications to determine what documents are missing. They must then tell borrowers what documents are missing, so that consumers can get a full evaluation of options they have available. One or more mortgage servicers offered a forbearance option to consumers to help them prevent foreclosure, but did not let the borrower know of their right to complete an application to be considered for other options. In addition, they did not exercise reasonable diligence in collecting information needed to complete the borrower’s application. Additionally, one or more servicers, through a vendor, also provided borrowers mortgage statements that failed to specifically list fees charged.

Today’s report shares information that companies can use to comply with federal consumer financial law. When CFPB examiners find problems, they alert the company and outline necessary remedies. These steps may include paying refunds or restitution, or taking actions to stop illegal practices and assure future compliance such as implementing new policies, or improving training or monitoring. When appropriate, the CFPB opens investigations for potential enforcement actions.”

For more information, see: today’s edition of Supervisory Highlights is available at: http://files.consumerfinance.gov/f/documents/201709_cfpb_Supervisory-Highlights_Issue-16.pdf

College Textbooks – Worth Their Weight in Gold?

By: Bob Bennett

Anyone who has either been in college recently or has had a child in college knows that textbooks are expensive. Some textbooks cost well over $200. Many students continue to purchase textbooks from their campus bookstore and then resell those books back to the university. The main reason is simply the convenience of purchasing the books near where you have the courses and not having to order them in advance. Unfortunately, campus bookstores often charge far more for books regardless of condition (New, Used, or Rental) than online retailers. Moreover, the campus bookstores also will pay far less for them at the end of the semester than other sources will.

What is the most cost effective way to purchase textbooks?

For any student looking to save money on their books, there are three simple steps. First, the student must determine the textbooks’ ISBN numbers, which can be used to find that textbook elsewhere. Many campus bookstores offer online book lists with ISBN numbers based on a student’s schedule. Second, the student needs to compare prices on a website, such as CheapTextBooks.org, or just search online retailers, such as Barnes & Noble or Amazon. Third, the student needs to order the books at least 2 weeks before classes begin.

Students always have the option of renting a textbook, rather than purchase the textbook. Websites, such as Amazon or CheapTextBooks.org, may have an option to rent the textbook for less than purchasing the book. This choice comes down to the preference of the student. If the student plans on making many notes and highlights in the book while studying, renters may charge the student. However, the student would not be responsible for reselling the book at the end of the year.

I, personally, recommend purchasing the textbook used around 3 weeks before courses start to get a lower price than right before classes start. Also, I recommend purchasing over renting textbooks, because a student may recover more money by reselling the books than students can initially save by renting.

What is the most cost effective way to resell textbooks?

Finals are over and students have 100lbs of textbooks that they never want to open again. Students have several options for reselling textbooks. Students may sell to the campus bookstore, a textbook company, or to another student. First, as mentioned above, reselling a book to the campus bookstore is not going to pay the most. Fortunately, some bookstores offer a minimum buyback price for those books which can only be purchased from the bookstore or are no longer used. For example, your marketing class requires you to pick up a book unique to your university. So you have to purchase the book from the campus bookstore. When classes are over, the marketing class decides to use a different book in the future. The student can go to the campus bookstore during their buyback and still sell the book back for $5.00 or some other minimum. Second, many textbook companies will set up on campuses at the end of the semester offering to buy textbooks for students. Most of their offers will be higher the campus bookstore’s offer. However, these tend to be picky about what books they purchase, and will not buy above a certain number of books. Third, the best way to recover your price of a textbook is to resell the book yourself to another student. Selling through an online retailer, such as Amazon, will cost a fee, but you will make far more money than reselling a book to a bookstore to act as a middleman.  However, this method requires much more effort than the first two. The student will have to ship the textbook to the other student and there is a chance the textbook will not sell.

This past semester I resold my books through Amazon and recovered most of my money. So, since I chose Amazon, I created a sellers account and then priced my books at the lowest price (or lowest price+shipping). The closer the school year comes, the more expensive books tend to get. Therefore, unlike when purchasing books, you should sell your books closer to classes beginning.