Common Law - The FindLaw Consumer Protection Law Blog


Recently in Banking and Credit Category

The Consumer Financial Protection Bureau just issued the finalized wording on the new arbitration rule. In short, the new rule allows consumers that have agreed to an arbitration clause in an agreement for consumer financial services to avoid being forced into arbitration when filing, or joining, a class action lawsuit.

As the CFPB explains, the arbitration clauses in a consumer finance agreement, such as bank, credit card, or other provider of consumer financial services, usually served to make it a financially bad decision to file a low value arbitration claim.

The credit reporting companies Equifax and TransUnion were fined over $20 million as a result of an order issued by the Consumer Financial Protection Bureau (CFPB). The CFPB found that both credit reporting companies had deceived customers by tricking them into signing up for recurring payment subscription-like services, as well as lied about the cost of their services. Additionally, the CFPB found that the companies misled consumers into thinking that the reports and scores provided were more useful than they actually were by falsely claiming that they were the same reports considered by lenders.

Equifax also violated a provision of the Fair Credit Reporting Act (FCRA) which required them to provide a free credit report once every 12 months. The company did provide it, but required consumers to view their advertising prior to receiving the report, which is a violation of the FCRA (which would have allowed advertising after receiving the report).

Nobody's perfect. Not the companies that send us bills for nonexistent charges, and not the credit reporting agencies that put dings on our credit for not paying disputed bills. In fact, the Federal Trade Commission just settled a lawsuit against the Credit Protection Association (which sounds like a credit reporting company, but is actually a debt collection agency), claiming it violated the Fair Credit Reporting Act (FCRA).

The FCRA in intended to secure certain consumer rights to the accuracy, fairness, and privacy of their credit information. Here are your rights regarding your credit information.

The investigation into Wells Fargo's fraudulent sales tactics has finally reached a conclusion with the bank paying a fine of $185 million. Included in that fine is a record setting $100 million penalty issued by the Consumer Financial Protection Bureau (CFPB) against Wells Fargo.

In addition to the fines, Wells Fargo must pay back all fees charged to customers as a result of the fraudulent sales, an estimated additional $5 million. As a result of Thursday's settlement, Wells Fargo stock has started to drop as Wall Street analysts predict that customers will start leaving the bank due to the severe breach of trust.

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Security National Automotive Acceptance Company (SNAAC) today for unfair debt collection practices.

Here is what you need to know:

Check Your Credit Report!

When you buy a car, the dealer checks your credit report. When you apply for a home loan, the bank checks your credit report. When you apply for a job, even your employer may check your credit report.

Warning: $9.84 Credit Card Charge May Be Fraudulent

See a strange $9.84 charge on your credit card statement? It could be a fraudulent charge by criminals hoping you won't notice.

The Better Business Bureau (BBB) issued a fraud alert last week after several consumers complained about a very specific, yet unidentified charge of $9.84 on their credit card bills, reports CBS News. These fraudulent charges have been connected to a handful of crooks overseas.

Some of the charges are purportedly for "customer support," while others purport to be linked to various websites. So what should you do if the $9.84 credit card charge pops up on your statement?

Contact Your Credit Card Company

The good news is that credit card companies and the BBB are aware of the fraudulent charge. If you see a charge for $9.84 that you don't remember making, contact your credit card issuer immediately. In most cases, the credit card company will issue a refund. They'll also issue you a new credit card or card number.

Be sure to monitor all of your receipts and bills to make sure that no other fraudulent charges have been made. If you're seeing multiple strange transactions that you didn't authorize, contact your bank or credit card issuer as soon as possible to set up a fraud alert on your cards.

What Are Fraud Alerts?

Fraud alerts are used by your credit card company to monitor your transactions. The credit card company will keep track of the type of purchases you make and the amounts you usually spend. Then if there's a strange transaction that's out of the norm that occurs, the credit card company will alert you.

In some cases, you won't be able to continue using the affected credit card until you've verified the purchases with your credit card company. For example, if you live in Baltimore, but a $600 charge from a restaurant in Belize shows up on your account, then your credit card company will be alerted of that potential fraud and will contact you to verify the transaction.

So when calling your bank about the mysterious $9.84 credit card charge, be sure to ask them about their fraud alert policies and whether your card is covered.

Related Resources:

Signing Up for Credit Card Fraud Alerts Can Pay Off

You know that email from your credit card company, inviting you to sign up for their credit card fraud alerts?

Well, in most cases this isn't spam, or a scam. And if you haven't already signed up, you should definitely think about it.

A credit card fraud alert can save you major headaches down the road by letting you know of suspicious transactions almost immediately after they occur, anywhere around the world. This prevents that unpleasant surprise when you open your monthly credit card statement and see a bunch of transactions you did not make.

Here are some things to know about credit card fraud alerts:

  • What are they? Your credit card company monitors all of your transactions. They know where you typically purchase goods and in what amounts. So if they start getting strange transactions (like a $300 charge at a gas station in Argentina, when you live in Omaha), the company may alert you and verify whether you made the purchase.

  • How do I sign up? Every credit card company has a different process for signing up. Typically, if you log in to your account online, you can find a link there. Or you can always call your bank or credit card company and have them sign you up.

  • What happens if fraud is detected? If the credit card company notices fraudulent activity quickly enough, it will typically suspend your account, remove the fraudulent charges, and issue you a new card and account number. So while it may be a hassle to change all your automatic payment setups, you are saved the hassle of arguing the fraudulent charges on your next bill.

  • What future steps should I take? If your credit card information was stolen, you may want to check to see if your other accounts have been compromised too. In general, if you place a fraud alert on your credit report, you will be entitled to a free look at your report, reports Fox News. You will also want to closely monitor your accounts in the next month or two to ensure that everything is secure.

Related Resources:

The Best Credit Cards to Ruin Your Credit

Having a credit card is an important way to build up your credit score but Consumer Reports Money Lab has compiled a list of the best credit cards out there for consumers.

There are a lot of variables to consider when choosing a credit card including rewards money or points, travel deals, low interest, and ability to make balance transfers. With all the choices out there is can be hard to even keep track of your options.

The list includes a variety of card types and banks that offer credit cards. While the perks are great, even better is knowing the cards listed are less likely to take advantage of consumers.

When rating the best cards, Consumer Reports took into account what they were used for.

The best cards with cash rewards were American Express Blue Cash Preferred, Fidelity Rewards American Express, and Capital One Cash Rewards. All of them provide some percentage back on a different variety of purchases. The best one for you would depend on what you buy most often.

When it comes to travel, your card can help you out with free miles and priority perks. The best cards for that? Chase Sapphire Preferred, American Express Blue Sky Preferred, and Capital One Venture Rewards came out on top although all three have a yearly fee.

If you're struggling with debt on one card or need to be able to quickly more money around, what you need is a good deal on balance transfers. Luckily the list covered that as well.

Check out the Chase Slate, Citi Diamond Preferred Card, and PenFed Promise Visa which have the lowest interest for the longest amount of time and which waive balance transfer fees for a while.

Credit cards haven't necessarily gotten more popular in the last few years but they've certainly become safer for consumers.

Better consumer protection laws ensure that your interest rate won't change without notice and that it won't go up continually. Not sure your bank is playing by the rules? Tell the FindLaw Answers Forum about your concerns and we'll get you a real answer quickly.

Whichever card you pick, keep in mind that credit cards are a double edged sword. Spend wisely and, hopefully, within your means to get the most out of your plastic.

Related Resources:

Annoyed at Credit Card Minimum Charges? Too Bad

Do you love going to that cute little diner for lunch but absolutely hate having to pay cash? There are drawbacks to carrying a lot of bills. Maybe you don't want to get mugged. Or, maybe you're just busy and can't make pit stops at the ATM before going out for a meal or a snack.

You might wonder if it's legal for stores to impose a credit card minimum charge before they'll swipe your plastic. You're not alone.

It seems some consumers think that it's against the law. Except, those consumers are wrong. It's perfectly legal to impose a minimum charge. Well, most of the time at least.

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. The legislation paved the way for new rules that affect cardholders nationwide.

It specifically allows merchants to set minimum credit card charges. But the cap can only be set at $10 or less.

Before the Dodd-Frank Act, such minimum charges typically violated service agreements with Visa and MasterCard. Meaning, merchants weren't allowed to set those limits. But the Act made it so that payment card networks like Visa can no longer have these types of regulations.

This means that most of the time, if you see a store posting a credit card minimum of $10 or less, that's perfectly legal. But if you see a store advertising a minimum purchase of $20, they are violating the law.

It certainly can be annoying. Some people genuinely dislike walking around with a wad of cash in their back pocket. But at the same time, if you want to enjoy a meal or buy something a small store, chances are they might not accept your card if you're only purchasing a few small items.

For consumers, this now means you might need to trudge around with some green in your wallet.

That is, unless you only plan on frequenting establishments that have no credit card minimum charges. But keep in mind: these rules don't apply to debit cards.

Related Resources: