Financial institutions

report highlights major violations of consumer rights by financial institutions | Lawyer Andy

Failures in credit reports and unwanted bank fees top the list of harms suffered by consumers in the financial market

The Consumer Financial Protection Bureau (CFPB) has published a report on the main harms caused to consumers in the financial market. Topping the list were errors in credit reports and unwanted charges from banks and other financial institutions.

The CFPB noted that its oversight of these institutions identifies harms and translates into action measures to protect consumers.

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

The CFPB pointed to specific results to highlight the importance of the oversight and review process.

CFPB reviewers found that one or more of the national consumer reporting companies had not reported to the CFPB the outcome of their reviews of complaints about inaccuracies in consumer credit reports. In response to these findings, consumer reporting companies have changed their policies, procedures and practices to be more transparent in handling these complaints.

Specifically, the CFPB pointed to the harm caused by the misreporting of medical debt.

“Inaccurate information about medical debt has plagued this space, and consumers have often been pressured into making payments on debt they don’t actually owe.”

Another area of ​​concern is illegal junk fees charged in the mortgage space.

CFPB examiners found that mortgage services violated federal law by charging significant pay-by-phone fees — even though consumers were not informed of these pay-by-phone penalties. In calls with borrowers, customer service representatives did not disclose the existence or cost of the telephone payment fee, but borrowers still had to pay a fee. As a result of these findings, the CFPB required managers to reimburse all borrowers who paid over-the-phone payment charges where such charges were not properly disclosed.

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