Consumer Alert: CFPB report outlines bad business practices that harm consumers

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This consumer alert is all about the ways bad businesses con consumers out of their cash.  The Consumer Financial Protection Bureau, CFPB, just released a report on the illegal practices it’s investigating across the country. And the 35-page report is a veritable consumer instruction manual of what to look out for.

The first topic the CFPB tackles is buying a car.  It indicates you need to read the contract carefully before driving off in the car.  Here are some of the findings.

  • It found that some dealers charged more than the car was worth by listing expensive options the car didn’t have. And when lenders discovered the discrepancy, dealers didn’t fix it.
  • It found lenders ran deceptive ads with attractive loan offers that didn’t apply to the cars pictured.
  • Lenders canceled auto-billing without enough notice so they could charge late fees.
  • Lenders failed to tell consumers that they had to manually pay the last payment in order to close the loan. Then often years later would bill them for months of late fees, even though the consumer had auto-paid the last loan payment.

The CFPB found lots of abuses around debt collection.  Here are some of them:

  • It found that some collectors harassed consumers over medical debt from work-related injuries.
  • It found that collectors would promise to reverse any interest accrued if they paid the loan in full but failed to do so.
  • Collectors failed to provide the information for consumers to validate and dispute a debt as required by law.

The CFPB also found abuses in mortgage lending

  • It found that some lenders discriminated against women and minorities in granting pricing exceptions based on competitive offers.
  • It found discrimination in lending restrictions in the way it handled an applicant’s criminal records.
  • And it also found discrimination against applicants who reported income from public assistance.

If you believe you’ve been a victim of discrimination in mortgage lending, you should file a complaint with Housing and Urban Development as well as the New York Attorney General’s office.

if you believe your rights have been violated by debt collectors, that’s a complaint for the consumer division of the New York attorney general’s office.

And if you believe a auto dealer or lender violated the law, complain to the state attorney general’s office and the state DMV.

And the CFPB supervises all these businesses, so of course you should file a complaint with it as well.