FTC Staff Provide Annual Report to CFPB on 2021 Financial Law Activities

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Federal Trade Commission staff provided its annual report to the Consumer Financial Protection Bureau on its enforcement and related activities in 2021 regarding the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act ( EFTA). ).

The report highlights the FTC’s enforcement actions related to laws and their implementing regulations, including in the areas of automotive purchasing and financing, payday loans, credit repair, and lending. debt relief, and electronic funds transfers:

  • Car purchase and financing: Report notes FTC settlement with Richard Berry, owner and manager of four car dealerships, in FTC action against Tate’s Auto for falsifying consumer information on finance applications and misrepresenting financial terms in advertisements . The settlement provides for a payment of $450,000 to the FTC for consumer relief and prohibits Berry from misrepresenting costs or other material facts related to the financing of the vehicle and violating TILA and CLA. Report also notes Commission’s administrative notice and order against Traffic Jam Events for sending consumers misleading letters about COVID-19 benefits and potential earnings, and violating TILA, including citing monthly payments for consumers to purchase vehicles that have not provided or hid in key financing terms in the fine print required by law. The order bars defendants from the auto industry, prohibits misrepresentation regarding government financial assistance and requires compliance with TILA.
  • Payday loan: The report sheds light on the FTC’s settlement against Harvest Moon Financial for charging consumers millions of dollars, misleading them about the terms of their loans, and failing to disclose required loans. According to the report, the owners and operators of the settlement entities are prohibited from extending loans or extending credits, almost all debts held by the company will be deemed paid in full and the companies concerned are being liquidated. , the proceeds to be used to provide redress to consumers harmed by the business.
  • Credit Repair and Debt Relief: The report discusses the FTC’s settlement with the operators of a student debt relief program (Student Advocates Team), accused of falsely promising consumers that the company could reduce or eliminate student loan balances , illegally charging upfront fees for credit repair services and enrolling consumers. for high interest rate loans to pay fees without making required loan disclosures in violation of TILA. The order prohibits the defendants from providing debt relief services and collecting other payments from consumers who purchased the services, and requires the defendants to return the money to be used to repay consumers.

The report also highlights the agency’s military task force, which includes a cross section of FTC representatives and focuses on various initiatives to help military consumers. The report further outlines the FTC’s consumer and business education efforts on truth in lending and electronic funds transfer issues, including updates on purchasing and financing vehicles and products. and add-on services that can cost consumers thousands of additional dollars, and information on how debit and prepaid cards differ from other cards and important considerations about each type of card.

The FTC also provided a copy of the report to the Federal Reserve Board.

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