Tag: The Zamparo Law Group

The CFPB seeks new rules for payday lenders, protecting consumers from unfair lending

Nobody likes payday loan shops, unless they are the one who owns it and gets rich off the people they prey upon. Many years ago when people borrowed money from the mob, they got hurt if they didn’t pay. Today, some folks under water with payday loan shops might prefer physical injury over the incredible fees and charges they pay for the convenience of a short-term loan. The Consumer Financial Protection Bureau (CFPB) focuses its latest in a series of efforts to give relief to consumers who suffer from the after effects of payday loans. The proposed rulemaking follows a 2014 CFPB study of payday lending practices which highlighted the frequency in which borrowers we able to extend their repayments, repeatedly, and owed more money in fees than the principal amount they originally borrowed. Meanwhile, payday loan industry representatives speak out against the CFPB and its proposed new rules.

Is there a significant trap in the payday loan process? The CFPB reports suggests so.

The 2014 payday study, CFPB Data Point: Payday Lending, conducted by the CFPB Office of Research, notes that more than half of payday loans are due within two weeks of the issuing date, with an annual interest rate of approximately 390 percent; most of the consumers repeatedly extend their repayments, incurring more debt and owing more fees than they borrowed. In 80 percent of the auto title loans, where borrowers secure the loans by putting their vehicles on line, the borrowers have to extend the loans because they cannot afford to pay them. Half of all the loans are renewed and the borrowers are in loans more than “ten loans long.” Key findings of the report also state that the majority of monthly payday loan borrowers are government benefit recipients.

The people who can least afford high interests rates are already facing financial difficulties that lead them to payday loans. These borrowers may not have the credit rating or access to affordable loans that others may enjoy.

The CFPB assesses data regarding payday loans to better highlight the realities of higher risk lending. The opening language of the study states that the CFPB is focused on “providing an evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse.”

The CFPB proposed rules set forth objectives in counteracting predatory payday lending practices.

There are two main loan categories considered in the proposed rules, loans shorter than 45 days and loans longer than 45 days, that have more than a 39 percent all-in annual percentage rate, and are either secured by the borrower’s vehicle or the payments are automatically deducted from their account or income. For both these loan categories, the new rules would require the lender to independently determine whether the borrower can afford to repay the loan.

Abusive and unfair short term and payday loan practices would also be identified under the proposed new rules. In addition to identifying bad practices, the rules would restrict lenders from loaning money to borrowers who already have outstanding loans. Additional restrictions would prevent lenders from making multiple payment attempts, trying to draw the payment from the borrower’s account, after two consecutive payments that declined when processed, and this saves already unable-to-pay borrowers from additional fees and charges from the payday lender.

Lenders say the rules would cripple their industry and block the access to money that borrowers need, often in emergencies.

The negative economic impact of the proposed new rules on payday lenders could be significant. Recent news articles noted, ““Thousands of lenders, especially small businesses, will be forced to shutter their doors, lay off employees, and leave communities that already have too few options for financial services,” said Dennis Shaul, the chief executive of the Community Financial Services Association of America, a trade group for payday lenders. According to the group’s website, “More than 19 million American households count a payday loan among their choice of short-term credit products.”[i]

With an average fee of $15 on every $100 borrowed, payday lenders have significant fees at stake and as lender experts suggest, the new CFPB rules run some payday lenders out of business. Those with financial interests in the outcome of the proposed new rules may be keeping a close eye on the presidential election, as the Democratic presidential candidates generally support stricter consumer finance rules and restrictions.

The Zamparo Law Group follows several rulemaking propositions and developments with the CFPB and will frequently share news that affects consumers, in particular, the development of rules for better practices in the short term and payday lending industry.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] New York Times, Payday Loans’ Debt Spiral to Be Curtailed, By Stacy Cowley, Jun 2, 2016.

Image Source Payday Loan Giant May Go to Prison for Racketeering http://bit.ly/1UkqCV8

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Fighting identity theft and making identity theft victims whole

White-collar crime is not victimless crime; victims of identity theft suffer significant losses and hardships. Advances in technology and Internet commerce are helping safeguard our private information but thieves and hackers are learning advanced methods to steal identities. Damage suffered by identity theft victims can be extensive and lead to long-term problems. Unfortunately, most people will not know their identity is stolen until after damage is done. The identify thief may have obtained a drivers license, insurance, bank accounts, credit cards and bought a new car, all in your name. What happens when the identity thief does not pay the bills that are in your name and affect your credit? What happens with the identity thief is arrested for DUI with their license in your name? What happens when a police officer comes to your house and arrests you for a crime you did not commit?

We say, “It won’t happen to me, I’m safe and cautious with my personal information.”

Imagine you never use credit or debit cards online or over the phone; you shred all mail with your personal information and pick up your mail the minute the post office delivers it to your home. Identity thieves will get your information if they want it. Whether they hack into systems, where your private information is kept or they buy illegal lists of identities and private information on the black market, there is little anyone can do to stop a thief. Another target for identity theft may be a company, such as an insurance provider, that failed to adequately secure your information from thieves. On a local scale, the family law firm down the street may have client files, full of private information, and an unscrupulous night cleaning crew who hit the identity theft jackpot. In many cases, the thieves simply sell your identity on the black market, to domestic and foreign buyers.

Identity theft can be a disaster for victims, left with a damaged life and reputation.

Cancelling and ordering new credit cards is one thing. Proving you did not commit a hit and run collision causing death is quite another. An identity thief could feasibly obtain all necessary information to register a stolen vehicle in your name and even insure it with your driver’s license number. If the thief causes a collision while pretending to be you, they can simply abandon the assumed identity, move along to the next victim, and become them. Along the way, your credit could be ruined and the work it takes to restore your credit rating is extensive. Tax identity theft is also on the rise. Thieves use tax filing websites to file phony returns in your name, have tax refunds deposited into phony accounts they open in your name, and when you file your actual tax return the IRS rejects your return, and audits everything tied to your name and social security number.

There are state and federal criminal and civil penalties for thieves, and remedies for victims.

In Illinois, a person commits identity theft, “uses any personal identifying information or personal identification document of another person to fraudulently obtain credit, money, goods, services, or other property.[i]” Illinois law classifies identity theft as a felony with increasing severity and penalties as the value of the theft of goods or services increases:

  1. Identity theft of credit, money, goods, services, or other property not exceeding $300 in value is a Class 4 felony.
  2. Identity theft of credit, money, goods, services, or other property exceeding $300 and not exceeding $2,000 in value is a Class 3 felony.
  3. Identity theft of credit, money, goods, services, or other property exceeding $2,000 and not exceeding $10,000 in value is a Class 2 felony.
  4. Identity theft of credit, money, goods, services, or other property exceeding $10,000 and not exceeding $100,000 in value is a Class 1 felony.

Under federal law, possession and transfer of private information to create or use a false identity is punishable by fines and prison terms of not more than five to 30 years.[ii]

Individual victims of identity theft may have a cause of action and file a lawsuit against the identity thieves, if they catch them and can collect damages if the thief is caught and illegally obtained assets are available for sale and recovery by a victim. A much more likely scenario is a lawsuit against a company who was negligent with your information and the identity theft occurred as a result of that negligence. The Fair Credit Reporting Act (FCRA) is a source of federal law providing remedies for consumer victims of identity theft.[iii] Victims can recover money for violations of the FCRA when your information was mishandled, and recovery can include actual damages, statutory damages and attorney’s fees.

To learn more about the FCRA and its enforcement, read our blog article, The Fair Credit Reporting Act, responsibilities and remedies for consumer reporting violations.

Cleaning up the damage: What else we can do to remedy your negative effects

If you are an identity theft victim, the attorneys at the Zamparo Law Group can assist and advise you about the process of contacting all the contacts on your accounts with banks, credit agencies, driver’s license facilities, the Social Security office, and with making proper reports of identity theft crime to the proper state and federal agencies. The paperwork involved can be extensive and there may be a specific order in the process of restoring your proper identity and canceling your bogus version of you.

The Zamparo Law Group can help consumers fight identity theft and companies who fail to safeguard your private information. We fight and win in court, individually and in class action lawsuits.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

 

[i] 720 ILCS 5/16-30

[ii] 18 U.S. Code § 1028

[iii] Fair Credit Reporting Act, 15 U.S.C. § 1681

Image Source: Identity theft complaints on the rise in Wisconsin http://bit.ly/1L7ksKd

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Image Source: Consumers Union website https://consumersunion.org/end-robocalls/

Campaign to stop robocalls: Consumers Union has a plan to fight illegal robocalls

To date, more than 600,000 consumers from coast to coast signed the online petition on the Consumers Union website, sharing their stories, and fighting to end robocalls. Despite our efforts to sign up on the National Do Not Call Registry and pay extra fees to our phone companies to restrict access to our phone numbers, we all receive annoying and unwanted robocalls from telemarketing companies telling us we won a free trip to an exotic location, to others offering payday loans, always interrupting us from anything we would rather be doing than receiving these calls. Consumers Union is a nationwide entity with offices located in New York, Texas, Washington D.C., and California. The company’s mission is, “Unleashing the world-changing power of consumers.[i]

The law on robocalls:

  1. Without express written consent, many telemarketing calls are illegal;
  2. Political and nonprofit groups need consent to call mobile phone numbers;
  3. It is however, legal for political and nonprofits to call landline phone numbers;
  4. Emergency and health-related robocalls are legal to both landline and mobile numbers.

Robocalls are a big problem and disturb consumers who do all they can to prevent unwanted calls.

Robocalls are a compelling problem, causing significant irritation to consumers, including the consumer rights lawyers who also receive these annoying calls. It is one thing to come home to a digital answering machine or voicemail full off robocalls from telemarketers, but it is another to receive those calls on cell phones, especially when busy, driving, or doing anything else where being disturbed is a problem. Many consumers elect not to give out their cell phone number, and others give to everyone and use it for business. In either scenario, most of us program saved numbers and contacts in our phones and we can be distracted by numbers we do not recognize.

New technology allows the robocallers to mask and hide their source location, so we cannot track them down. Similar technologies are used to assign area codes to phone numbers (spoof numbers), and it might appear to be a local call coming in, when it may actually be a computer calling you from overseas in an unknown location. If you think you can call the number back and have a word with them, good luck. Being annoyed is one thing, being scammed is another. According to the Consumer’s Union, “telephone scammers target vulnerable consumers, including the elderly. Consumers lost some $350 million to scams in 2011, according to the latest available FTC data.[ii]

Consumers Union calls on the phone companies to reduce the number of robocalls.

The technology exists but it not always used where it could be effective to the benefit of consumers. In Canada there is a service called Primus Telemarketing Guard, which identifies and intercepts telemarketing phone calls, similar to the SPAM filters we use to protect us from online viruses and emails posing security risks. Why can’t U.S. landline providers offer a similar technology? There is a service offered by Internet-based phone providers, called Nomorobo, however the phone companies do not directly offer the service to customers. Cell phone users can download and purchase apps that block telemarketing calls, but they are not offered directly by the service providers.

Consumers Union, collecting petitioners from all over the U.S., to present to phone companies, telling them that consumers want action and services and technologies directly from providers, to help combat robocalls and consumer fraud. Consumers Union states, “The FCC has authorized phone companies to use blocking technologies. Now we’re harnessing your outrage to demand the phone companies offer free, effective call-blocking solutions. And we’ll fight every effort to expand the use of robocalls to cell phones.”

Spreading the word among other consumers is helpful, in drawing awareness to problems and solutions to help protect consumers from unwanted communication, telemarketing and fraud schemes.

When you sign the online petition on the Consumers Union website, you receive an email encouraging you to share the campaign with more people, as Consumers Union states, “As individuals – filing complaints with the FTC, or trying to block unwanted calls on our own – we can be ignored. Together, we can be powerful.[iii]

DISCLAIMER: The Zamparo Law Group has no affiliation with Consumers Union, and this article is not an endorsement or makes any claim to the propriety of the company or its owners or affiliates. Having said that, the Consumers Union and their petition has reached news desks and has achieved considerable attention. The Zamparo Law Group, advocating for consumer rights, reports and shares consumer protection news.

The Zamparo Law Group can help consumers fight against robocallers and win in court, individually and in class action lawsuits.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] ConsumersUnion.org, About, Mission

[ii] ConsumersUnion.org, End Robocalls, Problems

[iii] Consumers Union autoreply email in response to signing petition, subject line: Can you share EndRobocalls.org with your network?

Image Source: Consumers Union website https://consumersunion.org/end-robocalls/

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