Security & Fraud

CFPB Recoups $24.5M For Consumers Hit With Illegal Payment Collection

CFPB regulation

The Consumer Financial Protection Bureau said Thursday (June 30) that it has, through the first four months of 2016, recovered $24.5 million for consumers harmed by illegal auto finance and other types of loans.

The restitution, said the agency in a press release detailing the actions, was paid out to more than 257,000 consumers.  The products under scrutiny run the gamut from auto loans to mortgages to small dollar lending.

The latest recovery efforts and fulfillment came as part of the 12th edition of Supervisory Highlights. Key findings include deceptive practices in auto loans. In other cases there had been erroneous manual inputs of data, chiefly through amounts financed.

Business practices also could use improvement, as the CFPB stated that consumers were misled about debt repayment processes. The coding of certain data incorrectly, in fact, stymied debt collection efforts. In other cases, some collectors were able to illegally steer consumers to affiliate companies for tax and other services. The violations that were uncovered by the agency, according to the release, were due at least in part to poor staff training and the fact that less than stellar in-house collection efforts led to poor results.

In a statement that accompanied the release, CFPB Director Richard Cordray stated that “this report highlights our ongoing work to address violations of the law and slipshod practices that endanger consumers. The Bureau’s supervisors continue to perform more and better oversight of these financial markets, and their report gives the industry an opportunity to reflect on their practices before consumers are made to suffer harm.”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 AML/KYC Tracker Report provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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