CFPB Finds Failures in Debt Servicing, Collection, and Prepaid and Deposit Account Management

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  • The CFPB found alleged violations of the Fair Debt Collection Practices Act (FDCPA) and other consumer protection laws in its examination of debt collectors, loan servicers, and financial institutions managing deposit, prepaid, and medical credit card accounts, as published in its Supervisory Highlights.
  • The CFPB’s report, based on examinations conducted between April 1, 2023, and December 31, 2023, found alleged misconduct by certain student and auto loan servicers, and prepaid and deposit account managers. These violations included inadequate notifications, unlawful late fees, excessive barriers to assistance, failing to notify consumers about funds transfers or account freezes, providing inaccurate information to borrowers about forms needed to qualify for loan programs, and imposing fees to access basic account information.
  • Additionally, the CFPB’s report alleged that some debt collectors violated the FDCPA and other consumer protection laws by failing to disclose or misrepresenting consumers’ rights, failing to provide timely debt validation notices to consumers after initial communication, and engaging in harassing, oppressive, or abusive conduct. The CFPB continues to monitor how healthcare providers offer medical payment products, such as medical credit cards.
  • We have recently covered the FTC’s report examining “junk fees” charged by mortgage servicers.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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