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Misrepresentation and Deception: Government Enforcement Agencies Ready to Litigate | Alston & Bird

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A&B ABstract: The COVID-19 pandemic appears to be drafting the attention to consumer protection regulators to products that were active after the 2008 recession.

In the midst of the global pandemic, with unemployment rates surging to unprecedented levels, consumer protection regulators appear focused on areas where cash-strapped consumers may turn, such as credit repair, payday loans, and mortgage and other debt relief.

Notably, these are the same areas that consumer protection regulators were active in during the post-2008 recession. For example, on May 22, 2020, the Consumer Financial Protection Bureau (CFPB) and Commonwealth of Massachusetts filed a lawsuit alleging that defendants misrepresented that they can offer solutions that will or likely will substantially increase consumers’ credit scores despite not achieving those results.

In addition, on May 19, 2020, the Federal Trade Commission (FTC) was granted a temporary restraining order and asset freeze against a payday lending operation alleging that it deceptively overcharged consumers millions of dollars and withdrew money repeatedly from consumers’ bank accounts without their permission.

These lawsuits are just two of many efforts that government enforcement agencies have undertaken recently to combat fraud and protect consumers. Businesses should be aware that agencies are actively pursuing litigation as a means to remedy potential consumer harm.

CFPB and Commonwealth of Massachusetts v. Commonwealth Equity Group d/b/a Key Credit Repair and Nikitas Tsoukales

The CFPB and Massachusetts allege that Commonwealth Equity Group d/b/a Key Credit Repair (KCR) and its president, Nikitas Tsoukales violated §§ 1031 and 1036 of the Consumer Financial Protection Act (CFPA), the Telemarketing Sales Rule’s (TSR) prohibition on deceptive and abusive telemarketing acts or practices, and the Massachusetts Credit Services Organization Law. 16 C.F.R. §§ 310.3 & 310.4; M.G.L. c. 93, §§ 68A-E (MA-CSO). KCR markets to consumers a service for supposedly removing harmful information from the consumer’s credit history, credit record, or credit scores or ratings. Since 2011, KCR has collected at least $23 million in fees from tens of thousands of consumers through its telemarketing services.

The Complaint

According to the complaint, consumers pay KCR a “first work fee” upon enrolling with the company and then charges an additional monthly fee. KCR allegedly collects these fees from consumers before performing any service. KCR markets to consumers that “on average it can raise a person’s credit score by 90 points in 90 days” and that clients start “seeing removals of bad credit history in 45 days.” However, “consumers did not see credit scores with an average 90-point increase in 90 days,” nor did they see “removals on their credit reports within 45 days” of enrolling with KCR in many instances.

The Complaint alleges that this scheme constitutes an abusive telemarking act because it is an improper advance fee to remove derogatory information from, or improve, a person’s credit history, credit record, or credit rating.

Further, the Complaint alleges that KCR’s conduct violates the CFPA because KCR allegedly misrepresented the material aspects of its services. Therefore, the CFPB and Massachusetts are seeking injunctive and monetary relief as well as civil monetary penalties.

FTC v. Lead Express, Inc., et al.

On May 11, 2020, the FTC filed an ex parte emergency motion for a temporary restraining order and sought other relief including an asset freeze against 11 payday lenders operating as a common enterprise through websites and telemarketing. The FTC alleged that the entities were engaging in the deceptive, unfair, and unlawful marketing tactics in violation of the FTC Act, the TSR, the Truth in Lending Act (TILA) , and the Electronic Fund Transfer Act (EFTA).

The Complaint

According to the FTC’s complaint, despite claiming that consumers’ loans would be repaid after a fixed number of payments, the defendants typically initiated repeated finance-charge-only withdrawals without crediting the withdrawals to the consumers’ principal balances. Thus, consumers allegedly paid significantly more than what they were told they would pay. These misrepresentations violate Section 5(a) of the FTC Act (15 U.S.C. § 45(a)) as well as the TSR (16 C.F.R. § 310.3(a)(2)(iii)). Additionally, the defendants allegedly made recurring withdrawals from consumers’ bank accounts without proper authorization which violates Section 907(a) of EFTA (15 U.S.C. § 1693e(a)) and illegally used remotely created checks, which under the TSR (16 C.F.R. § 310.4(a)(9)) are a prohibited form of payment in telemarketing.

The complaint also alleges that the defendants often failed to make required credit transaction disclosures in violation of Section 121 and 128 of TILA (15 U.S.C. §§ 1631 and 1638), and Sections 1026.17 and 1026.18 of Regulation Z (12 C.F.R. §§ 1026.17 and 1026.18).

The Court Order

On May 22, 2020, the District Court of Nevada granted an emergency motion for temporary restraining order against all eleven defendants. The order restrains the defendants from: (1) engaging in prohibited business activities in connection with advertising, marketing, promoting, or offering any loan or extension of credit, (2) releasing or using customer information, and (3) destroying, erasing falsifying documents relating to the business. Furthermore, the defendants’ assets are frozen pending the show-cause hearing or further court order which will take place via videoconferencing on June 2, 2020.

Takeaway

With these two cases, government enforcement agencies support their statements that as the global pandemic continues, they are watching for deceptive or fraudulent practices in the financial services industry. Businesses should remain vigilant in their compliance with existing and new laws and regulations.

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Nick Proffer Fighting Credit Bureaus the Right Way – Press Release

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WEST HOLLYWOOD, CA / ACCESSWIRE / October 22, 2020 / Good credit is a must-have for anyone who desires financial freedom, and Nick Proffer is working overtime to ensure that everyone gets a perfect credit score. Through his company, ClearMe Credit LLC, Nick Proffer offers credit restoration services by taking on credit bureaus and collection companies. Many people with bad credit have bad credit because of errors from credit bureaus and collection companies. By tackling the problem from the root, Nick Proffer can help his clients boost their credit scores and put them in a good position to get approved for loans and mortgages.

Nick Proffer runs two online businesses, and both businesses were built to solve problems. As a 28-year old entrepreneur, financial freedom is one of the things he is passionate about as well as helping people get the opportunity to travel through his free travel tips. He also has an affiliate partnership with a well-known internet entrepreneur, Tai Lopez. He helps upcoming entrepreneurs start their online business and set up their online marketing, e-commerce, and affiliate marketers.

His motivation to start a credit repair company comes from when he was in a similar situation himself. He got his first credit card, and through reckless spending, his credit score got ruined. He found himself in a terrible situation to the point that he was homeless for a while alongside his girlfriend at the time. This spurred him to start researching ways to fix his credit situation so he could get approved for an apartment. He attended a mastermind event called “Tribe of Buyers,” where he helped a friend remove negative items from his credit report. He was able to boost his friend’s score, and then he started receiving calls from other people who wanted to remove negative items from their reports. The workload became so much that he had to buy some software tools and outsourced the service fulfillment to a third-party company. He has since been able to travel all over the world utilizing credit rewards.

He turned credit restoration into a full-time job, and he kept learning from his mentors. He is working on establishing a full digital team that will be handling all the work and operate his company to the point that it can make $30,000 or more monthly. His ultimate goal is to inspire everyone to take control of their finances, leverage credit to build wealth and travel for free.

He’s also planning to start a YouTube channel where he can amplify his message and give free tips that people can make use of. Nick Proffer is a huge proponent of freedom both financially and generally in life. Nick Proffer learned everything on his own, applied the tips he learned, made mistakes, spent years practicing them till he became an expert. He also spent thousands of dollars on masterminds, courses, and mentorship programs.

Everyone and every business should be in a position to build and fix their credit so they can get access to financing and ultimately live a life of freedom. With Nick Proffer, the dream only just got closer to becoming a reality.

Learn more on his Instagram page.

Company: ClearMe Credit LLC

Email: 3xploremedia@gmail.com

Phone Number: 7196715032

Website: www.tailopez.com/smma/freeyourincome

SOURCE: ClearMe Credit LLC

View source version on accesswire.com:
https://www.accesswire.com/611901/Nick-Proffer-Fighting-Credit-Bureaus-the-Right-Way



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What To Do When You’re Rejected For A Mobile Phone Contract

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By Harriet Meyer

Many mobile phone contracts don’t require you to pay a penny upfront – even for the latest smartphone. Instead, you commit to regular payments over, say, 18 or 24 months.

But, just like other credit applications, such as for a mortgage or loan, you could be rejected for a mobile phone contract if you have a bad credit rating. 

Here, we consider why you might find yourself in this frustrating position and – most importantly – what you can do about it. 

Why was my contract application rejected?

It’s usually the first question on everyone’s lips when they have been turned down for credit. And the answer is that, essentially, the provider has checked your credit report and determined that you’re a high-risk customer who may fail to pay off your debt. 

Providers use the information on your credit file to assess your history of managing money. So, if you’re rejected, this could be for one of the following reasons, or a combination of these:

  • A history of late or missed bill payments, causing providers to see you as financially stretched, or someone who struggles to manage money
  • Holding an account in joint names with someone who has a poor credit history
  • You’re not registered on the electoral roll, so a provider may not be able to verify your identity and address
  • County Court Judgements (CCJs) against your name, or Individual Voluntary Agreements (IVAs) on your credit record, indicating that you could face financial trouble
  • Lack of credit history – you need some history of making regular payments to build up your credit history, and show that you can manage regular debt payments.

 How can I check my credit score?

 If you genuinely have no idea why you have been rejected, it’s worth checking your credit report. This way, you can find out what the provider was looking at when it decided not to offer you a contract. 

 You can do this at one of the three main credit reference agencies – Experian, Equifax, and TransUnion (formerly Callcredit). Experian offers a free service that enables you to sign up and check your credit score for a general overview. ClearScore is another free service that uses Equifax data. 

 The way credit scores are calculated varies between the different agencies, but they give providers an idea of how reliable you may be when you’re signing up for a contract. 

 What can I do if I’m rejected?

 Remember that any financial contract is a commitment – so if you’re rejected, consider if it’s sensible to be signing up at all, particularly if you’re battling with other bills.

But whatever you do, avoid applying for a string of mobile phone contracts in the hope of being accepted. Each one will involve a credit search and leave a mark on your file, which could impact on your ability to get future credit, such as a mortgage. 

The good news is there may be other options available which means you can still get a new phone or upgrade.

Find out more about your credit report with our guide.

Pay a deposit. The network provider may get around you having a poor credit history by asking you to pay an upfront deposit for the contract to offset any risk that you fail to make payments. 

The amount of deposit will vary depending on your credit status, the package and the provider. You typically receive the deposit back once you’ve made several months’ worth of payments – typically ranging from three to 12 months.

 Choose a SIM-only tariff. If you’re willing to buy a handset upfront, or already have an old phone you can use, you could opt for a pay monthly SIM-only deal. These are cheaper than full-blown contracts as you’re not receiving and paying for a phone as part of the deal. 

You will still have a credit check, but you’ve got a greater chance of being accepted as payments are typically lower for these contracts, so there’s less risk for the provider. 

Also, paying your monthly SIM-only bill on time will help show that you can sensibly manage a contract, which may boost your credit score over time.

 Opt for a pay-as-you-go deal. If you want a phone for occasional use, then a pay-as-you-go deal might suit. Once you’ve bought a phone upfront, you pay for credit as and when needed. You won’t be tied into a contract, and will not be subject to a credit check. 

Get a ‘bad credit’ contract. There are specialist companies which supply phone contracts to people with bad credit. You can do an online search to get an idea of what’s available, or speak to an adviser in a mobile phone store. 

However, you may not be able to get the phone model you want, and your monthly payments may be substantially higher than for a standard contract. This is not an option to be taken lightly.

Check out family deals. You may want to ask a family member with a good credit rating to sign up to the contract. That’s if you’re opting for a family deal, when several lines may be connected to a single contract – but only one person pays the bill and undergoes a credit check. 

Get a guarantor. Alternatively, you could ask someone to essentially guarantee your contract by co-signing it. But, of course, they must be comfortable being liable for any missed payments, thereby offsetting the risk for the network provider in case you default. Provided you make payments on time, this option can also gradually improve your credit rating. 

Improve your credit score. To improve your chances of being accepted for a mobile phone contract or any other form of credit in the future, you can take time to improve your credit score by, for example:

  • Registering on the electoral roll with your local authority
  • Ensuring you don’t fall behind with monthly repayments on any bills (set up direct debits to pay them automatically)
  • Sticking within your credit limit on any cards that you use and clearing the balances every month
  • Check your credit report (see above) and if you find any errors, ask the agency to amend them with a ‘Notice of Correction’

 Finally, if you’re struggling with debt, seek help. Charities such as StepChange and National Debtline offer free and independent advice that is tailored to your circumstances.

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Upstart vs. Sofi: Which Personal Loan Is Right for You?

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Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.

If you’re looking for a personal loan, you’ll likely come across Upstart and SoFi. Both companies offer flexible loans for a variety of purposes, but there are some differences to keep in mind when deciding between them.

Here’s a comparison of Upstart vs. SoFi to help you choose. Both Upstart and SoFi are Credible partners.

  upstart personal loans sofi personal loans
Fixed rates 8.13% – 35.99% APR4 5.99% – 18.83% APR
Loan amount $1,000 to $50,0005 $5,000 to $100,000
Loan terms 3 to 5 years4 2 to 7 years
Min. credit score 600

(in most states)
Does not disclose
Time to fund As soon as 1 – 3 business days6 3 business days
Origination fee 0% to 8% of loan amount None
Cosigners permitted No Yes
Income $12,000 Check with lender
Residency Available in all states except IA and WV Available in all states except MS
Perks
  • Options available for lower credit scores
  • Could be easier to qualify for
  • Higher borrowing limits
  • Protections if you lose your job
All APRs reflect autopay and loyalty discounts where available | Read more about Rates and Terms

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Upstart personal loans

Founded by ex-Googlers, Upstart’s artificial intelligence platform fully automates 58% of its personal loans. It has originated $6.9 billion in loans and notably offers loans to those with less-than-perfect credit.

Upstart offers personal loans for a variety of uses — including debt consolidation loans, wedding loans, and more. You can borrow as little as $1,000 or as much as $50,000 and can expect fast loan funding.

Learn More: Personal Loan vs. Credit Card

Pros

  • Lower minimum credit score: Upstart offers personal loans to borrowers with credit scores as low as 600. If you’re looking for bad credit personal loans or fair credit personal loans, Upstart could be a good choice.
  • No prepayment penalties: You don’t have to worry about any fees if you pay off your loan early.
  • Fast funding: If your application is accepted, you’ll likely get your money within just a few business days. In fact, Upstart says that 99% of applicants get their money after just one business day.
  • Low minimum borrowing amount: You can borrow as little as $1,000 with Upstart, which could be helpful if you only need a small loan.

Cons

  • Lower maximum loan amount: With Upstart, you can only borrow up to $50,000. This could make it harder to fund larger debt consolidations or bigger home improvements.
  • High origination fees: With Upstart, you might pay an origination fee of up to 8% of the loan amount.
  • No options for visa holders: Upstart doesn’t offer personal loans for visa holders — you must have a Social Security number to borrow with this lender.

Check out our Upstart personal loans review to learn more.

SoFi personal loans

SoFi offers a variety of financial products, including credit card consolidation loans and other types of personal loans. It also provides several perks to its members, such as unemployment protection, career coaching, and networking events.

With SoFi, you can borrow anywhere from $5,000 to $100,000. Plus, SoFi personal loans come with no fees.

Learn More: How Personal Loans Impact Your Credit Score

Pros

  • Large loan amounts: You can borrow up to $100,000 in unsecured funds with SoFi. This can be useful for home improvement loans, wedding loans, and other large borrowing needs.
  • Discounts available: If you sign up for autopay, you can get a discount on your SoFi personal loan. You might also qualify for a discount if you’re using other SoFi products.
  • Member benefits and perks: As a SoFi member, you’ll have access to additional resources, including financial planning, career coaching, and networking events. SoFi also provides unemployment protection in case you lose your job.
  • Options for visa holders: If you’re a visa holder without a Social Security number, you might still qualify for a SoFi personal loan.

Cons

  • Higher credit score requirements: You’ll need good to excellent credit to qualify for a personal loan through SoFi. If you have poor or fair credit, you’ll likely need to consider other lenders.
  • Higher minimum loan requirement: You’ll need to take out at least a $5,000 personal loan to borrow through SoFi. If you need a smaller loan, SoFi might not be the right choice for you.
  • Longer funding time: SoFi personal loans typically take a few business days to fund. If you need a faster loan funding time, you might need to look elsewhere.

See our SoFi personal loans review for more details.

Choosing a lender for a personal loan

A personal loan could help you cover large or unexpected purchases. Before you borrow, it’s a good idea to shop around and consider as many lenders as possible to find a loan that fits your needs. Credible makes this easy — you can compare multiple lenders, like Upstart and SoFi, in two minutes.

Ready to find your personal loan?
Credible makes it easy to find the right loan for you.

  • Free to use, no hidden fees
  • One simple form, easy to fill out and your info is protected
  • More options, pick the loan option that best fits your personal needs
  • Here for you. Our team is here to help you reach your financial goals

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Keep Reading: Where to Get a $10,000 Personal Loan

About the author

Miranda Marquit

Miranda Marquit

Miranda Marquit is a mortgage, investing, and business authority and a contributor to Credible. Her work has appeared on NPR, Marketwatch, FOX Business, The Hill, U.S. News & World Report, Forbes, and more.

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