Category Archives: Uncategorized

CFPB Issues Reminder on Spanish-Language Disclosures

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The bureau has model disclosures, including the debt collection model validation notice, available to help regulated entities provide materials to Spanish-speaking consumers.

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The Consumer Financial Protection Bureau has issued an updated list of disclosures in Spanish, including the debt collection model validation notice.

“Financial service providers increasingly recognize the need for more services and customer-facing materials in languages other than English,” the CFPB reports in a blog post. “Over the years, we have encouraged financial institutions to provide fair and transparent access to products and services to people who are more comfortable using a language other than English.”

The CFPB’s Reg F final rule does not adopt mandatory Spanish-language or other foreign-language disclosures, although it notes that consumers with limited English proficiency may benefit from translated validation notices, ACA International previously reported. Debt collectors using the model validation notice should be aware that it includes the optional Spanish-language disclosures, which the debt collector may remove without sacrificing the safe-harbor provided by the rule.

The CFPB also provides “considerations and guidelines” that companies can use when working with consumers in languages other than English.

ACA knows many companies continue to update their policies and procedures to comply with Reg F, and recommends the ACA How: Reg F Implementation video series and Reg F Resource Center for ongoing compliance resources.

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.

U.S. consumer spending rises sharply, but inflation climbs almost as fast

Source: site


By Jeffry Bartash

Incomes are falling after inflation is factored in

The numbers: Consumer spending rose a sharp 1.1% in March, but the increase barely outpaced another surge in inflation as Americans confront the biggest price increases in 40 years.

Economists polled by The Wall Street Journal had forecast a 0.7% rise.

Although households spent more, they are also paying higher prices for gas, groceries and other staples

A key measure of inflation included in the report rose by 0.9% last month, government figures showed A big jump in gasoline prices was a chief reason why.

Even after factoring in inflation, consumer spending rose a smaller but still solid 0.2% last month. But households appeared to dig into their savings to meet their needs.

The savings rate fell to 6.2% from 6.8% and is now below pre-pandemic levels.

Americans may be drawing on their savings because incomes are no longer keeping up with inflation — they increased by 0.5% in March.

Wages have also risen sharply over the past year, but not as fast as the cost of living.

Big picture: The U.S. economy has downshifted into a lower gear after a rapid burst of growth last year. Yet consumers and businesses are still spending and investing at fairly healthy levels — even after taking high inflation into account.

The U.S. is likely to keep expanding at a steady clip, economists say, but rising interest rates and more turbulence overseas in Ukraine and China loom as ongoing threats. If inflation gets worse it could spell even more trouble.

The so-called PCE price index leaped 6.6% in the 12 months ended in March. And a better known measure of the cost of living, the consumer price index, has risen at an even faster 8.5% pace

Key details: Americans spent more in March on travel, hotels, restaurants and other services. That’s viewed as a good sign for the economy because consumers tend to cut back when they aren’t as confident.

They also spent more on gasoline because of higher prices, but that’s not a good thing for households. It gobbles up a bigger share of their budgets and limits what they can spend on discretionary goods and services.

Gas prices leveled off in April, however, to offer Americans some relief.

Looking ahead: “Consumer spending has been supported by strong job and wage growth,” said senior economist Sal Guatieri of BMO Capital Markets. “Don’t count the American consumer out yet.”

Market reaction: The Dow Jones Industrial Average and S&P 500 were set to open lower in Friday trades.

-Jeffry Bartash
(END) Dow Jones Newswires
04-29-22 0932ET
Copyright (c) 2022 Dow Jones & Company, Inc.

Nearly Half Of 18- To 34-Year-Olds Feel Like They Are ‘Drowning In Debt’

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

It’s easy to feel overwhelmed by debt. Unpaid student loans, an ever-increasing credit card balance with high interest, a monthly car payment: these are just a few reasons why young consumers feel like they carry a huge financial weight on their shoulders.

In fact, a survey conducted by Select and Dynata found that nearly half (44%) of 18- to 34-year-olds feel like they are “drowning in debt.” While it can sometimes seem difficult to see a light at the end of the tunnel, the best move these debt-burdened adults can make is to simply do something, argues Kristen Ricupero, a financial coach and consultant at Financial Fitness Coaching.

“It doesn’t need to be big to be effective,” Ricupero explains. “Money is more emotionally and behaviorally charged than it is about the numbers.”

Her point is that your debt payoff journey can start with little wins, such as applying a small savings you have to your credit card balance or cutting out costs to find extra money. This can help motivate you to take the next small step, and so on until your debt is a thing of the past.

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Your first step: Do something, even if it’s small

Many people feel like they can’t move forward and accomplish life goals because they have too much debt. But keep in mind that any small step in the right direction can help put you on track.

“Too often the problem of feeling saddled by debt isn’t because we don’t make enough money to eliminate it, but because we don’t know where to start or where our money is going,” Ricupero explains.

If you feel like you’re drowning in debt, she encourages you to start by simply looking at your bank account so you can get a clearer understanding of your past spending. Doing this can help you see your purchasing habits and reveal categories where you may be able to cut back your expenses. One of the goals is to find excess money that can go toward your debt.

Then, pick one debt to pay off

Most people who feel overwhelmed by debt are carrying balances on multiple accounts, whether they have more than one credit card, student loan debt or a big car loan. Sometimes, it can be hard to prioritize what to pay off first.

You need to make at least the minimum payments on all your other debts in order to keep your accounts current — and your credit score stable. After that, figure out the best debt repayment plan for you.

You can choose to pay off your smallest balance first (snowball method) or focus on the debt with the highest interest rate (avalanche method).

Once you figure out how much extra cash you have to put toward your debt, Ricupero recommends you just put it toward one balance. Spreading out that extra cash to pay off multiple balances at once is one of the “biggest mistakes” she sees that keeps people in debt longer.

“The impact on the principal is greatest when you put everything toward one debt,” Ricupero says. “You’ll make faster progress, causing you to want to continue on the path when you focus on one at a time.”

If you have credit card debt, consider this third step

If you carry a revolving credit card balance, you might want to focus on it first, given credit cards’ notoriously high interest rates. “Interest can quickly compound and grow each month,” says Leslie Tayne, a debt-relief attorney at Tayne Law Group.

Consider signing up for a balance transfer credit card. When you make a balance transfer, you move debt from one credit card to a new card that offers a low or 0% introductory interest rate period, which usually lasts six to 21 months. During this period, you won’t incur any additional interest charges, and you can benefit from your payments going entirely toward your principal balance.

The Citi® Diamond Preferred® Card has a long 0% APR on balance transfers for the first 21 months, which is nearly two years (after, 13.74% to 23.74% variable APR.) Keep in mind that all transfers must be completed in the first four months from account opening, and there is a balance transfer fee of $5 or 5% of the amount of the transfer, whichever is greater.

The Citi® Double Cash Card offers no interest for the first 18 months on balance transfers (after, 13.99% to 23.99% variable APR; balance transfers must be completed within four months of account opening.) An intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies. The Citi Double Cash Card also has a cash-back rewards program where cardholders earn 2% cash back: 1% on all eligible purchases and an additional 1% after they pay their credit card bill (you don’t earn rewards on any transferred balances).

Catch up on Select’s in-depth coverage of personal financetech and toolswellness and more, and follow us on FacebookInstagram and Twitter to stay up to date.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

FTC Reaches $500,000 Settlement with Payment Processor for Its Role in Alleged Student Loan Debt Relief Scheme

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On November 8, 2021 the Federal Trade Commission (FTC) announced that it entered into a stipulated order with a payment processor, resolving allegations that the payment processor violated Section 5 of the Federal Trade Commission Act (FTC Act) and the Telemarketing Sales Rule (TSR) ​​​by facilitating payments related to an unlawful student loan debt relief scheme.

In a complaint simultaneously filed in the United States District Court of the District of Columbia, the FTC alleged that the payment processor withdrew at least $31 million from consumers’ bank accounts on behalf a fraudulent student loan debt relief company.  As previously reported by Enforcement Watch, in July 2019 the FTC obtained a judgment against the debt relief company for its allegedly false claims that it would service and pay down consumers’ student loans, while instead diverting loan payments directly to the debt relief company.  ​In the current action, the FTC alleges the payment processor facilitated withdraws on behalf of debt relief company with knowledge, or while consciously avoiding knowledge, of the debt relief company’s unlawful conduct.

Under the stipulated order, the payment processor is enjoined from providing payment processing services for any debt relief company.  The order also contains a $27.5 million judgment that will remain suspended as long as the payment processor pays $500,000.

No TCPA Exception For Job Robocalls

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The Telephone Consumer Protection Act (“TCPA”) prohibits the use of an autodialer or prerecorded voice when placing certain calls to consumers’ cellphones without their prior express consent. Recently, the Ninth Circuit clarified that the TCPA prohibits companies from placing all such non-emergency calls to consumers’ cellphones, without prior express consent, and not just those placed for advertising or telemarketing reasons. In a case captioned Loyhayem v. Fraser Financial and Insurance Services, the Court held that the TCPA’s ban on using an autodialer or prerecorded voice applies to job robocalls as much as it does to sales calls.

How does the Loyhayem decision on job robocalls affect how courts interpret the TCPA?

Loyhayem received an unwanted “job recruitment” call to his cellphone from Fraser Financial. He sued Fraser Financial, alleging violations of the TCPA’s ban on using an autodialer or prerecorded voice when calling a consumer’s cellphone without prior express consent. Fraser Financial moved to dismiss, arguing that the TCPA bans applied only to advertising and telemarketing calls. The district court agreed and dismissed the case.

On appeal, the Ninth Circuit overturned the dismissal, holding that the lower court had misinterpreted the pertinent TCPA regulations. Specifically, the Court explained that section (a)(1) of the TCPA implementing regulations establishes that the TCPA’s autodialer and prerecorded voice bans apply to all non-emergency calls to cellphones where the consumer did not provide prior express consent. It went on to explain that section (a)(2) does not narrow that application of these TCPA prohibitions; rather, that provision creates a heightened consent standard for advertising and telemarketing calls to cellphones: prior express written consent. As such, the Court held that the TCPA does apply to Fraser Financial’s job robocalls, requiring it to obtain prior express written consent from the consumer before placing those calls.

Why does the Loyhayem decision matter to your business?

Businesses place calls (or send text messages) to consumers for a variety of reasons. Some businesses do not place any advertising or telemarketing calls; others only place advertising or telemarketing calls; and still others fall somewhere in between. What the Loyhayem decision makes clear is that a business must know the reason for which it places calls and must obtain the correct type of consent from consumers prior to placing calls.

This mixed reality can make for a confusing patchwork of which level of consent is required for placing certain calls or sending certain text messages. This begs the question: How will a court view calls that combine something like job recruitment with advertising to sign up for a job website? It seems that taking a more conservative approach is the safest option. Obtaining prior express written consent from the consumer before placing any call or sending any text message, regardless of content or purpose, is a good first step towards keeping your business TCPA compliant.

Hire experienced TCPA attorneys.

Are your calls or text messages advertisements? Are they more akin to job recruitment messages? Do you have the right type of consent? The Loyhayem decision once again underscores the ever-changing nature of the TCPA landscape. Keeping track of developments in the law, both subtle and substantial, can be a full-time job in and of itself. However, there is a solution that will help you avoid spending the precious resource of employee time on staying up to date with the TCPA: hire experienced TCPA attorneys.

The attorneys at Klein Moynihan Turco have years of experience in all aspects of telemarketing law. We can help your business update your telemarketing policies to remain TCPA compliant even as the law evolves on a near-daily basis. We can also provide experienced, knowledgeable representation in defending your business in TCPA litigation proceedings. In short, we worry about the TCPA so that your business does not have to.