The world’s largest credit card lender has been ordered by a U.S. government watchdog agency to repay $700 million to its customers, plus $70 million in fines, due to illegal practices.
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Specifically, the bank marketed numerous add-on products for its credit cards in which it promised to offer credit monitoring, defer payments or forgive debts under certain circumstances such as job loss or financial hardship. The services were offered under such names as “Credit Protector,” “Payment Safeguard” and “AccountCare.”

Benefit of these programs were greatly overstated. Beyond that, the bank allegedly misrepresented fees, in some cases indicating the services were free or free for a period of time, when in fact, they were not.

In the case of “credit monitoring services,” there was no one monitoring changes made at the everyday transaction level, even though that’s what people believed they were paying for. Sales and marketing firms employed “leading questions” and also took ambiguous answers from consumers to mean confirmation they wanted the services.
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Sen. Elizabeth Warren has firmly stated she will not run for President in the 2016 general election. However, she is still vying to keep her U.S. Senate seat, and she is continuing her staunch advocacy for consumer protections.
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Among these efforts is to preserve the agency she helped start – the Consumer Financial Protection Bureau, which numerous Republican party candidates have vowed to dismantle. She has put forth a petition, asking the public to help protect the agency from attempts to weaken or even kill it.

In her call to action, she notes government agencies offer protections of all kinds. They ensure toys aren’t made with lead paint, that medicine isn’t tainted with poisons and that cars aren’t manufactured without functioning brakes. There is even an agency that protects against exploding toasters.
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Consumer advocates have been warning for years that bank debt collection tactics by third-party collection agencies are unfair, deceptive and abusive.
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Now, the Consumer Financial Protection Bureau (CFPB) and the attorneys general of 47 states and Washington, D.C., have filed an enforcement action against one of the largest banks in the country for allegedly unfair credit card collection tactics.

The action outlines the systematic approach the bank reportedly took in collecting debts that were unverified, inaccurate, discharged in bankruptcy or were not collectible for other reasons.

Our Miami consumer protection attorneys understand the list of alleged transgressions is long.

Among allegations made:

The bank used documents that were illegally-sworn in obtaining court judgments against some 500,000 borrowers whose debts were not verified. In those cases, people may not have had the resources to fight back, and ended up getting slapped with a default judgment – owing a debt they should never have had to pay to start. The bank issued sworn statements promising the debts were valid and accurate, but in fact, the company failed on a consistent basis to review those records and make sure those statements were truthful.
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In a scathing article detailing dealings of former U.S. Attorney General Eric Holder, Rolling Stone’s Matt Taibbi writes about Holder’s lack of bank prosecutions in the wake of the housing market bust and how he may now be personally benefiting from that.
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Taibbi calls out Holder as “Double Agent,” parading “brilliantly” as the U.S. Attorney General when, in fact, he was “the best defense lawyer Wall Street ever had.”

To back this assertion, Taibbi notes that prior to him taking on the position of attorney general, Holder was a top attorney for the firm Covington & Burlington, which is known to be one of the best white-collar defense firms in the nation. In fact, it’s a go-to for those in hot water on Wall Street.
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The latest report from the Federal Reserve Bank of New York indicates a quarter of all borrowers whose loans have come due are severely delinquent.students1

That tells us the percentage of Americans who have fallen further behind on student loan debts has spiked over the last 12 months, even though other measures indicate an economy that is steadily getting better.

As of June 30th, the number of outstanding student loan debts that were at least three months late stood at nearly 12 percent. That’s up from 10.9 percent one year earlier. Continue reading

Popular country singer Tim McGraw announced that on each of the remaining stops of his tour this year, he plans to give away a mortgage-free home to a U.S. veteran of the armed forces. flag1.jpg

The singer’s web site indicates he and Operation Homefront have gifted more than 100 homes to veterans and their families. By the close of his national tour in September, he said an additional 30 homes will have been given away.

McGraw cited the sacrifices so many U.S. veterans and their families have made, and noted the indelible mark made on his heart by those he has already aided. In his previous tour, he gave away 25 mortgage-free homes to wounded veterans or those whose families were in need.
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The CEO of JPMorgan Chase & Co. has joined the billionaire club, according to the most recent report by Bloomberg News.
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Jamie Dimon, the assembler of Citigroup Inc. and now head of JPMorgan, has a net worth of $1.1 billion, derived primarily from a $485 million stake in the bank where he has been a chief executive officer since 2005. His investment portfolio was seeded by the profits he incurred from sales of Citigroup stock.

While many media outlets have been heralding his “unconventional” path to billionaire-hood by noting he didn’t take the track of most billionaires (who start businesses or head investment funds), it’s worth noting Dimon’s success was built on the backs of consumers, homeowners and taxpayers. Neither he nor his company suffered any significant losses as a result of their role in creating the financial crisis that nearly led America into another Great Depression.
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It’s been eight years since the global financial crisis sent American homeowners into a tailspin. Many were fighting tooth-and-nail to keep their homes, and millions lost that fight. For a significant number, it was an uphill battle as they coped with job losses and stagnant wages on top of the plummeting value of their homes and toxic mortgages. tighteneddollarroll.jpg

And now, private equity firms and hedge funds have found a way to exploit the holes left in these communities. Wall Street is snapping up distressed properties from Freddie Mac, Fannie Mae and HUD at an alarming rate, according to a new report from housingwire.com.

In fact, researchers discovered that some of the very same corporations responsible for the housing market crash are now buying and selling those vacant houses and delinquent mortgages created by the fallout.

Collectively, Wall Street has raised more than $20 billion to purchase notes on more than 200,000 U.S. homes.

These companies are seeing a new market for single-family rental units. Those same people who lost their homes to foreclosure have been forced to rent because they don’t have the credit to buy. Even when they do, they are edged out of the market by large firms that plunk down cash offers before families even have a chance.
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Retirement is supposed to be about enjoying those “Golden Years.” Those who have spent a lifetime working, raising families and contributing to society are supposed to be able to kick back and enjoy the fruits of all their labor – perhaps with travel or gardening or simply spending more time with loved ones. handscompassion.jpg

Of course, some financial perils may be expected, particularly on a fixed income. There is always the concern of outliving the savings or paying for long-term care or even the possibility of being lured in by some scam. But of all of these, straining to make monthly mortgage payments shouldn’t be one.

And yet, it is. Following the worst economic downturn since the Great Depression, an increasing number of retirees and elderly Americans are struggling to pay housing costs. People in their 70s, 80s and beyond are forced to dip into retirement savings just to make sure they keep a roof over their head. The problem is more glaring in Florida, where nearly 19 percent of the nearly 20 million people in this state are over the age of 65. The national average is 14 percent. That figure is expected to grow exponentially in the coming years as the Baby Boomer generation ages.

In trying to keep pace with their mortgage payments and avoid a Miami foreclosure, these individuals often work until very deep in retirement. In some cases, they are more likely to seek assistance from the government or local charities and even their children.
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One might have thought we had seen the worst there was in terms of bankers’ greed at the height of the housing bubble. Banks were recklessly packaging toxic mortgages to unsuspecting investors, saddling homeowners with unrealistic mortgages and generally cutting whatever regulatory corners they had to in order to make a buck.
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Since then, banks have reluctantly conceded some degree of contrition in the form of sweetheart deals extended by the U.S. Department of Justice and a smattering of state attorneys general. Yes, these deals cost banks billions, but they were structured in such a way that no real consequences were suffered – certainly not by individual bankers.

It’s that “too big to jail” mindset that seems to be tainting whatever remorse bankers may have had. A recently-released study conducted by the University of Notre Dame’s Mendoza College of Business suggests to us it’s not going to get better. In fact, it’s getting worse.
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