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Law Offices of Robert W. Murphy, Esq. - Consumer Rights Lawyer and Consumer Fraud Attorney in Fort Lauderdale, FL 954.763.8660

Class Action Lawsuit Against Mitsubishi For Defective Commercial trucks

The Law Office of Robert W. Murphy together with co-counsel recently filed a class action in New Jersey federal court alleging that Mitsubishi Fuso Trucks of America, Inc. (“Mitsubishi”) installed defective emissions control systems in diesel trucks. The lawsuit filed on behalf of a Florida seafood supplier alleges that the so-called “Blue-Tech”® engines installed in commercial trucks were defective. According to Mitsubishi, Blue Tech® is an emissions control technology that utilizes selective catalytic reduction to reduce nitrogen oxide emissions for clean, efficient operation.”  Mitsubishi marketed the BlueTec® engines as a better alternative to the systems installed by other truck engine manufacturers to comply with new EPA regulations.

  According the Complaint in the lawsuit:

           As designed, adapted and installed on the diesel-powered, medium duty trucks sold by Defendant, however, BlueTec® technology has rendered the trucks defective.  Among other things, the technology has resulted in the repeated failures of the Diesel Exhaust Fluid (“DEF”) handler, the fuel injectors, the crank case pressure sensors and breather, the catalytic converter muffler, the DEF tank internal sensor, the engine protection system, the EEC programming, as well as a lack of power, and numerous other problems that have caused the trucks to stall or not restart.  In short, all medium duty trucks with the BlueTec® technology sold by Defendant have manifested a model-wide defect causing operational failures about which purchasers have continuously complained throughout the country.

The Complaint alleges that over 5,000 trucks with the technology were sold.
The Complaint seeks monetary and equitable relief under inter alia the New Jersey Consumer Fraud Act.

Additional information is available at: http://topclassactions.com/lawsuit-settlements/lawsuit-news/41247-mitsubishi-fuso-hit-class-action-lawsuit-bluetec-engine-defect/

Robert W. Murphy Consumer Fraud Lawyer Fort Lauderdale FL

Consumer Fraud Lawyer Fort Lauderdale, FL

Robert W. Murphy Consumer Fraud Lawyer Fort Lauderdale, FL.

 

 

Consumer Rights Attorney in Fort Lauderdale Interviewed On Forced Arbitration by Money Talks News.

Robert Murphy Consumer Rights Attorney in Fort Lauderdale, Florida

Experts in the video say, forced arbitration is used by companies to prevent them from being sued by you. They do this by adding language into their contracts – often in very tiny print – that requires the signer to submit to an arbitration process of their own choice if you have any complaints about their service.

How does this work? When you sign up for student loans or pay to put a loved one in a nursing home or even agree to a certain job position, there could be a section hidden in the small print. For example, when you buy Comcast services, you are given a twenty plus page contract.

What can you do? Besides urging your own Congress members, not much. An organization called Fair Arbitration Now suggests reading the fine print of your contracts and trying one of three tactics:

  • If the contract has an opt-out clause, use it.
  • If the contract doesn’t have an opt-out clause, ask to opt out anyway (although your odds aren’t good).
  • Take your business to a competitor (although it may be hard to find one that doesn’t also use forced arbitration).

http://www.moneytalksnews.com/2013/07/08/forced-arbitration-when-your-rights-get-the-runaround

CFPB takes action to stop Florida company from engaging in illegal debt-relief practice

Unfair Debt Collection Attorney Fort Lauderdale, Florida

The Bureau alleges company’s conduct is abusive and deceptive

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today filed a complaintUnfair Debt Collection Lawyer Fort Lauderdale in a federal district court against a Florida debt-relief company that misled consumers across the country and charged illegal fees for their services. The Bureau plans to submit a proposed consent order that, if approved by the court, would halt the company’s operation, prevent the company and owner from providing debt-relief services in the future, and impose a $15,000 civil penalty fine. Fair Debt Collection Lawyer Murphy helps victims of unlawful debt collection practices.
“Today we are taking action to halt a debt-relief company we believe has been preying on financially vulnerable consumers,” said CFPB Director Richard Cordray. “Consumers struggling to pay off a debt are among the most at risk and deserve better. We will continue to crack down on this type of harmful behavior.”
A Bureau investigation found that American Debt Settlement Solutions, Inc. (ADSS) and its owner Michael DiPanni routinely charged consumers illegal upfront fees for debt-relief services that rarely, if ever, materialized. In total, the CFPB believes that in the course of their illegal conduct, the defendants charged approximately $500,000 in fees to hundreds of consumers in multiple states. The proposed consent order would award a judgment against the company of approximately $500,000, which would be suspended based on the company’s inability to pay.
The Bureau alleges that ADSS and DiPanni violated the Federal Trade Commission’s Telemarketing Sales Rule (TSR) and the Dodd-Frank Act by charging the illegal up-front fees and making misrepresentations to consumers about their debt-relief services. ADSS deceived consumers by making numerous misrepresentations to lure in consumers who were deeply in debt and in dire circumstances. The upfront fees and the company’s failure to provide the promised services often caused consumers to fall further into debt.
In addition, the Bureau believes that the defendants engaged in abusive acts or practices by signing up and charging fees to vulnerable consumers who the defendants knew had inadequate incomes to complete the debt-relief programs in which they were enrolled. More specifically, ADSS:
  • Misled consumers by falsely promising them it would begin to settle their debts within three to six months when, in reality, services rarely materialized;
  • Enrolled consumers despite knowing that their income level made it highly unlikely that they could complete the debt-relief programs;
  • Collected upfront “enrollment” fees from consumers who ADSS knew could not afford the monthly payments required by these debt-relief programs, causing the consumers to spend their last savings on fees for services from which they ultimately would not benefit; and
  • Failed to settle these consumers’ debts within the promised time, forcing many consumers to drop out of the program and forfeit their “enrollment” fees without having received any debt-relief services.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 prohibits abusive debt collection practices in the consumer-financial marketplace. If someone – a person or a company – takes unreasonable advantage of a consumer in certain ways or interferes with a consumer’s ability to understand a term or condition of a financial product or service, the Bureau may take enforcement action. Today’s action is the first time the CFPB is enforcing this prohibition on abusive acts or practices.
This action is part of the CFPB’s comprehensive effort to prevent consumer harm in the debt-relief industry. The Bureau is working to ensure federal consumer financial laws are being followed at every stage of the process and is focusing not only on debt-relief companies, but also on those who facilitate their unlawful conduct and who may also violate federal consumer financial laws.
Consumer rights lawyer Robert Murphy has been litigating against abusive business practices for nearly two decades. Our office has successfully brought claims against debt settlement and credit repair agencies that charge hundreds and often thousands of dollars with little or no benefit to the consumer.

Abusive debt collection Practices

CONSUMER FINANCIAL PROTECTION BUREAU TAKES ACTION TO STOP FLORIDA COMPANY FROM ENGAGING IN ILLEGAL DEBT-RELIEF PRACTICE

Bureau Alleges Company’s Conduct is Abusive and Deceptive
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today filed a complaint in a federal district court against a Florida debt-relief company that misled consumers across the country and charged illegal fees for their services. The Bureau plans to submit a proposed consent order that, if approved by the court, would halt the company’s operation, prevent the company and owner from providing debt-relief services in the future, and impose a $15,000 civil penalty fine.
Unfair debt collection attorney ft lauderdaleToday we are taking action to halt a debt-relief company we believe has been preying on financially vulnerable consumers,” said CFPB Director Richard Cordray. “Consumers struggling to pay off a debt are among the most at risk and deserve better. We will continue to crack down on this type of harmful behavior.” Murphy Law is an Unfair Debt Collection Attorney Fort Lauderdale, Florida.
A Bureau investigation found that American Debt Settlement Solutions, Inc. (ADSS) and its owner Michael DiPanni routinely charged consumers illegal upfront fees for debt-relief services that rarely, if ever, materialized. In total, the CFPB believes that in the course of their illegal conduct, the defendants charged approximately $500,000 in fees to hundreds of consumers in multiple states. The proposed consent order would award a judgment against the company of approximately $500,000, which would be suspended based on the company’s inability to pay.
The Bureau alleges that ADSS and DiPanni violated the Federal Trade Commission’s Telemarketing Sales Rule (TSR) and the Dodd-Frank Act by charging the illegal up-front fees and making misrepresentations to consumers about their debt-relief services. ADSS deceived consumers by making numerous misrepresentations to lure in consumers who were deeply in debt and in dire circumstances. The upfront fees and the company’s failure to provide the promised services often caused consumers to fall further into debt. Fair Debt Collection Lawyer Murphy
In addition, the Bureau believes that the defendants engaged in abusive acts or practices by signing up and charging fees to vulnerable consumers who the defendants knew had inadequate incomes to complete the debt-relief programs in which they were enrolled. More specifically, ADSS:
·         Misled consumers by falsely promising them it would begin to settle their debts within three to six months when, in reality, services rarely materialized;
·         Enrolled consumers despite knowing that their income level made it highly unlikely that they could complete the debt-relief programs;
·         Collected upfront “enrollment” fees from consumers who ADSS knew could not afford the monthly payments required by these debt-relief programs, causing the consumers to spend their last savings on fees for services from which they ultimately would not benefit; and
·         Failed to settle these consumers’ debts within the promised time, forcing many consumers to drop out of the program and forfeit their “enrollment” fees without having received any debt-relief services.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 prohibits abusive acts or practices in the consumer-financial marketplace. If someone – a person or a company – takes unreasonable advantage of a consumer in certain ways or interferes with a consumer’s ability to understand a term or condition of a financial product or service, the Bureau may take enforcement action. Today’s action is the first time the CFPB is enforcing this prohibition on abusive acts or practices.

Fair Debt Collection Attorney Florida

The Law Office of Robert W. Murphy has a  long history of advocacy in preventing and remedying consumer harm in the debt-relief industry.  During the last several years, the State of Florida has become a haven for such business enterprises- which often provide no benefit to consumers  despite the payment of extraordinary fees. Unfortunately, many such businesses operate without a “bricks and mortar” presence- in other words, the enterprise does not have a physical location or identifiable assets or even employees. Rather, the enterprise may utilize  remote call centers, leased employees and third-party money transmitters such as Western Union to avoid being easily shut down. While our law office may not be able to obtain compensation for most consumers injured by such businesses, we can offer guidance on how to solicit the help of governmental agencies, such as the CFPB and the Florida Attorney General’s office.

U.S. Defendants Who Allegedly Abetted Fake Debt Collector Calls from India Agree to Settle FTC Charges

Callers Often Posed as Law Enforcement Authorities; Defendants will Be Permanently Barred from Debt Collection, Surrender Ill-Gotten Gains

Abusive Debt Collectors

A California man who worked with bogus debt collectors in India has agreed to settle FTC charges that he and his companies deceived and threatened consumers into paying debts that were not owed or that the defendants were not authorized to collect. As part of the settlement, the defendants will turn over nearly all of their assets, amounting to an estimated $170,000, which will be used for consumer refunds. The case against Villa Park, California-based Varang K. Thaker, American Credit Crunchers, LLC, and Ebeeze, LLC, is part of the FTC’s continuing crackdown on fake debt collectors.  The settlement order bans the defendants from debt collection, and prohibits them from misrepresenting:

  • that they are affiliated with the government or a non-profit group,
  • any terms or conditions for buying any good or service,
  • any aspects of the good or service, and
  • their refund policy.
The order includes a $5.4 million judgment, which is equivalent to the full amount of injury. The monetary judgment will be partially suspended due to the defendants’ inability to pay, but if it is determined that the financial information they gave the FTC was untruthful, the remaining amount of the judgment will become due. The FTC Complaint alleged that the callers who worked with the defendants would contact consumers who previously had received or inquired about online payday loans. Often pretending to be law enforcement or other government authorities, the callers would falsely threaten arrest  on a supposedly delinquent payday loan. The FTC alleged that information submitted by consumers who had applied online for these loans found its way into the hands of the defendants, who used it to convince consumers that they owed them money. Saying they represented the local police department, the “Federal Department of Crime and Prevention,” or simply a “federal investigator,” the callers allegedly typically demanded more than $300, and sometimes as much as $2,000. At other times, the callers claimed to be filing a large lawsuit against the consumer, or threatened to have the consumer fired from his or her job, according to the FTC. But the consumers did not owe money to defendants – either the payday loan debts did not exist or the defendants had no authority to collect them because they were owed to someone else, the FTC alleged. Consumers received millions of collection calls from India, and in a two-year period the operation took in more than $5 million from victims, according to the FTC. During that time, consumers filed more than 4,000 complaints with the FTC and state attorneys general about fraudulent debt collection calls. The FTC charged the defendants with violating the FTC Act and the Fair Debt Collection Practices Act. According to the complaint, they:
  • falsely told consumers they were delinquent on a loan, they must pay it, and the defendants had the authority to collect it.
  • falsely claimed to be law enforcement authorities or attorneys.
  • made false threats against consumers who refused to pay the alleged debts, including threats of arrest or imprisonment.
  • harassed and threatened consumers so they often paid the alleged debts out of fear of being arrested or sued.
The Commission vote approving proposed final order and permanent injunction was 4-0-1, with Commissioner Maureen K. Ohlhausen not participating. The FTC filed the proposed final order in the U.S. District Court for the Northern District of Illinois, and it was entered by the Court on October 10, 2012.
NOTE: This final order is for settlement purposes only and does not constitute an admission by the defendant that the law has been violated. Final orders have the force of law when approved and signed by the District Court judge. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.
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  The Law Firm of Robert W. Murphy aggressively litigates claims against abusive debt collectors. If you have been subjected to harassment or abuse by a debt collector, you may have the ability to bring a claim for statutory and actual damages under federal and state law. Our office typically handles such caes on a “results obtained” or contin- meaning, that our fees are paid by the debt collector.

Fake Debt Collectors

CONSUMER FINANCIAL PROTECTION BUREAU DEBUTS SPANISH LANGUAGE WEBSITE

Consumer Fraud Attorney MurphyCFPB en Español Features Mobile Capability and Answers to Consumers’ Common Financial Questions

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) launched its Spanish language website. The website, which is optimized for mobile use, provides access to essential consumer resources such as how to submit a consumer complaint and answers to consumers’ frequently asked questions.

“The CFPB is dedicated to being as accessible as possible for the greatest number of consumers,” said CFPB Director Richard Cordray. “CFPB en Español can be a trusted resource for Spanish-speaking consumers looking for clear information on consumer rights attorney and services.”

The CFPB’s mission is to make the consumer financial markets work for all Americans and to empower consumers to make informed, responsible financial decisions. Latinos were particularly hard hit by the recent financial crisis and are often targeted for financial scams. Latinos are also more likely to be unbanked, underbanked, or use alternative products like money transfers and payday loans. According to Census data, 37 million people speak primarily Spanish at home, and of those, 45 percent do not speak English very well. It is critical that those consumers have a place to turn for understandable, unbiased consumer financial information.

More than 75 percent of Latinos access the internet from a mobile device, at least occasionally, according to the September 2012 Pew Hispanic Center National Survey of Latinos. CFPB en Español uses responsive design to optimize content for use on both mobile devices and computers in order to better serve all consumers. CFPB en Español currently features 250 Ask CFPB questions with more to come. Ask CFPB is an online, interactive database of consumers’ most frequently asked questions and answers. The answers are written in easy-to-read, plain language by CFPB subject-matter experts and are an objective resource for consumers. The answers cover common financial situations, from paying for college and owning a home to dealing with debt and sending money to another country.

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Consumer Rights Attorney

Attorney Murphy applauds the CFPB in its efforts to expand consumer information to all Americans- including the underserved Spanish speaking community.  Our law office has aggressively  litigated cases against businesses which fail to provide non-English language disclosures when mandated by specific laws or trade regulations. As an example, in one past federal lawsuit, our firm represented a car buyer against an auto dealer that failed to provide Spanish-language material in either the buyer’s guide or the car window sticker, when the transaction was made in Spanish,  for violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA).

 

Attorney General Announces Suit Against JPMorgan Chase for Fraudulent and Unlawful Debt-Collection Practices

Fraudulent and Unlawful Debt-Collection Practices 

Unfair Debt Collection PracticesAttorney General Kamala D. Harris of California Announces Suit Against JPMorgan Chase for Fraudulent and Unlawful Debt-Collection Practices. LOS ANGELES — Attorney General Kamala D. Harris today filed an enforcement action against JPMorgan Chase & Co. (Chase) alleging that the bank engaged in fraudulent and unlawful debt-collection practices against tens of thousands of Californians. The suit alleges that Chase engaged in widespread, illegal robo-signing, among other unlawful practices, to commit debt-collection abuse against approximately 100,000 California credit card borrowers over at least a three-year period.  “Chase abused the judicial process and engaged in serious misconduct against California credit card borrowers,” Attorney General Harris said. “ This enforcement action seeks to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers. My office will demand a permanent halt to these practices and redress for borrowers who have been harmed.”
 From January 2008 through April 2011, Chase filed thousands of debt collection lawsuits every month in the State of California. On one day alone, Chase filed 469 such lawsuits in California. The Attorney General’s complaint against Chase alleges that, to maintain this pace, Chase employed unlawful practices as
shortcuts to obtain judgments against California consumers with speed and ease that could not have been possible if Chase had adhered to the minimum
substantive and procedural protections required by law. “At nearly every stage of the collection process, Defendants cut corners in the name of speed, cost savings, and their own convenience, providing only the thinnest veneer of legitimacy to their lawsuits,” the complaint states.

Chase used California’s judicial system as a mill to obtain default judgments, the suit alleges, using illegal tactics to flood the state’s court system in
order to secure default judgments and garnish wages from Californians.

The alleged misconduct includes:

• Robo-signing: Chase illegally robo-signed various litigation filings, including sworn documents, declarations, and verified complaints, without
reviewing the relevant files or bank records or even reading the documents before signing.
• “Sewer Service”: Chase failed to properly serve notice of debt collection lawsuits against consumers while claiming they had been served as required by
law. This practice, known as “sewer service,” deprives the consumer of any notice of the lawsuit.
• Filing Irregularities: Chase haphazardly assembled its official legal filings. For example, Chase failed to redact consumers’ personal information in
attachments to filings, potentially exposing them to identity theft and in violation of California law. In addition, when asking courts to enter default
judgments against consumers, Chase consistently swore under penalty of perjury that the consumers were not on active military duty. In fact, Chase never
checked.  This deprived service members of important legal protections to which they are entitled while on active duty.

Unlawful Debt-Collection Practices

The Law Ofice of Robert W. Murphy routinely litigates claims against creditors and debt collectors who do do not give consumers their due process and statutory rights under federal and state law.  Consumers who believe they have been victims of this misconduct or similar misconduct in the State of Florida should contact our law firm.

Attorney Murphy fight against forced arbitration – Legal Right to Day in Court

Sen. Franken Leads Charge to Protect Legal Right to Day in Court
Arbitration Fairness AttorneySenator Reintroduces Legislation to Restore Consumers, Workers, and Small Businesses’ Right to Seek Justice through Courts
WASHINGTON, D.C. [05/07/13]—Today, U.S. Sen. Al Franken (D-Minn.) reintroduced legislation that would restore consumers, workers, and small businesses’ right to seek justice through the courts. The Arbitration Fairness Act would eliminate forced arbitration clauses in employment, consumer, civil rights and antitrust cases, and would protect the right of consumers, workers, and small businesses to have their case heard in court.
“Mandatory arbitration can be a huge disadvantage to consumers, workers, and small businesses, often limiting their ability to have any meaningful legal recourse when they are wronged,” said Sen. Franken. “I’ve reintroduced the Arbitration Fairness Act to ensure that people and small businesses maintain their right to their day in court when they are cheated.”
“Forced arbitration clauses undermine our indelible Constitutional right to take our disputes to court,” said Rep. Hank Johnson (D-Ga.), who introduced the companion bill in the House. “They benefit powerful business interests at the expense of American consumers and workers. These bills are designed to defend our rights and to re-empower consumers.”
In 1925, Congress passed the Federal Arbitration Act (FAA). The legislative history of the FAA makes clear that Congress intended to target commercial arbitration agreements between two companies of generally comparable bargaining power. However over the years, the Supreme Court has slowly broadened the reach of the FAA, ignoring evidence that the FAA was never intended to apply to consumer or employment disputes, or to supersede all other federal laws protecting consumers, workers, and small businesses.
What the Arbitration Fairness Act does:
· Restores the original intent of the FAA by clarifying the scope of its application.
· Amends the FAA by adding a new chapter invalidating agreements that require the arbitration of employment, consumer, civil rights, or antitrust disputes made before the dispute arises.
· Restores the rights of workers, consumers, and small businesses trying to compete to seek justice in our courts.
· Ensures transparency in civil litigation.
· Protects the integrity of the Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, among others.
The Arbitration Fairness Act was cosponsored by Sens. Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I), Maize Hirono (D-Hawaii), Bernie Sanders (I-Vt.), Tom Udall (D-N. Mex.), Tom Harkin (D-Iowa), Jeff Merkley (D-Ore.), Bob Menendez (D-N.J.), Patrick Leahy (D-Vt.), Brian Schatz (D-Hawaii), Heidi Heitkamp (D-N.D.), Sherrod Brown (D-Ohio), Barbara Boxer (D-Calif.), and Ron Wyden (D-Ore.).
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During his career as a consumer attorney, Attorney Murphy has spoken out against forced arbitration as being a device to strip Americans of their Constitutional right to a jury trial. Please support the Arbitration Fairness Act by contacting your elected representative.

Consumer Financial Protection Attorney Fort Lauderdale

Consumer Protection Attorney Fort LauderdaleCONSUMER FINANCIAL PROTECTION BUREAU TAKES ACTION AGAINST TWO COMPANIES FOR CHARGING ILLEGAL DEBT-RELIEF FEES
WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today filed a complaint in a federal district court in New York against two debt-relief service providers that allegedly charged consumers illegal advance fees for debt-settlement services. The Bureau is seeking to halt the operations and to obtain both penalties and relief for victims.
“Today’s action takes aim at two operations we believe are designed to profit through unscrupulous and illegal business practices,” said CFPB Director Richard Cordray. “Consumers deserve better and we are proud of this coordinated effort with the Department of Justice and U.S. Attorney Preet Bharara to crack down on harmful behavior.”
According to the CFPB complaint, the defendants, Mission Settlement Agency (Mission) and related entities and individuals, and Premier Consultant Group LLC (Premier) along with a related entity, routinely charged consumers upfront fees prior to settling the consumers’ debts. These illegal fees and the companies’ failures to provide effective services often caused consumers to fall further into debt and harmed their credit history in the process. Mission is based in New York and Premier is based in New Jersey.
The Bureau alleges that all of the defendants violated the Federal Trade Commission’s Telemarketing Sales Rule (TSR). In addition, the Bureau alleges that Mission and its principal, Michael Levitis, engaged in deceptive and unfair practices in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Attorney Fort Lauderdale. In total, defendants allegedly charged fees to over a thousand consumers in multiple states in violation of the TSR’s advance fee ban, totaling over $1.3 million.
The CFPB initiated this investigation in July 2012, and later referred evidence of criminal conduct to the United States Attorney for the Southern District of New York. The CFPB is required by the Dodd-Frank Act to refer evidence of criminal activity to the Department of Justice. In connection with these actions, the CFPB has also received substantial assistance from the New York Office of the U.S. Postal Inspection Service.
This action is part of the CFPB’s comprehensive effort to prevent consumer harm in the debt-relief industry. The Bureau is working to ensure federal consumer laws are being followed at every stage of the process and is focusing not only on debt-relief service providers, but also on those who facilitate their unlawful conduct and who may also violate federal consumer financial laws.

A copy of the CFPB complaint is available here: http://files.consumerfinance.gov/f/201305_cfpb_complaint_mission-settlement.pdf

Consumer Fraud Lawfirm

Fair Lending Practices Attorney Robert Murphy

CONSUMER FINANCIAL PROTECTION BUREAU TO HOLD AUTO LENDERS ACCOUNTABLE FOR
ILLEGAL DISCRIMINATORY MARKUP
Bureau Provides Guidance on Fair Lending Practices to Indirect Auto Lenders
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB)
released a bulletin explaining that certain lenders that offer auto loans
through dealerships are responsible for unlawful, discriminatory pricing.
Potentially discriminatory markups in auto lending may result in tens of
millions of dollars in consumer harm each year, and the bulletin provides
guidance to indirect auto lenders within the CFPB’s jurisdiction on how to
address fair lendingrisk.

“Consumers should not have to pay more for a car loan simply based on their
race,” said CFPB Director Richard Cordray. “Today’s bulletin clarifies our
authority to pursue auto lenders whose policies harm consumers through unlawful
discrimination.”

When consumers finance automobile purchases from an auto dealership, the dealer
often facilitates indirect financing through a third party lender. The dealer
plays a valuable role by originating the loan and finding financing sources. In
this indirect auto financing process, the lender usually provides the dealer
with an interest rate that the lender will accept for a given consumer.

Indirect auto lenders often allow the dealer to charge the consumer an interest
rate that is costlier for the consumer than the rate the lender gave the dealer.
This increase in rate is typically called “dealer markup.” The lender shares
part of the revenue from that increased interest rate with the dealer. As a
result, markups generate compensation for dealers while frequently giving them
the discretion to charge consumers different rates regardless of consumer
creditworthiness. Lender policies that provide dealers with this type of
discretion increase the risk of pricing disparities among consumers based on
race, national origin, and potentially other prohibited bases. Research
indicates that markup practices may lead to African Americans and Hispanics
being charged higher markups than other, similarly situated, white consumers.

Today’s bulletin explains how the Equal Credit Opportunity Act (ECOA) applies to
indirect auto lending. The bulletin also provides guidance for indirect auto
lenders on ways to limit fair lending risk. The ECOA makes it illegal for a
creditor to discriminate in any aspect of a credit transaction on prohibited
bases including race, color, religion, national origin, sex, marital status, and
age. The CFPB recommends that indirect auto lenders within its jurisdiction take
steps to ensure that they are operating in compliance with fair lending laws as
applied to dealer markup and compensation policies. These steps may include, but
are not limited to:

Fair Lending Attorney

Fair Lending Practices

•    Imposing controls on dealer markup, or otherwise revising
dealer markup policies
;•     Monitoring and addressing the effects of markup policies as
part of a robust fair lending compliance program; and
•     Eliminating dealer discretion to markup buy rates, and
fairly compensating dealers using a different mechanism that does not result in
discrimination, such as flat fees per transaction.
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Our job is to protect consumer rights in the State of Florida. Call us today for a consultation. The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.