An official website of the United States Government
  • Home
  • Consumer advisory

Consumer advisory

Consumer advisory: Don’t be misled by reverse mortgage advertising


Reverse Mortgage Ads photo

You might see enticing images of youthful retirees on the golf course or enjoying other leisure activities in a reverse mortgage advertisement. A reverse mortgage is a special type of loan that allows homeowners 62 and older to borrow against the accrued equity in their homes. The loan must be paid back when the borrower dies, moves, or no longer lives in the home.

Ads for reverse mortgages are found on television, radio, in print, and on the internet, and many ads feature celebrity spokespeople discussing the benefits of reverse mortgages without mentioning risks. We looked closely at many ads and found incomplete and inaccurate statements used to describe the loans. In addition, most of the important loan requirements were often buried in fine print if they were even mentioned at all. These advertisements may leave older homeowners with the false impression that reverse mortgage loans are a risk-free solution to financial gaps in retirement.

In conducting our study, we met with older homeowners in Washington DC, Chicago, and Los Angeles to learn about their thoughts and impressions of reverse mortgage ads. After looking at a variety of ads, many homeowners we spoke to didn’t realize reverse mortgage loans need to be repaid. Instead, some thought they could access their equity interest-free, or that the federal government provided the money as a benefit to seniors. Homeowners told us that the most attractive messages in the ads were “you can live in your home as long as you want,” and that you “still own your home.” Many ads, however, didn’t mention that seniors could lose their homes if they don’t satisfy the loan requirements, such as paying property taxes or homeowners insurance.

Seniors said the ads made reverse mortgages look like a good way to travel and enjoy retirement while they were still young and active. Yet Americans are living longer, more active lives than ever before. Reverse mortgage borrowers can outlive their loan funds by borrowing without careful planning.

Reverse mortgage ads don’t always tell the whole story, so consider these facts when you see advertisements:

1. A reverse mortgage is a home loan, not a government benefit

Reverse mortgages have fees and compounding interest that must be repaid, just like other home loans. With most reverse mortgages, federal insurance guarantees that borrowers will receive their loan funds if their lender has financial difficulty or if their loan balance exceeds the value of their home. However, borrowers pay for this insurance and it’s not a government benefit.

2. You can lose your home with a reverse mortgage

When a reverse mortgage ad says you’ll retain ownership of your home, or that you can live there as long as you want to, don’t take these messages at face value. These statements are true only if you continue to meet all requirements of the reverse mortgage. If you fall behind on your property taxes or homeowners insurance, are absent from your home for longer than six months, or fail to satisfy other requirements, you can trigger a loan default. If you don’t take care of the default in time, the lender can foreclose on your home. Sometimes these requirements are listed in fine print, but not always. If you have a question about reverse mortgage requirements, contact a HUD-approved housing counselor near you.

3. Without a good plan, you could outlive your loan money

After seeing a reverse mortgage ad, you might think that a reverse mortgage guarantees your financial security no matter how long you live. Americans are living longer today than they were just a generation ago. Make sure you have a financial plan in place that accounts for a long life. That way if you need to tap your home equity, you won’t do it too early and risk running out of retirement resources later in life.

If you have a problem with your reverse mortgage

Check out Ask CFPB to learn more about reverse mortgages. You can also download a printer-friendly version of this information to share with friends or clients.

If you’re having a problem with your reverse mortgage or having problems getting through to your mortgage servicer, you can submit a complaint to us online or by calling (855) 411-2372 or TTY/TDD (855) 729- 2372. We’ll forward your complaint to the company and work to get you a response within 15 days.

For more information about how reverse mortgages work and questions to ask, read our guide to reverse mortgages for older consumers and their families. Do you or a loved one have a reverse mortgage loan? Here are three steps you should take.

Consumer advisory: Fact-check your specialty consumer report


You probably already know that when you apply for a loan, many lenders will get information about your credit history from one of the big three consumer reporting agencies (Equifax, Experian and TransUnion). This information can determine whether you are eligible for a loan and how much the loan will cost.

But did you know that there are other consumer reporting agencies that also collect and sell your personal data? Some of these companies, called specialty consumer reporting agencies, compile and sell reports with all kinds of personal data including, but not limited to, the history of your employment, rental, banking, lending, insurance, and criminal background. This includes other public record data such as tax liens, civil suits and bankruptcy data.

We’ve got a list of consumer reporting agencies, so you can fact-check them to ensure your personal report data is accurate and complete.

Why you should know what’s in your reports

If you’re applying for a job, planning to rent an apartment, or purchasing property or health insurance, you might want to check and see if one of these specialty consumer reporting agencies has a file with your information. It may also be useful if you’re applying for a checking account, or had problems with utility bills. For example, if you are applying for a lease, one of your “tenant screening” specialty reports might be reviewed by the landlord. Keep in mind that not every consumer reporting agency will have information on every consumer.

Check reports in advance

When it comes to your personal data, all consumer reporting agencies are required to follow reasonable procedures to ensure that the information in your report is accurate, but errors can happen. You should fact-check your report in advance, allowing sufficient time for companies to investigate and fix errors. Once you notify a consumer reporting agency of a potential error on your report, the agency generally has thirty days to investigate and fix the errors on your report. After completing the investigation, they generally have five business days to notify you of its results.

The last thing you want is an unpleasant surprise that may disqualify you from a loan, job or a new lease. You’re in the best position to know whether the information in your personal reports is accurate and complete.

How to request and dispute a report

Here’s a list of consumer reporting agencies, complete with the contact information, (including the phone numbers and websites), for nearly fifty companies. By law, consumer reporting agencies must provide you a copy of your report upon request. Most of the companies in this list provide reports for free once every twelve months (as indicated on the list) though others may charge you a small fee. If you spot any errors, you have the right to dispute the report’s content with the consumer reporting agency and the company that provided the data. The companies are required to investigate your dispute for free.

Check out Ask CFPB for more information about specialty consumer reporting agencies. You can also download a printer-friendly version of this information to share with friends or clients. If you have a problem with credit reporting or any other financial product, you can submit a complaint to us online.

Consumer advisory: Your benefits are protected from garnishment


Your benefits are protected from garnishment

Older Americans, like many of their younger counterparts, increasingly have debts in collection. Over one-third of the complaints that older consumers submit to us are related to debt collection. In some of these complaints, consumers told us that debt collectors threatened to garnish their benefits from Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and VA benefits, even though these funds usually can’t be garnished.

Garnishment can happen after a collector wins a lawsuit against you for a debt. A collector can then ask your bank or credit union to turn over money in your account to pay the debt.

According to the complaints we reviewed, threats to garnish these benefits cause older consumers and veterans significant distress, especially when they depend on this income to pay essential living costs. We’ve created a sample letter to help consumers tell debt collectors that their income is protected from garnishment.

We also explain how Social Security and VA benefits are protected in Ask CFPB. Here’s a preview:

Automatic protections for Social Security and VA benefits

If you receive Social Security or VA benefits by direct deposit, then your bank must protect 2 months’ worth of benefits in your account. This means you can continue using that money.

For example, if you receive $1,000 in Social Security each month, your bank will see that $2,000 in Social Security was direct deposited in the last two months. The bank must allow you to continue using up to $2,000 in the account. However, if you have $3,000 in your account, the bank can freeze $1,000 of the $3,000. It must give you access to the remaining $2,000 so you can continue to pay bills and withdraw cash as usual.

What happens if any of your money is frozen

If any of your money is frozen, your bank must send you a notice of garnishment. Then, a judge decides whether the amount that was frozen should be turned over to the debt collector based on factors such as the source of your income and state law. Seek help from a lawyer to alert the judge that your income is protected. If you can’t afford a lawyer, you may be eligible for free legal help.

Automatic protections for benefits on a prepaid card

Many people receive Social Security or VA benefits on a prepaid card. If your benefits are loaded onto a Direct Express prepaid card or into another prepaid account, they are still automatically protected from garnishment, just like money in a bank account.


Social Security and SSDI can be garnished to pay government debts such as back taxes or federal student loans, and debts for child or spousal support. Some other means-tested benefits, such as SSI, are protected from garnishment – even to pay a government debt or child or spousal support.

Learn more

To learn more, visit Ask CFPB. You can also download a printer-friendly version of this information to share with friends or clients.

If you have had a problem with debt collection, you can submit a complaint online or by calling (855) 411-2372.

Consumer advisory: You’ve got options when it comes to overdraft


Today, we’re announcing an enforcement action against Alabama-based Regions Bank for charging overdraft fees to consumers who had not opted-in for overdraft coverage. We’re requiring Regions Bank to fully refund all affected consumers – hundreds of thousands of consumers have already been refunded $49 million in fees. We’re also fining the company $7.5 million for its illegal actions and its slow response to correct the errors.

We want to take this opportunity to remind you that you have a choice when it comes to overdraft protection programs and these programs can be costly.

What is an overdraft?

An overdraft occurs when you don’t have enough money in your account to cover a transaction, but the bank pays for it anyway. Transactions include ATM withdrawals and debit card purchases. Many banks and credit unions offer overdraft protection programs in which your institution will pay for the transaction and charge you a fee (in addition to requiring you to repay the overdraft amount). For most banks, the overdraft fee is a fixed amount regardless of the amount of the transaction. And, you could incur several fees in a single day.

Overdraft programs are optional

You can choose not to have debit overdraft. Knowing your status allows you to decide what is best for you. Your bank or credit union can’t charge you for overdraft fees on ATM or debit card transactions unless you’re enrolled in an overdraft protection program.

If you decide not to enroll, your bank will likely decline ATM or debit card purchases when your account doesn’t have enough funds to cover them, but you won’t be charged a fee.

You should also keep in mind that banks and credit unions are allowed to charge you overdraft fees when the bank or credit union pays a check or certain recurring electronic payments that would have overdrawn your account, even if you did not opt in to overdraft protection.

How you can reduce or eliminate overdraft fees

  • You can opt out of overdraft protection programs anytime. This means that your debit or ATM card may be declined if you don’t have enough money in your account to cover a purchase or ATM withdrawal. However, it also means you won’t be charged for these transactions.
  • Link your checking account to a savings account. If you overdraw your checking account, your bank will take money from your linked savings account to cover the difference. You may be charged a transfer fee when this happens, but it’s usually much lower than the fee for an overdraft.
  • Ask your financial institution if you’re eligible for a line of credit or linked credit card to cover overdrafts. You may have to pay a fee when the credit line is tapped, and you will owe interest on the amount you borrowed, but this is still a much cheaper way to cover a brief cash shortfall.
  • Track your balance as carefully as you can and sign up for low balance alerts to let you know when you’re at risk of overdrawing your account. If you have regular electronic transfers, such as rent, mortgage payments or utility bills, make sure you know how much they will be and on what day they occur. You also need to know when the funds you have deposited become available for your use.
  • Shop around for a different account. Get a copy of your bank or credit union’s list of account fees, or ask about them, then compare them with account fees at other banks or credit unions. Assess your habits honestly and consider penalty fees, such as overdraft and non-sufficient funds charges, as well as monthly maintenance, ATM surcharge, and other service fees. When comparing banks or credit unions, also consider factors such as the hours of operation, locations, access to public transportation, available products and services, and reputation for customer service.

You can get a printer-friendly version of this information about overdraft options to share with friends and colleagues.

You can also check out Ask CFPB for more information about overdraft protection programs and fees. If you have a problem with overdraft fees or any other financial products, you can submit a complaint online or by calling (855) 411-2372.

Consumer advisory: 3 pension advance traps to avoid


Many retirees depend on a pension to cover day-to-day as well as occasional unexpected expenses, such as health emergencies or home repairs. We’ve heard that some retirees with pensions who are facing financial challenges have responded to ads for cash advances on their pensions. Although pension advances may seem like a “quick fix” to your financial problems, they can eat into your retirement income when you start paying back the advance plus interest and fees.

A pension advance is a cash advance in exchange for a portion, or all, of your future pension payments. Pension advance companies typically charge high interest rates and fees and often target government retirees with pensions. Former servicemembers should also be on guard. Military retirees and veterans who receive monetary benefits from the Department of Veterans Affairs (VA) have been offered pension advances even though it’s illegal for lenders to take a military pension or veterans’ benefits. Many of those companies use patriotic-sounding names or logos and even claim they are endorsed by the VA as a way of enticing potential customers.

If you or a loved one is considering a pension advance, consider your alternatives. A financial coach or credit counselor can help you weigh your options and plan for new or unexpected financial demands. The National Foundation for Credit Counseling (NFCC) provides a list of member agencies around the country. You can also search for local credit counseling agencies on the Association of Independent Consumer Credit Counseling Agencies (AICCA)’s website.

Here are 3 things you can do to protect your retirement pension:

  1. Avoid loans with high fees and interest. Pension advance companies may not always advertise their fees and interest rates, but you will certainly feel them in your bottom line. Before you sign anything, learn what you are getting and how much you are giving up.
  2. Don’t sign over control of your benefits. Companies sometimes arrange for monthly payments to be automatically deposited in a newly created bank account so the company can withdraw payments, fees and interest charges from the account. This leaves you with little control.
  3. Don’t buy life insurance that you don’t want or need. Pension advance companies sometimes require consumers to sign up for life insurance with the company as the consumer’s beneficiary. If you sign up for life insurance with the pension advance company as your beneficiary, you could end up footing the bill, whether you know it or not.

You can also get a printer-friendly version of this information to share with friends or clients who are considering pension advances.

If you know someone who’s received a pension advance offer, we want to hear about their experiences, good and bad. Please ask them to share their story at

Consumer advisory: Three steps you should take if you have a reverse mortgage


Infographic on reverse mortgages
Reverse mortgages are a type of loan that allows homeowners, 62 and older, to borrow against the accrued equity in their homes. Reverse mortgages can help some older homeowners meet financial needs in retirement. Most reverse mortgages today are federally insured through the Federal Housing Authority’s (FHA) Home Equity Conversion Mortgage (HECM) program.

We’ve heard many complaints from consumers who have experienced problems with reverse mortgages. The most common reverse mortgage complaint is about difficulty with changing the loan terms and problems communicating with loan servicers. Some consumers, for example, express frustration about slow, inconsistent communication from their reverse mortgage loan servicer.

We’ve also heard from consumers regarding non-borrowing spouses who are facing the loss of their home after the borrowing spouse has died. Recent changes to the federal program that insures most reverse mortgages allows some non-borrowing spouses to remain in the home after the death of the borrower spouse for HECM loans originated after August 4, 2014. Since this change is not retroactive, spouses of reverse mortgage borrowers who took out their loan prior to August 4, 2014 could be more likely to face losing the home when the borrower dies.

3 things you or your loved ones should do if you have a reverse mortgage

1. Verify who is on the loan

If you took out a reverse mortgage with two borrowers, check with your reverse mortgage servicer to make sure its loan records are accurate. Call your servicer to find out what names are listed on your loan. They may be able to help you over the phone. See your reverse mortgage statement for the phone number, and ask them to send you this information in writing for your records. You can also write a letter requesting information.

2. If your reverse mortgage is in the name of only one spouse, make a plan for the non-borrowing spouse

If your reverse mortgage is in the name of only one spouse, contact your loan servicer to find out if the non-borrowing spouse may qualify for a repayment deferral. A repayment deferral allows a non-borrowing spouse to remain living in the home after the death of the borrowing spouse. If not, make a plan in the event the borrowing spouse dies first and the loan becomes due. If you or your spouse are not on the loan but believe that you should be, promptly seek legal advice.

If you have enough remaining equity in your home, you could consider taking out a new reverse mortgage with both spouses. You’ll have to pay loan fees again, however, for the new loan. If the non-borrowing spouse can’t pay off the reverse mortgage when the borrowing spouse passes away, he or she might consider a new traditional mortgage if they have the income and credit to qualify. Also consider other family members that would be willing to cosign on such a loan. Some surviving spouses may need to sell the home and make plans for where they will live after the home is sold. Contact a HUD-approved housing counselor counselor near you to explore your options.

3. Talk to your children and heirs – make a plan for any non-borrower family members living in the home

Make sure your adult children or any family members living in the home know what to expect when your reverse mortgage comes due. If they wish to keep the home, contact your reverse mortgage company for written information that explains their options. Discuss this information with your family and follow up with the reverse mortgage company for anything you don’t understand.

Have a problem with your reverse mortgage?

If you’re having a problem with your reverse mortgage or having problems getting through to your mortgage servicer, you can submit a complaint online or by calling (855) 411-2372 or TTY/TDD (855) 729- 2372. We’ll forward your complaint to the company and work to get you a response within 15 days.

For more information about how reverse mortgages works and questions to ask, read our guide to reverse mortgages for older consumers and their families.

Check out Ask CFPB to learn more about reverse mortgages.