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Ally settlement administrator will contact eligible borrowers soon

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In December 2013, together with the Department of Justice (DOJ), we ordered Ally Financial Inc. and Ally Bank to pay $80 million in damages to consumers harmed by Ally’s auto loan pricing policies that resulted in discrimination. We found that Ally had a policy of giving dealers the discretion to increase or “mark up” consumers’ interest rates, and paying dealers for those markups. We found that between April 2011 and December 2013, Ally’s markup policy resulted in African-American, Hispanic, Asian and Pacific Islander borrowers paying more for auto loans than similarly situated non-Hispanic white borrowers. Ally agreed to a settlement and is paying a settlement administrator to distribute the $80 million in damages to harmed borrowers. Ally will also refund affected borrowers who it overcharged after December 2013, and Ally has already started paying some of those borrowers.

For Ally auto loans obtained between April 2011 and December 2013, the Ally Settlement Administrator will locate and send checks to affected borrowers who were overcharged. Over the next weeks, the Administrator will mail packages to identified borrowers with instructions for how to participate in the settlement. Borrowers who are African American, Hispanic, Asian, or Pacific Islander and who obtained an auto loan from Ally between April 1, 2011 and December 31, 2013 may be eligible for a payment from the Administrator. If you think you are eligible, you should look for a package explaining the specific minimum amount of money that you may be eligible to receive. Your actual payment amount may be greater, depending on how many borrowers participate in the settlement.

How to respond if you receive a package

The packages will tell you what you must do to receive your payment. To get your payment, you should follow those instructions, including returning any required forms. You can return any forms by postage pre-paid mail, fax, or through the Administrator’s website. Just follow the instructions on the form. Be sure to submit any required forms by October 24, 2015. Only those eligible consumers who return required forms by October 24, 2015, will receive their payment.

What to do if you think you are eligible but do not receive a package

If you don’t receive a package in the mail by July 15, 2015, but you think you should receive a payment, you can call the Ally Settlement Administrator to ask about your eligibility. You can also fill out a claim eligibility form and submit it to the administrator by mail, fax, or through the administrator’s website.

Participating in the settlement is free

Watch out for scammers claiming that they will help you for a fee or asking for your personal information in order to get your check. When large numbers of consumers receive settlement money, scammers sometimes pop up. The scammer may charge you a fee or try to steal your personal information. While you are of course free to speak with an attorney, you do not need to hire a lawyer or pay anyone a fee in order to participate in this settlement.

As part of this settlement, the Ally Settlement Administrator, the CFPB, the DOJ, or your local U.S. Attorney’s office may contact you. Ally is paying Heffler Claims Group to serve as the Administrator. You should treat any other contact claiming to be related to this settlement as a scam. Please immediately report any scam to the Administrator at info@autofinancesettlement.com.

Still have questions?

If you have any questions, check out the Ally Settlement Administrator’s website or can call the Administrator, starting on June 26, 2015, at 1 (844)-271-4780.

Learn more about how you can protect yourself from credit discrimination.

Un administrador del acuerdo de Ally en breve estará en contacto con prestatarios elegibles

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En diciembre de 2013, junto con el Departamento de Justicia (DOJ), ordenamos a Ally Financial Inc. y Ally Bank a pagar $80 millones en daños y perjuicios a los consumidores perjudicados por las políticas de precios de préstamos para vehículo de Ally que dieron lugar a discriminación. Descubrimos que Ally tenía una política de dar a los concesionarios la discreción para aumentar o “elevar los márgenes” de las tasas de interés de los consumidores y pagar a los concesionarios esos márgenes. Encontramos que, entre abril de 2011 y diciembre de 2013, la política de márgenes de Ally dio lugar a que los prestatarios afroamericanos, hispanos, asiáticos e isleños del Pacífico pagaran más por los préstamos para vehículo que los prestatarios blancos no hispanos en situación similar. Ally llegó a un acuerdo y contrató a un administrador de acuerdos para distribuir los $80 millones en daños a los prestatarios perjudicados. Ally también reembolsará a los prestatarios afectados a quienes cobró sobreprecios después de diciembre de 2013, y Ally ya ha comenzado a pagar a algunos de esos prestatarios.

Para préstamos de vehículo de Ally obtenidos entre abril de 2011 y diciembre de 2013, el Administrador del Acuerdo de Ally localizará a los prestatarios afectados que tuvieron sobreprecios y les enviará cheques. Durante las próximas semanas, el administrador enviará por correo paquetes informativos a los prestatarios identificados con instrucciones sobre cómo participar en el acuerdo. Los prestatarios afroamericanos, hispanos, asiáticos o de las islas del Pacífico que obtuvieron un préstamo para vehículo de Ally entre el 1 de abril de 2011 y el 31 de diciembre 2013 pueden ser elegibles para un pago del administrador. Si piensa que usted es elegible, manténgase en alerta para un paquete informativo que explica la cantidad mínima específica de dinero que usted puede ser elegible para recibir. El monto de su pago efectivo puede ser mayor, según el número de prestatarios participando en el acuerdo.

Cómo responder si recibe un paquete

Los paquetes le dirán lo que debe hacer para recibir su pago. Para recibir su pago, debe seguir esas instrucciones, incluido devolver los formularios requeridos. Puede devolver los formularios por correo con porte prepagado, por fax o a través del sitio web del administrador. Simplemente siga las instrucciones del formulario. No olvide enviar los formularios antes del 24 de octubre 2015. Sólo consumidores elegibles que devuelven formularios requeridos antes del 24 de octubre 2015 recibirán sus pagos.

Qué debe hacer si cree que es elegible pero no recibe un paquete

Si no recibe un paquete por correo antes del 15 de julio 2015, pero cree que debería recibir un pago, llame al Administrador del Acuerdo de Ally para preguntar por su elegibilidad. También puede llenar un formulario de elegibilidad para reclamación y enviarlo al administrador por correo, por fax o a través del sitio web del administrador.

La participación en el acuerdo es gratuita

Tenga cuidado con los estafadores que dicen que le ayudarán por una comisión o que le piden información personal con el fin de que pueda recibir su cheque. Cuando un gran número de consumidores recibe dinero de acuerdos es cuando a veces aparecen los estafadores. El estafador le puede pedir dinero o tratar de robar su información personal. Si bien usted está en total libertad de hablar con un abogado, no necesita contratar a un abogado ni pagarle a nadie para poder participar en este acuerdo.

Como parte de este acuerdo, el Administrador del Acuerdo de Ally, el CFPB, el DOJ o la oficina del Fiscal de EE. UU. local pueden ponerse en contacto con usted. Ally ha contratado a Heffler Claims Group para servir de Administrador. Debe tratar como estafa a cualquier otro intento de contacto que afirme estar relacionado con este acuerdo. Por favor, traiga a la atención inmediata del administrador cualquier estafa enviando un email a info@autofinancesettlement.com.

¿Tiene más preguntas?

Si tiene preguntas, consulte el sitio web del Administrador del Acuerdo de Ally o empezando el 26 de junio de 2015, puede llamar al Administrador, al 1 (844) 271-4780.

Obtenga más información sobre cómo puede protegerse de la discriminación crediticia.

Sprint and Verizon will refund $120 million to consumers harmed by illegal billing practices

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Today we’re announcing settlements with Sprint and Verizon, who illegally billed consumers over a hundred million dollars in unauthorized third-party charges. If approved, these settlements will return $120 million directly to affected consumers.

Sprint’s and Verizon’s customers became victims by clicking on ads for “free” digital content such as ring tones or daily horoscopes, and were then charged without their consent. Many people did not know that third parties could add charges to their wireless bills. The illegal billing often continued undetected for months.

Sprint’s and Verizon’s billing systems invited illegal third-party charges and the companies did little or nothing to root them out. Sprint and Verizon also failed to properly track and respond to consumer complaints about these charges, while collecting hundreds of millions of dollars in revenue by serving as payment processors for these third-party companies. Sprint and Verizon received a 30-40 percent cut of every third-party charge.

Under the Dodd-Frank Act, we can hold companies, including payment processors and lenders, accountable when they engage in unfair, deceptive, or abusive practices.

If you believe you may have been impacted

Verizon customers can submit claims for refunds at www.CFPBSettlementVerizon.com and learn more about the settlement by calling (888) 726-7063. Sprint customers can submit claims for refunds at www.SprintRefundPSMS.com or learn more about the settlement by calling (877) 389-8787.

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

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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.

The VA doesn’t send you mortgage ads

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We’re announcing an enforcement action against a lender that wrongfully used the logos of the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA). RMK Financial Corporation (also doing business as Majestic Home Loans) sent out ads to veterans and other VA-eligible borrowers that misled consumers to think that RMK’s products were endorsed by the VA, or even sent by the VA, and they misrepresented the terms and costs of the mortgages themselves. This is the fifth enforcement action we’ve completed in the past two months against companies using deceptive mortgage advertising.

Deceptive advertising to mislead consumers

RMK sent out mailings to over 100,000 consumers across the country. These ads used the name, seal, and logos of the VA, giving the impression that the VA had sent the ad or endorsed the product. Also, the ads misrepresented the price of the advertised mortgages, including whether the interest rate was fixed or variable. Sometimes, important disclosures about loan rates were hidden on the back of the ads or buried in fine print. Envelopes were plastered with warnings about “fines or imprisonment” under US law.

Two years ago, along with the Federal Trade Commission, we warned companies that were placing mortgage ads directed at consumers, some of which targeted those eligible for VA benefits. Since then, we’ve continued to investigate mortgage lenders, including RMK.

The VA won’t advertise to you

Mike Frueh, Director of the VA Home Loan Program, had this to say about mortgage offers that represent themselves as coming from the VA:

“VA will never email or mail out solicitations for our loan program. VA does not endorse or sponsor any particular lender; instead, we work to ensure all Veterans and Servicemembers can safely use the benefit they’ve earned, at the lender of their choice. If you have any questions about your home loan benefit, please visit the VA website, or call VA at (877) 827-3702.”

Here’s what you can do

While we may not reduce the volume of your junk mail as a result of today’s action, we hope that we’ve called attention to a significant problem. Here’s how you can avoid being taken in by similar offers:

  • Be a savvy consumer— look at everything an advertiser has to say about the product they’re selling. Today’s action involved a mortgage lender that placed flashy seals and logos front and center, but hid important disclosures in the fine print on the back of their ads.
  • Get information from trusted sources — even if an ad is plastered in official-looking seals and impressive endorsements, check with a trusted source to learn all you can about the product being advertised. Learn more about VA loans and refinances. Ask CFPB also has answers to some common questions.
  • Let us know about misleading ads— if you see an ad that looks deceptive or misleading, or just looks too good to be true, submit a complaint to us. We accept complaints about mortgages and other financial products marketed to veterans, such as consumer loans. Information you provide informs our work every day.

We’re suing a robo-call debt collector

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Today, we’re announcing that we filed a lawsuit against a robo-call debt collection operation, including its ringleaders, their companies, and service providers. The debt collectors allegedly sent millions of robo-calls to threaten, harass, and deceive consumers to collect debt that consumers do not owe, or were not owed to the debt collectors themselves. The complaint alleges that the scheme depended on the participation of the telemarketing company that sent the robo-calls and the payment processors that allowed the collectors to access consumers’ bank accounts.

Look for warning signs

If you don’t recognize a debt from a debt collector, ask the caller for their name, company, address, telephone number, and professional license number. If a caller is unable to provide you information about his company, or can’t verify information, do not give money to the caller or company. Learn more about warning signs that could signal a debt collection scam.

You have certain rights to ask a debt collector to verify debt. You can send a letter to the debt collector to request more information.

If you have a complaint about debt collection, you can submit a complaint online or by calling us at (855) 411-2372.