Welcome to RegulationRoom RHN91362, and thank you for your comments. CFPB has questions on how to make sure that validation notices give consumers enough information to figure out whether or not the debt belongs to them. For example, even if the name of the current debt owner is on the notice, consumers may not recognize the debt because they may be more familiar with the creditor’s brand name or the notice includes the name of the new owner, but not the old one. What do you think about this? You can read more about CFPB’s questions on the topic page about the “validation notice” sent to consumers.
I agree that this is about Financial Literacy, and I'll give a couple of examples at the bottom of this comment.
However, this is also about the court's enforcing completely one sided credit card adhesion agreements that don't give the debtor/defaulter, rights of any kind, even in the most humanitarian of situations, thereby calling into question the legality of these one sided credit card adhesion agreements.
Lets not forget that it was the comptroller of the currency back in 2002 that prevented the Insurance industry from competing in the credit card debt suspension insurance arena with the credit card companies.
This allowed the credit card companies to then have an obscene monopoly on overpriced credit card debt suspension insurance premiums they charged their own customers who otherwise could have carried insurance policies that would have frozen interest rate charges for a certain period of time when a life changing emergency occurred.
Financial literacy is in play when it comes to the 2% monthly minimum payment addiction scam perpetrated on first time credit card borrowers. 2% monthly minimum payments are literally no different than a crack dealer giving out a few free hits of crack to get people hooked on their product.
A person can be buy a $1,000 top of the line television set and only have a 20 or 25 dollar payment due the next month. That's credit card crack in my opinion.
Financial Literacy could be a warning printed in bold letters on every credit card agreement warning how credit cards purposely have low monthly minimum payments to lure one into more and more debt, how credit card companies have no compassion for life changing events, and that credit card companies are overcharging for credit card debt suspension insurance by a factor of up to 2,000%.
Put those three warnings on every agreement in bold letters, and two things happen, customers have a better chance of becoming financially literate, and it also is an admission of fraud by the credit card companies for all the prior agreements already in place.
So the irony is the credit card companies can't change even if they wanted to.
But where is the outside force to come from to make the obvious happen in regards to those three credit card wanrings? Apparently it can't come from the CFPB, which is unfortunate because it turn this ties the courts hands that much more.
The "promise to pay" meme has not been fairly vetted in the credit card agreement, that is the issue here for me.
Credit Card companies are not required to mention in very visible lettering in the agreement (if its even mentioned at all) that under no circumstances will a bank or credit card company ever suspend a debt.
Credit card companies enjoy an unfair perk at the expense of the consumer by not disclosing their most glaring warts at the time the agreement is signed by the customer, and that seems to be a violation of the spirit and purpose of an adhesion contract.
Those Capital One commercials with the baby and Jimmy Fallon are false advertising in my opinion since Capital One is not really pro family or pro community. If Capital One was either pro family or pro community, they would either offer a REASONABLY priced debt suspension insurance program, or simply agree that a natural disaster or personal emergency beyond their customer's control is not cause to declare a default or to penalize the customer with ongoing interest rate charges.
Apparently the customer does not have the right to suspend a debt under any circumstance unless they declare bankruptcy. If credit card customers don't have the right to suspend a credit card debt under any circumstance, then that should be specifically mentioned and clearly visible in the agreement before the customer signs the agreement.
Your comment appears to have attempted to personalize money and I find that controversial. The fed is giving out money at zero percent interest to the banks, yet if a person has a situation beyond their control occur that causes them to need zero percent interest to pay back their UNSECURED debt, somehow that is different??? How can an unsecured debt actually be more secure than a secured debt?
I would suggest that narrowing the discussion to "the people's money" obfuscates that the fed gives "free money" to banks and wall street. This free money (zero percent interest) eventually leads to toxic wall street investment schemes and scams that then cause the middle class to lose their existing home equity and 401K wealth while wall street then gets bailed out by the government.
The desire for ongoing perpetual economic growth has created a world in which debt has now become the enemy, whereas in the past debt was not the enemy. Reinforcing the old "economic growth by increasing consumer debt" paradigm continues to sink the U.S. further and further into economic chaos because it requires the consumer be saddled with more and more debt and less and less avenues to pay it off.
How can the economic growth model suddenly not work anymore? To get a better paying job in society one needs computer skills that create ways to achieve greater economic efficiency, which over time results in the loss of main street blue collar jobs that are not computer based. The people with the money are creating profits via computer jobs and a satellite economy while reducing blue collar jobs, meaning blue collar debts are becoming harder to pay off.
Though I do not agree with "someone to rack up tens of thousands of dollars of debt and never pay it back". My current standing is that the laws of each and every state allow for higher interest rates to be charged for non-secured debt. This is because the lenders take more losses "the risk should be in alignment with the award".
In many cases the principal has been paid back in full or the majority of the debt has been paid back. To allow a "third party" to buy it at a significantly reduced price, after the debt has been charged off by the original “lender/creditor” AND allow the third party to collect the full alleged balance and interest is not just.
This is the way I am leaning at this time. Explain to me why you or I feel differently?
Your point about the overshadowing is well taken. My comments are based upon suggested changes to the debt collection process. You are correct, if the FDCPA remained the way it is currently it may be considered a violation. The FDCPA allegedly is geared to the "least sophisticated individual". However, I currently speak to many people that are not able to properly respond to a debt validation (even when they have a credible dispute). I am currently dealing with a 72-year old woman whose son "stole" her identity. He was convicted of fraud and deported for other credit cards that he took out in her name. She received a dunning notice and now is being sued on another card that she was not even aware of. Our experiences are just different. I once felt the same way as you when I was in commercial debt collection. I truly appreciate your response but you and I will have to disagree that "he or she should be able to articulate that dispute". I enjoyed reading your well thought out response and look forward to the continued debate.
Thanks for your comments RHN91362. You're right to point out that credit reporting is covered by the FCRA. However, this stage is an advanced notice of proposed rulemaking. Because CFPB hasn't proposed specific rules about debt collection or credit reporting yet, it's interested in learning more about the range of issues implicated in debt collection. Are there things CFPB should keep in mind about credit reporting when making new regulations for debt collection, even though credit reporting issues might still be dealt with in a separate regulation?
It is the responsibility of the creditor and debt collectors to report accurate information. Reporting accurate information has nothing to do with "debt collectors who don't report to credit reporting agencies at all." If a debt collector reported accurately that the debt in question has not been paid, but now is, it is the responsibility of that debt collector to report the newly accurate information. As I too have noticed, some debt collectors will not accurately report updated information to the credit bureaus once they are paid.
My only concern about this excellent comment is that consumers not be subjected to a flood of confusing or potentially intimidating information. The most useful information is the what, when, who, and why of the original transaction that incurred the unpaid debt. The original creditor should be identified by a name known to the consumer, e.g. DR. JOHN SMITH, RHEUMATOLOGIST not DYNAMIC HEALTHCARE OF GREATER ANYTOWN d/b/a ASSOCIATED SPECIALISTS P.C. You get the idea.
RHN91362, I have already answered your comment but it still bothers me that "financial literacy" may be the escape clause that the CFPB uses to avoid the real issue. How about rewarding those of us who have tirelessly blogged about exposing the financial traps set up by the credit card companies, especially those of us who did it all on our own dime and time.
Credit Cards are THE BIGGEST PROFIT MAKING scheme in the U.S., much bigger than the mortgage industry. And as the CFPB knows, any type of money making machine gets protected through lobbying.
That is exactly why the CFPB was able to fine the credit card companies well over 1/2 billion dollars for aggressively marketing the credit-protector Insurance program. When something makes so much money so easily, people just can't help themselves to try and keep expanding the money making venture.
I personally warned about the credit card credit protector programs almost FIVE YEARS BEFORE the CFPB made their over half billion in fines. Credit-Protector
I created my site on my own time and with no funding, and I think my warning almost five years before should matter.
I also don't understand why someone like myself who created my warning so early on, with no funding, can't be compensated on any level simply as a way to energize future generations that if they take the time and show they care for something that matters, they may someday be publicly rewarded/acknowledged.
I also created blogs about Chase Bank and their credit card shenanigans back in 2009. Once again, the class action lawyers swooped in and took 25 million dollars in legal fees. I didn't see a dime for my blogging even though my 2009 protest blogs probably helped fuel the justified anger by some consumers who then went on a mission to get a class action lawyer involved. Once again, I got nothing.
If Government Consumer Organizations are not willing to acknowledge those who care and show it, the system may never truly improve. Daily-ProtestBloggers Against Chase BankParallel ForeclosureSwarm The BanksWall Street Change
I have gone out of my way to offer financial literacy through the exposure of unfair credit card and banking policies for several years now.
The tree fell, people heard it, but no one made a sound.
Moderator
1
Welcome to RegulationRoom RHN91362, and thank you for your comments. CFPB has questions on how to make sure that validation notices give consumers enough information to figure out whether or not the debt belongs to them. For example, even if the name of the current debt owner is on the notice, consumers may not recognize the debt because they may be more familiar with the creditor’s brand name or the notice includes the name of the new owner, but not the old one. What do you think about this? You can read more about CFPB’s questions on the topic page about the “validation notice” sent to consumers.
View this comment in the discussion thread
Debt Neutrality Petition
2
I agree that this is about Financial Literacy, and I'll give a couple of examples at the bottom of this comment. However, this is also about the court's enforcing completely one sided credit card adhesion agreements that don't give the debtor/defaulter, rights of any kind, even in the most humanitarian of situations, thereby calling into question the legality of these one sided credit card adhesion agreements. Lets not forget that it was the comptroller of the currency back in 2002 that prevented the Insurance industry from competing in the credit card debt suspension insurance arena with the credit card companies. This allowed the credit card companies to then have an obscene monopoly on overpriced credit card debt suspension insurance premiums they charged their own customers who otherwise could have carried insurance policies that would have frozen interest rate charges for a certain period of time when a life changing emergency occurred. Financial literacy is in play when it comes to the 2% monthly minimum payment addiction scam perpetrated on first time credit card borrowers. 2% monthly minimum payments are literally no different than a crack dealer giving out a few free hits of crack to get people hooked on their product. A person can be buy a $1,000 top of the line television set and only have a 20 or 25 dollar payment due the next month. That's credit card crack in my opinion. Financial Literacy could be a warning printed in bold letters on every credit card agreement warning how credit cards purposely have low monthly minimum payments to lure one into more and more debt, how credit card companies have no compassion for life changing events, and that credit card companies are overcharging for credit card debt suspension insurance by a factor of up to 2,000%. Put those three warnings on every agreement in bold letters, and two things happen, customers have a better chance of becoming financially literate, and it also is an admission of fraud by the credit card companies for all the prior agreements already in place. So the irony is the credit card companies can't change even if they wanted to. But where is the outside force to come from to make the obvious happen in regards to those three credit card wanrings? Apparently it can't come from the CFPB, which is unfortunate because it turn this ties the courts hands that much more.
View this comment in the discussion thread
Debt Neutrality Petition
3
The "promise to pay" meme has not been fairly vetted in the credit card agreement, that is the issue here for me. Credit Card companies are not required to mention in very visible lettering in the agreement (if its even mentioned at all) that under no circumstances will a bank or credit card company ever suspend a debt. Credit card companies enjoy an unfair perk at the expense of the consumer by not disclosing their most glaring warts at the time the agreement is signed by the customer, and that seems to be a violation of the spirit and purpose of an adhesion contract. Those Capital One commercials with the baby and Jimmy Fallon are false advertising in my opinion since Capital One is not really pro family or pro community. If Capital One was either pro family or pro community, they would either offer a REASONABLY priced debt suspension insurance program, or simply agree that a natural disaster or personal emergency beyond their customer's control is not cause to declare a default or to penalize the customer with ongoing interest rate charges. Apparently the customer does not have the right to suspend a debt under any circumstance unless they declare bankruptcy. If credit card customers don't have the right to suspend a credit card debt under any circumstance, then that should be specifically mentioned and clearly visible in the agreement before the customer signs the agreement. Your comment appears to have attempted to personalize money and I find that controversial. The fed is giving out money at zero percent interest to the banks, yet if a person has a situation beyond their control occur that causes them to need zero percent interest to pay back their UNSECURED debt, somehow that is different??? How can an unsecured debt actually be more secure than a secured debt? I would suggest that narrowing the discussion to "the people's money" obfuscates that the fed gives "free money" to banks and wall street. This free money (zero percent interest) eventually leads to toxic wall street investment schemes and scams that then cause the middle class to lose their existing home equity and 401K wealth while wall street then gets bailed out by the government. The desire for ongoing perpetual economic growth has created a world in which debt has now become the enemy, whereas in the past debt was not the enemy. Reinforcing the old "economic growth by increasing consumer debt" paradigm continues to sink the U.S. further and further into economic chaos because it requires the consumer be saddled with more and more debt and less and less avenues to pay it off. How can the economic growth model suddenly not work anymore? To get a better paying job in society one needs computer skills that create ways to achieve greater economic efficiency, which over time results in the loss of main street blue collar jobs that are not computer based. The people with the money are creating profits via computer jobs and a satellite economy while reducing blue collar jobs, meaning blue collar debts are becoming harder to pay off.
View this comment in the discussion thread
U.S. Marine
4
Though I do not agree with "someone to rack up tens of thousands of dollars of debt and never pay it back". My current standing is that the laws of each and every state allow for higher interest rates to be charged for non-secured debt. This is because the lenders take more losses "the risk should be in alignment with the award". In many cases the principal has been paid back in full or the majority of the debt has been paid back. To allow a "third party" to buy it at a significantly reduced price, after the debt has been charged off by the original “lender/creditor” AND allow the third party to collect the full alleged balance and interest is not just. This is the way I am leaning at this time. Explain to me why you or I feel differently?
View this comment in the discussion thread
U.S. Marine
5
Your point about the overshadowing is well taken. My comments are based upon suggested changes to the debt collection process. You are correct, if the FDCPA remained the way it is currently it may be considered a violation. The FDCPA allegedly is geared to the "least sophisticated individual". However, I currently speak to many people that are not able to properly respond to a debt validation (even when they have a credible dispute). I am currently dealing with a 72-year old woman whose son "stole" her identity. He was convicted of fraud and deported for other credit cards that he took out in her name. She received a dunning notice and now is being sued on another card that she was not even aware of. Our experiences are just different. I once felt the same way as you when I was in commercial debt collection. I truly appreciate your response but you and I will have to disagree that "he or she should be able to articulate that dispute". I enjoyed reading your well thought out response and look forward to the continued debate.
View this comment in the discussion thread
Moderator
6
Thanks for your comments RHN91362. You're right to point out that credit reporting is covered by the FCRA. However, this stage is an advanced notice of proposed rulemaking. Because CFPB hasn't proposed specific rules about debt collection or credit reporting yet, it's interested in learning more about the range of issues implicated in debt collection. Are there things CFPB should keep in mind about credit reporting when making new regulations for debt collection, even though credit reporting issues might still be dealt with in a separate regulation?
View this comment in the discussion thread
stopwithspoofedcallerID
7
It is the responsibility of the creditor and debt collectors to report accurate information. Reporting accurate information has nothing to do with "debt collectors who don't report to credit reporting agencies at all." If a debt collector reported accurately that the debt in question has not been paid, but now is, it is the responsibility of that debt collector to report the newly accurate information. As I too have noticed, some debt collectors will not accurately report updated information to the credit bureaus once they are paid.
View this comment in the discussion thread
muscogulus
8
My only concern about this excellent comment is that consumers not be subjected to a flood of confusing or potentially intimidating information. The most useful information is the what, when, who, and why of the original transaction that incurred the unpaid debt. The original creditor should be identified by a name known to the consumer, e.g. DR. JOHN SMITH, RHEUMATOLOGIST not DYNAMIC HEALTHCARE OF GREATER ANYTOWN d/b/a ASSOCIATED SPECIALISTS P.C. You get the idea.
View this comment in the discussion thread
Debt Neutrality Petition
9
RHN91362, I have already answered your comment but it still bothers me that "financial literacy" may be the escape clause that the CFPB uses to avoid the real issue. How about rewarding those of us who have tirelessly blogged about exposing the financial traps set up by the credit card companies, especially those of us who did it all on our own dime and time. Credit Cards are THE BIGGEST PROFIT MAKING scheme in the U.S., much bigger than the mortgage industry. And as the CFPB knows, any type of money making machine gets protected through lobbying. That is exactly why the CFPB was able to fine the credit card companies well over 1/2 billion dollars for aggressively marketing the credit-protector Insurance program. When something makes so much money so easily, people just can't help themselves to try and keep expanding the money making venture. I personally warned about the credit card credit protector programs almost FIVE YEARS BEFORE the CFPB made their over half billion in fines. Credit-Protector I created my site on my own time and with no funding, and I think my warning almost five years before should matter. I also don't understand why someone like myself who created my warning so early on, with no funding, can't be compensated on any level simply as a way to energize future generations that if they take the time and show they care for something that matters, they may someday be publicly rewarded/acknowledged. I also created blogs about Chase Bank and their credit card shenanigans back in 2009. Once again, the class action lawyers swooped in and took 25 million dollars in legal fees. I didn't see a dime for my blogging even though my 2009 protest blogs probably helped fuel the justified anger by some consumers who then went on a mission to get a class action lawyer involved. Once again, I got nothing. If Government Consumer Organizations are not willing to acknowledge those who care and show it, the system may never truly improve. Daily-Protest Bloggers Against Chase Bank Parallel Foreclosure Swarm The Banks Wall Street Change I have gone out of my way to offer financial literacy through the exposure of unfair credit card and banking policies for several years now. The tree fell, people heard it, but no one made a sound.
View this comment in the discussion thread