Consumer Financial Protection Bureau filed a lawsuit in federal district court against the credit repair company Prime Marketing Holdings alleging it charged consumers illegal advance fees and misrepresented the cost and effectiveness of its services. CFPB is seeking an injunction and refunds of fees to consumers. This company used the names Park View Credit, National Credit Advisors, and Credit Experts.

The company lured consumers with misleading, unsubstantiated claims that it could remove virtually any negative information from their credit reports and could boost credit scores by significant amounts. The company charged consumers a variety of illegal advance fees such as a set-up fee of hundreds of dollars and monthly fees of $89.99 per month.

In sales calls, the company failed to disclose consumers would be charged a monthly. It advertised an illusory money-back guarantee. The company advertised it would be able to get negative entries on consumers’ credit reports removed when in fact they had no way of doing so. They falsely claimed their repair services would, or likely would, result in a substantial increase to consumers’ credit scores.

Bobby Allyn, a NPR reporter for station WHYY in Philadelphia writes in the Washington Post about his experience with Trans Union having mixed his identity with that of a criminal imprisoned in Tennessee. Mr Ally had applied to rent an apartment in Philadelphia. The landlord ran his name through Trans Union’s tenant screening service (called SmartMove). Unfortunately for Mr. Allyn, SmartMove reported he had a dozen criminal convictions on his rap sheet. Mr. Ally called Trans Union to complain about the error; a representative told him the records were from Rutherford County Circuit Court in Tennessee outside of Nashville where Mr Allyn used to live. Mr Ally called the court clerk who said they had records on a person named Bobby Allyn born in the same year as the reporter. The person with the criminal records was incarcerated and African American unlike reporter Allyn.

The landlord accepted Mr Allyn’s explanation and he got the apartment, but Mr Allyn points out that as an investigative reporter, he was better equipped than most people to deal with such a problem. Mr Ally also references studies on the credit reporting agencies’ error rates.

Checkbook publishes useful reports on consumer products and services. They have an updated report on using credit card chargebacks in cases of defective goods or fraudulent charges of any kind.

The Fair Credit Billing Act gives consumers the right to dispute charges and withhold payment for goods and services that you didn’t accept or that weren’t delivered as promised. Consumers must first try to work it out with a seller (be sure to put it in writing), but if that doesn’t work, consumers should go online to the credit card company and ask for a chargeback.

Checkbook asked its members to share their credit card chargeback stories; members sent more than 100 emails, almost all of them success stories. Some shared negative experiences with credit card issuers siding with sellers, even when sellers clearly were in the wrong.

There is good news for the 70 million U.S. consumers who are behind in their bills and being pursued by a debt collector. The federal Consumer Financial Protection Bureau has proposed new rules that apply to the debt collectors that collect bills for other creditors. The current rules are outdated and inadequate. For example, when existing law was enacted, there was no voicemail, email or text messages. Back when the debt protection laws were written, debt collectors were sending consumers postcards, collect calls and telegrams!

Here are the main new rules:

  1. Debt collectors would have to tell consumers they could no longer be sued on the “stale” debt because the statute of limitations has run.

Effective last month, collection agencies and debt buyers that report information to the credit bureaus must report the name of the original creditor and may not report debt that did not arise from a contract or agreement to pay, which includes parking fines, parking tickets, and involuntary towing fees.

Beginning September 1, 2016, the collection agencies and debt buyers will have a “full file” each month, meaning the agencies and buyers will have to report positive as well as derogatory information to the bureaus. Typically, agencies and buyers only now report derogatory information to the bureaus.

In September 2017, collection agencies and buyers will be barred from reporting medical collection items less than 180 days old and they must delete accounts being paid or were paid in full by insurance.

A report by the National Consumer Law Center entitled Past Imperfect: How Credit Scores and Other Analytics “Bake In” and Perpetuate Past Discrimination shows how past discrimination perpetuates low credit scores. Credit reporting and credit scoring are supposed to be objective, with no room for flawed tools such as human judgment and biases. Yet for years, study after study has found that African-American and Latino communities have lower credit scores as a group than whites and Asians. The report discusses how credit scores perpetuate racial and economic inequality. Eliminating the impacts of past discrimination may require treating disadvantaged groups differently. The report includes some policy reforms and a list of studies and other resources that could assist advocates working on reform.

Banks and payday lenders have had a good deal going for a while: They could break the law, trick their customers in illegal ways, and not have to face any consumer lawsuits. Armed by some pretty bad 5-4 Supreme Court decisions, they could hide behind Forced Arbitration clauses (fine print contracts that say consumers can’t go to court even when a bank acts illegally), even when it was clear that the arbitration clauses made it impossible for a consumer to protect their rights.

But the free ride is coming to an end. After an extensive study, that proved beyond any doubt how unfair these fine print clauses have been for consumers, the CFPB is taking a strong step to reign in these abusive practice. In a new rule, the CFPB says banks can no longer use forced arbitration clauses to ban consumers from joining together in class action lawsuits. That means banks can no longer just wipe away the most effective means consumers often have for fighting illegal behavior.

This is a common sense rule that will go a long way in combating some of the financial industry’s worst practices.

The Consumer Financial Protection Bureau has a report on the 26 million Americans who are “credit invisible.” The Bureau found that one in every 10 adults do not have any credit history with a nationwide consumer reporting agency. About 189 million Americans have credit records that can be scored.

The report also found that Black consumers, Hispanic consumers, and consumers in low-income neighborhoods are more likely to have no credit history with a nationwide consumer reporting agency or not enough current credit history to produce a credit score.

Another 19 million consumers have unscored credit records, which is 8 percent of the adult population. The credit scoring models, which are based on credit histories, don’t produce any score for people with insufficient credit history or a lack of recent credit history.

Consumers are often confused about the effect of inquiries on their credit scores. CreditCards.com consulted experts about the differences between hard and soft inquiries, how the big three credit bureaus’ report on inquiries, and inquiries’ effects on credit scores.  Their experts explained that a hard inquiry means the consumer  actively applied. for credit. Soft inquiries are reported anytime you review your own personal credit report, your credit is evaluated by existing creditors, or you receive a promotional credit card offer in the mail. Soft inquiries have no impact on your credit report or score.

How big of a hit on your score do hard inquiries create? It varies.“Applying for one credit card every so often is no big deal, but when you apply for more than one at a time, you look desperate for money that you don’t have to prove you have upfront, and that is why it can have a decent effect on lowering your credit score,” says Matthew Coan, owner of the credit card comparison website Casavvy.com.

The impact also depends on existing credit history. “The hit is usually about three to five points per inquiry” according to Priyanka Prakash, of FitBiz Loans. “While that may not seem like much, it adds up – particularly if you have borderline credit to start with. For some people, there’s no impact from a hard pull. In general, the shorter your credit history, the fewer accounts you have and the more recent inquiries you have, the greater the impact.”