Defenses to Citibank Credit Card Claims

If you’re facing a Citibank credit card claim, you may have a variety of defenses.

  1. Interest Rate Questions and Citibank Violation of Truth in Lending Regulations
    An investigation said.  The Bureau of Consumer Financial Protection (Bureau) has reviewed the credit card account management activities of Citibank, N.A. and has identified the following law violations: (1) violations of the Truth in Lending Act (TILA), as implemented in Regulation Z, by failing to reevaluate and reduce the annual percentage rates (APRs) for certain consumer credit card accounts consistent with the requirements of section 1026.59(a) of Regulation Z; and (2) violations of TILA, as implemented in Regulation Z, by failing to have reasonable written policies and procedures in place to conduct the APR reevaluations consistent with the requirements of section 1026.59(b) of Regulation Z.  The Bureau issues this Consent Order.
    If you have an older loan and the interest rate was increased, the amount sought by Citibank may be inaccurate and the claim can be contested.


  2. Discovery
    If you have a loan potentially subject to the above investigation, request specific documents regarding review of your account.  Don’t be surprised if the Citibank attorney just gives you the account statements, but you may be allowed “discovery,” disclosure of pertinent material and documents.


  3. Hardship
    Maintain open and clear communication with Citibank or their counsel. Explain and document any hardship and you may be able to secure a reduction in the claim or reasonable repayment options.


  4. Arbitration
    The Citibank Cardholder Agreement provides that either party may request arbitration. Arbitration is frequently more flexible than court, and potentially more favorable to the consumer.

Call (973) 598-1980 for a Free Consultation

 

Phoenix Financial Consumer Financial Protection Bureau Investigation

CFPB Takes Action Against Phoenix Financial Services for Illegal Medical Debt Collection and Credit Reporting Practices

Debt collector attempted to collect on disputed debts using unlawful collection letters and misrepresentations

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) took action against medical debt collector Phoenix Financial Services (Phoenix) for numerous debt collection and credit reporting violations. In at least thousands of cases, Phoenix continued to attempt to collect on a debt that was not substantiated after a consumer disputed the validity of the debt. Today’s order requires Phoenix to pay redress to affected consumers, and pay a $1.675 million penalty to the CFPB’s victims relief fund.

“With medical debt looming over so many American families, we are taking action against companies seeking to illegally profit off patients,” said CFPB Director Rohit Chopra. “Given widespread inaccuracies in medical billing and credit reporting, the CFPB will be working to ensure that patients are not coerced into paying debts that they do not owe.”

Phoenix is a third-party debt collector with its principal place of business in Indianapolis, Indiana. Phoenix collects primarily past-due medical debts, and furnishes information about consumers to consumer reporting companies. Between January 2017 and December 2020, Phoenix received approximately 54.4 million accounts with allegedly outstanding and owed debts from its clients for collection.

In a report published last year, the CFPB found that 43 million consumers had medical bills on their credit reports and that, all together, American families owed around $88 billion in medical bills. Medical debt affects people’s ability to access affordable credit, find quality housing, or even obtain a job. One of the findings from the CFPB’s research is that many consumers report that the medical tradelines on their credit reports are not accurate. When inaccurate or false information is furnished to consumer reporting companies, it can be a form of coercing patients and their families into paying medical bills and debts they do not owe.

The CFPB’s investigation found that Phoenix sent collection letters to consumers who had disputed the validity or accuracy of their purported debts, even though Phoenix had not obtained substantiation for the debts. Debt collectors are required to have a reasonable basis for asserting that a consumer owes a purported debt if a dispute is submitted.

Phoenix’s sending of unlawful debt collection letters risked harming consumers by pressuring or inducing them to pay debts they did not owe. In addition to sending the debt collection letters, Phoenix also furnished debt information to consumer reporting companies. Phoenix’s failure to conduct reasonable investigations of disputes likely resulted in many inaccuracies remaining on consumers’ credit reports, and harmed consumers in a number of ways, such as making credit more expensive or inaccessible.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating federal consumer financial protection laws, including the Fair Credit Reporting Act and Fair Debt Collection Practices Act. The CFPB found Phoenix violated the Fair Credit Reporting Act and its implementing Regulation V by not conducting reasonable investigations of consumer disputes or having reasonable written policies and procedures regarding the accuracy and integrity of the information it furnished to consumer reporting companies. Phoenix also violated the Fair Debt Collection Practices Act by using false and deceptive means to collect debts, and by not ceasing collection of a debt upon notification by the consumer of a disputed debt collection claim.

Consumer Financial Board Claims Against Debt Settlement Company

Claims Against Debt Consolidation Companies 

The CFPB’s complaint alleges that the defendants violated the Telemarketing Sales Rule by collecting illegal fees and deceiving consumers about being charged upfront fees. Consumers seeking debt relief help from the attorneys in this case were given two contracts, one for debt settlement services and the other for bankruptcy-related services. The CFPB alleges that consumers who signed up sought services only for debt relief and not bankruptcy. The contract given to consumers related to bankruptcy was a ruse to disguise illegal upfront fees.

 

Assessing your debt consolidation compamy

How do you access a debt consolidation company

1. Check reviews

First you want a company in business long enough to generate reviews.  Then you want mostly good reviews.

2. Interim Check 

If you retained a company, check to see if progress has been made in 3 or 6 months.  By then creditors should have been contacted and some arrangements made for resolution.  Otherwise, you could find after say 2 years that little progress has been made.

3. Clarify Long-Term Contracts

One worries that you could enter into a long-term agreement and find that little has been done during that period and the consumer is without recourse.

References  

Singletary, M. (2011, June 16) Debt Consolidation Companies: 6 Red Flags. Retrieved from https://www.pbs.org/wnet/tavissmiley/a-wealth-of-knowledge/debt-consolidation-companies-6-red-flags/

NA (2010, July) Debt Relief Services & the Telemarketing Sales Rule: A Guide for Business. Retrieved from https://www.ftc.gov/tips-advice/business-center/guidance/debt-relief-services-telemarketing-sales-rule-guide-business

Shannon. (2012, April 25) How To Find A Reputable Debt Consolidation Company. Retrieved from https://blog.readyforzero.com/how-to-find-a-reputable-debt-consolidation-company/#.V0W69Pkwjbh

Friedberg, B. (ND). Compare Reviews for Debt Consolidation Companies. Retrieved from https://www.consumeraffairs.com/debt_counsel/

N.A. (ND) Pay off credit card balances and save. Retrieved from: https://www.sofi.com/personal-loan-credit-card-consolidation/

N.A. (ND) Personal Loans. Retrieved from: https://www.avant.com/personal-loans/

N.A. (ND) Personal Loans Through Prosper. Retrieved from: https://www.prosper.com/trusted/personal-loans

N.A (ND) Personal Loans. Retrieved from: https://www.lendingclub.com/loans/personal-loans-pd-1

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