The CFPB Begins Taking Complaints on Debt Settlement and Credit Repair

Aug 12, 2014

 

Credit-RepairHow the CFPB Works

The Consumer Financial Protection Bureau (CFPB) began operations in July 2011, and takes complaints about a wide range of financial services including credit cards, mortgages, bank accounts and services, private student loans, auto and other consumer loans, credit reporting, debt collection, payday loans, and money transfers. On July 21, 2014, the CFPB announced that it was extending this list to include complaints from consumers with problems with prepaid cards, debt settlement services, credit repair services, and pawn and title loans. This is an indication that these companies will now face greater scrutiny by the CFPB.

Upon receiving a complaint, the CFPB forwards it to the company in question and works to get a response. The company is then given 15 days to respond to both the customer and the CFPB and it is expected that all but the most complicated complaints should be summarily dealt with within 60 days. Financial institutions should note that complaint data is shared with state and federal agencies who oversee the financial products and services they offer and that the CFPB non-personal complaint information is disseminated through its database so that all members of the public are privy to the kinds of complaints that were received and how companies responded. This strategy is hoped to help consumers in their evaluation of companies when they are shopping around for a bank or other financial service.

Debt Settlement and Credit Repair

A debt settlement service is one that typically promises consumers it can renegotiate, settle, or in some way change the terms of a person’s delinquent debt, by asserting that they can reduce the outstanding balance, interest rates, or fees owed. Credit repair services offer to improve a consumer’s credit reports by contacting credit reporting agencies on the consumer’s behalf and challenging items on the reports. A good credit repair service will, in addition to this, give financial counseling, and teach their client how to improve his credit scores and keep his credit record free of negative influences such as liens, collections, late payments, and repossessions. Many credit repair services accept credit and debit card payments through a credit repair merchant account.

The fees charged by these types of companies are often high and the CFPB has already taken several enforcement actions against debt settlement firms for manipulation of consumers struggling to get their financial affairs in order. Complaint categories against debt settlement and credit repair services include: excessive or unexpected fees; advertising, disclosures, and marketing practices; customer service issues; and frauds or scams. These new categories of complaints, in effect, give consumers a greater voice in these markets, along with a feeling that a watchdog is present to deter shady dealings. It also gives them a place to turn in the event that they encounter problems.

Honest companies will no doubt welcome the new move by the CFPB, since consumers will now be better able to differentiate between those companies out to take advantage of them and those that are working in the consumers’ best interest.

EMB can set you up with a credit repair merchant account in as little as 2 days, contact us today to get started!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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