Drobot Dean / AdobestockThe world of debt collection is never at a loss for updates, but separating the important stuff from the background noise isn't always easy. At insideARM, our goal is to help you answer those questions. Every Monday, we bring you a recap of the need-to-know highlights to help you stay informed.
On Tuesday, CFPB Bites featured a CFPB report exposing cash-back fees at major retail chains that disproportionately impact low-income communities, a report on ongoing issues in medical and rental debt collections, and a consumer advisory on hidden costs in video games. The CFPB also provided guidance to banks on obtaining consent for overdraft fees and defended the Small Business Data Rule in court. Notable enforcement actions targeted a deceptive membership credit card, a misleading mortgage lender, a mortgage servicer violating foreclosure policies, a national bank reporting inaccurate credit data, and a federal student loan servicer accused of mismanaging loans.
On Wednesday, we circulated news that the CFPB has permanently banned private arbitration platform Ejudicate from handling consumer financial product disputes, citing misleading and unfair practices toward student borrowers. Ejudicate allegedly initiated sham arbitration proceedings on behalf of Prehired, a company previously shut down for illegal lending practices tied to its income share agreements. The CFPB found Ejudicate falsely claimed neutrality while earning contingency fees from settlements, forced consumers into arbitration without their consent, and limited borrowers' ability to contest claims. Along with the ban, Ejudicate received a nominal civil penalty due to its inability to pay. This action highlights the CFPB's focus on protecting consumers from deceptive arbitration practices under the Dodd-Frank Act.
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