1 Law Enforcement Techniques and Cross-Border Collaboration: Financial Consumer Protection - PowerPoint Presentation

1. 1Law Enforcement Techniques and Cross-Border Collaboration: Financial Consumer Protection IssuesSixth Annual African Dialogue ConferenceLilongwe, MalawiSeptember 2014Charles Harwood U.S. Federal Trade Commission

2. Con artists take advantage of extremely financially distressed consumers and try to take their last dollarConsumers without income are promised a job, government grant, or some other money-making opportunity Consumers deep in debt are promised homes will be saved or credit record fixed“Last Dollar” ScamsFTC v. Innovative Wealth BuildersFTC v. Oro Marketing

3. Mortgage relief scammers claim they will negotiate with mortgage lenders to avoid foreclosureCharge advance fee of hundreds or thousands of dollars paid up-frontScammers often fail to obtain the relief they promise (and may not do anything)Mortgage Relief FraudFTC v. Prime Legal PlansFTC v. Heritage Homes Group

4. FTC v. BurnLoungeFTC v. Fortune Hi-Tech MarketingFTC v. SkyBizPyramid SchemesFalse promises of return on investmentParticipants focus on recruiting new members instead of on selling productsRecruits only profit if they recruit more members who recruit more membersRecruits pay a share of fees earn to their recruiter and their recruiter’s recruiterScheme collapses and most participants lose moneyVictims in multiple countries

5. Automobile FinancingDealer misrepresentations in print, Internet, and video advertisements about low monthly payments to buy, no upfront payment to lease, required credit terms not disclosed in adsSubprime auto lending company that:Misrepresented fees consumers owedUnilaterally increased principal balancesOffered loan extensions without disclosing additional costsEngaged in abusive collectionVehicle loan modification schemeOperation Steer ClearFTC v. Consumer Portfolio ServicesFTC v. Auto Debt Consulting/Vehicle Loan Mod

6. Mortgage AdvertisingMisrepresenting the terms, including the interest, fees or costs, monthly payment, taxes and insurance, among other thingsMisrepresenting total costs, including money down to purchase a home, or that consumers will receive 100% financing and pay no closing costsIllegally disclosing, selling, or transferring consumer dataFTC v. Homes Heritage GroupFTC v. GoLoansOnline.Com

7. Payday Lending FraudConsumers who need cash quickly turn to payday loans: short-term, high interest loans that are generally due on the consumer’s next payday after the loan is taken outConsumers may not understand high costsLenders may engage in prohibited collection practicesFTC v. AMG ServicesFTC v. Vantage Funding

8. FTC v. Williams, Scott & AssociatesFTC v. Asset Capital and Mgmt.FTC v. Goldman SchwartzFTC v. Pinnacle Payment ServicesDebt CollectionMost debt collectors are careful to comply with laws, but some engage in illegal collection practicesSome collectors harass and threaten consumers, demand larger payments than allowed, refuse to verify debts, disclose debts illegallySome consumers pay collectors money they do not owe, others suffer invasions of their privacy, emotional distress, job loss

9. Phantom Debt CollectionFalse threats bully consumers to pay debts that do not belong to consumersFalsely claim affiliation with governmentFalsely claim imminent arrest, other legal actionConsumers complete online forms posted by loan brokersSome calls come from off-shoreFTC v. Williams, Scott & AssociatesFTC v. Pro Credit Group Inc.

10. MOU with Canadian Provincial Financial and Consumer Affairs AuthorityAgree to use “best efforts to cooperate” with investigations, cooperation in joint investigations, maintain the confidentiality of shared informationFTC v. EMGMortgage relief fraud boiler room operating from MontrealFTC assisted by Royal Canadian Mounted Police and provincial/local law enforcementCross Border