Friday, July 11, 2014

Payday Lending - The Fees and Now the Fines!

Yet another victory for citizens when it comes to payday lenders...
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ACE Cash Express has agreed to pay a total of $10 million as part of a consent order obtained by the federal Consumer Financial Protection Bureau.
The bureau accused the Irving-based payday lender of using illegal debt collection practices to pressure overdue borrowers.
“ACE used false threats, intimidation, and harassing calls to bully payday borrowers into a cycle of debt,” bureau Director Richard Cordray said today. “This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back.”
The $10 million will consist of $5 million in borrower refunds and a $5 million fine for the violations, the bureau said.
“We are proud of our company, the value we deliver to our customers, our nearly 5,000 associates and the more than 40 million customer visits over the past 12 months,” said ACE Cash Express Chief Executive Officer Jay B. Shipowitz. “We settled this matter in order to focus on serving our customers and providing the products and services they count on.”
The company said in response to the bureau’s concerns, it hired Deloitte Financial Advisory Services LLP to review a “statistically significant” random sample of ACE collection calls and found that more than 96 percent of the calls during the review period “met relevant collections standards.”
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One thing that needs to be made clear: action like this undertaken by the Consumer Financial Protection Bureau, is not to protect 'dead beat' clients. That seems to be a popular notion among those who want to defend a 'free market' system against the interests of ne'er do wells, and people who don't pay their bills. 
This action is undertaken on behalf of people who are trying to pay their bills and who are swept under because they cannot keep up with the interest disguised as fees, and who fall behind further because of action taken by an industry that causes bounced checks and other fees. 
It is just another 'blame the victim' argument...don't listen to it!

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