Bank of America is duking it out with the Consumer Financial Protection Bureau over allegations that it deceived customers in the sale of credit card add-on products, specifically a debt cancellation service. The bank advertised that its services could ease consumer payment obligations in case of job loss or other major life changes.
Bank of America stopped offering the debt protection products at the heart of this investigation in 2012. Now, sources say the bank and the Bureau can’t seem to agree on how much restitution should be owed to customers who purchased this product and others. At this point, a deal is not imminent.
These negotiations come as the CFPB is taking big public steps to assert itself in the debt collection industry. Wednesday, the Bureau added debt collection complaints to its Consumer Complaint Database. In 88 of those complaints, consumers listed Bank of America as the company responsible for their issue. The good news for Bank of America is that those complaints make up less than two percent of the total data. The bad news is that makes the bank one of only 21 companies in the CFPB’s database with 50 or more debt collection complaints.
Overall, approximately 24 percent of debt collection complaints dealt with credit card issues.
While this data definitely put the debt collection industry on notice, the CFPB took things one step further Wednesday when it issued an Advance Notice of Proposed Rulemaking, asking the public for feedback on how it should govern debt collectors. To help the industry get ready for the impact of this rulemaking process, we’re hosting a free, late-breaking webinar: The CFPB’s Proposed Rules for Debt Collectors: What You Need to Know. Join expert ARM industry attorneys John Bedard of Bedard Law Group; Ron Canter of The Law Offices of Ronald S. Canter, LLC; and John Rossman of Moss & Barnett to learn what you need to know in the face of this new regulatory development, namely:
- What does this mean for the collections industry?
- What should be the industry’s top focus?
- What is the best way to align industry resources?