The staff of the Federal Trade Commission has provided its annual report to the Consumer Financial Protection Bureau on its enforcement and related activities in 2021 regarding the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA).
The report highlights the FTC’s enforcement actions related to the Acts and their implementing regulations, including in the areas of automobile purchases and financing, payday lending, credit repair and debt relief, and electronic fund transfers:
- Automobile Purchase and Financing: The report notes the FTC’s settlement with Richard Berry, the owner and manager of four auto dealers, in the FTC’s action against Tate’s Auto for falsifying consumers’ information on financing applications and misrepresenting financial terms in advertisements. The settlement provides for a $450,000 payment to the FTC for consumer redress, and prohibits Berry from misrepresenting the costs or other material facts related to vehicle financing and from violating the TILA and CLA. The report also notes the Commission’s administrative opinion and order against Traffic Jam Events for sending consumers deceptive mailers about COVID-19 benefits and potential prize winnings, and violating the TILA including by quoting monthly payments for consumers to purchase vehicles that failed to provide or hid in fine print key financing terms required by law. The order bans the defendants from the auto industry, prohibits misrepresentations regarding financial assistance from the government, and requires compliance with TILA.
- Payday Lending: The report highlights the FTC’s settlement against Harvest Moon Financial for overcharging consumers millions of dollars, deceiving them about the terms of their loans and failing to make required loan disclosures. According to the report, the owners and operators of the settling entities are banned from making loans or extending credit, nearly all debt held by the company will be deemed paid in full, and the companies involved are being liquidated, with the proceeds to be used to provide redress to consumers harmed by the company.
- Credit Repair and Debt Relief: The report discusses the FTC’s settlement with the operators of a student loan debt relief scheme (Student Advocates Team), charged with falsely promising consumers the company could lower or eliminate student loan balances, illegally imposing upfront fees for credit repair services, and signing consumers up for high-interest loans to pay the fees without making required loan disclosures in violation of TILA. The order bans the defendants from providing debt relief services and from collecting any further payments from consumers who purchased the services, and requires the defendants to return money to be used to refund consumers.
The report also highlights the agency’s Military Task Force, which comprises a cross-section of FTC representatives and focuses on various initiatives to assist military consumers. The report further outlines the FTC’s consumer and business education efforts on truth in lending and electronic fund transfer issues, including updates about vehicle purchases and financing and add-on products and services that can cost consumers thousands of extra dollars, and information about how debit and prepaid cards differ from other cards and important considerations about each type of card.
The FTC also has provided a copy of the report to the Federal Reserve Board.