Thursday, July 9, 2015

CFPB, 47 States and D.C. Take Action Against JPMorgan Chase for Selling Bad Credit Card Debt and Robo-Signing Court Documents

Chase Ordered to Overhaul Debt Sales and Halt Collections on 528,000 Consumers’ Accounts.

Awesome!!!


WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau and Attorneys General in 47 states and the District of Columbia took action against JPMorgan Chase for selling bad credit card debt and illegally robo-signing court documents. The CFPB and states found that Chase sold “zombie debts” to third-party debt buyers, which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible. The order requires Chase to document and confirm debts before selling them to debt buyers or filing collections lawsuits. Chase must also prohibit debt buyers from reselling debt and is barred from selling certain debts. Chase is ordered to permanently stop all attempts to collect, enforce in court, or sell more than 528,000 consumers’ accounts. Chase will pay at least $50 million in consumer refunds, $136 million in penalties and payments to the CFPB and states, and a $30 million penalty to the Office of the Comptroller of the Currency (OCC) in a related action.
“Chase sold bad credit card debt and robo-signed documents in violation of law,” said CFPB Director Richard Cordray. “Today we are ordering Chase to permanently halt collections on more than 528,000 accounts and overhaul its debt-sales practices. We will continue to be vigilant in taking action against deceptive debt sales and collections practices that exploit consumers.”
Chase Bank, USA N.A. and its subsidiary Chase BankCard Services, Inc. are based in Newark, Del. and provide consumers with credit card accounts. From 2009 to 2013, when consumers defaulted on debts, Chase attempted to collect by contacting consumers, filing collections lawsuits, and selling accounts to third-party debt buyers. When Chase sold accounts, it provided debt buyers with an electronic sale file containing certain basic information about the debts from Chase’s internal databases, which the debt buyers used to collect on the debts. Chase was also responsible for preparing affidavits to verify debts when it or its debt buyers filed lawsuits to collect on defaulted credit card debts.
The CFPB found that Chase violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibitions against unfair, deceptive, or abusive acts and practices. Chase sold faulty and false debts to third-party collectors, including accounts with unlawfully obtained judgments, inaccurate balances, and paid-off balances. Chase also sold debts that were owed by deceased borrowers. Chase also filed misleading debt-collections lawsuits against consumers using robo-signed and illegally sworn statements to obtain false or inaccurate judgments for unverified debts. Specifically, the CFPB and states found that Chase:
  • Sold bad debts to third-party debt buyers: Chase sold certain accounts that had already been settled by agreement, paid in full, discharged in bankruptcy, identified as fraudulent and not owed by the debtor, subject to an agreed-upon payment plan, no longer owned by Chase, or that were otherwise no longer enforceable. Chase also sold debts with missing or erroneous information such as whether the debt had been paid and the amount owed.
  • Assisted third-party debt buyers in deceptively collecting debt: By selling inaccurate or uncollectable debts, Chase subjected certain consumers to debt collection by its debt buyers on accounts that were not theirs, in amounts that were incorrect or uncollectable. Chase knew, or should have known, that third-party debt buyers would seek to collect these faulty debts. Therefore, by providing inadequate or incorrect information, Chase assisted debt buyers in deceptive collection activities.
  • Robo-signed affidavits to sue consumers for unverified debt: Chase filed more than 528,000 debt collections lawsuits against consumers and provided more than 150,000 sworn statements to debt buyers for their collections lawsuits against consumers, often using robo-signed documents. In doing so, Chase systematically failed to prepare, review, and execute truthful statements as required by law. Chase also made calculation errors when filing debt collection lawsuits that sometimes resulted in judgments against consumers for incorrect amounts. Chase failed to notify consumers and the courts once it learned of these problems.

Enforcement Action

Pursuant to the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals engaging in unfair, deceptive, or abusive acts or practices or that otherwise violate federal consumer financial laws. Chase suspended collections litigation in 2011 and stopped selling debts in 2013. The CFPB and state actions provide relief for injured consumers, prohibit Chase from reviving its unlawful practices, and impose penalties for Chase’s law violations. Specifically, the order requires Chase to:
  • Cease collecting on 528,000 accounts: Chase cannot collect, enforce in court, sell, or transfer debts for consumers whose Chase credit card accounts were sent to collections litigation between January 1, 2009 to June 30, 2014. If Chase previously obtained a court judgment requiring consumers to pay the debt, Chase will notify the consumer that they will not try to collect, enforce, or sell the judgment. Chase will also contact the three major credit reporting companies to request that the judgments not be reported against consumers. These accounts had an original face value estimated at several billion dollars when Chase sent them to collections litigation. The actual market value is now estimated in the tens or hundreds of millions of dollars. Debt relief of this kind permanently protects consumers from any further collections and judgments on these accounts.
  • Pay at least $50 million in cash redress to consumers: Chase will pay cash refunds to consumers against whom collections litigation was pending between January 1, 2009 and June 30, 2014, for amounts paid above what the consumer owed when the debt was referred for litigation, plus 25 percent of the excess amount paid.
  • Prohibit debt buyers from reselling accounts: Chase must require by contract or agreement that debt buyers cannot resell debts purchased from Chase, unless to sell back to Chase.
  • Confirm debt before selling to debt buyers: Chase cannot sell debts that have been paid, settled, discharged, or are otherwise uncollectable. Prior to sale, Chase must provide account-level documentation to debt buyers confirming that the debts are accurate and enforceable. For a minimum of three years after selling the debt, Chase must make certain additional account information available to debt buyers including agreements, statements, and dispute records.
  • Notify consumers that their debt has been sold and make their account information available to them: Chase must notify consumers when their account is sold and reveal who purchased the account, the amount owed at the time of sale, and that consumers can request further information about their accounts at no charge.
  • Not sell zombie debts and other specified debts: Chase may not sell debts that do not have the required documentation, have been charged off for over three years or where the consumer has not paid for three years, are in litigation, are owed by a servicemember, are owed by someone who is deceased, or where the debtor has a payment plan.
  • Withdraw, dismiss, or terminate collections litigation: Chase will withdraw, dismiss, or terminate all pre-judgment collections litigation pending at any time after January 1, 2009.
  • Stop robo-signing affidavits: Declarations must be signed by hand, must reflect the actual date of signing, and must be based on the direct knowledge of the person signing and their review of Chase’s business records. Supporting documents submitted for debt collection litigation must be actual records of the debt, verified to be accurate, and not created solely for litigation.
  • Verify debts when filing a lawsuit: When filing collections lawsuits, Chase is required to submit specific information associated with the debt including the name of the creditor at the time of the last payment, the date of the last extension of credit, the date of the last payment, the amount of debt owed, and a breakdown of any post-charge-off interest and fees.
  • Pay $30 million civil penalty: Chase will pay a fine for its unlawful debt sales and robo-signing practices.
Chase must also implement policies, procedures, systems, and controls to ensure compliance with federal consumer financial laws when selling and collecting debts.
The Bureau is joined by 47 states and the District of Columbia in today’s action. The Bureau also worked in coordination with the OCC, which entered into a related agreement with Chase in 2013. The total relief to consumers includes debt relief associated with halting collections on more than 528,000 consumers’ accounts and at least $50 million in refunds. The amount of penalties and payments to states includes a $30 million civil penalty paid to the CFPB, a $30 million civil penalty paid to the OCC on the related matter, and $106 million in payments to states.
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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.





Thursday, July 2, 2015

"Opting Out" Does NOT Increase Your Credit Score

There is an abundance of information and advice regarding credit scores floating around online. Most of it is well-intentioned and much of it is accurate, but there is still a great deal of misinformation polluting the Internet. Sorting myth from reality is a constant challenge. 

Credit card issuers and other lenders can buy prescreened lists of consumer names from each of the three credit-reporting companies and then mail these consumers offers of credit, via the prescreening process described here.

The Fair Credit Reporting Act (FCRA) allows consumers to have their names removed from any of these prescreened lists, a process called “opting out.” When you’ve opted out, the credit bureaus can no longer sell your name as part of any prescreened list.

The myth associated with opting out is that your score will actually improve as a result of you doing so. This is false. Your choice to opt out or not is not even reflected in your credit files at the CRCs, so credit scoring models cannot and do not consider your choice whether to opt out when determining your credit score. Again, the choice to opt out has no direct influence on your credit scores.

The next logical question is, “Could there be an indirect influence on your credit score if you choose to opt out?” The answer is also “no.” The only impact opting out has on your credit reports, which are the sole basis of information used to determine your credit scores, is that by doing so you’ll reduce the number of soft inquiries appearing on your reports. 

Soft inquiries are those posted to your credit reports if your name has been sold by the credit bureaus as part of prescreened lists, and soft inquiries have no effect on your credit score.

Many consumers mistakenly believe that fewer inquiries on a credit report lead to improvement in credit score. That misperception assumes soft inquiries have an impact on your scores, which they do not. Soft inquires are never seen or considered by lenders or credit scoring models, so whether you have one soft inquiry or 100 of them, they have no impact on your credit scores.

If you’re tired of receiving credit card solicitations in the mail, then opting out is a great way to reduce or eliminate them. But if you think opting out will improve your credit scores, then you are mistaken. You will have to pay your bills on time and stay out of excessive debt in order to accomplish that goal.




Saturday, June 6, 2015

CRA / Liberty Tax Affiliate Agreement



Email:  Robert@CreditRA.com for a current PDF copy of the Liberty Tax Affiliate Agreement.



Liberty Tax Franchisees,

It was fantastic meeting everyone at the 2015 convention. I hope that everyone had a great time and made it home safely!

Now, it's time to get back to business as you still need to make money in the off-season. We have the BEST Credit Repair affiliate program in the country.

If you have not signed up... what are you waiting for? Please print, and sign the following affiliate agreement and get back to us as soon as possible. Scan and email or fax to secure: 804-767-1839. REQUEST DOCU-SIGN e-signature HERE: robert@creditra.com subject line: DocuSign Affiliate Agreement.

*** Please include your direct phone number (one that you will answer), and your preferred email address. Also, we need the addresses and numbers of your individual stores. 

Also - depending on your internet browser, the formatting of this agreement might look a little strange. Please email: Robert@creditra.com for a fresh PDF copy of the complete affiliate agreement.





Credit Repair Affiliate Agreement for Liberty Tax Franchisees






This Agreement is between the undersigned Participant and CRA Alliant Companies Inc. D/B/A  Credit Restoration Associates (CRA). Each may be referred to as a “Party” or collectively as “Parties.” Both the Participant and CRA's agreement to the terms and conditions of this Agreement shall be evidenced by the Participant’s activation into the Program (as defined below).

WHEREAS, Participant, using their own systems and trademarks offers tax and financial
related services to customers;


WHEREAS, Credit Restoration Associates, as a preferred vendor for Liberty Tax, provides professional credit improvement solutions (the “Program”);


WHEREAS, Participant desires to make available the Program to its customers, CRA desires to enroll Participant into the Program, and CRA agrees to provide Client account managers, FICO certified credit experts and trained credit improvement processors to perform the work and support to the Participant under the Program;


NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as
follows:


AGREEMENT

1. Effective Date. This Agreement is effective upon the Participant’s signing this Agreement and being enrolled by CRA to offer the Program.

2. Term. This Agreement shall remain in effect until all transactions contemplated under the Program have been finally completed or until CRA otherwise chooses to terminate this Agreement in writing pursuant to its terms.


Page 1 of 5

3. Program Definitions.

            a. "Free Consultation" means that the prospective client will receive a one hour appointment with a CRA certified account manager and credit expert at no charge to the client. The purpose of this consultation is to review the clients credit reports in a secure webinar or face to face setting. It will also determine the clients eligibility for the CRA program.

            b. "Initial Audit / Analysis / Action plan" means that upon qualification for the CRA credit improvement program, CRA will perform a thorough forensic credit report audit, public records search, collection agency audit, and a written action plan containing the entire action plan on how CRA intends to move forward with the client's case. Once this action plan is delivered and accepted by the client,  CRA will move forward doing the work to implement the action plan.

            c.  Monthly results audit's and new action plans are part of the ongoing credit improvement process.

4. Duties and Obligations of Participant. Participant shall perform the following duties during
the Term of this Agreement:

             a. perform all servicing obligations with respect to the Program in accordance with the
                 guidelines established by CRA, and in accordance with industry standards;

            b. advertise the Program as directed by CRA, using only the marketing materials provided to Participant from CRA as an approved vendor;



5. Duties of CRA. CRA shall perform the following duties during the Term of this Agreement:


            a. Provide professional and ethical credit improvement services. This involves client services to set the initial credit report review, complete the review, offer CRA services as the solution, send CRA New Client Enrollment paperwork to client, follow up with completion and return of paperwork, create the initial Audit / Analysis and Action plan, email Action plan to client, receive acceptance from client, complete the first work as detailed in the action plan, communicate expectations to the client and notify Liberty Participant of status.

            b. Notification to Liberty Participant of the status of all CRA clients and prospective CRA clients. Communication will be both verbal and in the form of reports emailed by CRA to Participant on a monthly basis. There will be three individual reports: 1. Prospects in the CRA pipeline.  2. New CRA sign-ups for the previous month.  3. Total number of CRA clients enrolled and their progress status through the CRA program.  

            c. Make payment to Liberty participant by the 5th of the month for clients signed up into the CRA credit improvement program for the previous month. This will be in the form of an ACH draft to recipient on the 5th, or a mailed paper check postmarked by CRA on the 3rd.



Page 2 of 5

                
Affiliate program. Referrals who signed up as new clients in the CRA credit improvement program:

                1-3 new clients = $50.00 each.
                4-5 new clients = $75.00 each retroactive to beginning of current month.
                6-10 new clients = $100.00 each retroactive to beginning if current month.
                11+ new clients = $150.00 each retroactive to beginning if current month.   


6. Confidential Information.


            a.  In performing its obligations pursuant to this Agreement, the Participant may, with or
                without consent, gain access to certain confidential proprietary information about the
                Program, including the Program’s marketing, objectives, pricing, completed Enrollment Forms and any other Program documents (collectively referred to as “Confidential Information”).

            b. Section 501(b)(3) of the Gramm-Leach-Bliley Act states that information security
                standards must include various safeguards to protect against not only “unauthorized
                access to” but also the “use of” Confidential Information relating to clients,
                including Enrolled Clients, that could result in “substantial harm or inconvenience
                to any CRA client.” In that regard, Confidential Information includes, but is not limited
                to, clients ‟ names, social security numbers, dates of birth, addresses, number of
                months at address, phone numbers, financial information, or other loans or accounts
                or tax information, bankruptcy, employer names and phone numbers.

            c. Participant shall maintain as proprietary and confidential all such Confidential
               Information and further agrees not to use such Confidential Information, nor to
               disclose such Confidential Information to any third party, except in performing its
               obligations pursuant to this Agreement and as authorized by clients.

            d. Unless prohibited by law, upon termination of this Agreement Participant agrees to
               return all Confidential Information including, but not limited to, all Program materials
               used in connection with the Program, and shall shred all voided, damaged and unused
               documents. Such obligations survive the termination of this Agreement.


7. Limitation of Liability. CRA shall not be liable to Participant or its clients
or agents for any consequential, incidental, indirect or special damages, or the loss of profits,
income or other benefits, arising out of or in connection with this Agreement or the services
performed hereunder; In addition, Participant shall not be liable to CRA or its clients
or agents for any consequential, incidental, indirect or special damages, or the loss of profits,
income or other benefits, arising out of or in connection with this Agreement or the services
performed hereunder.


Page 3 of 5

8. Indemnity. Participant shall indemnify, hold harmless and reimburse CRA, its officers, directors, employees and agents, for all expenses and costs, reasonable attorney's fees, judgments, penalties, damages, direct expenses and other payments in connection with any claims, disputes, controversies or litigation with respect to:
(i) anything wrongfully done or not done by Participant, 
(ii) the violation of any laws, rules or regulations applicable to Participant in connection with the Program, or 
(iii) Participant’s violation of this Agreement.


9. Trademarks. All CRA and Participant trademarks, name and logos remain the property of CRA and Participant Respectively. These (“Trademarks”) shall not be used in conjunction with any advertising, with the exception of those materials provided by or purchased from Participant Tax Service, without written consent from CRA or Participant Tax Services Respectively.


10. Advertising. If Participant elects to create advertising for the Program, Participant agrees to
submit any and all Program training, advertising, and/or marketing material including but not
limited to point-of-sale materials, direct mail pieces, newsletters, radio/television
scripts/video, newspaper/magazine advertisements, internet websites or advertisements,
and/or announcements to Participant Tax Service in accordance with the Participant Tax
Service Operations Manual for prior written approval.


11. Severance. If any provision of this Agreement is prohibited by or deemed invalid under
applicable law, such provision shall be ineffective to the extent of such prohibition or
invalidity, the remainder of such provision or the remaining provisions of this Agreement
will remain enforceable. Any headings or captions are intended solely for the convenience or
reference purposes and do not constitute part of this Agreement.


12. Choice of Law, Dispute Resolution, Jury Waiver, and Class Action Waiver.

            a. Virginia Law. Virginia law governs all claims which in any way relate to or arise out
                of this Agreement or any of the dealings of the Parties hereto.

            b. The Parties will act in good faith and use commercially reasonable efforts to promptly
                resolve any claim, dispute, controversy or disagreement (each a “Dispute”) between
                the Parties under or related to this Agreement. The efforts will include at least one
                face-to-face meeting between the Parties. Any Dispute arising out of this Agreement
                which cannot be resolved by the Parties will be governed exclusively by arbitration.
                The arbitration will be initiated and conducted (except as otherwise provided herein)
                in accordance with the Commercial Arbitration Rules of the American Arbitration
                Association, will be conducted by one arbitrator, and will be conducted in Richmond,
                Virginia. The arbitrator will have the power to award reasonable attorney’s fees and
                costs to the prevailing party in any arbitration, and either party will have the right to
                take appropriate action in a court located in the same jurisdiction where the
                arbitration occurred to enforce any arbitration award.



Page 4 of 5

            c. Jurisdiction and Venue. In any Dispute which in any way relates to or arises out of
                this Agreement, or any of the dealings of the Parties hereto, Participant consents to
                venue and personal jurisdiction in the state and federal court of the city of CRA's’ Corporate Office, presently Chesterfield County, Virginia state courts and the United States District Court in Richmond, Virginia. In any Dispute or suit brought against CRA , including CRA's present or former employees or agents, which in any way relates to or arises out of this Agreement, or any of the dealings of the Parties hereto, venue shall be proper only in the federal court district and division located nearest CRA ’s Corporate Office (presently the U.S. District Court in Richmond, Virginia), or if neither federal subject matter nor diversity jurisdiction exists, in the city or county state court located where CRA ’s Corporate Office is (presently the County of Chesterfield of Richmond, Virginia).


            d. Jury Waiver. In any trial between any of the Parties hereto, including present or former employees or agents of CRA, which in any way relates to or arises out of this Agreement, or any of the dealings of the Parties hereto, Participant and CRA each agree to waive the rights to a jury trial and instead have such action tried by a judge


            e. Class Action Waiver. Participant agrees that any claim it may have against Participant or CRA shall be brought individually and Participant shall not join such claim with claims of any other person or  entity or bring, join or participate in a class action against CRA.


13. Acknowledgments. Participant acknowledges that it has read this Agreement and that Participant is familiar with its contents. Participant acknowledges that no person is authorized to make and no person has made any representations regarding the terms of this Agreement or the Program.



FRANCHISEE SIGNATURE _____________________________   DATE: ________

Printed Name __________________________     Contact Phone Number:_______________

Email Address (one that you check regularly): 

Number of Stores: __________


Store Address(s) for customized marketing materials: 





Mailing Address (to send brochures and marketing materials):  



CRA SIGNATURE                      DATE: