Compliance

Fed tells SCUSA to shore up compliance management

DALLAS - 

According to documents filed on Thursday with the Federal Reserve and the Securities and Exchange Commission, Santander Consumer USA and its parent's subsidiaries entered into a written agreement on Tuesday with the Federal Reserve Bank of Boston.

Under the terms of the written agreement, SCUSA is required to enhance its compliance risk management program, board oversight of risk management and senior management oversight of risk management.

Within 60 days of this agreement, the Santander board of directors has been instructed to submit a written plan to strengthen board oversight of the management and operations acceptable to the Reserve Bank; a strategy that’s to include:

—Measures to oversee compliance by the board of directors and senior management with this agreement.

—Allocation of adequate resources to ensure the company’s compliance with this agreement and applicable consumer compliance laws and regulations.

—Actions that the board of directors will take to maintain effective control over, and supervision of, the company’s compliance risk management program.

—Structure of the board’s oversight of compliance risk management program, including a description of the committee and officer positions responsible for oversight of the compliance risk management program and a description of the duties and responsibilities of each committee and officer.

Furthermore, the agreement said that within 30 days of the end of each calendar quarter, the board or authorized committees are asked to submit to the Reserve Bank written progress reports detailing “the form and manner of all actions taken to secure compliance with the agreement, a timetable and schedule to implement specific remedial actions to be taken, and the results thereof.”

The agreement goes on to state, “Each provision of this agreement shall remain effective and enforceable until stayed, modified, terminated or suspended in writing by the Reserve Bank.

The agreement closed with, “The provisions of this agreement shall not bar, estop or otherwise prevent the Board of Governors, the Reserve Bank, or any other federal or state agency from taking any other action affecting Santander, their subsidiaries, or any of their current or former institution-affiliated parties and their successors and assigns.”

Santander Consumer USA president and chief executive officer Jason Kulas discussed compliance at length during the finance company’s “Investor Day” back on Feb. 23. Kulas first mentioned compliance near the beginning of his opening remarks to Wall Street observers.

“You’re going to hear us talk about (compliance) several times today and anytime you hear us speak, you'll hear that as a central component of our strategy,” Kulas said according to the event transcript posted by the company. “We believe strongly that focusing on this is one of the keys to success in consumer finance for many years in the future and regardless of how the political winds may shift every four years or so.

“We’re going to continue to focus on compliance and putting the customer at the center of everything we do and making that a central component of how we are successful going forward,” he continued.

When circling back to compliance again, Kulas compared abiding by regulatory mandates to the human body.

“They aren’t arms and legs or fingers and toes. You can survive without some of those. These are vital organs. So without any one of these things we’re not the company we’re capable of being best case and we don’t exist worst case. So that’s how critically important these things are and that’s why they're the central components of our strategy,” Kulas said.

“If we’re really good at driving the vehicle finance business … and we have all the funding that we would ever need for that but we ignore compliance, we don’t think we’re (in business),” he continued.

Kulus also highlighted that SCUSA already hosts what he called “regularly scheduled town hall meetings” that focus on compliance. The sessions already include all employees, who are also reached via video and written messages within the company.

“It’s filtering through the entire organization in exactly the way it should be if we’re going to ultimately be able to say that we’re really good at this,” Kulas said.

Kulas closed the discussion about compliance during the company’s event back last month by highlighting the compliance expertise SCUSA employees possess.

“If we had their resumes in this presentation, you’d agree they must be pretty good at compliance,” Kulas said. “They’ve got good backgrounds at big institutions.

“But our entire team is responsible for compliance,” he continued. “I think what’s really critical is every executive you'll hear from today has spent more of our career working for large, regulated financial institutions than not. So the way we talk about that internally is we’ve got a group of people running this company who know what good looks like from a compliance perspective, from a consumer practices perspective and we talk about making this a place that treats employees well and makes them feel valued.

“All these things, happy customers, happy employees, lead to better cash flows and long-term good performance. So it's all related. We think we’ve got the pieces in place to do that,” Kulas went on to say.

CFPB hands $3M fine to Experian over credit scores

WASHINGTON, D.C. - 

On Thursday, the Consumer Financial Protection Bureau (CFPB) took action against Experian and its subsidiaries for what regulators said was “deceiving” consumers about the use of credit scores it sold to consumers.

The CFPB said Experian claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. The regulator found lenders did not use Experian’s scores to make those decisions.

The CFPB ordered Experian to “truthfully” represent how its credit scores are used. Experian must also pay a civil penalty of $3 million.

“Experian deceived consumers over how the credit scores it marketed and sold were used by lenders,” CFPB director Richard Cordray said. “Consumers deserve and should expect honest and accurate information about their credit scores, which are central to their financial lives.”

Experian, based in Costa Mesa, Calif., is one of the nation’s three largest credit reporting agencies. Experian markets, advertises, sells, offers and provides credit scores, credit reports, credit monitoring and other related products to consumers and third parties.

As finance companies know, credit scores are numerical summaries designed to predict consumer payment behavior in using credit. Many lenders and other commercial users consider these scores when deciding whether to extend credit.

The CFPB emphasized no single credit score or credit scoring model is used by every lender.

In addition to the credit scores that are actually used by lenders, the regulator said several companies have developed so-called “educational credit scores,” which lenders rarely, if ever, use. These scores are intended to inform consumers.

The CFPB recapped Experian developed its own proprietary credit scoring model, referred to as the “PLUS Score,” which it applied to information in consumer credit files to generate a credit score it offered directly to consumers. The PLUS Score is an “educational” credit score and is not used by lenders for credit decisions.

From at least 2012 through 2014, the CFPB charged that Experian violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by “deceiving” consumers about the use of the credit scores it sold.

“In its advertising, Experian falsely represented that the credit scores it marketed and provided to consumers were the same scores lenders use to make credit decisions,” the CFPB said. “In fact, lenders did not use the scores Experian sold to consumers.

“In some instances, there were significant differences between the PLUS Scores that Experian provided to consumers and the various credit scores lenders actually use. As a result, Experian’s credit scores in these instances presented an inaccurate picture of how lenders assessed consumer creditworthiness,” the CFPB continued.

The regulator went on to state Experian also violated the Fair Credit Reporting Act, which requires a credit reporting company to provide a free credit report once every 12 months and to operate a central source — AnnualCreditReport.com — where consumers can obtain their report.

Until March 2014, the CFPB found that consumers getting their report through Experian had to view Experian advertisements before they got to the report. The regulator said this practice violates the Fair Credit Reporting Act prohibition of such advertising tactics.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is authorized to take action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws. Under the consent order, Experian must:

—Pay a $3 million penalty: Experian must pay a civil money penalty of $3 million to the bureau’s civil penalty fund.

—Truthfully represent the usefulness of credit scores it sells: Experian must inform consumers about the nature of the scores it sells to consumers.

—Put in place an effective compliance management system: Experian must develop and implement a plan to make sure its advertising practices relating to credit scores and on Internet webpages that consumers access through AnnualCreditReport.com comply with federal consumer laws and the terms of the CFPB’s consent order.

The full text of the CFPB’s consent order against Experian is available here.

TrainAndCertify.org offers new certification program for VSC professionals

LOS ANGELES - 

TrainAndCertify.org, a national provider of training and certification programs for sales and customer service reps in various consumer-centric industries, recently announced its Certified Vehicle Protection Professional (CVPP) certification program.

TrainAndCertify.org established the CVPP program via the Academy of Certified Vehicle Protection Professionals (ACVPP) to recognize individuals who demonstrate the requisite knowledge required to responsibly and effectively market vehicle service contracts (VSCs) to consumers.

TrainAndCertify.org has also produced and launched a branded version of the CVPP certification program for the vehicle service contract industry trade association Vehicle Protection Association (VPA) and its member companies.

TrainAndCertify.org president Laurence Larose emphasized training and certification constitute a standardized method for evaluating employee knowledge and providing measurable results that can be tied to development plans and business objectives.

TrainAndCertify.org currently serves the consumer debt relief industry (International Association of Professional Debt Arbitrators), the vehicle service contract industry (ACVPP and Vehicle Protection Association) and the student loan consolidation industry (Association for Student Loan Relief).

Larose contends impact on the success of an industry and its organizations is significant, bringing each industry's sales and customer service consultants to a minimum standard of excellence, customer protection and product knowledge.

“We’re excited to introduce the new CVPP certification that was created with VSC industry experts to accurately validate the very specialized industry knowledge and skills of sales and customer service employees of vehicle service contract marketers," Larose said.

“Professionals are looking for a way to demonstrate and promote their skills by earning a certification that is a distinct indicator of their deep industry knowledge and VSC marketing companies also benefit from the rigor and integrity of the CVPP training and exam process,” he continued.

Vehicle service contract sales and customer service professionals who would like to be CVPP certified must complete the online CVPP training module and certification exam. Organizations that work with CVPP certified professionals will be assured that these individuals are well-versed in industry knowledge and best practices for the vehicle service contract industry.

All participating companies are granted CVPP Accredited Service Center status with no monthly or annual fees or dues. The CVPP Accredited Service Center credential validates an organization's level of commitment to staff CVPP training and certification, resulting in competitive differentiation and consumer confidence. It can identify organizations that employ CVPP certified customer service and sales staff members.

To learn more about the program, go to TrainAndCertify.org.

13 industry groups & DOJ file briefs in CFPB constitutionality case

WASHINGTON, D.C. - 

The parade of legal developments leading toward the U.S. Court of Appeals for the District of Columbia Circuit rehearing an important case involving the Consumer Financial Protection Bureau has started in earnest.

First, the American Financial Services Association, along with a dozen other organizations, delivered an amicus brief — a legal document filed in appellate court cases by non-litigants with a strong interest in the subject matter. AFSA joined other organizations that have involvement in auto finance such as the American Bankers Association (ABA), the Consumer Bankers Association (CBA) and the Credit Union National Association (CUNA), as well as the Financial Services Roundtable (FSR).

The entire matter stems from a case in which the initial decision reached last October called the CFPB “unconstitutionally structured.” The case pit the regulator against PHH Corp., a Mount Laurel, N.J.-based finance company that operates in the mortgage space.

It involved a three-judge panel of the court, which ruled the CFPB’s structure was constitutionally flawed and that its director, who currently is Richard Cordray, should be removable at the will of the president.

As AFSA shared through its weekly Newsbriefs, the case deals with Corday’s order from June 2015 asserting that PHH violated the Real Estate Settlement Procedures Act (RESPA). The CFPB asked for the rehearing after a panel of judges ruled that the CFPB’s structure of a single director who can only be removed by cause is unconstitutional.

The rehearing will intensify further when oral arguments before the en banc court will be heard on May 24. AFSA and its fellow industry organization looked to make clear their issues with the CFPB’s actions and what the court should do next.

“In abruptly departing from the plain language of the statute, the bureau’s own regulations and longstanding guidance for industry, the order exceeded the bureau’s authority and violated fundamental tenets of administrative law and fair notice. The order also raises the troubling specter of further changes without notice, deeply unsettling a market built on predicable legal rules,” the organizations said in their amicus brief, which is available here.

Meanwhile, last Friday, the U.S. Department of Justice filed its own amicus brief, referencing a 1935 case that determined the president has “Article II authority to supervise, direct and remove at will subordinate (principal) officers in the executive branch in order to exercise his vested power and duty to faithfully execute the laws.” The specific matter — Humphrey’s Executor vs. United States — involved how Congress could forbid removing members of the Federal Trade Commission except for cause.

Then, the Justice Department made its connection to this matter involving the CFPB.

“The principal constitutional question in this case is whether the exception to the president’s removal authority recognized in Humphrey’s Executor should be extended by this court beyond multi-member regulatory commissions to an agency headed by a single director,” DOJ officials said in its amicus brief obtained and posted online by Hudson Cook.

“While we do not agree with all of the reasoning in the panel’s opinion, the United States agrees with the panel’s conclusion that single-headed agencies are meaningfully different from the type of multi-member regulatory commission addressed in Humphrey’s Executor,” they continued. “The Supreme Court’s analysis in Humphrey’s Executor was premised on the nature of the FTC as a continuing deliberative body, composed of several members with staggered terms to maintain institutional expertise and promote a measure of stability that would not be immediately undermined by political vicissitudes. A single-headed agency, of course, lacks those critical structural attributes that have been thought to justify ‘independent’ status for multi-member regulatory commissions.

“Moreover, because a single agency head is unchecked by the constraints of group decision making among members appointed by different presidents, there is a greater risk that an ‘independent’ agency headed by a single person will engage in extreme departures from the president’s executive policy,” the Justice Department went on to say. “And as the panel recognized, while multi-member regulatory commissions sharing the characteristics of the FTC discussed in Humphrey’s Executor have existed for over a century, limitations on the President’s authority to remove a single agency head are a recent development to which the executive branch has consistently objected."

The Justice Department closed its summary with a request for the U.S. Court of Appeals for the District of Columbia Circuit.

“We therefore urge the court to decline to extend the exception recognized in Humphrey’s Executor in this case. In addition, in our view, the panel correctly applied severability principles and therefore properly struck down only the for-cause removal restrictions,” DOJ officials said.

AUL outlines 3 components F&I training offering

NAPA, Calif. - 

Warranty and vehicle service contract administrator AUL Corp. released its 2017 F&I training schedule on Thursday, marking the second year in a row the company is offering F&I training.

AUL highlighted its training is designed to provide a tailored education that includes a three-day live course, virtual training sessions and an online platform that includes a variety of videos and quizzes available for 12 months following the in-person course. The curriculum is designed for F&I professionals selling finance and insurance products in dealerships.

Each course will be conducted by Kirk Manzo, director of global training for Assurant's Vehicle Protection Services group. Since 1999, Manzo has consulted and trained retail dealerships to help them maximize profits in their sales and F&I departments. He is a certified member of the John Maxwell Team. 

The live workshops will be held in Dallas; Napa, Calif.; Atlanta and Chicago. The three-day workshop will include training on compliance, objection handling, turnovers from sales to F&I and menu-selling. These highly interactive workshops will teach real-world strategies and tactics necessary to improve performance and increase satisfaction. Also included in the in-person training will be role-playing scenarios and valuable feedback following a video session.

When asked about the courses, Manzo said, “AUL’s training program integrates the use of virtual roundtables to provide a unique 'peer to peer' learning and accountability component unlike anything in the industry. It's like having your own private F&I 20 group to support and encourage your performance improvement."

AUL general sales manager Jason Garner elaborated about why the administrator is providing these resources

“Training must be a proactive and continuous process that becomes an essential element in a dealership's culture,” Garner said. “In addition to three days of classwork, AUL’s 12-month follow-up delivers the necessary components to ensure a successful continuous learning environment at the dealership.”

To learn more about AUL’s 2017 F&I Training, contact marketing@aulcorp.com or call (800) 826-3207.

Reynolds releases F&I libraries for Maine & Vermont

DAYTON, Ohio - 

Earlier this week, Reynolds and Reynolds announced the release of the Reynolds LAW Maine F&I Library, just a short while after the firm unveiled a similar product for a neighboring state with the rollout of the Reynolds LAW Vermont F&I Library.

In both of these instances, as well as for the more than 30 other states where Reynolds offers resources, the library is a comprehensive catalog of standardized, legally reviewed finance and insurance (F&I) documents for franchised dealers in the state of Maine and Vermont.

“The pressure of regulatory scrutiny is a constant for automotive dealers,” said Jerry Kirwan, senior vice president and general manager of Reynolds Document Services. “The documents in the LAW Maine F&I Library are regularly reviewed for legal sufficiency by Reynolds' industry-leading forms specialists alongside our outside legal partners. As a result, the library is a tool designed to help dealers better meet compliance obligations and manage risk.”

Kirwan went on to say, “We are pleased to announce the new LAW Vermont F&I Library. Regulatory scrutiny is an ongoing pressure on automotive retailers, and the LAW Vermont F&I Library is a tool designed to help dealers meet compliance obligations and manage risk.”

Kirwan also noted that because the documents in the library are written in consumer-friendly language, they can help dealers to establish a clearer, more efficient F&I process. A more efficient F&I process can help lead to a better overall customer experience with the dealership.

In addition, the printed documents in the Maine and Vermont F&I Libraries are available in digital format, which can help facilitate the conversion to laser-printed forms and e-contracting transactions. Reynolds Document Services maintains licensing agreements with all major providers of electronic F&I (e-F&I) solutions.

Now with Maine and Vermont in the offering portfolio, other states where Reynolds resources are available include: Alabama, Arizona, Arkansas, California, Colorado, Georgia, Hawaii, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia and Wyoming.

GWC Warranty rolls out free compliance training for top dealer clients

WILKES-BARRE, Pa. - 

Used-vehicle service contract and related finance and insurance products provider GWC Warranty introduced a new exclusive benefit for its top dealers. Members of the WealthBuilder and Elite Dealer Programs now have access to free, online, on-demand compliance training.

Through GWC Warranty’s Dealer Portal, WealthBuilder and Elite Dealers can access an online compliance training platform. The suite of tools and training is available in an intuitive, easy-to-use interface that is accessible 24/7 with modules dedicated to F&I personnel.

“Dozens of major federal regulations create a time-consuming, confusing and potentially costly environment for automotive dealers who do not have adequate training resources available to them,” said GWC Warranty chief executive officer and president Rob Glander said in a news release posted on Monday.

“It is our hope that offering compliance training to our top dealers will allow them to spend fewer hours navigating complicated regulations and more time doing what they love — selling cars,” Glander continued.

In addition to the free compliance program available to all WealthBuilder and Elite Dealers, GWC Warranty is also offering two optional upgrade packages at discounted rates.

WealthBuilder and Elite Dealers interested in signing up for compliance training should contact their GWC Warranty Dealer Consultants to get started. Dealers interested in partnering with GWC Warranty can visit www.GWCWarranty.com/dealers to learn more.

CFPB’s supervisory highlights focus on credit reporting

WASHINGTON, D.C. - 

The Consumer Financial Protection Bureau (CFPB) recently released a report detailing the problems in the credit reporting industry that the bureau said it has uncovered and corrected through its oversight work. Since launching its supervision of the credit reporting market, the CFPB has identified significant issues with the quality of the credit information being provided by furnishers and maintained by credit reporting companies.

The report outlines the actions that the CFPB has taken to address these ongoing problems, such as fixing data accuracy at credit reporting companies, repairing the broken dispute process and cleaning up information being reported.

“Since we began our oversight work, the CFPB has been uncovering and correcting problems in the consumer reporting industry,” CFPB director Richard Cordray said. “Because of our work, important improvements are being made. Much more work needs to be done but our corrective actions are leading to positive changes that are benefiting consumers all over the country.”

The CFPB maintained that consumer reporting companies are businesses that track information about a consumer, including credit history, deposit account history and other consumer transactions. The agency insisted such companies, which include what are popularly called credit bureaus or credit reporting companies or agencies, play a key role in the consumer financial services marketplace and in the financial lives of consumers.

For example, officials pointed out the reports sold by the three largest consumer reporting companies — Equifax, Experian and TransUnion — are used in determining everything from consumer eligibility for credit to the rates consumers pay for credit. The consumer reporting companies receive their information from furnishers, including both banks and nonbanks.

“Inaccurate information can lead to inaccurate reports, and consumer and market harm,” the CFPB said.

Consumers continue to complain about the credit reporting industry in high numbers. The bureau has handled approximately 185,700 credit reporting complaints as of Feb. 1.

“Consumers have said that when they dispute an item on their report, nothing changes even though federal law requires the consumer reporting company to conduct a reasonable reinvestigation and update the file to reflect any necessary changes or delete the item,” the bureau said.

“Consumers also frequently complain of debts already paid showing up on their report as unpaid and information that is not theirs being included in their report negatively affecting their credit scores,” the regulator added.

In 2012, the CFPB became the first federal agency to supervise all sides of the credit reporting market, which includes the consumer reporting companies and providers of consumer financial products or services, many of whom furnish or use consumer reports. In 2013, the CFPB published a bulletin warning that the agency would hold furnishers accountable for their legal obligation to investigate consumer disputes forwarded by the consumer reporting companies. The bulletin also reminded companies that they must review all relevant information provided with the disputes, including documents submitted by consumers.

The CFPB added that it has also made efforts to educate the public about the importance of checking their credit reports, what to look for in their reports, and how to dispute mistakes. As outlined in its special edition of Supervisory Highlights, because of these widespread issues, CFPB supervision has aimed its work at:

—Fixing data accuracy at consumer reporting companies: Early on, examiners found that one or more of the consumer reporting companies lacked good quality control to check the accuracy of their consumer records. The CFPB directed them to make necessary changes, and they did.

In recent exams, examiners have found that quality control programs have been instituted that include tests to identify whether reports are produced for the wrong consumer and whether reports contain mixed-up files. The companies are also taking better corrective actions when mistakes are identified, and making system improvements to prevent the same mistakes from happening again.

—Repairing broken dispute processes at consumer reporting companies: CFPB examiners discovered that one or more consumer reporting companies were not following federal requirements that said they must send a notice with the results of disputes to consumers. They also found one or more consumer reporting companies failing to consider documentation provided by the consumer on a disputed item.

The CFPB directed these companies to improve their dispute investigation systems. Now, continued monitoring has shown that the consumer reporting companies have improved processes for investigating disputes and are improving response letters to consumers.

—Cleaning up information from furnishers: Through earlier reviews at banks and nonbanks, CFPB examiners found widespread problems with furnishers supplying incorrect information to the consumer reporting companies. The CFPB directed them to take steps to address these problems, such as maintaining evidence that they are accurately handling disputes and conducting reasonable investigations.

Since then, the bureau indicated several furnishers have dedicated more resources to ensuring the integrity of the information. This effort includes better investigations and handling of disputes, notifying consumers of results, and taking corrective action when inaccurate information has been supplied. Importantly, though, examiners continue to find numerous violations at one or more furnishers, particularly around deposit account information.

The CFPB went on to mention its approach when examining the credit reporting activities of supervised entities is just like its approach to examining other activities of supervised entities. Supervision includes a review of compliance systems and procedures, on-site examinations, discussions with relevant personnel and requirements to produce relevant reports. The Fair Credit Reporting Act governs how companies handle consumers’ information.

When examiners find violations of law, they direct the companies to change their conduct and remediate consumers. When appropriate, the CFPB’s supervisory activity also results in enforcement actions, such as the action against the furnisher Wells Fargo Bank for failing to update or correct inaccurate, negative information reported to credit reporting companies about student loans.

The latest edition of the CFPB's Supervisory Highlights that focus on credit reporting is available here

FTC and New York AG release annual auto-related complaint stats

NEW YORK and WASHINGTON, D.C. - 

Coinciding with the start of National Consumer Protection Week, both the Federal Trade Commission and New York attorney general Eric Schneiderman — one of the most active individual regulatory enforcers in the auto finance space — both released annual consumer compliant figures associated with their respective agencies.

While complaints associated with auto financing made the national regulator’s list of 10 top categories, auto-related complaints received by the FTC’s Consumer Sentinel Network in 2016 registered only a fraction of the overall figures generated by activities associated with categories such as debt collection, imposter scams and identify theft.

The FTC reported that it received 94,673 auto-related complaints last year, constituting 3 percent of the annual figure. The agency defines auto-related complaints as “Misleading or deceptive claims regarding auto prices, financing, leasing or warranties; repair\maintenance issues with newly purchased used or new cars, including dissatisfaction with service provided by auto mechanics; price fixing and price gouging concerns against gas stations and oil companies; etc.”

Last year, the FTC said it received 103,768 auto-related complaints and 95,039 auto-related complaints in 2014.

The regulator went on to say imposter scam complaints surpassed identity theft for the first time as the second most common category of consumer complaints, according to the agency’s new Data Book.

Although debt collection complaints declined slightly between 2015 and 2016, the FTC indicated they remained the top consumer complaint category, comprising 28 percent of all complaints. Officials determined the high number of reported debt collection complaints was due in part to complaints submitted by a data contributor who collects complaints via a mobile app.

The FTC contends the rise in impostor scam reports is due to an increase in complaints about government imposters. Officials explained imposter scams come in many varieties, but work the same way: a scammer pretends to be someone trustworthy, such as a government official or computer technician to convince a consumer to send money.

Imposter scams also topped the list of complaints from military consumers followed by identity theft complaints, according to the FTC.

The regulator noticed identity theft complaints declined from 16 percent in 2015 to 13 percent in 2016, with 29 percent of 2016 consumers reporting that their data was used to commit tax fraud. Officials added there was a jump in those consumers who reported that their stolen data was used for credit card fraud; this figure rose from nearly 16 percent in 2015 to more than 32 percent in 2016.

“Our latest data book shows that imposter scams are a serious and growing problem, and you can be sure that the FTC will use all the tools at its disposal to address it,” said Thomas Pahl, acting director of the FTC’s Bureau of Consumer Protection. “That includes law enforcement actions against scammers and consumer education to help consumers avoid losing money.”

The most widely reported method of payment (58 percent) for those who reported losing money to fraud was a wire transfer. Of those who noted in their fraud complaint how they were first contacted, 77 percent said it was by phone.

In 2016, the Consumer Sentinel Network collected more than 3.1 million consumer complaints, which the FTC has sorted into 30 top complaint categories. As with 2015, Florida, Georgia and Michigan were the top three states for fraud and other complaints, while Michigan, Florida and Delaware were the top three states for identity theft complaints.

The complaint categories making up the top 10 are:

    Number of complaints Percentage
 1.  Debt Collection  859,090  28
 2.  Impostor Scams  406,578  13
 3.  Identity Theft  399,225  13
 4.  Telephone and Mobile Services  292,155  10
 5.  Banks and Lenders  143,987  5
 6.  Prizes, Sweepstakes and Lotteries  141,643  5
 7.  Shop-at-Home and Catalog Sales  109,831  4
 8.  Auto-Related Complaints  94,673  3
 9.  Credit Bureaus, Information Furnishers and Report Users  49,679  2
 10.  Television and Electronic Media  49,546  2

The FTC produces the Consumer Sentinel Network Data Book annually using complaints received by the Consumer Sentinel Network. These include complaints made directly by consumers to the FTC, as well as complaints received by state and federal law enforcement agencies, national consumer protection organizations, and 2non-governmental organizations.

The Data Book includes national statistics, as well as a state-by-state listing of top complaint categories in each state and a listing of metropolitan areas that generated the most complaints per capita.

The Consumer Sentinel Network’s secure online database is currently available to more than 2,300 individual users in civil and criminal law enforcement agencies across the country and abroad. Agencies use the data to research cases, identify victims and track possible targets. Although non-governmental organizations may contribute data to the database, only law enforcement agencies can access the database.

New York complaint data

Meanwhile in the Empire State, Schneiderman’s office reported that complaints about automobile sales, service, financing and repairs ranked second on the attorney general’s annual rundown, totaling 3,437. Officials explained many of the vehicle-related complaints were filed by Volkswagen consumers after Schneiderman announced an investigation into Volkswagen’s installation of software devices that caused its diesel vehicles to cheat environmental pollution tests.

The office participated in an interrelated series of partial settlements with Volkswagen and its Audi and Porsche affiliates that provided unprecedented relief, including enabling over 21,500 New York vehicle owners to sell their models back to the companies at pre-scandal, fair market value, plus receive a cash payment of at least $5,100.

Furthermore, Schneiderman highlighted that this year marks the 30th anniversary of New York’s New and Used Car Lemon Laws, which provide a legal remedy for buyers or lessees of new vehicles that turn out to be lemons. The arbitration program was extended to used vehicles three years after being introduced.

“You may be entitled to a full refund if your car does not conform to the terms of the written warranty and the manufacturer or its authorized dealer is unable to repair the car after a reasonable number of attempts,” Schneiderman’s office said. “The law allows consumers to shop around for the best deal when leasing a car, set limits on early termination, and gives the attorney general’s office jurisdiction to resolve excess wear-and-tear disputes.”

Since 1987, the attorney general’s office reported more than 30,000 new-model applications were filed resulting in more than 20,000 dispositions through either an arbitration award or a settlement. The 30-year total recoveries to consumers from the new-vehicle program are estimated to be in excess of $245 million and an estimated excess of $39 million from the used-vehicle program.

For the 11th year in a row, Internet-related complaints topped the annual list with 4,605 complaints received by Schneiderman’s office last year.

“This serves as a reminder: Fraudsters are always looking for ways to line their pockets at the expense of unsuspecting consumers,” Schneiderman said. “The best weapon against scams is an informed consumer — and the law. I encourage New Yorkers to report fraud, and my office will continue its long tradition of vigorously enforcing New York’s strong consumer protection laws.”

3 components of Trump demands for regulator task forces

WASHINGTON, D.C. - 

President Trump took aim again at government regulation with the executive order he signed on Friday. The latest action is requiring every agency to establish a regulatory reform task force “to eliminate red tape,” according to the White House.

The administration explained this executive order contains three main components, including:

— Each regulatory reform task force will evaluate existing regulations and identify candidates for repeal or modification.

— Each agency’s task force will focus on eliminating costly and unnecessary regulations.

— To hold the task forces accountable, agencies will measure and report progress in achieving the president’s directives.

“This executive order directs each agency to establish a regulatory reform task force, which will ensure that every agency has a team of dedicated — and a real team of dedicated people to research all regulations that are unnecessary, burdensome and harmful to the economy, and therefore harmful to the creation of jobs and business,” Trump said in remarks during the signing.

“Each task force will make recommendations to repeal or simplify existing regulations,” he continued. “The regulatory burden is for the people behind me and for the great companies of this country, and for small companies — an impossible situation, we’re going to solve it very quickly. They will also have to really report every once in a while to us so we can report on the progress, and so we can come up with some even better solutions.”

Trump went on to note that regulation need only clear one hurdle.

“Every regulation should have to pass a simple test: Does it make life better or safer for American workers or consumers?  If the answer is no, we will be getting rid of it and getting rid of it quickly,” the president said.

“We will stop punishing companies for doing business in the United States. It’s going to be absolutely just the opposite. They’re going to be incentivized for doing business in the United States,” Trump added.

Video from the executive order signing can be seen here or at the top of this page.