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Deceptive Debt Collector Fined by CFPB

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


This week, the Consumer Financial Protection Bureau ("CFPB") took action against National Corrective Group, a debt collection agency that had been consistently breaking the rules and telling lies to customers. As a result of the action, the company and its owner, Mats Jonsson, will be forced to pay a $50,000 fine and dramatically change their collection practices.  The CFPB would have issued a greater fine, but "the poor financial condition of the companies and Jonsson make them unable to pay a greater sum."

National Corrective Group is in the business of collecting bounced checks through a program called the "bad check diversion program." Writing a check that bounces is a crime, and people who write checks can be prosecuted. Many state and local prosecutors partner with debt collection agencies to see if they can arrange payment plans with the consumers, rather than proceeding with legal action. According to the law, the debt collection agencies are not allowed to reach out to customers until the prosecutors office reviews the case and determines eligibility for a payment plan to commence.

National Corrective Group did not follow the rules. They reached out to consumers right away. And, when they sent letters, they used official letterhead to make it look like a state or local prosecutor was writing the letter. The company tried to scare consumers into believing that they were about to be sued, when no legal action was pending. According to a review of the cases by the CFPB, only 1% of the people who received letters threatening lawsuits were actually prosecuted.

The debt collection agency also became creative. They invented a financial education course, and told people that they needed to enroll in the course in order to avoid prosecution. The cost of the course was $200, which was often much more than the amount of the original check that bounced.

Through a combination of aggressive collection activities, misrepresentation and outright lies, National Corrective Group attempted to intimidate and scare people into paying. In addition to the fine, the CFPB will be monitoring National Corrective Group to ensure that the fake letters are no longer sent, and that no consumer is forced to enroll in their course.

The CFPB has been targeting collection agencies on a regular basis, and this is the most recent in a series of penalties.

Collection Agencies Often Bend The Law

Collection agencies are famous for using aggressive tactics. They will often impersonate law enforcement agencies, make threats that they cannot legally keep, and attempt to use personal account information to regularly debit checking and savings accounts in an attempt to extract as much money as possible. In addition to collecting the original amount due, agencies will often add significant fees on top. The paperwork used by collection agencies, especially when they are buying and selling debt, is often limited or non-existent. Many collection agencies are collecting debt which they have already sold or not even purchased. All of this can make it overwhelming for an individual to defend themselves.

The CFPB started accepting complaints from the public regarding debt collection agencies in July 2013, and it is now the second most frequent topic of complaint received by the agency, after only mortgages. You can read more details on the complaints here.

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Consumers Have Rights

Consumers have a number of legal protections in place. The Fair Debt Collection Practices Act (FDCPA) is a federal law that covers most debt collection practices. Here are some of the most important rules:

  • Collectors cannot contact you at an unusual time, such as before 8 a.m. or after 9 p.m., unless you have specifically authorized them to do so.
  • If the collector has been informed that you are not allowed to take calls at work, then the collector is not allowed to call you there.
  • If you have an attorney representing you, the collector must contact the attorney directly (so long as you provide the contact information of that attorney to the collector).
  • You can tell a collector to stop contacting you completely, and they must do so. The collection agency can still proceed with legal action, but they can no longer call you. If you want to stop a collection agency from calling, you can use these sample letters prepared by the CFPB.
  • Collectors have to prove that you owe the debt.

If you feel that any of these rights have been violated, you can and should complain directly to the CFPB. You can call them at 1-855-411-2372 or submit your complaint online.

Not only will you receive help in your complaint, but the CFPB will be able to identify patterns and trends in the complaint data. If a lot of people start complaining about a particular debt collection agency, the CFPB could launch an investigation, and ultimately take legal action, like the action taken this week.


Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Consumer Watchdog

Consumer Watchdog: 7 Things You Need to Know If You Have Debt in Collections

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Dealing with a debt collection agency can be painful. The phone never stops ringing, and they won't stop asking for money. Agencies have a reputation for pushing the boundaries of the law, using aggressive (and sometimes illegal) tactics, and bending the law to pressure people into making payments.

In fact, at the Consumer Finance Protection Bureau (a government agency that gathers financial services complaints), collection agencies are the fastest growing complaint category. And the main reason people complain: they don’t recognize the debt that is being collected. That complaint is often valid. There is no central registrar of debt, and sometimes the only “proof” that a collection agency has of your debt is that your name is on a spreadsheet. The debt collection market has a high risk of fraud, abuse and simple human error.

In this post, we wanted to make it clear:

  • How a debt can end up with a collection agency
  • The impact of a debt collection item on your credit score
  • Seven things you need to know about a collection agency, and your rights

Why are they calling me?

A collection agency will take control of your account when: they buy the debt, or they are hired by the bank/entity who owns the debt to collect on their behalf.

Banks and credit card companies usually make the collection calls themselves during the first 180 days. However, after 180 days of collection activity, the bank “writes off” the debt. At this point, most major banks will hire a collection agency to collect the debt. And after a few more months, the banks will typically sell the debt to a collection agency. When banks sells the debt, they wipes their hands of the relationship.

The business model of an agency is to collect more from you than they pay for the debt. So, if they pay one cent for every $100 of debt, they will want to collect two cents. That is why they are begging, prodding and pushing for any payment, however small.

Another common type of debt to end up with a collection agency is medical debt. Your doctor or hospital decides when they hand the debt over to the collection agency, but it is usually around 60 days without payment. There are a lot of horror stories here, given the complexities of our medical system. Over 60 million people have medical collection items.

But any debt can ultimately end up with a collection agency. If you owe money to your phone company, utility company, or anyone else – that debt can end up with an agency.

And, when debt is with a collection agency, a “collection account” will appear on your bureau. This will have an impact on your score.

Impact on your credit bureau

A collection item has a big impact on your credit bureau. The higher your score, the more points your score can drop. For example, if you have a 770 credit score, you could see your score drop 40 to 70 points from a single collection item.

A collection items stays on your credit report for seven years. Even if you pay the collection item, it doesn’t disappear.

Fortunately, this is changing with FICO 9. If you pay off a collection item, the item will no longer be included in your FICO score. However, it will be awhile before banks start using FICO 9.

In the current model, the only way for a collection item to disappear is to wait seven years from the date it is first reported. So, that means seven years from the date that you become 180 days past due.

The only way to have a collection item removed is for the collection agency to remove the debt. You can ask an agency for a “pay for delete” deal. This means that you agree an amount to pay, and then the agency will remove the collection item from your account. Some collection agencies will offer this (even though they technically are not supposed to do so). The closer you are to seven years, the more likely they are to deal with the debt. You can also dispute the item with the credit bureaus (online). If the debt collection agency does not respond with proof of the debt in 30 days, then the item would be removed. Here are the links to dispute:

7 Things to Know

  1. If you don’t think the debt is yours, then take action right away. Within 30 days of the first collection activity, write a letter (certified, copied, with proof of delivery) to the collection agency. Tell them that you do not owe the debt and they must cease and desist all collection activity. Collection activity must stop until the agency provides concrete proof that you owe the debt.
  2. If you don’t think the debt is yours, and the collection agency provides proof that you don’t agree with, then complain to the CFPB. The more documentation you have, the better.
  3. Dispute the items with the credit bureaus. You can dispute the items online at Transunion, Equifax and Experian. It is fast and easy to make a dispute. The burden of proof is now with the collection agency, and they often will just decline to provide further information. If they don’t provide proof within 30 days, the information disappears from your bureau.
  4. The item disappears from your credit report seven years after it is with a collection agency. That usually means seven years after you become 180 days past due. This is not the same as the date you opened your account. Sometimes the best option is to just wait for the item to disappear.
  5. Be careful when you communicate with the agencies. There is a statute of limitations, which varies by state. After the statute of limitation expires, you are protected from further legal action (wage garnishment, etc.). In some states, admitting that the debt is yours on the phone is enough to reset the statute.
  6. Just because you are outside of the statute of limitations doesn’t mean that the collection agency won’t try to sue you. And, if they do, make sure you defend yourself in court. It will be easy: you just reaffirm the statute of limitations. But, if you don’t defend yourself, you could end up with wage garnishment or a new judgment. In addition, complain to the FTC, because it is against the law for a collector to sue you or threaten to sue you on a time-barred debt.
  7. When all else fails, use this line with the collection agency: “I do not recognize this debt. I have provided a written request for you to cease and desist all collection activity. In addition, I have complained to the CFPB. After this conversation is complete, I will reach out to the CFPB to update my complaint with this conversation. Given that you have not provided adequate proof that I owe this debt obligation, I believe you have further incriminated yourself by making this phone call. I will also provide a written complaint to the FTC, as I believe you are violating the FDCPA. At this point, I am going to terminate the conversation, and I hope that you will respect the law and promptly cease and desist from all collection activities, and ensure that negative information is removed from all 3 credit bureau. Goodbye.”

If you have questions or feel you are being unjustly harassed by a collections agency, then reach out via TwitterFacebook, email info@magnifymoney.com or in the comment section below!

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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How to Complain

Most Complained About Banks – We crunched the numbers

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Analysis of CFPB DATA

  • Bank of America remains America's most complained about bank
  • Ocwen has rapidly become America's most complained about mortgage servicer. (Not surprising, given the mistakes they have made. If you are a customer, you could get money back from them. Find out more here.)
  • Citibank Credit Cards have the highest complaint ratio (complaints as a % of total credit cards)
  • Capital One received the most retail bank complaints per branch (with Bank of America a close second)
  • Experian is the most complained about credit bureau
  • Encore Capital Group is the most complained about debt collector

If you are having a problem with your bank, you can get help with your complaint from the CFPB (Consumer Financial Protection Bureau). Just file your complaint online, and they will help you get answers - and maybe even money. I told the story of my friend, who had his credit history fixed and money reimbursed, in this DailyFinance article. The CFPB has received over 400,000 complaints since it was launched, providing a real alternative for people to get help.

The CFPB makes its complaint database public. To date, over 250,000 complaints have been made public (and more are being added to the database every day). At MagnifyMoney, we believe that public access to complaint data is a great public service. It enables people like us to identify trends, rank banks based upon complaints, and help consumers make good financial decisions.

Today we are pleased to release our analysis of the complaint database.

Over 76,000 complaints were made public during the first six months of the year. Of the big four banks, Bank of America remains the most complained about bank. 5,261 people complained about BofA. Wells Fargo received 4,834 complaints. Chase received 3,988 complaints and Citibank received 3,025.

What does this mean for you?

We have crunched the complaint numbers, and have the following tips:

  1. If Ocwen is your mortgage servicer (now the largest non-bank servicer in the country), you should pay close attention. They have a history of mistakes, which can be very costly. If you are having problems with Ocwen, don’t be shy. Complain to the CFPB, and tell Ocwen that you are going to complain to the CFPB. They are a bit touchy, given they have just been punished with a judgment of more than $2 billion due to their mistakes.

  2. If you are receiving calls from a collection agency, you have rights. And if someone like Encore Capital Group keeps calling you - and you don’t know why - don’t be afraid to raise the issue to the CFPB (and tell Encore that you are doing so).

  3. For choosing a retail bank, we have long argued that branch-free banking is the way to go. Traditional banks pay the lowest rates on savings accounts, charge the highest monthly and overdraft fees, and limit you to their ATM network. Look at our checking account and savings account pages to make your checking account free, earn the highest interest on your savings account, and ditch your traditional bank. Of the big banks, Chase has half as many complaints per branch at BofA. And PNC and US Bancorp always did well.

  4. Credit bureaus can make mistakes. You should check your credit report every year, and make sure that mistakes aren’t there. You are allowed to get a free report every year from all three bureaus, and make sure you do. To get the issue fixed, you can go straight to the bureau. But, if they don’t move quickly enough, use the CFPB.

  5. The biggest complaint categories for credit cards are billing disputes and ID fraud. Sign up for alerts with your credit card company (they can send you an email if a large purchase is made). You should also download your bank’s app so that you can keep an eye on spending. Any suspicious activity should be reported immediately - and you should keep a paper trail of your communication with your bank. The earlier you catch anything suspicious, the better.

At MagnifyMoney, we will continue to update the complaint database, and try to provide you  with useful tips based upon the data.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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How to Complain

Ocwen Loan Servicing Settlement: Apply Now Online

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Young couple calculating their domestic bills

The deadline to submit a claim is now past

Ocwen Loan Servicing is the 4th largest mortgage servicing company in the country. That name will be familiar to millions of people across the country who make their mortgage payments to Ocwen every month.

As we reported here, Ocwen is now the most complained about mortgage company in the country. And we should not be surprised: negligence and incompetence at Ocwen has caused harm to countless families. It is so bad at Ocwen, that the CFPB has ordered Ocwen to:​

  • Forgive $2 billion of principal balance for its customers, and
  • Pay $125 million to people who have already lost their homes

Where did Ocwen do wrong? In short - they built a machine that was very good at foreclosing homes, but not very good at working with customers to avoid foreclosure. Examples include:

  • Not making people aware of ways to avoid foreclosure
  • Not acting upon a loan modification application, and proceeding straight to foreclosure
  • Turning people down for loan modifications in error
  • Foreclosing on homes, even though people were making payments under the terms of a trial modification

Ocwen also has a history of overcharging delinquent customers and losing loan payments. The list goes on. It is no wonder that Ocwen has been told that it can no longer acquire new mortgage portfolios until it cleans up its own house.

The good news is that money is now available to help people who have suffered from Ocwen’s incompetence.

  • If you are still in your home, you may be able to have the balance of your mortgage reduced (principal reduction). $2 billion is being forgiven.
  • If you already lost your home to foreclosure (and shouldn’t have), then you could receive a cash payment. A fund of $125 million has been created to pay victims.

Making sure that the claims are paid out is the responsibility of the National Ocwen Settlement Administrator. You can call them at 1-866-783-5382 for general questions. But, the good news is that you can file a claim online. And, remember: if you do not file a claim, you will not receive a settlement.

You should have received (or will be receiving shortly) a letter from Ocwen letting you know that you are eligible to file a claim. On the form, you will see a Claimant ID number, which is required to file the claim. If you think you are eligible for a claim but have not received a letter, then call 1-866-783-5382.

If you have received the letter, then we think the best way to file is online.  You can do that here.

If for some reason you are not satisfied with the way your claim is being handled, then you can complain to the CFPB directly on their website.

Finally, make sure you DO NOT pay anyone to help you with your claim. A lot of scam artists out there will tell you that they can get you more money or better deals. They can’t. Just submit your claim directly to the claims administration so that you can get the money that you are owed.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com


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How to Complain

The Most Complained About Banks

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


The Consumer Financial Protection Bureau was established by Congress in 2010 as part of the Dodd-Frank Act. The CFPB has a big job: protect any consumer who uses a financial product or service. How does the CFPB protect consumers? They write rules that banks must follow and they fine banks when they don't follow the rules. Only a small part of the fine goes to the government: the biggest portion is actually refunded to the people who were victims. To date, the CFPB has put over $3 billion into the pockets of everyday Americans.

But the CFPB also does something that we find very exciting: they will handle your complaints. We think this is amazing for 3 reasons:

  1. Banks will be held accountable. Speaking to the manager is no longer the last line of defense. If you have suffered a serious grievance - you have a real alternative to the bank.
  2. The CFPB can see complaint trends. Why is that important? Complaints are usually a great way to figure out if there is a systematic problem. If, all of sudden, thousands of people start complaining about a small bank charging lots of hidden fees - then the CFPB can use those complaints as a clue to investigate the bank. When I used to run a credit card business, I would use complaint data internally to find out where we got things wrong.
  3. The CFPB shares the data publicly - including the names of the banks. We think this is the best part of the story. Airlines are constantly ranked based upon their on-time performance. Why can't we do the same thing for complaints about banks? When I lived in the UK, the complaint data would be front-page news.

At MagnifyMoney, we love that the CFPB manages complaints and publishes the data. We want to help the CFPB advance their mission. We have put together a simple guide on How to Complain. Don't be afraid to make the CFPB work for you!

Monthly Reports

Starting today, MagnifyMoney will be publishing a monthly report on the most complained about banks. Here are some of the most interesting findings for this month:

  • Bank of America received more complaints than any other institution. A total of 35,847 complaints have been made
  • 5 of the Top 10 Most Complained About Banks are not banks!
    • 2 are mortgage companies: Nationstar and Ocwen
    • 3 are credit bureaus: Experian, Equifax and TransUnion
  • The most complained about product: mortgages
  • During the first 3 months of 2014, Ocwen actually received more complaints than Bank of America.  Ocwen is a mortgage-servicing company.
  • Debt collection has rapidly risen and is now the second most complained about topic. The worst offender: a company called Encore Capital Group. Banks will sell your debt to companies like Encore Capital.
  • Experian is the most complained about credit bureau - having received 8,630 complaints
  • When adjusted for the number of branches, Capital One is the most complained about bank. They received more than one complaint for every branch that they operate.
  • When adjusted for the number of credit cards outstanding, Citibank received more complaints than any other issuer
    • The top 3 credit card complaints: Billing Disputes, Interest Rate and Identity Theft
  • In absolute numbers, New York has sent more complaints to the CFPB than any other region
  • When adjusted for the number of people, Miami had the highest per capital complaint ratio


Complaint Roundup


CFPB Data on Most Complained about Banks: See more details

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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How to Complain

Social Media Amplifies Your Voice to Get Complaints Heard

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


There is a nuanced art to complaining and getting results from a company.  A few years ago, you could call a customer service line, write a letter or shoot an email into the abyss with the faintest hope that someone might be inclined to help you resolve your issue. Those with a major issue might get a lawyer to assist in their struggles. Gone are the days of waiting on hold for an hour listening to awful muzak before a customer service rep tells you he can’t do anything for you.  It can take as few as seconds now, thanks to social media, which provided a game-changer in the war of getting a major company to recognize they’ve mistreated you.

Going up against a major company

In February of 2013 a winter storm named for an orange fish in a children’s movie came ripping through the Northeast. Several feet of snow crippled transportation in and out of New York City, leaving would-be-travelers stranded. As a New York City dweller, I was stranded in the comfort of my own home, but it provided little solace when I realized the major airline I’d booked travel through did not intend on refunding my fare.

To set the stage: my attempt at frugal travel had me departing New York City by bus to reach my destination in upstate New York. I had booked a flight back for two days later.

Nemo’s winter chaos cancelled my bus trip (for which I was refunded) but the storm had cleared up by the time I would have returned two days later so my flight wouldn’t be cancelled affording me a refund.

I called the airline’s customer service line and explained the storm had prevented me from reaching my destination, so I wouldn’t be there to board the return flight. A semi-polite representative told me that was unfortunate, but I’d have to forfeit the cost of my ticket with no refund.

In a black-and-white scenario, I understood the airline’s position. The storm did not cancel the flight I had booked, so they shouldn’t have to refund me just because the storm prevented me from getting there. Plus, I didn’t use one of their planes to reach my destination.

After two attempts at resolving the issue through the airline’s customer service line, hoping a combination of my sob story and being a loyal flyer would illicit a kind gesture, I changed my tactic.

I decided to pull a typical millennial move and vented my frustration on Twitter.

Getting Social

Tagging the offending airline in the tweet, I used my 140 characters to sum up how Nemo had disrupted my travel plans and I wished the airline would reward my loyalty with understanding by offering me a refund or travel credit.

Within 10 minutes, a member of their social media team made contact with me and asked that I send my email address in a direct message on Twitter so they could attempt to resolve my issue.

Thirty minutes later I had a travel credit for the cost of the flight I would be unable to board. I tweeted my thanks to the airline and still fly with them today.

Why companies react to social media

Social media is by no means the only way to try and resolve your complaint, but it’s an incredibly effective tool. Twitter, Facebook, Google+ and similar platforms all amplify your voice to reach thousands to potentially millions of people.

Dealing with a bank-related issue isn’t much different than travel related frustrations. You may feel utterly helpless or completely ignored when it comes to going through typical customer service channels to draw attention to your complaint or issue. This is why social media is such a valuable tool for the average consumer. Social media can provide companies with easy public relations wins or become an absolute nightmare within seconds.

Major companies from all sectors have experienced the embarrassment of trending on Twitter or losing hundreds to thousands of Facebook fans after an inappropriate or ill-timed post caused a backlash from consumers.

Fearing the amplified voice of social media, most banks have dedicated social media teams that work to field complaints (or compliments) sent to them via Twitter, Facebook or Google+.

How to use social media to complain

If you plan to use social media to get your bank’s attention, be sure you’re going about the process the right way.

  • Don’t just vent or threaten

Expressing your outrage might feel good, but it’s better to approach the situation diplomatically and mention being a loyal customer but that you’re disappointed with how you’ve been treated.

  • Using the appropriate mentions and hashtags

If you don’t “at mention” or “tag” your financial institution in the tweet or Facebook post, then it will likely just get lost. You should also look to see if your bank has a specific handle for customer support. Chase for example has their team responding to customer complaints from the @ChaseSupport handle. If you have an issue that many other people are experiencing, look to see if a trending hashtag exists that you can use to amplify your voice.

  • Don’t give away personal information in a public forum

Never divulge personal details like credit card or social security numbers on social media.

  • Thank them for their help

If using social media resolves your issue, then be sure to publically thank your bank. For example: Thanks @Chase and @ChaseSupport for helping me resolve my billing cycle issue so quickly.

What happens if social media doesn’t resolve your problem?

If using the powers of social media doesn’t resolve the situation, then you still have another major player at your disposal.

The Consumer Finance Protection Bureau was established to help and protect you. You can reach out to the CFPB to be an advocate on your behalf and try to resolve the situation.

It doesn’t hurt to mention to your bank (via social media or on the phone) that you’ll be filing an official complaint with the CFPB. Banks may be big, and sometimes feel like bullies, but they aren’t fans of getting publically reprimanded. Find more information about how to utilize the CFPB here.

Have you used social media amplify your complaint? Tell us about it in the comment section or on Twitter/Facebook/Google+!

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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