In our weekly Fine Print Alert we call out news from the financial community and shine a spotlight on any sneaky changes in the fine print. We also share our favorite reads from the week.
FINE PRINT ALERT
The CFPB is Ordering Two More Banks to Pay Up…
Last week the CFPB hit Chase and this week Discover and Citibank are both handing over money.
Discover has been ordered to pay 18.5 million dollars for allegedly engaging in illegal practices for the repayment and collection of student loans. Discover is the third largest student-loan lender by origination volume. The CFPB maintains that Discover used illegal debt-collection tactics, overstated the minimum amount borrowers needed to pay each month and did not give borrowers information about how the borrowers could receive federal income tax benefits. Discover will be returning $16 million to more than 100,000 borrowers as well as giving account credit to about 5,200 who overpaid their minimums. Nearly 130,000 borrowers will receive up to $300 or account credit of $75 for each tax year to amend for their 2011 or 2012 tax returns.
Citibank was fined $35 million by the CFPB and is being ordered to reimburse $700 million to the consumers who were victims of deceptive marketing, unfair billing practices and deceptive collection practices. This included over-stating the benefits of add-on insurance products, misrepresenting the cost of a fee to pay by phone and being enrolled in programs without being qualified.
FAVORITE READS FROM AROUND THE WEB
When smart personal finance habits just become stupid When you start getting your finances in order, it’s exciting. You see the basic concepts and rules of personal finance in action, and, after a while, they start to pay off. This makes it easy to become a personal finance devotee. But even the best financial advice can become counterproductive.Sometimes we try to use these rules when they don’t make much sense. Here are a few instances when otherwise smart personal finance concepts become kind of silly. Kristin Wong shares 4 ways that typically smart personal finance moves can result in some stupid behaviors on LifeHacker’s Two Cents blog.
A choice you make for your money today could cost you as much as $100,000 by the time you retire Erickson and Madland pinpoint two overarching problems with the fee structure of the investment options offered to most Americans through their retirement accounts: First of all, the fees are difficult to understand, and second, they “are often simply too high.” They point out that the better Americans understand the fees, the more likely they are to choose low-cost investments for their savings. Libby Kane shares details of the study from the Center for American Progress on Business Insider.