Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB) ordered OneMain Financial, an installment lender, to pay $20 million in restitution and penalties for allegedly refusing to refund interest charges to 25,000 customers who cancelled their purchases within an advertised “full refund period.” OneMain also allegedly deceived borrowers about needing to purchase add-on products to receive a loan. OneMain was ordered to pay $10 million in refunds to consumers it harmed and an additional $10 million penalty to the CFPB’s victims’ relief fund.
The CFPB also reached a settlement resolving allegations that Citizens Bank violated consumer financial protection laws and rules that protect individuals when they dispute credit card transactions. The CFPB alleged that Citizens Bank failed to properly manage and respond to customers’ credit card disputes and fraud claims. If entered by the court, the order, among other things, would require Citizens Bank to pay a $9 million civil penalty.
Federal Communications Commission
The Federal Communications Commission (FCC) proposed new rules that would require companies with existing authorizations to provide international telecommunications services to and from the United States to file renewal applications at the FCC. The FCC proposed rules are designed to establish a careful review of foreign-owned authorization holders as part of a renewal process involving close consultation with national security, law enforcement, and other members of the Executive Branch.
Commodity Futures Trading Commission
The Commodity Futures Trading Commission and state regulators in California and Hawaii filed a joint civil enforcement action against a precious metals dealer, Red Rock Secured LLC, for allegedly perpetrating a $61.8 million nationwide fraud scheme. The complaint alleges the defendants fraudulently convinced customers to transfer funds from their retirement and other accounts to buy silver and gold coins from Red Rock.
The CFTC also obtained a $45 million settlement with HSBC Bank USA, N.A. (HSBC), a provisionally registered swaps dealer. The order charges HSBC with manipulative and deceptive trading related to swaps with bond issuers, spoofing, and supervision and mobile device recordkeeping failures at various times during an approximately eight-year period.
Federal Trade Commission
The Federal Trade Commission (FTC) says Meta violated the terms of its $5 billion settlement, alleging the tech giant misled users about children’s communications and access provided to outside app developers. The agency proposed revising the 2020 consent decree to impose a prohibition against Meta monetizing the data of children and teens under 18 that use any of Meta’s platforms, even after those users turn 18. Meta would also be subject to other expanded limitations, including in its use of facial recognition technology, and required to provide additional protections for users.
The FTC filed a lawsuit to stop a pair of student loan debt relief schemes that it says bilked students out of approximately $12 million by using deceptive claims about repayment programs and loan forgiveness that did not exist. The complaints against SL Finance LLC and BCO Consulting Services Inc. and SLA Consulting Services Inc. allege the companies have lured consumers looking to pay down their student loans into paying hundreds to thousands of dollars in illegal upfront fees. According to the lawsuits, the defendants tricked consumers into believing that they were registered in an authentic loan repayment program, that their loans would be forgiven, and that most of the payments would go to their remaining loan balances. Instead, the defendants were pocketing students’ payments, according to the FTC’s complaints.
The FTC filed a lawsuit to stop a Voice over Internet Protocol (VoIP) provider, XCast Labs, Inc., for allegedly continuing to funnel hundreds of millions of illegal robocalls through its network, even after receiving multiple warnings. According to the complaint, in January 2020, the FTC sent letters to a number of VoIP providers, including XCast Labs, warning them that assisting and facilitating illegal telemarketing or robocalling was against the law; XCast Labs continued to allow its services to transmit these calls even after being alerted to their illegality. The complaint also alleges Do Not Call violations and deceptive actions including spoofing caller ID information.
The FTC expanded its probe into the country’s six largest pharmacy benefit managers to also cover two group purchasing organizations that negotiate drug rebates on behalf of other PBMs Almost a year after the FTC sent information demands to the six largest PBMs in the U.S. healthcare industry, the agency said it is sending additional compulsory orders to Zinc Health Services LLC and Ascent Health Services LLC.
The FTC obtained an order against education technology provider Edmodo for collecting personal data from children without obtaining their parents’ consent and using that data for advertising, in violation of the Children’s Online Privacy Protection Act Rule (COPPA Rule). The company also allegedly unlawfully outsourced its COPPA compliance responsibilities to schools. In its complaint, the FTC says Edmodo violated the COPPA Rule by failing to provide information about the company’s data collection practices to schools and teachers, and failing to obtain verifiable parental consent.
In Other Federal News
The Federal Communications Commission (FCC) adopted new rules to further expand call blocking requirements to provide greater robocall protections for consumers. The new rules extend requirements to voice service providers that were not originally covered by the existing FCC rules. The rules further expand existing robocall blocking rules by requiring all voice service providers to take reasonable and effective steps to ensure that any immediate upstream provider from which they accept call traffic is not using it to carry or process a high volume of illegal traffic.
The U.S. Securities and Exchange Commission announced that it has reached a nearly $5 million deal with a former Wells Fargo executive to settle investor fraud claims stemming from her role in the bank’s so-called fake accounts scandal. The SEC said Carrie Tolstedt, the former head of Wells Fargo’s community banking division has agreed to pay a $3 million fine as part of the settlement, along with roughly $1.5 million in disgorgement and nearly $450,000 in interest.
The U.S. Department of Justice (USDOJ), FBI, U.S. Postal Inspection Service (USPIS), and other federal law enforcement agencies announced the completion of a three-month campaign that disrupted networks used by foreign fraudsters to obtain fraud proceeds. Over approximately the last three months, law enforcement took over 4,000 actions against individuals responsible for facilitating a range of fraud schemes. These schemes included those that targeted consumers, such as lottery fraud and romance scams, as well as those that targeted businesses or pandemic funds.
Ohio Attorney General Dave Yost secured a preliminary injunction against Michael Peppel and his Ohio Clean Water Fund for soliciting money but not delivering aid to residents of East Palestine, Ohio, affected by the recent train derailment disaster. The creator of the allegedly phony charity claimed to be collecting donations on behalf of Second Harvest Food Bank of the Mahoning Valley to provide residents of East Palestine with emergency aid and bottled water. The Attorney General’s initial lawsuit and request for a temporary restraining order alleged that Peppel and others have pocketed at least $131,000 of the roughly $141,000 raised from more than 3,000 donors.
Other articles in this edition include: