The National Attorneys General Training & Research Institute

The National Attorneys General Training & Research Institute The National Attorneys General Training & Research Institute

Consumer Protection News October 2016

The following is a compendium of information that may be of interest to our AG offices who are dealing with consumer protection issues. Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute expresses a view as to the accuracy of the matters, nor as to the position expounded by the authors of the hyperlinked materials.

Multistate Investigations and Settlements

USA Discounters

A $135.9 million settlement with USA Discounters over allegations that the company used deceptive marketing and unlawful debt collection practices targeting military service members. Of that amount, $95.9 million will go to consumers with the remaining $40 million being a penalty payable to the states. USA Discounters, which also did business as USA Living and Fletcher’s Jewelers, operated retail stores near military installations. USA Discounters advertised that military, veterans and government employees would never be denied credit for goods purchased from the retailer and then used abusive tactics to collect on debts owed, such as persistently contacting service members’ chains-of-command and using the military allotment system to guarantee payment. USA Discounters closed its stores in the summer of 2015 before declaring bankruptcy. Under the terms of this settlement, the company agreed to write off accounts, remove negative information from credit reports, and provide other consumer relief. The settlement also includes provisions for injunctive relief and civil penalties. All fifty states and the District of Columbia participated in the settlement.

Federal Consumer Protection Agencies

Consumer Financial Protection Bureau

CFPB Open Notices:

Final Rule

Electronic Fund Transfers (Regulation E); Amendments

On Oct. 5, 2016, the Bureau released a final rule to correct certain clerical and non-substantive corrections to errors it has identified in Regulation E. Prior amendments to Regulation E, which became effective in 2013, provided new protections to consumers who send remittance transfers to other consumers or businesses in a foreign country.

For more information:


Final Rule

Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z)

The Bureau is finalizing comprehensive consumer protections for prepaid accounts under Regulations E and Z, including tailored provisions governing disclosures, limited liability and error resolution, periodic statements, and the posting of account agreements. The final rule also regulates overdraft credit features that may be offered in conjunction with prepaid accounts.

For more information:


Final Rule

Status of New Uniform Residential Loan Application and Collection of Expanded Home Mortgage Disclosure Act Information about Ethnicity and Race in 2017 under Regulation B

This notice is issued pursuant to section 706(e) of the Equal Credit Opportunity Act and concerns the new Uniform Residential Loan Application and the collection of expanded Home Mortgage Disclosure Act information about ethnicity and race in 2017.

For more information:


CFPB Action:

Wells Fargo Bank secretly created accounts leads to $100 million fine

The CFPB has fined Wells Fargo Bank $100 million for widespread unlawful sales practices. The Bank’s employees secretly opened accounts and shifted funds from consumers’ existing accounts into these new accounts without their knowledge or permission to do so, often racking up fees or other charges.

For more information:


CFPB Other:

D.C. Circuit Court rules CFPB structure unconstitutional

The D. C. Circuit Court of Appeals issued a ruling on October 11, 2016 holding the structure of the CFPB to be unconstitutional. The case, PHH Corporation, et al v. Consumer Financial Protection Bureau, arose out of a challenge to a CFPB enforcement action under Section 8 of the Real Estate Settlement Procedures Act. The holding found that the agency structure violated Article II of the Constitution, which gives the president authority to exercise executive power. In so doing, the opinion struck down the provision requiring cause for removal of the director and gave, per the opinion’s author, “the president the power to remove the director at will, and to supervise and direct the director.”

For more information:


CFPB Monthly Complaint Report, Vol. 15 (September 2016) Available

Federal Communications Commission

Public Notice

Clarification on Blocking Unwanted Robocalls


Federal Trade Commission

Disclosure Evaluations

Interesting read – a summary of disclosure-related studies and evaluations from the FTC archives.

For more information:

Other Items of Interest

Better Online Ticket Sales Act of 2016

Legislation has been introduced in the U.S. Congress that would prohibit the circumvention of a security measure, access control system, or other technological measure that is used to enforce posted event ticket purchasing limits. Authority to enforce the law would be given to the FTC and the states.

For more information:



Midland Funding, LLC v. Johnson, 16-348

The United States Supreme Court has granted a writ of certiorari in this case involving a debt purchaser (petitioner) that acquired respondent’s defaulted credit card account and, after respondent filed for bankruptcy, filed a proof of claim in her bankruptcy case — even though the debt was time-barred under the relevant state law. After the bankruptcy court disallowed the claim respondent sued petitioner, alleging that it violated the Fair Debt Collection Practices Act. The Eleventh Circuit allowed the claim to proceed. The questions presented are: (1) “Whether the filing of an accurate proof of claim for an unextinguished time-barred debt in a bankruptcy proceeding violates the Fair Debt Collection Practices Act.” (2) “Whether the Bankruptcy Code, which governs the filing of proofs of claim in bankruptcy, precludes the application of the Fair Debt Collection Practices Act to the filing of an accurate proof of claim for an unextinguished time-barred debt.”


Arrest of 70 Call-Center Workers in India

Call-center workers in India, posing as U.S. Internal Revenue Service officers, were arrested recently in India. Authorities raided nine call centers in a Mumbai suburb, detaining over 700 workers. Most were released pending questioning. Police estimate that $36.5 million was obtained through this network. 

Consumer Protection News welcomes submissions for inclusion in future editions.

Mark Neil is the Editor of Consumer Protection News and may be reached at 202-326-6019. Consumer Protection News is a publication of the National Association of Attorneys General (NAAG). Any use and/or copies of this newsletter in whole or in part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material presented in this publication. For content submissions or to contact the editor directly, please e-mail

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