Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Brill Emphasizes FTC Consumer Protection Activities in Financial Services in Speech to Public Policy Institute, (May 3, 2013)

By Tobias J. Gillett, J.D., LL.M.

In an address delivered yesterday to the Third Annual Public Policy Institute on Financial Services at the Law and Economics Center at George Mason University, FTC Commissioner Julie Brill described the agency’s activities in the financial services area, particularly with respect to debt collection, payday lending, mortgage and debt relief, and mobile payments.

Brill opened her speech by discussing the FTC’s recent partnership with the Consumer Financial Protection Bureau (CFPB). She noted that the Dodd-Frank Act, which transferred the rulemaking authority of the FTC in the financial services area to the CFPB but also gave the FTC and the CFPB overlapping jurisdiction over the enforcement of consumer protection laws regarding many non-bank financial products and services. She observed that the agencies’ collaboration—which included working groups on credit reporting, debt collecting, debt relief, mortgage assistance and credit repair, mortgage advertising, mortgage services, and online lending—had resulted in increased enforcement and stronger protections for consumers. The Commissioner predicted future growth in the agencies’ relationship.

She then proceeded to discuss the FTC’s work with respect to financial services, focusing on the areas of debt collection, payday lending, mortgage and debt relief, and mobile payments. Brill noted that the FTC receives more complaints about debt collection than about any other industry. She observed that the FTC’s recent work in the field has included four cases against debt collection operations using allegedly abusive or deceptive tactics and three cases against "phantom debt collectors"—those that attempt to collect on debts not actually owed or that do not apply the results of their efforts to consumers’ actual debts.

She pointed to the FTC’s January report on the debt buying industry, which found that debt buyers attempt to verify only about half of the estimated one million or more debts that consumers dispute, and did not obtain information from creditors about whether the debts they purchased had been disputed or verified in the past. She also suggested that the Fair Debt Collection Procedures Act, and FTC enforcement and rulemaking, must keep pace with advances in debt collection technology.

The agency official noted the FTC’s recent cases against allegedly abusive payday lenders, including its current cases against two lenders with ties to Native American tribes, AMG and Lakota Cash, in which the FTC is attempting to obtain a ruling that the FTC Act applies to tribal businesses, and challenging the practice of suing consumers in distant tribal courts.

She moved on to discuss the FTC’s actions against fraudulent mortgage assistance and debt relief operations, describing the FTC’s recent enforcement action—in coordination with state governments in Arizona, Arkansas, and Florida—against entities placing allegedly illegal robocalls to consumers advertising bogus debt relief services. She also noted the FTC’s prize given to developers of software intended to block those calls.

Finally, Brill addressed the FTC’s work with respect to mobile payments, beginning with its recent report on them. The report identified concerns regarding the differing levels of consumer protection available with different sources of mobile payments, the amount of security provided by mobile technology, and the degree of privacy afforded to consumers subject to data collection by their mobile devices. The reported urged industry to develop more consistent protections for billing errors, to impose stronger measures to ensure security, and to address concerns about the collection and use of data. Brill also noted the FTC’s recent, and first, case against a company accused of placing unauthorized charges on consumers’ mobile telephone bills, a practice known as "mobile cramming," and the FTC’s May roundtable on the practice.

News: ConsumerProtection FederalTradeCommissionNews