Archive for the ‘Bureau of Consumer Credit Protection’ Category

There’s no such thing as a ‘free government grant’


By Russ Van Arsdale, executive director Northeast CONTACT
Posted July 20, 2014, at 6:01 a.m.

As soon as she heard the offer of a “free grant from the U.S. government,” Barbara Purington of Litchfield was suspicious.

It was offered simply because she was a good citizen, she was told. She kept the caller on the line, getting as much detail as she could before saying she would think about the offer. Instead, she called David Leach, principal examiner at Maine’s Bureau of Consumer Credit Protection. Leach told her what she thought she might hear: The offer was certainly a scam attempt.

Unsolicited offers of “free government grants” are always scams:

— Government officials don’t make random calls for such purposes.

— The government doesn’t have money to give away.

— Government representatives don’t get angry or upset with people on the phone who won’t do what they ask.

What the caller asked Barbara to do was to go to the nearest store that sold Green Dot prepaid cards, buy one for $250 and wire the money by Western Union. She knew if she did so, she would never see the money again — even though the caller assured her “that’ll come right back to you; [the money] will never leave the voucher.”

Barbara told the caller she would continue to think about the “offer.” He called back three consecutive days, leaving a phone number so he could “walk her through the process” of wiring money. The last call came from another man, who became belligerent when told his offer sounded fishy.

The final caller threatened to sue Barbara. She invited him to show up with his paperwork in hand and see who ended up behind bars.

People at BCCP know cases like these are all too common.

“There’s been an explosion of these scam calls,” David Leach said. “We know as regulators we only see the tip of the iceberg.”

Scammers often try to pass themselves off as government officials. On its website, the Council on Financial Assistance Reform — which coordinates federal assistance — states callers purporting to represent COFAR have told people they can receive grants of up to $25,000 if they’ll pay an up-front “processing fee” of $150 to $700. As with all other such offers, these calls are scam attempts.

Scammers don’t restrict themselves to phone lines. Fake websites abound, saying they’ll get you thousands of dollars if you’ll only send a few hundred up front for “processing” or “administrative” fees. They might also want your bank account number “for direct deposit.” If you reveal enough of your personal information, they can steal your identity.

When considering any such offer, ask for details in writing. People making legitimate offers will not hesitate to send written details, while scammers want quick answers along with your money.

Follow this advice from a BCCP news release last week:

— Don’t wire money to an unknown caller.

— Don’t give out your personal information to such callers.

— If someone calls claiming to be from a federal agency, ask for the agency’s name, physical address and supervisor’s direct-dial (not 800) phone number.

— Report any suspected government grant scams to the Bureau at 1-800-332-8529. More information about the Bureau is available at

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit or email

Maine State Officials Issue Warning about Fake Offers of Government Grants in Exchange for Advance Fee

David Leach, Principal Examiner
Bureau of Consumer Credit Protection

GARDINER – Governor Paul R. LePage joined officials in Maine’s Bureau of Consumer Credit Protection in highlighting a recent trend of Mainers receiving unsolicited offers of substantial government grants if they pay an initial advance or administrative fee. In some of these cases, the consumers are also asked to provide personal and financial information.

“Government agencies aren’t in the business of making unsolicited calls to offer grants or financial awards of any kind,” Governor LePage said. “Mainers receiving such offers are encouraged to be cautious and to contact the Bureau of Consumer Credit Protection, which provides expert advice and assistance on many personal finance matters, including those related to unexpected offers of funds, prizes, debt management services or other financial incentives.”

The Bureau’s Principal Examiner, David Leach, outlined several recent cases:

  • A Chelsea resident received an unsolicited call from the “United States Federal Grant Program,” promising an $8,400 grant for an advance fee of $400. The consumer’s Caller ID displayed a Washington, D.C. area code (202), but the call was traced to India.
  • Another Mainer was offered a government grant through the “Finance Accounting Department.” This $6,000 grant, she was told, could be obtained by sending $250 through a Green Dot Money Pack card.
  • The “Federal Treasury Department” offered a Maine man a $6,500 grant in exchange for an unspecified wire payment to cover administrative costs and other program fees.
  • The “Federal Grant Program” called another Maine consumer informing her that she had been selected out of 1,500 Mainers to receive a $7,000 grant. The consumer became wary when the caller demanded an upfront “administrative fee” payment.

In each of these cases, the consumers contacted the Bureau, and were warned not to send funds or permit access to their checking accounts. The phony grant dollar figures typically range from $800 to more than $8,000.

“Consumers are often asked to disclose their bank account numbers, under the premise that the funds could be transmitted directly into those accounts, and are asked for their Social Security numbers and dates of birth,” David Leach said. “But then, before their “grants” are sent, the consumers are told they must transmit funds using money services such as Western Union, MoneyGram, Vanilla Card or Green Dot card to pay administrative costs and fees,”

Leach said the personal information, such as bank account numbers, Social Security numbers and dates of birth, is likely collected to perpetrate subsequent identity theft. He emphasized that if an unknown person offers free grant money in exchange for an advance or processing fee or disclosure of personal or bank account information, it’s a scam.

The Bureau of Consumer Credit Protection offers the following guidelines:

  • Never send money, especially using money transmitters or prepaid cash cards, to unknown telephone solicitors.
  • Do not disclose personal information such as Social Security number, date of birth, credit card or bank account numbers to unknown callers. This could lead to identity theft.
  • If the callers say they are from a federal agency, ask for the exact name of that agency, the agency’s physical address, and their supervisor’s direct dial (not an 800 number). If the caller claims to be in Washington, DC, the number should have a Washington, DC area code of 202.
  • Report any suspicious activity involving government grant scams to the Bureau of Consumer Credit Protection, 1-800-332-8529. Additional information about the Bureau and its resources is available at

The Maine Bureau of Consumer Credit Regulation was established in 1975 to enforce consumer financial protection laws. The Bureau is an agency within the Department of Professional and Financial Regulation, which can be reached online at

Using common sense when you buy will keep your home from plunging ‘under water’


By Russ Van Arsdale, executive director Northeast CONTACT
Posted March 09, 2014, at 8:50 a.m.

DowneastGuide-to...yourMainehomeWe’ve all heard the ads urging us to buy, since “interest rates are near historically low levels.” With spring approaching (at least on the calendar) and those low rates expected to hold for a while, many renters are thinking about buying a home.

Many may think twice, wondering if all those horror stories about houses going “under water,” or costing more than they’re worth, might come back to bite them. Those with second thoughts might want to spend some time with a new publication from the Maine Bureau of Consumer Credit Protection.

It’s called The Downeaster Common Sense Guide to Finding, Buying and Keeping Your Maine Home. The 32-page guide was written by the bureau’s principal examiner, David Leach, and senior consumer credit examiner, Edward Myslik.

It starts in exactly the right place: asking if you should buy a home or continue to rent. Once you’ve determined that your best bet is to buy, the real work begins.

The best piece of advice in the guide is not to buy more home than you can afford. You figure affordability through a debt-to-income ratio. The “front-end ratio” is figured by dividing the monthly mortgage payment (principal, interest, taxes and insurance) by the borrower’s total monthly income. The ratio should not be more than 28 percent.

What’s termed the “back-end ratio” is a measure of income against the mortgage cost plus the cost of all other loans.

The guide cautions against allowing this ratio to go higher than 43 percent.

New federal lending rules are aimed at ensuring that borrowers will be able to make payments on schedule; those rules make it unlikely that a loan will be approved if the back-end ratio exceeds 43 percent.

Once you’ve ordered an up-to-date credit report (, 877-322-8228) you’ll have an idea what your credit score will be. The score is not part of the report; it’s a number generated by Fair Issue Corporation, also known as FICO.

The scores provided to each of the three credit reporting bureaus may be different, and lenders will use the lowest number when offering an annual percentage rate, also known as APR, on a loan.

When shopping for a mortgage, you need to decide between conventional loans and Federal Housing Authority, also known as FHA, backed loans. Under the latter type, the FHA provides a guarantee to investors should a borrower default. The guide advises that, while FHA loans are priced about the same as conventional loans, the mortgage insurance costs more (meaning higher APRs).

The guide has lots of nuts-and-bolts info on shopping for mortgages. Note rate vs. APR, mortgage points, disclosure, home inspections and other concerns are all covered. The authors also caution against falling for three advance payments that guarantee a low APR. Advance fee loans are always scams and are illegal in the U.S. and Canada.

Read the guide online at and go to “Consumer Guides.”

Maine residents can also request a free printed copy by calling 800-332-8529. For a real estate professional’s take on home mortgages, visit

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit or email

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State’s Bureau of Consumer Credit Protection Issues Comprehensive Home Mortgage Guide

GARDINER — Maine’s Bureau of Consumer Credit Protection, an agency within the Department of Professional and Financial Regulation, announces the release of a new, comprehensive mortgage guide, titled The Downeaster Common Sense Guide to Finding, Buying and Keeping Your Maine Home. Free to Maine residents, this 32-page booklet provides information for those contemplating the purchase and financing of a home. Covered topics include:

  • How to evaluate whether renting or buying makes the most sense, given income and future plans;

  • How to use current income, debt load and credit reports to predict if a loan may be approved;
  • How to select a mortgage lender or loan broker;
  • How to choose the type of loan product that best fits your needs; and
  • Understanding your obligations after the loan closes

Governor Paul R. LePage commented on the timeliness of the guide and the information it offers. “With interest rates near historically low levels and the Maine economy improving, this is an excellent time to purchase a home,” Governor LePage said.  “But it’s important to know if you’re in a good position to make a significant purchase of this kind and to fully understand the home-buying process.  This new booklet provides thorough, step-by-step guidance.”

“This publication will help Maine residents to become better-informed mortgage borrowers,” David Leach, principal examiner with the Bureau and one of the booklet’s co-authors, said. “One thing we’ve learned from assisting hundreds of homeowners avoid foreclosure is that some did not know the right questions to ask when they were deciding to get a mortgage.”

An online copy can be found at by clicking “Publications” or “Consumer Guides” (directly at Printed copies are available free of charge by calling the Bureau at 1-800-332-8529 (toll-free in Maine).

“With federal regulators setting tougher borrowing standards this year for so-called ‘qualified mortgages’ (QMs), it’s more important than ever that potential borrowers understand how lenders calculate debt-to-income ratios,” Edward Myslik, Bureau senior consumer credit examiner and co-author of the guide, said. “This booklet demystifies the process. Understanding how current debt loads factor into lenders’ decisions will help consumers make prudent decisions, such as avoiding taking on additional financial obligations if they plan to apply for a mortgage.”


The Bureau of Consumer Credit Protection, which is part of the Maine Department of Professional and Financial Regulation, was established in 1975 to administer the state’s consumer financial services laws.  The agency investigates consumer complaints, conducts compliance examinations, licenses companies that offer financial products to Maine residents, and performs outreach to advise consumers and creditors of their legal rights and responsibilities.


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New Year’s tips for consumers


By Russ Van Arsdale, Executive Director Northeast CONTACT

Posted Dec. 29, 2013, at 2:17 p.m.

To all Maine consumers, we offer a few thoughts for a Happy New Year:

Take back your phone

“John” from “Medical Alert Services” is the new Rachel, a robot caller who’ll try to scam anyone who presses a button confirming the number called is working. Since they can “spoof” their own numbers and fool your caller id, just let the answering machine pick up.

Alert your friends and family that you’re doing this and that you’ll call right back. The Federal Trade Commission says it’s stopped billions of fraudulent calls angling for ways to steal your identity, but it can’t stop them all. And make sure you’re on the federal Do Not Call list (

Keep your identity safer

You already give personally identifiable and financial information only on secure websites you trust. You shred old documents, use strong computer passwords and use caution entering PINs. Take the next step, and offer up fewer details on social networking sites. Once on the internet, data can never really be deleted; that includes embarrassing photos potential employers might (and do) look at when considering new hires. Those photos may be tagged with GPS locations and other personal data.

Keep an eye on your credit

Find out how to check your credit report for free at That’s the truly free site that links to the three major credit reporting agencies. Check with each of them regularly (you’re entitled to one free report annually from each one, so you can get a report every four months). Get individual help with credit problems through the Maine Bureau of Consumer Credit Protection by going to or by calling 1-800-332-8529.

Beef up cyber security at work

Data breaches don’t happen just to the big chains. Find lots of user-friendly tips in a guide prepared by the University of Southern Maine’s Maine Cyber Security Cluster and Cyber Security Organization, a USM student group (

Scrutinize health claims

Just in the last month, studies were published showing that taking multivitamins to prevent major health problems is a waste of money and that soap and water is just as effective as antibacterial cleaners. Look hard at advertising, and do your own research before buying.

Give until it feels good, not until it hurts

Charitable giving spikes around the holidays and after disasters, and so do the scams. If you’re donating, make sure your money goes to a real charity. Find information about charities at the Maine Department of Professional and Financial Regulation ( or by calling the Department’s Charitable Solicitations Program at (207) 624-8525.

Get a second opinion

Find a buddy, a family member, friend or other trusted person, to help you with “offers that sound too good to be true.” If they are, trash them and have a good laugh together; you can be a sounding board for your buddy as well.

Be a good neighbor

Keep an eye out for signs that a neighbor who is homebound or has mobility problems may need help. Our letter carriers alert superiors when mail piles up, and we can look for other signs of possible distress.

Use your resources

Read parts or all of the Consumer Action Handbook online ( and search “consumer handbook”) or order a free copy (by phone, 1-800-FED-INFO). The Handbook covers almost everything most consumers need to know. And visit our blog ( for archived articles, consumer alerts and other helpful information.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit or email

Recording scam calls a defense against fraud


By Russ Van Arsdale, Executive Director Northeast CONTACT
Posted Sept. 15, 2013, at 1:22 p.m.

If you want to turn the tables on someone who calls on the phone who you suspect is a scam artist, tell the caller that you are recording the conversation. Better yet, wait until after the pitch is complete before making your announcement.

That’s a suggestion we received last week from William Lund, superintendent of Maine’s Bureau of Consumer Credit Protection. He suggested that, at the very least, it would bring the call to a rapid end. At best, it might provide incriminating information that could help authorities track down and prosecute telephone fraud artists.

“Recordings are the only things that make these collectors nervous,” Lund told us. He said a recording negates charges of “my word against yours.” Also, it is far more reliable than one’s memory which could be clouded by a less-than-friendly discussion.

Lund said recording could be useful in cases where a caller threatens legal action to force a Maine consumer to hand over money, claiming the consumer has not paid an outstanding debt. He said a threat of legal action is almost always an empty one, since authorities will not act on complaints from unlicensed, out-of-state payday lenders. In civil court, such firms must be represented by a local company employee (there are none) or an attorney. Not many lawyers will stand up to represent unlicensed, out-of-state payday lenders.

On that point, Lund says Maine law is clear. If a lender is not licensed to do business in Maine, that lender cannot collect interest on a loan. While that provision of the law is not a loophole to avoid paying back a legitimate debt, Lund said, “Neither should Maine residents be scared by illegal phone calls.”

Superintendent Lund is not a fan of internet-based lenders. He said they collect too much personal information when making loans, including data on a borrower’s workplace and family members. “All this information is used — and misused — in the collection process,” he said, adding that a borrower’s stress level can soar through threats of disrupting a workplace or pestering elderly parents.

Lund suggested turning the process around on unlicensed collectors. As soon as they state their business, tell them you’re recording the call. Maine law states that recording calls is legal, as long as one party knows the recording is taking place, so you don’t have to tell the caller right away. If you catch the caller violating the law and he or she slams down the phone, you can stay on long enough to identify yourself for the recording and note the time and date; you’ll have a piece of evidence that speaks for itself.

Scammers often use automated calls to generate lists of working phone numbers. You might be urged to press a number to prevent further calls, but that’s just part of the scam; pressing a button just verifies that the scammer has reached a working number. If you don’t want to record the call, don’t press anything; just hang up.

Recording calls won’t make them stop all at once. You can help by reporting the number you see on caller ID. Even though many of those numbers are “spoofed,” Federal Trade Commission regulators say that if they get enough reports they can trace certain calls. File complaints at See who’s licensed to make collections in Maine and get other information about your credit at the Maine Bureau of Consumer Credit Protection (

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit or email


Another reason to send for your credit report

Click this image for additional information

Errors on your credit report? Easy fix??

Watch Sunday, August 25, 2013 rebroadcast from CBS 60 Minutes 40 Million Mistakes: Is your credit report accurate?

Visit Obtaining a credit report in Maine

Certegy settlement a warning for credit reporting industry


By Russ Van Arsdale, Executive Director, Northeast CONTACT
Posted Aug. 25, 2013, at 9:19 a.m.

The Federal Trade Commission has given the credit reporting industry a major wake-up call.

Earlier this month, the FTC settled with Certegy Check Services, one of the biggest check certification services in the United States. Certegy, facing charges of violating the Fair Credit Reporting Act (FCRA), agreed to pay a fine of $3.5 million and to improve the way it resolves disputes with consumers. As a consumer-reporting agency, Certegy also provides information to other, similar agencies.

Back in April, Certegy drew the wrath of one Bangor-area consumer, who submitted a check at a major grocery chain. The check went through Certegy’s computerized scan and was rejected; our consumer was unhappily surprised, since she had plenty of money in her account to cover the check.

She was given a printed instruction sheet from Certegy and, upon phoning the company, was bounced around their telephone tree for some time. Finally, she was asked to provide some personal information; she declined and she and her husband headed for their bank.

A helpful bank executive got a Certegy representative on the phone and determined the problem had started a week earlier. The woman had written a check to a local store in a major retail chain which also used Certegy. Her driver’s license number had been recorded incorrectly and, when the check was scanned, the computer declared that her’s was an invalid account. The error was not our consumer’s, but the Certegy rep said the woman’s ability to write checks could not be restored for several business days.

All of this made our consumer quite unhappy, since she regularly used checks to pay for her medications. We suggested she relate the events to Maine’s Bureau of Consumer Credit Protection, who heard a kinder, gentler story from Certegy.

Certainly the company did not mean to cause any hardship, and in cases of hardship, steps could be taken to restore check writing privileges immediately. No, they weren’t trying to pry by asking for personal information, just offering to enroll the consumer in “Certegy VIP.” Enrollment, the company said, might help avoid future check refusals.

Many consumers had to do their own investigative work to restore check privileges, and that did not make the FTC happy. It charged Certegy with violating provisions of the Furnisher Rule, which took effect in 2010. The rule said information provided to credit bureaus should be accurate and that consumers can take their challenges straight to the data furnishers.

Certegy did not admit any wrongdoing but promised in the agreement to do better. It issued this statement following the FTC’s Aug. 15 announcement:

“The Federal Trade Commission fine levied against Certegy Check Services was in response to the FTC’s allegation that some customer care processes did not comply with the Fair Credit Reporting Act. Consumer satisfaction is at the very core of Certegy’s business. We are committed to continuing to bolster our internal processes and have addressed all items identified by the FTC in order to ensure full compliance and to achieve consistent outstanding customer service.”

Just in case it missed a spot, Certegy has 180 days to get those internal processes humming. A judge needs to sign off on the agreement, under which Certegy also must give the FTC copies of consumer complaints for the next 10 years.

David Leach of Maine’s Bureau of Consumer Credit Protection said until now Certegy didn’t have a plan for investigating errors “and instead foisted too much of that responsibility onto the consumer.”

Leach said the settlement “sends a message to companies like Certegy that provide consumer data to insure they are following correct dispute procedures internally for consumer.”

For a rundown of your rights under the Fair Credit Reporting Act, visit and search for FCRA. Find out more about Maine’s Bureau of Consumer Credit Protection at or call 1-800-332-8529.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit or email

Debt Collection – WABI-TV

Russ Van Arsdale and Joy discussed new regulations on debt collectors. Video

The Consumer Financial Protection Bureau sent out two bulletins last week one talking about false threats, lawsuits, arrest, or prosecution. This bulletin was all about how a debt collection company can not make false statements about the debt or misrepresent that a debt will be waived or forgiven if the debtor accepts a settlement offer, and not failing to post payments to a consumer’s account and then trying to charge late fees.

The second bulletin warned that collectors should not make promises about a debtor’s credit score, credit report, or credit worthiness.

For more information about debt or to get help with debt related issues you can visit the website or call 1-800-332-8529.

Action letters to debt collectors

How to deal with debt collectors


By Russ Van Arsdale, Executive Director, Northeast CONTACT
Posted July 20, 2013, at 12:48 p.m.

Debt collection is big business. It’s worth an estimated $12 billion in the U.S., with nearly 15 percent of all consumer credit reports showing something is “in collection.” How collectors go about getting creditors the money they’re owed is our topic today.

The federal Consumer Financial Protection Bureau, or CFPB, has authority over about 175 companies that do at least $10 million in collections annually. The bureau flexed a little muscle at the industry last week, and some in the industry flexed right back.

Earlier this month, CFPB issued two bulletins on the subject. The first reminds any entity covered by the Consumer Financial Protection Act of 2010 that it must not use unfair, deceptive or abusive means of collecting. That means no false threats of lawsuits, arrest or prosecution; not making false statements about the amount of the debt, who owns it or its legal status; not misrepresenting that a debt would be waived or forgiven if the debtor accepts a settlement offer; and not posting payments to a consumer’s account and then charging late fees.

The second bulletin cautions collectors against making promises that payment will automatically improve a debtor’s credit report, credit score or credit worthiness. CFPB says some of these statements may be deceptive, and the bulletin contains some examples.

The CFPB website also contains what are termed “action letters” that the bureau says consumers might use when dealing with debt collectors. The letters can be used depending on where consumers are in their particular debt process: to ask for more information about the debt, say that they want to dispute a debt, restrict how and when a debt collector can contact them, cut off all contact with a collector, or indicate that they have hired a lawyer.

Consumer advocates say such letters are a big step up from people simply calling a debt collector with a complaint and thinking that will resolve whatever situation they face. Putting things in writing is always a sound move in any dispute. At the very least, it helps organize your thoughts, facts, timelines, etc.

Other voices say that while the CFPB’s heart is in the right place, consumers may need some guidance before they can use the action letters responsibly. Attorney John Culhane Jr. from the national law firm Ballard Spahr LLP wrote in his firm’s blog that one of the letters asks whether a consumer thinks a debt might have outlived the statute of limitations. Culhane suggested the purpose of the letters “is simply to induce the collector to tell the debtor how long to stall to avoid litigation.” He also said requests in the letter for detailed information may or may not align with a particular consumer’s wishes.

Find the sample action letters at CFPB’s website, You can also visit our blog ( and click on “self-help” to find the sample action letters. There you can also learn about protections afforded under Maine law and find information from the Maine Bureau of Consumer Credit Protection.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit or email


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