Archive for the ‘Bureau of Consumer Credit Protection’ Category

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

Wednesday, July 17, 2013 is Military Consumer Protection Day


By Russ Van Arsdale, Executive Director, Northeast CONTACT
Posted July 16, 2013, at 6:51 p.m.

Wednesday marks Military Consumer Protection Day. It is so designated in light of some special situations that members of the military and their families face in today’s marketplace.

Our military members tend to be younger and financially less experienced than average citizens. They move more often and often face challenges in securing housing. Ten years of war have meant mission training has come before financial training, leaving many enlisted veterans poorly equipped to deal with the rigors of economic life back home.

In the past, payday lending operations located near military bases helped those needing a small loan to tide them over until payday. Today there are fewer of those businesses; the internet-based array of illegal, unlicensed predatory lenders may demand interest with an annual percentage rate of 300 percent or more.

At Maine’s Bureau of Consumer Credit Protection, principal examiner David Leach says, “We have a small handful of licensed payday lenders, who follow Maine law — no more than a $25 fee on a payday loan of $250.00 or more.”

Leach urges military people to check with his office for licensed lenders (, 1-800-332-8529) and avoid all others.

A white paper by the federal Consumer Financial Protection Bureau last September called for expanding availability of small-dollar, low-interest military loans. These loans could include an automatic savings component in the repayment plan; accumulated savings over time could help build credit and be used for future short-term cash needs.

Deciding when to leave the military can have big financial implications. People at a financial planning conference late last year were told that career people who leave early could lose between $300,000 and $400,000 in pension and benefits. Planners were urged to prompt clients who insist on leaving active duty to consider joining the reserves.

There are several websites that can help with financial planning, among them, and The Maine state government site includes a “Financial Field Manual” for military families, produced by Kiplinger’s and the Better Business Bureau. Find the manual at (scroll down to “recent publications”) or call 1-877-624-8551 for a hard copy.

HOPE NOW is an alliance of HUD-approved counselors, investors and others in the mortgage market. Help tailored for military families can be found at

To be on guard against scams targeting service people, visit Maine’s Bureau of Insurance has a webpage dedicated to life insurance (from search “military insurance”).

The Federal Trade Commission has more on Military Consumer Protection Day 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 04412, visit or email



Department of Professional and Financial Regulation Encourages Seniors and Caregivers to Utilize State Resources to Protect Against Elder Abuse and to Report Suspected Cases

‘Crime of the 21st Century’ under-reported, causing untold pain & suffering and costing an estimated $2.9 billion nationally each year

GARDINER – Calling elder abuse one of the most under-reported and fasting growing crimes of the 21st century, Commissioner Anne L. Head and other officials with Maine’s Department of Professional and Financial Regulation (DPFR) joined Governor Paul R. LePage in highlighting the June 15th observance of World Elder Abuse Awareness Day by urging seniors and caregivers to utilize state agency resources to protect themselves, and encouraging them to report cases of suspected abuse.

Officials are also highlighting an effort by the Maine Council on Elder Abuse Prevention, which is encouraging businesses and nonprofits to post “No Excuse for Elder Abuse: World Elder Abuse Day, June 15th” on their signage.

“Financial abuse, which includes investment fraud and exploitation, is among the most common forms of elder abuse, costing its victims an estimated $2.9 billion a year,” Commissioner Head said. “Because these crimes are often committed by caregivers, family members or trusted financial advisers, they go unreported in too many cases.”

Maine’s Office of Securities, an agency within DPFR, emphasizes that investment scams targeting seniors are increasingly prevalent and particularly troubling. Securities Administrator Judith Shaw, who co-chairs the Maine Council on Elder Abuse Prevention, noted the importance of reporting suspected cases. “Maine’s Office of Securities is committed to fighting elder financial exploitation, but our efforts are much more successful when people come forward to report their concerns.”

Administrator Shaw noted that the Office recently concluded a case in which a former New Hampshire stockbroker took nearly $200,000 from a senior couple in Aroostook County as part of an investment scheme. The perpetrator was sentenced to time in prison and ordered to pay restitution to the victims. “This case illustrates that strong action can be taken when problems are brought to light,” Shaw said. “Unfortunately, too few people speak up or they come forward after their life-savings has been depleted.”

Commissioner Head and Administrator Shaw encourage seniors and those who care for them to contact the Department for answers to questions or to obtain resources. The Office of Securities offers educational materials and personal assistance to consumers regarding safe investing and investment professionals by calling 1-877-624-8551. Information is also available at

Additionally, the Downeaster Guide to Elder Financial Protection can be obtained from the Department’s Bureau of Consumer Credit Protection. The 32-page publication is free of charge to Maine residents by calling 1-800-332-8529 (1-800-DEBT-LAW). It can also be found at under “Publications”. The Department’s Bureau of Financial Institution offers a comprehensive online Consumer Library ( with many resources of interest to seniors.

A partial list of State agencies and organizations in Maine providing information, services and education on elder abuse, including financial exploitation, accompanies this release



Partial List of State Agencies and Organizations in Maine providing information, services and education on elder abuse, including financial exploitation:

Maine Office of Aging and Disability Services:

1-800-262-2232 or 207-287-9200


 Maine Adult Protective Services:

Hotline: 1-800-624-8404


Maine Department of Professional and Financial Regulation:

(Five Agencies Offering a Wide Range of Assistance to Seniors and Caregivers)


Office of Securities: 1-877-624-8551

(Investment Questions of Concerns)


Bureau of Financial Institutions: 1-800-965-5235

(Banking Questions or Concerns)


Bureau of Consumer Credit Protection: 1-800-332-8529

(Credit, Foreclosure, General Financial Scam Concerns)


Bureau of Insurance: 1-800-300-5000

(Insurance-related Questions or Concerns)


Office of Professional and Occupational Regulation: 624-8603

(Questions or Concerns Related to Licensed Professionals)


Maine Area Agencies on Aging:

List of regional agencies with full contact information:


Legal Services for the Elderly:




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