Archive for the ‘Bureau of Consumer Credit Protection’ Category

Phony phone cops bullied US consumers out of millions in bogus debt


Posted Nov. 24, 2014, at 9:21 a.m.

Click image to learn more about phantom debt collectors

They make harassing phone calls, claiming that they are law enforcement agents. They threaten to revoke your driver’s license, prosecute you and lock you up. All for debts that aren’t yours.

The National Consumers League says on its website ( that thousands of consumers are being bullied into paying debts they don’t owe.

There are many variations, but all scams boil down to one harsh message: wire us money or be in big trouble.

The perpetrator of one such scam received a harsh message last week. A complaint filed by a U.S. attorney in New York charged Williams Scott and Associates of Georgia with scamming $4 million from 6,000 consumers in all 50 states. The complaint charges that over a five-year period, the company had employees pose as police officers, Justice Department officials or FBI agents.

An affidavit filed by a real FBI agent says callers claimed falsely that people owed money for payday loans or had committed fraud.

The affidavit says the scheme involved up to 87 different phone numbers, changing when the scammers realized there were too many complaints. One script seized in an FBI raid includes this exchange between a caller and a frightened woman.

“You think an eight months pregnant woman wants to go to jail?”

“I don’t care if you’re nine months pregnant. I have a job to do.”

When I called Maine’s Bureau of Consumer Credit Protection, principal examiner David Leach was helping a woman whom scammers had tried to dupe.

The scammer had claimed to be from the “Kennebec County Private Locating Service” and said there was legal action pending. When the consumer called the Kennebec County court clerk’s office, she found nothing pending and no record of the “locating service.”

“Scam collectors will do anything to collect money,” Leach told me. He said the fake phone calls “started in Maine sometime in the summer of 2014 and may have peaked somewhere in October.”

However, Leach said this is the most frequent consumer complaint his office deals with.

In some cases, people have taken out payday loans from illegal, unlicensed lenders and repaid the money. The lenders sell their names and other personal information to illegal, unlicensed collectors who then put their defrauding machinery to work.

Consumers may believe these calls are real because the scammers have some personal details about them. If you get such a call, ask for the caller’s name and address, company name and original creditor, if you do have an outstanding loan.

If the caller demands a lot more than you owe, it’s likely a scam. If you have questions about the status of a real loan, hang up and call the number on your loan paperwork.

If you get a call and are uncertain, ask the caller to send a written notice of the debt; then say you don’t want to be called again. That request must be honored, according to the Fair Debt Collection Practices Act.

You can find sample letters drafted by the Consumer Financial Protection Bureau at the “self-help/action letters” tab on our blog (

Some consumers hire an attorney. Giving callers the attorney’s name and number usually stop such calls, when scammers realize the person isn’t an easy target. Report suspicious calls to the Maine Attorney General’s Consumer Protection Division, 1-800-436-2131 or email

Advise the Federal Trade Commission at

The federal prosecutor says it’s likely that more cases will be brought in the future. He says payday lenders may be among those prosecuted.

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


WABI Interview w/ Wayne Harvey

Feds sue for-profit college network of predatory lending, phony career services


By Russ Van Arsdale, executive director Northeast CONTACT

Posted Sept. 21, 2014, at 10:40 a.m.

It’s likely that only a small percentage of Maine’s college-age students have even heard of Everest University, Heald College and WyoTech. The three schools are operated for profit by Corinthian Colleges Inc (CCI). None is in Maine; the two closest campuses are in the Boston area.

Still, a lawsuit filed last week by the Consumer Financial Protection Bureau against CCI should be of interest to students who have taken out private student loans to pay for their education. The suit charges Corinthian with predatory lending, persuading students to take out the higher-cost private loans by advertising phony job prospects and career services.

In announcing the lawsuit, the director of CFPB did not mince words. “We believe Corinthian lured in consumers with lies about their job prospects upon graduation, sold high-cost loans to pay for that false hope, and then harassed students for overdue debts while they were still in school,” Richard Cordray said in remarks prepared for a reporter telephone briefing.

Cordray cited “egregious” examples of alleged misdeeds by CCI employees. One school apparently paid legitimate employers to hire graduates just long enough to count them as “employed” (CCI apparently defined a “career” as a job lasting only one day).

Although it touted ongoing career services, students often got generic Craigslist job postings. Often they could not contact any CCI personnel in the various career services offices.

Once they signed up, students faced high-cost tuition. In 2013, CFPB says tuition and fees for an associate degree ran between $33,000 and $43,000; for a bachelor’s degree, the range was $60,000-$75,000.

Tuition was higher than the federal loan limit, so many students were forced to take out private student loans. Corinthian offered its own “Genesis loans” costing more than twice as much as federal student loans.

The CFPB investigation found that three of every five students were likely to fall behind on Genesis loan payments within the first three years. Investigators said CCI did not share that reality with students; rather, it said the students “had no idea they were being set up to fail.”

Corinthian set an unusual policy of requiring students to start paying back those Genesis loans as soon as their classes began. If they fell behind on the payments, they faced what the CFPB director called “harassing and bullying debt-collection methods.” If they dropped out of school, they had all the debt and no degree.

A statement on Corinthian Colleges’ website strongly disputes allegations in the suit. It says the CFPB “wrongly disparages the career services assistance that we offer our graduates and mischaracterizes both the purpose and practices of the ‘Genesis’ lending program.” The company says it discloses details about its loan program before students enroll, calling that process “clear and extensive.”

It also says that a number of the problems CFPB identified were brought to the agency’s attention by the company, and that Corinthian is working on improvements. CFPB is looking for full redress of all Genesis loans made since July 21, 2011, including those that have been paid off.

The future of the 100-plus campuses across the country is uncertain. The company entered into an agreement with the U.S. Department of Education in July to sell or close a number of its campuses.

Meanwhile, a bill pending in the U.S. Senate would allow 25 million Americans to renegotiate their student loans at today’s lower interest rates. It would also cap undergrad loans below 4 percent; federal Stafford loans top out at 9 percent, while some private loans can exceed 14 percent.

You can read the “Downeaster Common Sense Guide to Student Loans” 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

Consumers should prepare for more data breaches


Posted Sept. 07, 2014, at 1:09 p.m.

They are dirty, rotten scoundrels. Unfortunately, we’re getting much too used to them.

They are the writers of the sinister computer codes that prowl the Internet, looking for vulnerable systems to infect and mine for our personal and financial data. They have found mother lodes of info on several servers that try to handle big retail’s payment systems.

The breaches come so frequently and in such staggering numbers we barely pay attention any more. The crooks keep coming, and the security people are swamped. Consider one estimate that some large banks face as many as 35,000 threats of possible computer mischief every day.

Security officers quickly toss aside the work of hacker wannabes, so the number of real threats they face may number 100 or so a day. That’s still a pile of work, and missing a genuine threat can cause major problems for the company and its customers.

The results stunned us when we first heard the reports: 110 million or so consumers affected by last year’s Target breach. By the time news broke last week about what could become an even larger breach of Home Depot customers’ data, our eyes were beyond glazed over.

The good news, really, is that the banks that issue credit cards assume the financial liability if those cards are misused. That’s written into state and federal law, with varying standards and deadlines for avoiding fraudulent charges on your credit versus debit cards.

The bad news is that the underlying security nightmare will continue as long as most American commerce is tied into magnetic stripe technology. Much has been written about the much better chip-and-pin technology, backed by use of a personal identifying number. What has worked well in much of Europe for several years is still on the horizon for many U.S. retailers.

That technology will come, but it will be costly. Banks have tried to shift financial liability for data breaches to retailers, pointing at poor security systems. As you’d expect, retailers have reacted strongly; however, they are moving faster toward adopting more modern card security technology.

Will Lund, superintendent of Maine’s Bureau of Consumer Credit Protection, told me last week the changeover will happen piecemeal, and that will mean problems during the transition.

“Questions of liability may arise if a store has the technology but the consumer’s card does not, and vice versa,” Lund said.

Lund’s bottom-line advice to consumers is to remember they are not liable if they take reasonable steps to notify their banks of unauthorized charges. They can get free credit reports at each of the three major reporting companies each year — rotating requests yields a new report every four months — by visiting Lund said consumers should not feel scared or bullied into buying identity theft insurance, credit monitoring or other costly products, because “the most important rights and protections are already granted by state and federal law.”

People in Lund’s office and at the Bureau of Financial Institutions can answer individual questions about data breaches and consumers’ rights. Both are part of Maine’s Department of Professional and Financial Regulation.

Visit our blog — — and search “breach” to read PFR’s information and guidance to consumers regarding financial breaches. You can find information online at the PRF website — — or by calling 207-624-8500.

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


“Gone Phishing” – WABI-TV

Video link

David Leach of the Maine Bureau of Consumer Credit Protection was in the studio with Russ Van Arsdale on Monday for this week’s Consumer Contact segment. They were speaking to Joy about a new anti-scam guide being released by the bureau. The guide is called “Gone Phishing” and it gives tips on avoiding all manner of scams and protecting your credit.

Order form for all Bureau publications

Publications available on-line:

State Officials Issue Consumer Protection Alert Following Data Breach Announcement by Shaw’s Parent Company

Press Release

GARDINER – Governor Paul R. LePage joined officials at Maine’s Department of Professional and Financial Regulation to reassure consumers that state and federal laws are in place to protect them from major losses due to file breaches containing debit and credit card information, such as the one disclosed August 14 by AB Acquisition LLC, which operates Shaw’s supermarkets in Maine and other states.


Although it’s unknown whether consumers will be impacted by the data breach involving Shaw’s, the company indicates that stores in Maine were among those affected,” Governor LePage said. “I encourage people to closely monitor their credit and debit card statements, and to contact the financial institution that issued the card promptly if questionable charges appear.  Staff at Maine’s Department of Professional and Financial Regulation is also available to provide information and guidance.” 

The Bureau of Financial Institutions and Bureau of Consumer Credit Protection at the Department of Professional and Financial Regulation outlined the following information and guidance for consumers responding to news of a financial data breach:

  • Consumers should always thoroughly review credit and debit card statements from the card issuer, and also review all other account statements from their bank or credit union.
  • If consumers have online access to their credit or debit card information, they should review account activity as soon as possible, rather than waiting for the statement to arrive in the mail.
  • If a credit or debit card was used at a business that has experienced a data security breach, or there is uncertainty about whether a card was used, consumers should be especially diligent in evaluating charges or withdrawals on their statement.
  • Since the data breach involving Shaw’s reportedly began in June, consumers should review statements covering June to the present.
  • If unknown charges or other suspicious activity appear on the account, consumers should notify the financial institution that issued the credit or debit card.
  • Consumers do NOT need to contact the company that experienced the data breach, such as Shaw’s.
  • Consumers’ liability for unauthorized use of a CREDIT CARD is limited to $50.  If account numbers have been stolen, consumers have no liability for unauthorized use.  
  • Consumers noticing unauthorized activity on their DEBIT CARD resulting from a data breach have sixty (60) days from when the bank or credit union sent the statement to report it.  If consumers fail to notify the bank or credit union of unauthorized transactions within this time, they are liable for the amount of the unauthorized transactions. This 60 day timeframe applies ONLY when the card’s data has been compromised through a data breach, as in the Shaw’s case.  See below for details about when a DEBIT CARD has been lost or stolen.
  • When a DEBIT CARD has been lost or stolen, consumers have two (2) business days after learning of the loss or theft to notify their financial institution in order to limit their liability to $50. If they do not notify their bank or credit union about the lost or stolen DEBIT CARD within two (2) business days, consumers may be liable for up to $500 of the unauthorized transactions. If consumers do not notify their financial institution within sixty (60) days after being provided a monthly statement that lists a fraudulent debit, they can be liable for unauthorized withdrawals of any amount that occur after that 60 day period.
  • To be safe, DEBIT CARD holders should act immediately if they notice unauthorized withdrawals.
  • If impacted by unauthorized charges or withdrawals, consumers should first call the bank or credit union that issued the credit or debit card, and then follow up in writing to explain the problem.
  • Some banks and credit unions may issue new cards to customers whose credit or debit card numbers are known to have been compromised through a data breach.
  • Consumer may ask a financial institution to re-issue a new card if they have concerns about their account.
  • Again, consumers do NOT need to contact the business that was subject to the data breach; and they need to contact the bank or credit union that issued their credit or debit card ONLY if they notice suspicious activity on their statement.
  • For more information, contact the Bureau of Financial Institutions toll-free at 1-800-965-5235, or the Bureau of Consumer Credit Protection is 1-800-332-8529.


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


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