CONSUMER e-ALERT©
(11-27-17)
ANYONE USING UBER MAY HAVE HAD PERSONAL INFORMATION COMPROMISED WHILE UBER HID THE BREACH
FACTS
Uber hid cyberattack that exposed people’s data AND it paid hackers $100,000 to delete the data and keep the breach quiet
Sensitive personal information of tens of millions of Uber customers and drivers was exposed, and Uber HID THE BREACH FROM PUBLIC VIEW FOR MORE THAN A YEAR.
The information includes names, email addresses and phone numbers of 57 million people around the world, including around 600,000 U.S. drivers, according to a statement from the company CEO “Our outside forensics experts have not seen any indication that trip location history, credit card numbers, bank account numbers, Social Security numbers and dates of birth were downloaded,” the statement said. “At the time of the incident,” the statement added, “we took immediate steps to secure the data and shut down further unauthorized access by the individuals. We subsequently identified the individuals and obtained assurances that the downloaded data had been destroyed.”
The statement said users’ personal information was accessed by two individuals via “a third-party cloud-based service” that Uber uses.
Uber now says it had a legal obligation to report the hack to regulators and to drivers whose license numbers were taken. INSTEAD, the company paid hackers $100,000 to delete the data and keep the breach quiet. Uber said it believes the information was never used but declined to disclose the identities of the attackers. (caag112217)
MORAL
What is worth remembering is the extreme measures Uber took to hide the attack. What is also worthwhile is for readers that used Uber during this time may want to check with one or more of the three credit bureaus to see if their credit was compromised. If anyone would like the telephone number of the three bureaus contact our firm at (888)667-8529).
READ THIS IF YOU DO NOT THINK SMOKING CIGARETTES IS DANGEROUS TO A PERSON’S HEALTH
FACTS
On November 22, 2017 Tobacco Companies were ordered to begin issuing Court-Ordered Statements in Tobacco Racketeering Suit.
Several of America’s major cigarette manufacturers will begin issuing court-ordered “corrective statements” in major daily newspapers and on television beginning Friday, November 24, 2017.
The statements will clarify for the public the effects of tobacco use and will appear in full-page print ads in the editions of more than 50 newspapers, including the Wall Street Journal, USA Today, New York Times, and Washington Post over four months. The same statements will also appear in television markets across the country beginning the following week for the next year.
Following a nine-month civil racketeering trial, the U.S. DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ORDERED THE TOBACCO COMPANIES, INCLUDING ALTRIA, ITS PHILIP MORRIS USA SUBSIDIARY, AND R.J. REYNOLDS TOBACCO, to issue corrective statements as part of a permanent injunction in 2006 designed to “prevent and restrain” further deception of the American people regarding tobacco use.
In its 2006 permanent injunction, the district court found that “DEFENDANTS LIED, MISREPRESENTED, AND DECEIVED THE AMERICAN PUBLIC,” on a host of topics. These topics included:
Fraudulently distorting and minimizing the health effects of smoking;
Falsely denying and minimizing the addictiveness of smoking and nicotine;
Designing cigarettes to create addiction;
Fraudulently presenting light/low-tar cigarettes as less dangerous;
Falsely denying marketing to youth; and
Falsely denying the hazards of secondhand smoke.
The court concluded that, absent court action, the tobacco companies were “reasonably likely” to continue engaging in this behavior and imposed a permanent injunction to prevent future violations. Among other things, this injunction requires the tobacco companies to issue these “corrective statements” in multiple mediums: newspaper, television, company websites, and package “inserts.” (PR:17-1331)
Download Print Corrective Statements
MORAL
The court order issued in 2006 did not go into effect until November 2107, over 11 years later! Reason: The tobacco companies appealed to higher court and if on appeal the court order did not have to be obeyed. So, for an additional 11 years the tobacco companies had their way.
378 billion cigarettes sold in the United States last year.
More than 480,000 deaths annually (including deaths from secondhand smoke)
278,544 deaths annually among men (including deaths from secondhand smoke)
201,773 deaths annually among women (including deaths from secondhand smoke)
CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) SUES CITIBANK FOR STUDENT LOAN SERVICING FAILURES THAT HARMED BORROWERS
FACTS
On September 18, 2017 he Consumer Financial Protection Bureau (CFPB) sued Citibank, N.A. for student loan servicing failures that harmed borrowers. Citibank misled borrowers into believing that they were not eligible for a valuable tax deduction on interest paid on certain student loans.
The company also incorrectly charged late fees and added interest to the student loan balances of borrowers who were still in school and eligible to defer their loan payments.
Citibank also misled consumers about how much they had to pay in their monthly bills and failed to disclose required information after denying borrowers’ requests to release loan cosigners. The Bureau is ordering Citibank to end these illegal servicing practices, and to pay $3.75 million in redress to consumers and a $2.75 million civil money penalty.
Citibank is responsible for providing borrowers with accurate periodic account statements and supplying year-end tax information. Also, it must keep track of the borrower’s in-school enrollment status and is responsible for granting and maintaining deferments when appropriate.
CFPB found that Citibank misrepresented important information on borrowers’ eligibility for a valuable tax deduction, failed to refund interest and late fees it erroneously charged, overstated monthly minimum payment amounts in monthly bills, and sent faulty notices after denying borrowers’ requests to release a loan cosigner.
Specifically, the Bureau found that Citibank:
Misled borrowers about their tax-deduction benefits: Federal law allows some borrowers to deduct up to $2,500 in student loan interest paid on “qualified education loans” annually. On its website and periodic account statements, Citibank made statements that suggested borrowers had not paid qualified interest, or that the borrowers were not eligible for the qualified interest tax deduction. Consequently, borrowers did not seek this tax benefit, even though they may have been able to benefit from it.
Incorrectly charged late fees and interest on loan balances to students still in school: Current students are eligible for in-school deferments, which postpone repayment until six months after they are no longer enrolled in school. Citibank erroneously canceled in-school deferments for certain borrowers based on inaccurate information about their enrollment status. In doing so, Citibank charged late fees when the borrowers did not make payments, even though payments should not have been due. Citibank also erroneously added interest to the loan principal, and failed to refund late fees and erroneously charged interest after discovering that in-school deferments had been terminated in error.
Overstated the minimum monthly payment due on account statements: Citibank serviced some loans for “mixed-status borrowers,” who had multiple student loans with Citibank, some of which were in repayment status, while other loans were in deferment status. While loans were in deferment, no payment was required, though borrowers had the option to make payments on those loans. For mixed-status borrowers with student loans in or approaching repayment, Citibank overstated the minimum amount due on the mixed-status account statements.
Failed to disclose required information after refusing to release a cosigner: Many consumers applied for student loans from Citibank with a cosigner to help guarantee the loan. Some of these borrowers later requested that these cosigners be released for some or all of their student loans with Citibank. When Citibank received an application from a student loan borrower to release a cosigner and place the loan in the borrower’s name only, Citibank would decide based on information in the borrower’s credit report and score. When Citibank denied a cosigner release application, it failed to provide the borrower with all the information required under the Fair Credit Reporting Act.
Enforcement Action
The CFPB’s order requires Citibank to:
Refund $3.75 million to harmed consumers: The Bureau’s order requires Citibank to pay $3.75 million in restitution to harmed consumers who were charged erroneous interest or late fees, paid an overstated minimum monthly payment, or received inadequate notices because of Citibank’s faulty servicing.
Make changes to their servicing practices: The Bureau’s order requires Citibank to provide accurate information regarding student loan interest paid, implement a policy to reverse erroneously assessed interest or late fees, and to provide borrowers who were denied a cosigner release with their credit scores, the phone number of the credit reporting agency that generated the credit report, and disclosure language confirming that the credit reporting agency did not make the decline decision.
Pay a $2.75 million fine: The Bureau’s order requires Citibank to pay a $2.75 million penalty to the CFPB’s Civil Penalty Fund.
A copy of the Bureau’s consent order is available at:
http://files.consumerfinance.gov/f/documents/cfpb_citibank-n.a._consent-rder_112017.pdfThe
CFPB previously addressed many of these issues in a related 2015 enforcement action against Discover for servicing practices related to the loans it acquired from Citibank beginning in late 2010.
MORAL
Does anyone have their student loans serviced by Citibank? If so, review your billing. There may be errors.
CFPB sues National Collegiate Student Loan Trusts and transworld systems for Illegal Student Loan Debt Collections
FACTS
CONSUMERS WERE SUED FOR PRIVATE STUDENT LOAN DEBT THAT THE COMPANIES COULDN’T PROVE WAS OWED OR WAS TOO OLD TO SUE OVER. These lawsuits relied on the filing of false or misleading legal documents.
The proposed judgment requires an independent audit of all 800,000 student loans in the National Collegiate Student Loan Trusts’ portfolio. It prohibits the National Collegiate Student Loan Trusts, and any company they hire, from attempting to collect, reporting negative credit information, or filing lawsuits on any loan the audit shows is unverified or invalid. In addition, it requires the NATIONAL COLLEGIATE STUDENT LOAN TRUSTS TO PAY AT LEAST $19.1 MILLION, WHICH INCLUDES INITIAL REDRESS TO HARMED CONSUMERS. Under a separate consent order, Transworld Systems, Inc. is ordered to pay a $2.5 million civil money penalty.
“The National Collegiate Student Loan Trusts and their debt collector sued consumers for student loans they couldn’t prove were owed and filed false and misleading affidavits in courts across the country,” said CFPB Director Richard Cordray. “We’re ordering them to pay at least $21.6 million, stopping them from filing illegal lawsuits, and requiring the trusts to thoroughly audit their loan portfolios to identify any other consumers who were harmed.”
The National Collegiate Student Loan Trusts are 15 Delaware statutory trusts that own more than 800,000 private student loans. Between 2001 and 2007, the trusts purchased and securitized the loans, and then sold notes secured by the loans to investors. The TRUSTS HAVE NO EMPLOYEES BUT INSTEAD USE SERVICE PROVIDERS TO INTERACT WITH CONSUMERS ABOUT THEIR LOANS. Transworld Systems, Inc. is a nationwide debt collector incorporated in California, with a principal place of business in Ft. Washington, Pennsylvania. Transworld Systems employees complete, sign, and notarize sworn legal documents for collections lawsuits brought on behalf of the trusts. Transworld Systems hires a national network of law firms to file and prosecute collections lawsuits on behalf of the trusts in courts across the country.
The complaint against the National Collegiate Student Loan Trusts and the Bureau’s consent order regarding Transworld Systems include allegations and findings that the companies violated the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act by filing false affidavits and for pursuing collections lawsuits they could not have won, if contested.
Specifically, the companies:
Sued consumers for debts the trusts could not prove were owed:In order to sue to collect debts, the person or company filing suit must be able to prove that the consumer owed the debt and that they own the loan that is being collected. The companies participated in illegal litigation practices when suing consumers without the necessary documentation required to sue. Over 2,000 collections lawsuits were filed where the consumers really did not have to pay debts they legally did owe. In these lawsuits, the trusts do not have or cannot find the documentation necessary to prove either that they own the loans or that the consumer owed the debt. In some of these cases, the document the consumer signed promising to pay back the loan is missing.
Filed false and misleading affidavits:In many of the collections lawsuits, false and misleading affidavits were filed. To be valid, these affidavits must be signed by a witness with personal knowledge of the consumers’ account records and the debt. In numerous instances, affiants claimed personal knowledge of the student loan debt they did not have.
The Bureau also alleged that the National Collegiate Student Loan Trusts filed at least 486 collections lawsuits after the applicable statute of limitations on the debt collection had expired. The complaint alleged that, in numerous instances, many of the affidavits filed were improperly notarized because they were not sworn or signed in the presence of the notary.
Enforcement action
Under the terms of the proposed final judgment and consent order, the Bureau is requiring the companies to:
Conduct a thorough audit of the 800,000 student loans :The proposed final judgment requires the National Collegiate Student Loan Trusts to hire an independent auditor acceptable to the Bureau to audit their student loan Pay at least $3.5 million in restitution:Under the proposed final judgment, the National Collegiate Student Loan Trusts is ordered to pay at least $3.5 million in restitution to more than 2,000 harmed consumers who made payments after being sued by the trusts on a loan where documentation was missing or the statute of limitations had expired. The National Collegiate Student Loan Trusts is required to provide restitution to additional consumers identified through the independent audit.
Stop filing collections lawsuits on debt that can no longer legally be sued over:the companies are prohibited from tying consumers up in litigation after the expiration of the applicable statute of limitations.
Stop attempting to collect, reporting negative credit information, and suing consumers for debt without proper documentation.