Federal Enforcement Action

In settlement of alleged violations of federal law prohibiting unfair or deceptive acts or practices and unfair methods of competition, this consent agreement, accepted subject to final commission approval, would require, among other things, the Georgia-based money lender and its president to send a notice to all of its current customers offering them the opportunity to cancel the credit-life, credit-disability, and accidental death and disbursement insurance coverages written on their loans, and to receive cash refunds or credits.

This session will discuss new predatory and illegal practices that have been arising in the higher education space and highlight exciting cases that are tackling these issues head on. We will discuss recent cases challenging schools' use of online program managers and predatory recruitment occurring in the distance education space, issues with schools' use of college banking cards, and schools' use of Income Share Agreements (ISAs). 

In In re 1st Fin. Bank USA, the bank agreed to pay $10 million in restitution to injured consumers and $140,000 in penalties for assessing two consecutive over-the-limit fees. The banks would assess an over-the-limit fee during the billing cycle in which the consumer went over their limit, then assess a second over-the-limit fee on the first day of next billing cycle, before the consumer had a chance to make a payment in order to get back under the limit.

In In re World’s Foremost Bank, the bank agreed to pay $10.1 million in restitution to injured consumers and $250,000 in penalties for assessing two consecutive over-the-limit fees. The banks would assess an over-the-limit fee during the billing cycle in which the consumer went over their limit, then assess a second over-the-limit fee on the first day of next billing cycle, before the consumer had a chance to make a payment in order to get back under the limit.

 Letter from Robin S. Minor, Acting Director, Admin. Actions & Appeals Serv. Grp., U.S. Dep’t of Educ., to Jack Massimo, Chairman & CEO, Corinthian Colls., Inc. (Apr. 14, 2015). The Department is taking this fine action pursuant to 20 U.S.C. § 1094 and 34 C.F.R. § 668.84.

The FTC brings this action in a Georgia federal court under FTC Act § 13(b to obtain temporary, preliminary, and permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief for Prog Leasing’s unfair or deceptive practices in connection with the marketing, offering for sale, and sale of rent-to-own payment plans.