Working on the premise that two heads are better than one, the
century-old Federal Trade Commission and the new Consumer Financial
Protection Bureau announced this week that they have joined forces
to go after deceptive and confusing mortgage lenders.
For starters, the two agencies say they have opened
investigations into 19 companies after reviewing some 800 mortgage
ads from a wide variety of media - including websites, Facebook,
direct mail and newspapers.
In addition, they sent letters to 32 others whose practices were
"less serious," warning them that their ads may be deceptive.
Among their targets were ads offering a very low fixed-rate
mortgage or "guaranteeing" approval and low monthly payments without
discussing significant terms, and ads containing images, symbols and
abbreviations suggesting that the advertiser is a government agency.
The agencies were "far more likely to have opened an
investigation" when there "is clearly a misrepresentation" or the ad
"is clearly false," while warnings went to companies whose ads may
be technically true or contain small-type disclaimers, Kent Markus,
the consumer bureau's assistant director of enforcement, said at a
telephone news conference in Washington.
The joint sweep allows the FTC and consumer bureau to leverage
their combined resources to look at claims being made in all types
of media and to make sure there were "consistent standards across
the marketplace," said Thomas Pahl, assistant director in the FTC's
Division of Financial Practices.
The FTC oversees ads by real estate agents, home builders and
lead generators, while the CFPB is in charge of mortgage brokers and
lenders. The two agencies also share enforcement of non-bank
mortgage advertisers such as lenders, brokers, servicers and
advertising agencies.
A Penney Fan
J.C. Penney has been trying to reinvent itself, eliminating big
sales and coupons for what it says are low everyday prices. The
strategy has been a total bust thus far, although company officials
put on an optimistic public face.
But there are some shoppers who like the strategy, as seen in
this note I received from John Klucharits of Emerson.
"I read all the time about the obvious customer rejection [due to
the lack of sales volume] of the new way J.C. Penney is doing
business with the everyday pricing," Klucharits said.
"I used to always look for percent-off coupons when I needed
something. Between Macy's, Kohl's and J.C. Penney, one could go stir
crazy trying to figure out what was actually allowed to be purchased
with each coupon.
"Recently, I needed to purchase a variety of clothes so I decided
to try Penney," he said. "I was very happy I did because it felt
good to go pick something out and to know what was on the tag was
what I was going to pay and the pricing was, in my opinion, very
good.
"In other words, I walked into the store, picked out what I
wanted without the hassle of coupons, paid a reasonable, if not low,
price and went on my way. So simple and easy.
"Too bad it isn't working for them."
I agree. The most frustrating part of shopping, whether for
shirts or airline tickets, is thinking the price tag is the actual
cost, and then getting hit with all sorts of fees and taxes.
But Penney still hasn't sold the idea to shoppers, and it will be
interesting to see how things go during this crucial holiday
shopping season.
Scam Warning
Speaking of the holiday season, here's some timely advice from
the Better Business Bureau:
* Don't click on any links or open any attachments to emails
until you confirm that they are not malicious. Phishing emails are a
common way for hackers to get at your personal information or break
into your computer.
* Beware of e-cards and messages supposedly from companies like
UPS or FedEx with links to package tracking information.
* Email addresses that don't match up, typos or grammatical
errors are common red flags of a malicious phishing email.
