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.
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.
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