Consumer Finance Protection Bureau Fines Payment Processor
According to an article in American Banker, the Consumer Financial Protection Bureau (CFPB) recently charged Meracord LLC, one of America’s “largest payment processors,” with a fine totaling $1.4 million.  The company received the fine after processing about $11.5 million “in illegal upfront fees from consumers on behalf of debt-relief service providers,” the article reported.  While Meracord LLC is based in Washington, there are several payment processors and debt collection companies that operate in Illinois, such as Midland Funding and Portfolio Recovery Associates.  In some cases, debt collectors and payment processors illegally solicit funds from debtors.  As the recent Meracord fine makes clear, these companies can be held accountable if they act in ways that hurt consumers.
If you have been harassed by a debt collector or if you believe you have been forced to pay illegal upfront fees in order to settle your debts, you may be eligible for compensation.  It’s important to speak to an experienced consumer law attorney about your case.  Contact the dedicated consumer defense lawyers at the Emerson Law Firm today.
What is the Consumer Financial Protection Bureau and What Does it Do?
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, also known simply as the Dodd-Frank Act, created the CFPB.  Established as a consumer “watch dog” of sorts, the CFPB supervises banks, credit union, and other financial companies.  When it looks like one of these companies isn’t obeying the law, such as Meracord’s recent illegal actions, the CFPB issues fines and seeks to “enforce federal consumer financial laws.”
Specifically, Congress created the CFPB “to protect consumers by carrying out federal consumer financial laws.”  In order to undertake this task, the CFPB’s website explains that is responsible for such practices as:
·      Writing financial rules, supervising financial companies, and enforcing consumer protection laws, including anti-discrimination laws
·      Restricting unfair or abusive consumer practices
·      Accepting complaints from consumers
·      Educating consumers about their financial rights
·      Conducting research about finance and consumer behavior
·      Keeping an eye on financial markets for potential consumer risks
Details of the Illegal Consumer Collection Practices
The CFPB keeps an eye on companies precisely like Meracord, which is a processing company that collects payments from consumers on behalf of debt-settlement companies, according to an article in the Chicago Tribune.  In short, debt-settlement companies often “negotiate with creditors to help borrowers eliminate credit card or other debt,” and they work with companies like Meracord to collect those debt-settlement payments.  
Why were Meracord’s actions illegal?  In short, debt-settlement companies aren’t permitted to charge upfront fees before they provide assistance to consumers.  Before these companies can collect any fees, they must actually “eliminate or reduce consumers’ debts,” the Chicago Tribune explained.  The nearly $1.4 million fine will allow the CFCB to assist consumers who were charged illegal upfront fees.  In fact, the CFCP alleged that Meracord “processed thousands of illegal upfront fees since 2010, resulting in millions of dollars in charges to about 11,000 consumers.”  Of those consumers, about 5,000 had “none of their debts settled.”
If you believe you have been victimized by the illegal acts of a debt-settlement company or a payment processing company, you deserve to be compensated.  As a consumer, you are entitled to certain rights that the CFPB is working to protect.  Don’t hesitate to contact an experienced Illinois consumer protection lawyer today to discuss your case.
See Related Blog Posts:
Many American Debtors are Too Poor to File Bankruptcy

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