The Government's Not the Only One Fighting Fraud in Fintech

Recession, crisis, and panic almost always lead to times of financial emergencies. Where do people turn when these times are upon us? Fintech businesses such as online lenders serve as an important lifeline for consumers who are unable to access credit from their own banks and credit card providers, something far more common in the United States than many may think.

Read more at Huffington Post.

Like It or Not: The Internet Impacts Consumer Financial Services Decisions

We turn to the Internet as a source for almost every aspect of our lives. For example, we can make online business transactions, earn a college degree, research genealogy, and comparison shop for the best deal on, well, anything. The swift advancement and evolution of Internet technology have afforded us an unprecedented efficiency to access, gather, and process information for any number of uses. Financial technology (fintech) online has ignited innovation in the area of consumer financial services. Fintech is changing how we do our banking and given rise to competitive choices for consumer financial services. In fact, as consumers become better informed about online financial services, they are increasingly deciding to choose them.

 The increasing growth of fintech innovation and consumer use of financial services online is a subject of discussion by both its supporters and detractors. Here are the most commonplace fintech pros and cons:

Pros:

Convenience and availability - Fintech innovation gives the consumer a multitude of financial services at their fingertips via the Internet 24/7. Traditional banking hours are simply just not convenient for most consumers. Additionally, online financial innovation allows consumers to quickly and easily compare costs associated with different financial services products without having to go bank to bank or make a number of phone calls for information.

Innovations meet consumers’ needs – The underbanked and unbanked turn to the Internet to have their financial services needs met. Online financial services needed by this group drives fintech innovation with built-in consumer protections. For example, online lending evolved, in part, to stop the abusive practices of lenders in the two-week payday loan industry. Many of the lending products online today – small dollar installment loans – were created so that consumers have control over their re-payment schedule.

Financial services innovations also meet the very real needs of the underbanked who cannot access many of the financial services offered at traditional brick and mortar banks. Sub-prime credit and costly fees associated with maintaining checking accounts have outcast a large portion of consumers from traditional and simple banking services. Online financial products have low or no cost fees for usage.

 Mobile Innovation – Mobile access has become a must have for online financial services and transactions.  According to the Medallia Institute, 81% of millennials and 72% of baby boomers have logged into an online account and/or used a mobile banking application in the past 30 days.

 Cons:

Customer Service – It can be difficult to get immediate human customer assistance when an issue arises with online companies. While this is true of any industry, it is human nature to get more anxious and bothered when the product relates to our personal finances. Addressing simple issues with online financial services typically involves an e-mail to the company and waiting – sometimes up to 24 hours – for a response. With a traditional bank, you can still go to the branch and get face-to-face customer service.

Accenture recently reported, however, that 67% of millennials said that the traditional and digital banking experience they receive at their current bank is only somewhat or not at all seamless. It seems that the real issue is difficult customer service, not fintech innovations.

Technology Failure – Supporters of fintech innovation and financial services love the ease of use, convenience, and products made possible by the internet. That is until there is a failure in technology which prohibits their use of the service. Technology failures or the inability to carry out a transaction online is one of the most frustrating banking experiences felt by millennials, according to the Medallia Institute.

Fraud – The fear of fraud and a scam happening to a consumer’s online financial product is a valid concern and not taken lightly by online financial services companies. The best financial Internet companies educate customers on how to spot and prevent a typical fraud attempt from being perpetrated.

It is important to remember, financial technology and innovations were created to fill the need for consumer-friendly products online. Creating greater and more sophisticated consumer protections is a part of fintech innovation and just as important as the financial services created by it. Quality online financial services companies will have in place proactive security measures to guard against fraud. A component of fintech innovation is also technology that evolves constantly, just as fraud does. Technology today can preemptively prevent consumers of online financial services from becoming victims to theft and fraud.

With the help of technology, industry employees, and savvy consumers, Reform Online Lending is continuing its efforts to rid the online lending industry of fraudsters and scammers. If you believe your employer is committing fraud, report it here and you could be eligible for ROL’s $25,000 reward!

 

Three Signs a Debt Collection Scammer Is Calling

Under the Fair Debt Collection Practices Act (FDCPA), there are things debt collectors can and cannot do while trying to collect. It’s important for consumers to understand their rights under the FDCPA so that they don’t fall victim to scams.

Here are three signs you have been contacted by a debt collection scammer:

1.       They refuse to send you a debt validation notice through the mail. All legitimate debt collectors are required to send a debt validation notice that includes amount owed, identity of original lender, and license number of the debt collector.

2.       They threaten you with civil action. Debt collectors cannot threaten or harass consumers with legal action. This includes threatening to serve papers, make an arrest, or issue a lawsuit.

3.       They call a third party MORE than once. Debt collectors are prohibited from calling a third party, such as a relative or spouse, on more than one occasion. They are also not permitted to discuss your debt with anyone other than you without prior consent.

Reform Online Lending has recently been informed that consumers are receiving debt collection phone calls from 855-904-7781. Operators of this scam have personal information and report to be “handling a claim in [their] office.” If you receive a similar phone call or voicemail, you can report it to the FTC. Similarly, if you are an employee of the online lending industry and you believe your employer is committing a debt collection scam, you can report it to Reform Online Lending. Take action today!

Scammers Get Creative As Tax Day Quickly Approaches

With Tax Day only two weeks away, Reform Online Lending has seen a rise in tax-related scam complaints. Scammers often falsely claim to be representatives from the IRS or U.S. Department of the Treasury to fool consumers.

Similar to the scam highlighted in our February blog post, ROL has recently been informed of another deceptive caller claiming to represent the Treasury. The caller is relentless, leaving numerous voicemails and calling multiple times a day. This particular scammer threatens arrest if the individual doesn’t cooperate and requests to be called back at 214-617-9668.

We’ve also been informed that, in order to further deceive victims, the caller will hang up and call back with a number that appears on Caller ID as the local police department. This tactic is known as “ghost calling” and can be very intimidating. If you receive a similar phone call, don’t give-in to fear tactics. First, do a Google search of the phone number and research recent tax-related scams. If you are still unsure, call the IRS or U.S. Department of the Treasury.

Tax-related scams, and consumer scams in general, are constantly evolving, making it more difficult for consumers to identify when they are being scammed. Consequently, the best line of defense is to remain informed and educated.

Financial Predators: Victims Go Beyond Just Consumers

Increases in consumer protection initiatives may have you thinking online financial services scams are finally coming to an end. The reality, though, is that scammers are constantly evolving. Today, financial scams not only victimize consumers, they also victimize legitimate businesses.

For example, when a scammer steals from a consumer who is already in a financial bind they are hindering the consumer’s ability to repay loans they have with legitimate lenders. On top of this, scammers tarnish the reputation and trust that credible businesses have earned from their customers.

Fortunately, continued efforts from consumer protection organizations, like Reform Online Lending, are slowing scammers down.  According to the Consumer Financial Protection Bureau’s Monthly Complaint Report, payday loan complaints have shown a 12 percent decline from November 2014 to January 2015 to November 2015 to January 2016. This decline, in part, can be attributed to the aforementioned consumer protection organizations and their efforts.

This doesn’t mean the fight to protect innocent Americans and legal businesses is over, though. Reform Online Lending continues its efforts to create a safer, more secure borrowing experience for both consumers and online lenders. You can visit ROL’s Home page to learn more about its mission and bounty program.

Ridding the industry of bad actors and scammers is not a simple task, but being proactive, staying informed, and remaining cautious as a consumer and industry employee is a good start. Together, we can stop financial predators from defrauding consumers and sullying legitimate businesses.

Reform Online Lending Recognizes 18th Annual National Consumer Protection Week

With the start of the 18th annual National Consumer Protection Week (NCPW), Reform Online Lending invites consumers to join them and more than 100 agencies and organizations that are working to inform, empower, and protect consumers this week and always.

NCPW is a time for consumer protection organizations, like Reform Online Lending, to inform and educate consumers. ROL believes one of the most valuable resources for a consumer is information. Consumers are encouraged to stay informed on their rights as consumers, including what is considered legal for lenders and debt collectors.

Under the Fair Debt Collection Practices Act, Debt Collectors May NOT:

  • Falsely represent the amount or legal status of any debt
  • Falsely represent that an individual is an attorney or that any communication is from an attorney
  • Threaten to take legal action that cannot legally be taken or is not intended to be taken

Anyone who witnesses unfair debt collection practices or believes they have become victim to a scam should report it through the FTC’s Complaint Assistant. For more consumer information and resources, visit NCPW’s Consumer Topics.

Happy National Consumer Protection Week from Reform Online Lending!

With Debt Collection Complaints on the Rise, ROL Encourages Consumer Caution

According to the Federal Trade Commission’s Annual Summary of Consumer Complaints, debt collection rose to the top of consumer complaints in 2015. Reform Online Lending, the Federal Trade Commission and other organizations work hard to rid the industry of scammers while educating consumers along the way.

In an effort to protect consumers and clean up the marketplace, Reform Online Lending offers a reward for employees in the online financial services industry who report unlawful conduct related to phantom debt collection scams or payday loan debt collection scams. Also contributing to this effort, the Federal Trade Commission offers resources for consumers to file complaints or report scams.

It’s important for consumers to know their rights under the Fair Debt Collection Practices Act, as well as where they can go for useful information and resources. Together, with the help of state and federal law enforcement agencies, national consumer protection organizations and consumers, we can reform online lending!

Reform Online Lending Recommends Vigilance During Tax Season

Reform Online Lending has recently been made aware of a U.S. Treasury Scam. It is important for consumers to remain cautious year-round, but you should be extra vigilant during tax season.

 A man, who refers to himself as Steve Martin, has been calling consumers and claiming to be enforcing action on behalf of the U.S. Treasury. He threatens “federal criminal offense” if his message is ignored and the consumer doesn’t call him back at 352-600-3039.

Please be aware that this is a scam. The U.S. Treasury and IRS will first contact you via postal mail if there is an issue. If you believe you have received a phone call from a scammer, you can report it through the FTC’s Complaint Assistant. If you are unsure whether the phone call you received is a scam or not, you can call the IRS at 1-800-829-1040 to verify.

Veterans Day Serves as a Great Reminder to Be Aware of Military Scams

As Veterans Day is celebrated this week, Reform Online Lending would like to remind military families and veterans to be especially aware of the financial services scams that often target them. Unfortunately, many fraudsters will use Veterans Day as an opportunity to scam those who have served our country.

It is important to not only be aware of the most common online lending scams, but also the ways to avoid and recognize them.The FTC’s consumer information page for military families is a great resource for this kind of information.

Reform Online Lending is continuing to focus its efforts on weeding out fraudsters who target members of the military and their families. Financial services industry employees have a duty to report lending scams, especially those that defraud military men and women, veterans and their families.

FTC Bans Operators of an Advance Fee Recovery Scheme

Scammers who falsely claimed they could recover money for consumers are being banned from the Advance Fee Recovery business by the FTC. These operators targeted victims of timeshare resale and investment scams then misled these consumers into believing they would recover most of the money they had originally lost.

Reform Online Lending backs the FTC and their decision to ban these scammers from selling recovery services, collecting payments for any recovery service and profiting from these victims’ personal information. This recent FTC action supports Reform Online Lending’s fight to rid the alternative financial services industry of bad actors and its goal to return any money stolen from consumers.

Reform Online Lending is continuously working hard to prevent fraud and uncover scam artists who contaminate the industry. If you are an employee of the online lending industry and witness or believe your employer is committing fraudulent activity, let ROL know! You may be eligible for Reform Online Lending’s $25,000 reward!

FTC Action Gives Consumers $1.5 Million; Online Lenders Cheer

Did you hear that the FTC is mailing $1.5 million to 64,607 consumers who were scammed by a group of scammers claiming to be online payday lenders? These scammers illegally debited the bank accounts of consumers who had applied for loans from the bogus lenders – the FTC put an end to the fraudsters’ operations.

Reform Online Lending supports a legitimate online lending marketplace with online lenders who use best practices. These lenders and Reform Online Lending also believe consumers need stronger protection from those scam artists who claim to be legit.

The FTC action supports both goals of Reform Online Lending: Ridding the online lending industry of fraudulent actors and helping consumers by returning money the scam artists stole.

Reform Online Lending continues to offer $25,000 to employees with information about scams in the alternative financial services industry that can be successfully prosecuted. If you are an employee in the industry and believe fraud is being perpetrated against consumers, let Reform Online Lending know about it!