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  • Swanson cracks down on fraudulent debt management companies

    Minnesota Attorney General Lori Swanson is cracking down on companies making false promises about lowering interest and credit card rates in exchange for up-front fees paid by consumers.

    Swanson announced Tuesday that the state had filed separate lawsuits against three companies posing as debt counseling services that had charged initial fees for services that were never rendered. The three companies singled out by the lawsuits were Priority Direct Marketing, which charged fees of up to $1,590; Clear Financial Solutions, which charged fees of up to $999; and Moneyworks LLC, which charged fees of up to $1,995.

    According to the lawsuits, the fraudulent debt counseling services made unsolicited phone calls to residents throughout the state promising lower rates and savings or a full refund for their services. After getting consumers to bite on their claims and pay, the companies would provide a poorly run service, or no service at all, while not returning the refunds.

    Additionally, Priority Direct Marketing also allegedly claimed falsely to be affiliated with the government’s federal economic stimulus plan.

    “Many people are struggling to keep up with their bills in this tough economy, and a new cottage industry of debt assistance companies promises to help them. But these companies often do little or nothing to justify their high fees, leaving people in even worse shape,” said Attorney General Swanson.

    In addition to the lawsuits, Swanson also issued a warning to consumers about debt assistance programs that could look to take advantage of the poor economic conditions to lure those in need of debt management into scam.

  • Swanson cracks down on fraudulent debt management companies

    Minnesota's Attorney General Lori Swanson filed three lawsuits against companies that promised false money saving techniques Minnesota Attorney General Lori Swanson is cracking down on companies making false promises about lowering interest and credit card rates in exchange for up-front fees paid by consumers.

    Swanson announced Tuesday that the state had filed separate lawsuits against three companies posing as debt counseling services that had charged initial fees for services that were never rendered. The three companies singled out by the lawsuits were Priority Direct Marketing, which charged fees of up to $1,590; Clear Financial Solutions, which charged fees of up to $999; and Moneyworks LLC, which charged fees of up to $1,995.

    According to the lawsuits, the fraudulent debt counseling services made unsolicited phone calls to residents throughout the state promising lower rates and savings or a full refund for their services. After getting consumers to bite on their claims and pay, the companies would provide a poorly run service, or no service at all, while not returning the refunds.

    Additionally, Priority Direct Marketing also allegedly claimed falsely to be affiliated with the government’s federal economic stimulus plan.

    "Many people are struggling to keep up with their bills in this tough economy, and a new cottage industry of debt assistance companies promises to help them. But these companies often do little or nothing to justify their high fees, leaving people in even worse shape," said Attorney General Swanson.

    In addition to the lawsuits, Swanson also issued a warning to consumers about debt assistance programs that could look to take advantage of the poor economic conditions to lure those in need of debt management into scam.

  • Bank of America and Chase adjust handling of overdraft fees

    Bank of America and JPMorgan Chase has announced that they will both be adjusting the way their debit card programs handle overdraft fees by allowing the opting out of overdraft protection and adjusting how charges are credited.

    News of the adjustments will likely be welcomed by those looking to consolidate debt that may have been caused by paying steep fees when their accounts have been overdrawn.

    Beginning October 19, Bank of America will cease charging overdraft fees for customers who overdraw their account by less than $10, impose a limit of four overdraft fees per day and allow customer to opt out of overdraft protection and not allow any charges to go on the card once it reaches its balance.

    “We made the decision that we had to help customers now and help those most stretched by the economy,” Brian Moynihan, the president of Bank of America’s consumer and small-business banking operations, told the New York Times.

    Chase will impose similar changes, not charging fees for accounts overdrawn by less than five dollars and capping the amount of fees per day at three. By the end of Q1 2010 the bank will also stop lumping transactions for one day together and processing the highest charges first.

    Upon hearing of the changes made by the banks, House Financial Services Committee Chairman Barney Frank of Massachusetts was pleased with the move and hoped that change would confirm to other banks that “it’s doable.”

    “No one else will be able to argue that it’s too burdensome,” he added, according to the Wall Street Journal.

  • Bank of America and Chase adjust handling of overdraft fees

    Bank of America and JPMorgan Chase are both changing how, when, and if they charge overdraft fees in certain circumstances Bank of America and JPMorgan Chase has announced that they will both be adjusting the way their debit card programs handle overdraft fees by allowing the opting out of overdraft protection and adjusting how charges are credited.

    News of the adjustments will likely be welcomed by those looking to consolidate debt that may have been caused by paying steep fees when their accounts have been overdrawn.

    Beginning October 19, Bank of America will cease charging overdraft fees for customers who overdraw their account by less than $10, impose a limit of four overdraft fees per day and allow customer to opt out of overdraft protection and not allow any charges to go on the card once it reaches its balance.

    "We made the decision that we had to help customers now and help those most stretched by the economy," Brian Moynihan, the president of Bank of America’s consumer and small-business banking operations, told the New York Times.

    Chase will impose similar changes, not charging fees for accounts overdrawn by less than five dollars and capping the amount of fees per day at three. By the end of Q1 2010 the bank will also stop lumping transactions for one day together and processing the highest charges first.

    Upon hearing of the changes made by the banks, House Financial Services Committee Chairman Barney Frank of Massachusetts was pleased with the move and hoped that change would confirm to other banks that "it’s doable."

    "No one else will be able to argue that it’s too burdensome," he added, according to the Wall Street Journal.

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