Division of Financial Practices
Financial practices affect all consumers in fundamental ways, including whether they pay more for – or can even buy – essential goods and services, such as cars and homes. Deceptive and unfair financial services practices often cause serious consumer injury, making consumer financial literacy a key goal. The Division of Financial Practices plays a vital role in this market because much of the financial services industry is under the FTC’s jurisdiction. The Division protects consumers from deceptive or unfair practices by financial services companies through law enforcement in both federal and administrative courts, education, and policy leadership in the following areas:
- The advertising of financial products or services, including subprime credit cards or stored value cards. Consumers are entitled to accurate and complete information about costs and other key terms before they enter into financial transactions: it allows them to compare offers and make informed purchasing decisions. The Division challenges the deceptive marketing of credit cards, stored value cards, leases, and other financial products.
- Mortgage lending, including subprime and fair lending practices. The purchase of a home often is a consumer’s biggest financial investment. The Division brings cases to halt deceptive mortgage lending practices, particularly those in the subprime market. The Division also ensures that lenders comply with the Equal Credit Opportunity Act, which prohibits discrimination in lending – for example, charging higher prices or denying credit based on reasons that are not related to creditworthiness, like race or national origin.
- Mortgage servicing practices. Consumers can pick which home to buy, but have no choice in the company that collects their mortgage payment – known as a mortgage servicer. The Division enforces consumer protection laws in this industry to ensure that these companies do not use deceptive or unfair practices when servicing mortgage loans.
- Payment systems and processing. In many of the Commission’s fraud cases, telemarketers deceive consumers into providing their bank account information by lying, and use the services of payment processors who submit the debits to a financial institution. The Division coordinates the Commission’s law enforcement efforts against payment processors who commit unfair practices when processing payments for fraudulent merchants.
- Debt collection and debt reduction practices, including credit counseling. The Division takes action against companies that violate the law when collecting debts, marketing debt reduction or relief services, and offering credit counseling services.