By John Schmoll – Daily Finance
Debt, especially consumer debt, can be like an anchor that weighs you down. It’s an ever-present reminder of why you’re not able to do the things in life you’d like to do. As we approach a new year, our debt can cloud our perception and emotions about the future. If we let it, debt can either discolor our resolutions or fuel a desire to establish healthy financial habits in the year ahead.
Having dealt with this myself, I know how easy it can be to believe that it’s impossible to pay off debt. You begin to believe you can’t live without it. You begin to believe that everyone has debt and it’s no big deal that you do. Unfortunately, there are many who know this feeling well. Nearly 45 percent of Americans carry credit card debt –- with the average coming in at just shy of $11,000.
However, there are ways to kill your debt and get to where you want in life. I’ve interviewed Travis Pizel from Enemy of Debt to share his insights. Pizel and his wife recently finished paying off $109,000 of consumer debt in 55 months.
1. Don’t Stay Isolated
When we’re in debt, it’s common to feel shame. We pull back and don’t share what we’re going through with others. If you want to kill your debt, you can’t stay isolated. According to Pizel, “Do not underestimate the power of a support system. Surround yourself with people you can lean on, and who will offer you encouragement.” [read more]
By Fred O. Williams – CreditCards.com
For the second time this year, the federal government’s consumer watchdog is trying to lighten the burden of overdue medical bills, which affect nearly one of every five consumers with a credit report.
New requirements released Thursday dictate major credit bureaus must start tracking credit information “furnishers” – including hospitals and doctors — that generate the most billing disputes, and find out why.
“It’s hard for consumers to navigate the medical debt maze and come out with a clean credit report on the other side,” Richard Cordray, director of the U.S. Consumer Financial Protection Bureau, said in a statement.
Under the requirements, credit bureaus will be required to file regular accuracy reports with the agency. The reports must list the industries from which they receive the most information, and the total disputes generated by those industries. The reports will also list the furnishers with the largest number of consumer disputes. If some furnishers continually have high rates of disputed information, credit bureaus should investigate to identify the causes and take corrective action.
In an emailed statement, the Consumer Data Industry Association, the trade group for credit bureaus, said the new reporting requirement is not out of the ordinary run of data requests received from the CFPB. The effort to track dispute rates should work in hand with the bureaus’ efforts to ensure the accuracy of credit reports, the group said. [read more]
By Martha C. White – Time
Consumer confidence may be up, but the picture changes when Americans think about their debt load and the likelihood they’ll ever dig out from it.
In a new CreditCards.com survey, 18% of Americans with debt say they won’t eliminate those debts in their lifetime, double the number who said the same in a 2013 survey.
There are a few reasons behind this rapid increase, says the site’s senior analyst, Matt Schulz. Our ballooning student loan debt and increasing willingness to carry balances on credit cards play a role, but they’re not the only factors.
“Underemployment is still a problem as is wage growth, even though unemployment is lower,” he says. This malaise stretches across the economic spectrum. The survey found that higher incomes don’t translate to optimism. Households who earn more than $75,000 aren’t much more confident about their ability to shed their debt than less well-off families.
The average age when borrowers expect to be completely debt-free, owing nothing on credit cards, car loans, student loans, mortgages and loans, is 53, but a significant number of people think it will take longer. More than 40% of people who carry debt think they’ll be over the age of 60 before they pay everything off, and almost a third of debtors 65 and older say they’ll never get out of debt. [read more]
By Patrick Lunsford – insideARM
Consumer Financial Protection Bureau Director Richard Cordray today will call on credit reporting agencies to take a more active role in policing the companies that furnish data on consumers, including a mandate to report consumer disputes made against specific companies. The new requirements stem from a CFPB study on debt collection tradelines in credit reporting.
In a speech in Oklahoma City Thursday, Cordray will announce that large national credit reporting bureaus will now be required to track which creditors, debt collectors, debt buyers, and other companies are providing information for publication on consumer credit reports that see the highest level of disputes from those consumers. The credit reporting agencies will then provide an “accuracy report” to federal regulators.
The CFPB will also be tracking which industries draw the most disputes and which companies receive the highest number of disputes relative to their peers within industries.
The federal financial watchdog released a sample accuracy report that it suggested credit reporting agencies could use to comply with the new requirement.
The Bureau did not say how it will use the information it collects from the credit bureaus, but it did say that it “expects the credit reporting agency to investigate, identify if there is a problem, and take appropriate action” against companies with a high number of disputes. In his speech, Cordray said that appropriate action “may include declining to accept information from the troubled furnisher.” [read more]
By Kyla Asbury – Legal Newsline Legal Journal
A federal judge has granted preliminary approval of a settlement in a class action lawsuit against Kaiser Permanente for sending unsolicited, pre-recorded messages to former customers’ cell phones.
Kaiser will pay $5.35 million to settle the class action lawsuit in which Rafael David Sherman claimed it violated the Telephone Consumer Protection Act by sending the messages to cell phones of former customers after they had canceled their health insurance plans with the company, according to the order filed Dec. 4 in the U.S. District Court for the Southern District of California.
Class members can expect to receive a pro rata share of the settlement proceeds, and if all of the approximately 864,412 members file a claim, each will receive approximately $4, according to the settlement document.
District Judge John A. Houston also approved class certification.
“The court preliminarily finds that the lawsuit satisfies the applicable prerequisites for class action treatment under Fed. R. Civ. P. 23, for purposes of settlement only,” Houston’s order states.
If more than 1,000 class members opt out of the settlement, Kaiser has the right to terminate the settlement.
The class action lawsuit was initially filed on April 24, 2013, in federal court.
Sherman claimed Kaiser violated the TCPA when it called him after he canceled his health insurance plan with the company. [read more]
By Jana Kasperkevic – The Guardian
A Georgia scam ring of seven criminals illegally collected debts from 6,000 people by pretending to be FBI or Justice Department agents threatening people with arrests.
Several employees of Williams, Scott and Associates, a debt collection company operating out of Georgia, are facing criminal charges of one count of conspiracy to commit wire fraud. The penalty could be up to 20 years in jail for each of the defendants, who used pseudonyms including Sharon Wright and Robert French.
Williams Scott bought debt for only a few cents on the dollar from banks and other lenders. Then, from 2009 to this April, employees of the company approached 6,000 victims across the United States by saying they were investigators or detectives who worked for – or were in contact with – the Justice Department, the US Marshals Service, the FBI and the local sheriffs’ departments. The defendants, who were arrested this morning, earned $4.1m from the tricks, the US Attorney’s office said.
Among the victims of Williams Scott were those who had taken out payday loans. In 2010 alone, over 12 million Americans took out payday loans amounting to $30bn.
At times, the Williams Scott employees sent the victims mail with the seal of the US State Department. They also threatened arrests of victims who did not accede to demands to make a payment within 15 minutes. [read more]