Two companies engaged in contracts for deeds have settled charges that they misrepresented procedures to customers for filing complaints about how to resolve errors on consumer reports, the federal consumer financial protection agency said Tuesday.
In a release, the Consumer Financial Protection Bureau (CFPB) said it had settled with Harbour Portfolio Advisors, LLC, of Texas, and National Asset Advisors, LLC (NAA); and National Asset Mortgage, LLC (NAM), both of South Carolina. The companies worked together to issue contracts for deeds to consumers; NAA dissolved in 2018, according to the agency.
Under the settlement, Harbour will pay a $25,000 civil money penalty to the bureau, and NAA and NAM will jointly pay a $10,000 civil money penalty to the agency.
According to the CFPB, Harbour acquired foreclosed properties in bulk at auction, then resold them to individual consumers, typically those who could not obtain conventional financing and then through financing offered by the firm. NAM and NAA serviced the loans made by Harbour, including collecting payments, fielding disputes from consumers, and speaking with consumers about the contracts’ terms.
“The bureau’s investigation found that between 2012 and 2016, when consumers called NAA or NAM to complain about errors on their consumer reports relating to their financing with Harbour, they were sometimes told that they had to file a dispute with the consumer-reporting agency. These representations were inaccurate and constituted deceptive acts and practices in violation of the Consumer Financial Protection Act,” the CFPB said.
The agency noted that Regulation V, which implements the Fair Credit Reporting Act, required NAA or NAM to investigate written disputes and contact the consumer reporting agency to resolve any errors.
“Also, either company could investigate a consumer-reporting complaint based solely on a consumer’s phone call, and if they discovered an error, could fix the error by contacting the consumer-reporting agency,” CFPB said. “The Bureau also found that NAM lacked adequate policies and procedures to protect the accuracy and integrity of information furnished to consumer-reporting agencies, in violation of Regulation V.”
Also under the settlement, the agency said, the companies agreed not to misrepresent or assist others in misrepresenting how consumers can resolve errors in their consumer reports or any other material fact concerning their consumer reports. NAM agreed to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information that it furnishes to consumer-reporting agencies and a plan to review such policies and procedures periodically to update them as necessary to ensure their continued effectiveness, the agency said.