The Dealers Financial Services Case Analysis
The consumer’s interpretation of the representation, omission, act, or practice is reasonable under the circumstances.
Determining if the consumer’s interpretation was reasonable requires identifying the “target audience” and ascertaining whether the interpretation was reasonable from the perspective of the “target audience.” The “target audience” is the specific group the credit union is soliciting. A typical “target audience” can be older Americans, veterans, college students, or financially distressed consumers. When a credit union’s representation conveys more than one meaning to a reasonable member of the “target audience,” one of which is untrue or false, the representation is deceptive.
One recent CFPB consent order that clearly …show more content…
For example, in July the CFPB issued a consent order with CitiBank for, among other things, misrepresenting that an identity-monitoring program’s credit score was from all three credit reporting bureaus, when it was not. In the Dealers’ Financial Services, LLC (Dealer) consent order, Dealer misrepresented that an add-on vehicle service contract would add “just a few dollars to your monthly payment” or that GAP insurance product would add “just a few pennies a day to your monthly payment” when average monthly cost was over $40 and $12.55, respectively. Last, in Chase Bank USA and Chase BankCard Services (Chase) Consent Order, Chase substantial assistance to debt collectors seeking to collect on unenforceable debt. The actions by Chase were material because they were likely to affect a consumer’s choice or conduct regarding how to respond to a lawsuit or collection …show more content…
In this Bulletin, the CFPB states that it has observed credit card issuers not including any information about the loss of the grace period during a promotional period in its advertisements when the consumer does not pay his entire credit card balance by the statement due date. In these cases, a consumer who accepts a promotional offer (such as a reduced rate on purchases made in December) and continues to make purchases in subsequent billing cycles will not be able to avoid paying interest unless they pay the entire balance (both promotional and new purchase balance) by the statement date. This omission of important information would be presumptively material because it pertains to a central characteristic of the product—its
Determining if the consumer’s interpretation was reasonable requires identifying the “target audience” and ascertaining whether the interpretation was reasonable from the perspective of the “target audience.” The “target audience” is the specific group the credit union is soliciting. A typical “target audience” can be older Americans, veterans, college students, or financially distressed consumers. When a credit union’s representation conveys more than one meaning to a reasonable member of the “target audience,” one of which is untrue or false, the representation is deceptive.
One recent CFPB consent order that clearly …show more content…
For example, in July the CFPB issued a consent order with CitiBank for, among other things, misrepresenting that an identity-monitoring program’s credit score was from all three credit reporting bureaus, when it was not. In the Dealers’ Financial Services, LLC (Dealer) consent order, Dealer misrepresented that an add-on vehicle service contract would add “just a few dollars to your monthly payment” or that GAP insurance product would add “just a few pennies a day to your monthly payment” when average monthly cost was over $40 and $12.55, respectively. Last, in Chase Bank USA and Chase BankCard Services (Chase) Consent Order, Chase substantial assistance to debt collectors seeking to collect on unenforceable debt. The actions by Chase were material because they were likely to affect a consumer’s choice or conduct regarding how to respond to a lawsuit or collection …show more content…
In this Bulletin, the CFPB states that it has observed credit card issuers not including any information about the loss of the grace period during a promotional period in its advertisements when the consumer does not pay his entire credit card balance by the statement due date. In these cases, a consumer who accepts a promotional offer (such as a reduced rate on purchases made in December) and continues to make purchases in subsequent billing cycles will not be able to avoid paying interest unless they pay the entire balance (both promotional and new purchase balance) by the statement date. This omission of important information would be presumptively material because it pertains to a central characteristic of the product—its