News From Our Blog

Protecting servicemembers from predatory auto loans: Harry and Ari’s story

By Ashley Gordon, CFPB

Watch Harry and Ari’s story

Protecting consumers from predatory financial products and services is part of our mission and something we take very seriously. We received a Tell Your Story from the father of a servicemember that led to us opening an investigation into an auto loan program. The program, which targeted servicemembers, was found to have deceptive marketing and lending practices. The investigation led to an enforcement action against auto lenders requiring them to refund approximately $6.5 million to over 50,000 servicemembers. Ari, a servicemember, and his father Harry, shared their story with us, and here’s what they had to say:

 “It’s very important to speak up because there are people within the government that are there to help us get through challenging financial situations,” Harry said. “It’s very important for any citizen to speak up and just tell your story.” Ari mentioned that: “The fact that the CFPB took action in the name of servicemembers across the entire country… really shows us that someone’s in our corner.”

 We were glad to be there for Harry and Ari - they shared their story with us and got the help they needed. To learn more about their story, share your own, or find resources for servicemembers check out www.consumerfinance.gov/yourstory.

You don’t have to give children an allowance—but if you do, talk about it

By CFPB and FDIC

Giving children an allowance is a topic many parents discuss. Even within families, parents can disagree about whether it’s a good idea.

Research doesn’t conclusively prove whether or not having an allowance helps children achieve better financial well-being as adults. However, research does suggest how to make an allowance work well for your children, if you do decide to give one.

Don’t just hand over the money and leave it at that. Make it part of your conversations. Talk about what the family budget still covers. For example, you can clarify that the child’s meals with the family, school clothes, and school supplies are the family’s responsibility. The child’s own expenses, like clothes he wants to buy or apps she wants to add, should come from the allowance.

If you give the allowance weekly, check in each week and ask about what the child decided to do with the money. Did she save any of it for a future goal? What did he learn about spending, saving, or planning ahead? Does she want to make changes to how she spends money next time?

Some families decide to pay children for certain chores. If this sounds like your family, you can have similar conversations about what your child earned.

Whether to give an allowance at all is a choice each family should make. To make the most of an allowance if you choose to give one, commit to giving your child some of your own time and guidance along with it.

Disputing debt you never owed: William’s story

By: Ashley Gordon, CFPB

Watch William’s story

Being on the hook for a debt you don’t owe is not only stressful, but can be scary. If you don’t know where to turn, you might feel hopeless. We heard from William, who was receiving calls for a debt he didn’t owe. William tried to resolve the issue for over four years, seeing his credit get ruined in the process. He said “None of them could do anything… except tell me I had to pay them the $8,500.”

Stories like William’s are important because it’s often hard to know where to turn and who to trust for help. Because William submitted a complaint, he was able to end a four year long credit dispute in one week.

“Just to have the situation resolved…that just felt good.” William said. “In a situation for me that was seemingly endless and hopeless, the CFPB helped me to find resolution. It’s a new day.”    

We’re glad William got the help he needed, and we want to make sure that you know that we’re here for you too. To share your experience or learn more from others, visit us at www.consumerfinance.gov/yourstory.

 

What to do if Someone Steals Your Identity

Identity theft occurs when someone steals your name and other personal information, such as your Social Security or driver’s license numbers, and uses it without your permission.

What to do if Someone Steals Your Identity
If you think you may be a victim of identity theft:

The FTC’s ID Theft Affidavit is a form that you can use to report information to businesses, notifying them that there is a fraudulent debt in your name. Download a copy of the ID Theft Affidavit (PDF | requires Adobe Acrobat Reader) or call the FTC’s ID Theft Hotline at 1-877-IDTHEFT (1-877-438-4338) to get a copy.

Security Freeze
Some states allow you to place a “security freeze” on your credit report, which will keep businesses from issuing credit to a thief. The cost of a security freeze varies from state to state, and is not available in every state. Contact your state consumer protection office for more information about your state security freeze laws.

Ask Marietta: Paying Down Debt

Video description

In this episode, Marietta answers the age old question, “What’s the best way to get rid of personal debt?”

Video transcript

Hi it’s Marietta with the Consumer Action Handbook. After our Google Hangout we had so many questions left to answer. We heard from so many people that we wanted to take time to answer as many as possible. And so that’s what I’m here to do, to answer more of your questions.

So without anymore…let’s just dive right in.

Today’s question is really about credit and it’s says, “What’s the best way to get rid of personal debt.”

And there are really two schools of thought on this in the personal finance world.

The first way is based on interest rates. Basically you pay down the debt with the highest interest rate first and then move through all of your debt until you’ve paid off all your debt all the way.

Over time this will allow you to pay less interest on each credit card or each type of credit because you’re paying off things with the higher interest rate first.

The other strategy is more so based on the balance on the debt, but it’s in the reverse. You pay off things with the lowest balance and then move up the line. So if you have several accounts you pay off something with a $500 balance completely and then you pay off things that have a $1000 balance and move up the line.

The strategy behind this gives you a sense of accomplishment and allows you to have some momentum. You’ve seen success, you’ve seen that you’re able to do this that you’re able to tackle your debt and pay it down and get rid of it so it gives you the momentum and strength and just the willingness to stick to it because you’ve seen that you’ve done it and you can continue you to do it.

Regardless of what strategy you use, you should pick one that works best for you. Knowing what your motivated by is a good thing. If you’re motivated more so by rationality and numbers, maybe the interest rate version works better for you. But if you need something to get you started and give you some steam to keep going, maybe using the balance as your motivating factor is the best one.

Regardless always of which method you use, you definitely want to make sure you’re making at least the minimum payments on all of your accounts because that demonstrates you’re making significant strides to managing your credit reports and credit history.

So thanks for your question.

If you’d like to ask us a question, we’d love to hear from you! You can write us by postal mail to Ask Marietta, 1800 F St. NW, Washington DC, 20405, email us (askmarietta@gsa.gov) or tweet us using the hashtag #AskMarietta.