CFPB Warns Against Deception in Fine Print

By Staff Writer June 11, 2024

The Consumer Financial Protection Bureau issued a warning against the use of unlawful or unenforceable terms and conditions in contracts for consumer financial products or services.

Companies use this fine print tactic to try to trick consumers into believing they have given up certain legal rights or protections. When financial institutions take these types of actions, they risk violating the Consumer Financial Protection Act. The warning is part of the CFPB’s broader efforts to ensure freedom and fairness in people’s interactions with financial institutions.

The CFPB has taken action with respect to this unlawful conduct on many occasions over the past several years, including on deceptive behavior toward auto loan borrowers, The CFPB found an auto loan servicer deceptively included language in contracts that indicated that consumers could not exercise bankruptcy rights, when in fact, waivers of bankruptcy rights generally are void as a matter of public policy.

“Federal and state laws ban a host of coercive contract clauses that censor and restrict individual freedoms and rights,” said CFPB Director Rohit Chopra. “The CFPB will take action against companies and individuals that deceptively slip these terms into their fine print.”

The circular warning explains how and when fine print tricks and intimidation in contracts for consumer financial products and services may violate the CFPB’s prohibition on deceptive acts and practices. Companies may be liable even if the unenforceable terms are borrowed from form templates or widely available contracts.

Rate this item
(0 votes)
Last modified on Monday, 17 June 2024 19:28