-by Michael D. Finn, Esq.
his is the second part of the Survey of Administrative Remedies (and Some Non-Administrative Ones as Well) for Timeshare Owner Consumers to Consider if They are Seeking Relief. In this part we will be looking at governmental agencies, including the Federal Trade Commission (“FTC”) and the Consumer Financial Protection Bureau (“CFPB”).
Federal Trade Commission (“FTC”)
The FTC is an independent agency of the United States government created in 1914 whose purpose is to prevent unfair and deceptive acts or practices to consumers, to educate the public on the competitive process, and to accomplish these goals without adding an undue burden on legitimate business activities.9
b. Dispute Process
Filing a complaint with the FTC is not complicated. A consumer just needs to provide contact information, type of product or service involved, information about the business, and the details about the transaction.10 After filing the complaint, unfortunately, consumers should not expect an immediate result or even an individual acknowledgement. In fact, consumers should not expect a resolution at all because the FTC cannot resolve individual complaints, but can provide information about the next steps a consumer may take.11
So what is the purpose of filing a complaint with the FTC if they are not going to resolve the consumer’s dispute? The FTC looks at fact patterns in the industry. Although one single consumer complaint will not be resolved, several complaints may indicate to the FCT a pattern of fraud and abuse which may lead the FTC to investigate and eliminate those unfair business practices.12
c. Agency Conclusion
Although the FTC is a regulatory agency and it does have the authority granted by Congress to adopt industry-wide regulations rules,13 the FTC does not resolve an individual consumer complaint. The FTC will only investigate patterns once it decides enough similar complaints have been filed with them. A consumer should not be completely discouraged by a lack of personal resolution but should take encouragement that if there is an unfair and deceptive practice that is reported multiple times, the FTC will investigate and, if it sees appropriate, will create rules that will fix an entire industry. The caveat, consumers must report.
Consumer Financial Protect Bureau (“CFPB”) (Federal Regulatory)
The CFPB is one of the newest government agencies, created in July 2010. It was created as a result, in part, of the mortgage crisis in the late 2000s. Consumers were not being protected against a rapid growth in irresponsible lending practices. The CFPB focuses on consumers and its one goal is to watch out for American consumers in the market for consumer financial products and services.14 Since the timeshare industry utilizes various financing tools in its sales practices and presentations, a CFPB complaint may be a very viable option depending, of course, on the nature of the complaint.
b. Dispute Process
Filing a complaint with the CFPB is not difficult. A consumer only needs to choose the type of loan, product, or service involving the matter, fill out an electronic form with consumer and business’ information, and then tell his/her story.15 Another great feature provided by the CFPB is the ability to track the complaint,16 which is a feature not found with other regulatory agencies like the FTC.
After the consumer files the complaint, the CFPB forwards it to the company who then has 15 days to respond to the consumer and the CFPB.17 The CFPB expects companies to close complaints within 60 days. If the complaint is deemed to be more complex, then companies can take longer to close the complaint, but the CFPB does not define nor does illustrate what a complex complaint entails.18 A consumer can view the CFPB as a hub for all complaints because it can determine that another agency would be better able to assist the consumer and if it does make that determination, then the CFPB forwards the consumer’s complaint to that agency and notifies the consumer of such.19
Since this is a government agency, the CFPB does publish the subject and data of the complaint to the public20 feeding its Consumer Complaint Database.21 Further, the CFPB will report to Congress with the purpose of enforcing federal consumer financial laws and writing better rules and regulations.22
The CFPB provides report snapshots that allow consumers to see what type of complaints have been filed and their outcomes. As of June 2014, 11% of the complaints were closed with monetary relief; 11% closed with non-monetary relief; 68% closed with explanation; 2% closed (without relief or explanation); 3% administrative response; 2% under review; 3% the company did not provide a timely response.23 This gives the consumer an idea of what to expect as an outcome to their complaint. Although the individual complaint will be resolved, only a very small percentage of the complaints will be closed with a monetary relief, with the top two categories in which consumers received monetary relief being (1) Bank Account or Service at 26% and (2) Credit Card with 33%.24
However, as more credit card transactions involving timeshare purchases are generated, the credit card financing aspect should not be overlooked by the consumer looking for a monetary resolution to their timeshare purchase issues assuming a credit card was utilized. More and more timeshare developers are acting as new credit card originators for third party financial provides such as Bill Me Later (a division of PayPal) Barclay Bank, Bank of America, and a couple of credit unions.
c. Agency Conclusion
Unlike other regulatory agencies, companies must reply to the CFPB’s complaints and inquiries. This is great news for consumers because it means consumers will be heard. But being heard and made whole are two different things. Consumers should still file their complaints with the CFPB and expect a modest resolution and an opportunity to be heard. However, the more complaints the CFPB receives regarding a company, practice, or industry, it is likely that those complaints will be presented to Congress who have the power to create new rules and regulations that will improve the market for consumers. Although that is not the ideal individual resolution a consumer may want, consumers still have a chance of having their individual complaint resolved and in the process may end up helping future consumers when Congress reviews and enacts new laws.
CONTINUE TO PART 3: Florida Department of Business Professional Regulation (“DBPR”), Division of Florida Condominiums, Timeshares, and Mobile Homes (“Timeshares Division”), Attorney General (“AG”) (State’s Attorney), and National Timeshare Owners Association (private member based non regulatory association).
Michael D. Finn, Esq.
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