July 27, 2020

consumer news

FEDERAL DEPOSIT INSURANCE CORPORATION

The FDIC encourages banks to work with 

their customers experiencing financial 

difficulty, where possible. This may include 

delaying loan payments, extending the terms 

of a loan, or restructuring loan agreements. It 

is important to contact your bank to discuss 

your options before skipping any payments 

or taking any other action that differs from 

the terms of your loan. 

If you do not think you can make your loan 

payments on time, contact your bank as 

soon as possible to discuss your options. 

Paying your debts late or not at all can 

cause significant problems, including the 

assessment of fees. In addition, making late 

payments can damage your credit score. 

Your bank may be able to work with you 

on a solution, but it is critical that you 

contact your bank as soon as possible and 

explain your situation. 

If you have additional concerns or a complaint 

with your bank, be proactive. First, contact 

the bank directly to work on a mutual 

resolution. If that is not effective, you may 

contact the appropriate federal or state 

Working Through Financial Difficulty 

regulatory agency for help or guidance. This 

includes the FDIC at https://ask.fdic.gov/

fdicinformationandsupportcenter/s/.

Beware of scams

Scammers try to profit from people who 

are financially vulnerable. Scams are meant 

to sell you services or products that sound 

good, but only take your money, so be on 

the lookout. Do not provide bank account 

or credit card numbers or other personal 

information over the phone or in an email, 

unless you can verify that the entity is 

reputable and trustworthy. More information 

on debt relief scams is available from the 

Federal Trade Commission (FTC). 

Credit counselors and assistance with 

creating a budget or plan

With the help of a credit counselor, you 

can get advice on creating a budget and 

a plan to address your financial difficulty. 

This should allow you to organize your 

debts and establish a roadmap to paying 

them down. A credit counselor may 

also help you work with your financial 

institution. Counselors typically do not 

negotiate any reduction in the debt you 

owe. However, they may be able to help 

make your monthly debt payments more 

manageable by negotiating extensions 

of the time that you can repay loans and 

working with your financial institution 

regarding fees and interest charges. The 

Consumer Financial Protection Bureau 

(CFPB) can assist you with finding a 

credit counselor. 

What is mortgage forbearance?

Mortgage forbearance is when your 

financial institution or lender agrees to 

allow you to temporarily make reduced 

mortgage payments or suspend your 

mortgage payments for a period of time. 

Forbearance may help you through your 

financial hardship by providing temporary 

PHOTO: GETTY IMAGES

Overcoming 

budgetary 

setbacks
For more help or information, go to www.fdic.gov or 

call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342). 

Please send your story ideas or comments to Consumer Affairs 

at ConsumerNews@fdic.gov

budget relief or giving you additional time 

to catch up. Forbearance does not cancel the 

amount you owe to your financial institution. 

You will have to repay any missed or 

reduced payments in the future. 

You can find additional information on the 

Coronavirus Aid, Relief, and Economic 

Security Act (CARES Act), which may 

provide you with additional forbearance 

options due to the coronavirus pandemic 

by visiting the CFPB at https://www.

consumerfinance.gov/about-us/blog/guidecoronavirus-mortgage-relief-options/ for 

more information. 

If you are having trouble paying or 

managing your mortgage, you can contact 

a U.S. Department of Housing and Urban 

Development (HUD)-approved housing 

counselor for help with your situation. 

Dealing with a debt collector

Ignoring or avoiding a debt collector will not 

stop their attempts at contacting you. The 

debt collector may even use other means to 

try to collect the outstanding debt, including 

a lawsuit. If you do not owe the debt, you 

should explain this to the debt collector 

attempting to contact you. If the debt is 

yours and you are unable to make payments, 

you may be able to make arrangements 

with the debt collector. You can also ask the 

debt collector in writing to stop contacting 

you, which will stop the communications; 

however, this does not necessarily stop other 

efforts to collect the debt.

The Fair Debt Collection Practices Act 

(FDCPA) is a federal law that governs 

debt collection practices and prohibits debt 

collection companies from using abusive, 

unfair, or deceptive practices. The CFPB

(toll-free 1-855-411-2372) and the Federal 

Trade Commission (toll-free 1-877-FTCHELP) share overall enforcement 

responsibility for the FDCPA and accept 

complaints about debt collectors. The FDIC

toll-free at 1-877-ASK-FDIC (1-877-275-

3342) may also help with your complaint. 

FDCPA covers consumer debts mainly for 

personal, family, or household purposes 

such as mortgages, credit cards, and medical 

debts. Please note that the FDCPA does not 

cover business or commercial purpose debts. 

FDCPA communication requirements for 

debt collectors: 

• Generally, debt collectors are prohibited 

from contacting you at an unusual time or 

place, and are prohibited from contacting 

you before 8 a.m. or after 9 p.m. 

• Debt collectors are not allowed to harass 

you or anyone else through any forms of 

their contact.

• If you are represented by an attorney, 

the debt collector generally must stop 

contacting you, and must contact the 

attorney instead.

More information about the FDCPA is

available at https://www.consumerfinance.

gov/consumer-tools/debt-collection/answers/

key-terms/#fair-debt-collection-practicesact-fdcpa. 

Additional resources:

What is mortgage forbearance? (CFPB)

https://www.consumerfinance.gov/ask-cfpb/

what-is-forbearance-en-289/

What happens after I complete an application

to determine my options to avoid foreclosure?

(CFPB)

https://www.consumerfinance.gov/askcfpb/what-happens-after-i-complete-anapplication-to-determine-my-options-toavoid-foreclosure-en-1851/

Protecting your finances during the

coronavirus pandemic (CFPB)

https://www.consumerfinance.gov/

coronavirus/

How To Get Out of Debt (FTC)

https://www.consumer.ftc.gov/topics/

dealing-debt/

Home Buying and Ownership Counseling

NeighborWorks America

https://www.neighborworks.org/HomesFinances

Credit Building and Credit Repair National

Foundation for Credit Counseling

https://www.nfcc.org/en/