Congress to Address Deceptive Lender Solicitations

Most of us receive them in the mail on a pretty regular basis - those official-looking envelopes that resemble a communication from a government agency, or our home lender, or someone else we cannot afford to ignore.  If we open the letter, it is likely to contain a solicitation for questionable financial services.

Having recently worked with a client who responded to such a solicitation and ended up in a nightmarish home refinancing situation, we applaud H.R. 5895, “A Bill to Require Certain Labeling of Unsolicited Commercial Mail”, introduced by Gary Ackerman (D-NY) on April 24 and referred to the Committee on Financial Services.  The bill requires that any unsolicited commercial offer for any financial product or service, including loans or offers of credit, offers of insurance coverage, debt refinancing services, debt cancellation services, mortgages, and investment products, bear a prominent notice on the outside of the envelope including the name of the person or company making the offer and a statement that it is an unsolicited commercial offer. The Federal Trade Commission and State insurance Commissions have authority to enforce the law.

In addition to providing some protection for unsophisticated consumers against being tempted to enter financial contract with cleverly disguised abusive terms, the proposed legislation should also make it easier for more careful consumers to avoid discarding genuine pieces of mail that require attention.