BETHESDA — Consumers in Montgomery County can count on regulations being enforced at the local, state and federal levels to protect their rights, Sen. Chris Van Hollen (D-Md.) and Attorney General Brian Frosh (D) said while speaking at a consumer protection forum Thursday evening at Bethesda Chevy-Chase HS.
“Consumer protection involves having rules in place at the federal level, the state level, and at the local level to try to make sure that businesses … play by the rules,” Van Hollen said. “Those rules are important to have in place to protect consumers and they’re also important to have in place to protect those businesses that are playing by the rules.”
Van Hollen, took time to praise both Frosh’s work and that of Eric Friedman, director of the Montgomery County Office of Consumer Protection as he explained how consumer protection laws deter businesses from engaging in abusive or predatory practices and establish a framework of transparency and fairness at the federal, state and local levels.
Friedman returned the favor by lauding Van Hollen’s work on a 1999 lawsuit that alleged Warner Cos., a Virginia based heating and plumbing company, overcharged its costumers for labor hours resulting in a $1.6 million settlement.
But when it comes to federal consumer protection rules, Van Hollen warned that efforts to protect that framework were under constant attack from Congressional Republicans.
The Consumer Financial Protection Bureau (CFPB), a federal agency created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as Van Hollen explained, protects consumers from mandatory arbitration, a practice that forces consumers to resolve disputes without going to court.
“When you sign a mandatory arbitration clause and they’re usually buried deep inside something you’re asked to sign, you’re giving up your right to have your day in court,” the Van Hollen said.
While the CFPB protects consumers from arbitration in some cases, Congress overturned a CFPB rule announced last July that would have limited when companies can impose arbitration agreements in financial contracts after Vice President Mike Pence cast a tie-breaking vote in October.
Another attack on the agency from Capitol Hill, Van Hollen warned, comes from Sen. Ted Cruz (R-TX), who introduced legislation to abolish the agency even as White House Office of Management and Budget Director Mick Mulvaney carries out his role as the Acting Director of the CFPB. President Trump appointed Mulvaney to serve in that role concurrently with his OMB position after Director Rob Cordray – the only other person to head the agency – resigned in November.
Mulvaney’s goal is to “try to take it apart from the inside,” Van Hollen said, before explaining how Mulvaney had evaded answering one of his questions at a recent Senate hearing.
Frosh (D), who Maryland voters elected as Attorney General in 2014 after many years of service in the General Assembly, explained how his office’s consumer protection division “punches well above its weight” despite being “small and robust,” and lamented how he was forced by Gov. Larry Hogan (R) to shift appropriations from consumer protection lawsuits to fund litigation against the Trump administration.
Redirecting those funds, Frosh said, “was not too particularly helpful.”
Still, his office receives so many complaints by phone, and it often relies on volunteers to process them, he said.
Frosh said even with the small size of his office, the lack of resources does not keep it from its goal, to “go after the worst of the worst.”
Frosh offered as an example the recent litigation his office commenced against Chase Bank, alleging that it engaged in fraudulent debt collection practices, such as suing for money their borrowers did not owe. He advised audience members to take steps to protect themselves against fraudulent and predatory practices, and suggested that simply hanging up the phone when confronted with unknown numbers and activating a freeze on one’s credit record were effective ways of avoiding phone scammers and preventing identity theft.
“Keep in mind there are tens of thousands of people at work every day trying to steal your money,” he said. “They don’t have another job and they’re trying to rip you off.”