In a recent case against three major credit reporting agencies, one Ohio woman may have changed the landscape for the thousands of consumers who are unable to correct problems with their credit reports each year.
For 12 years, Julie A. Sagstetter endured calls, letters and posted notices from collectors and the sheriff’s department for failing to pay her bills. However, the collectors had her confused with another woman, Julie V. Sagstetter. Although Julie A. consistently tried correcting the information, the agencies refused to admit their mistake and continued harassing her.
Julie A. finally contacted Ohio Attorney General Mike DeWine in a desperate attempt for help. DeWine launched a case against Experian, Equifax and TransUnion that led to a settlement that will hopefully change this type of behavior. A total of 31 states have announced a crackdown on some of the nation’s largest credit-reporting agencies this past week.
The agreement requires the agencies to launch investigations when consumers report mistakes and keep a list of credit companies that regularly provide inaccurate information on credit reports, among other things.
For more information, visit http://www.dispatch.com/content/stories/local/2015/05/20/mike-dewine-credit-scars.html.
The Federal Trade Commission is planning to hold various dialogues around the country to discuss consumer protection issues with the debt collection industry.
The first event will be held on June 15, 2015 in Buffalo, New York and will be hosted by the Office of the New York Attorney General.
The Association of Credit and Collection Professionals International (ACA) will attend the discussion and provide input on behalf of the industry to make sure that its voice is heard. The agenda will include recent enforcement actions, consumer complaints about debt collection practices and compliance issues.
Other participants will include a representative from the CFPB and local collections professionals. Future discussions are scheduled to be held in Dallas and Atlanta and are free and open to the public.
For more information, check out the FTC website: https://www.ftc.gov/news-events/events-calendar/2015/06/debt-collection-dialogue-conversation-between-government.
The 2015 West Virginia legislative session saw significant changes for the debt collection industry. The WV Legislature passed Senate Bill No. 542, which amended several sections of the West Virginia Consumer Credit Protection Act (WVCCPA). The bill, which was signed into law by Governor Tomblin on March 31, made concessions regarding when and how often consumers can be contacted, how collectors must be notified when a consumer has obtained attorney representation and minimized the interest rate on collections’ penalties, which will be effective on September 1.
For more information, you can read the bill in its entirety here: https://legiscan.com/WV/text/SB542/2015.
Or check out our blog this Thursday for a breakdown of the WVCCPA amendments and how they will affect collections in the Mountain State.
The Consumer Financial Protection Bureau (CFPB) recently announced that they will be taking action against a nationwide debt collection operation and it’s CEO for threatening consumers with criminal prosecution and jail time for writing bounced checks. National Corrective Group, a privately-held corporation based in California, is also charged with misleading consumers to believe that they were required to enroll in an expensive financial education program to avoid the criminal charges.
The CFPB’s proposed order is currently being reviewed by the federal district court. The order would end all illegal activity, impose a civil penalty of $50,000 and require new regulations on consumer disclosure and strong supervision of the bounced check program.
For more information, check out the following press:
Law firms put their best foot forward to attract new clients and maintain their reputations.
However, sometimes it’s hard to think like a potential client. Westfair Communications Online recently published an article directed toward businesses looking to hire a law firm for complex legal transactions. Check out their list of criteria for choosing the best firm: http://westfaironline.com/70038/column-top-7-considerations-when-choosing-a-law-firm/.
This is a great resource for firms. It’s important to know what potential clients are looking for in a firm, and with this information, you can better market your skills, experience and reputation!
According to this list, many businesses want a firm that provides a “one-stop-shop” of legal knowledge and services so they can avoid having to hire multiple lawyers for each specific need. They also value depth and continuity when communicating with firms.
A furniture and electronics retailer based in Virginia will be required to pay more than $2.5 million in restitution and $10,000 in civil penalties for illegal debt collection practices according to the Consumer Financial Protection Bureau.
Freedom Stores, Inc., Freedom Acceptance Corporation and Military Credit Services, LLC has been accused of filing illegal lawsuits, making unauthorized withdraws from consumer accounts and contacting service members’ commanding officers.
Many of the consumers who were in debt with these companies had parents, significant others or third parties that authorized a one-time payment on their behalf. The withdrawals became illegal when the companies kept that payment information in their systems and took funds from those accounts without authorization or notification (sometimes years later).
Between July 2011 and December 213, Freedom Acceptance Corporation and Military Credit Services filed more than 3,500 lawsuits in Norfolk, Virginia against consumers who had not signed their financing contracts in Virginia and did not live there when the suits were filed. Nearly all of the suits filed resulted in default judgment and the companies garnishing the consumers’ wages. Many of the consumers did not even know they had been sued until their bank funds had been depleted.
The company currently has 14 store locations across the country. Freedom Stores has agreed to compensate its customers and forgive more than $2 million in loans. The company is subject to continued monitoring by the CFPB.
To learn more, check out http://www.jdnews.com/news/military/retailer-to-pay-2-5-million-for-illegal-debt-collection-1.454369?page=1.
In Carson City, Nevada, state legislators are considering a bill that will allow finance companies to use a disabling device called the “Starter Interrupt Device,” which will allow companies to electronically disable a car when a buyer gets behind on car loan payments.
Consumer advocates are fighting the bill because the language says that the remote tool can be used when a buyer is only three days late on a payment, even though Nevada state law says that a buyer isn’t delinquent on their payment until after 30 days.
Consumer advocates are concerned that changes to the 30-day grace period will fundamentally change car sale laws that have been in effect for more than 50 years. A similar bill failed in the last legislative session. To learn more, visit:
Under the Servicemembers Civil Relief Act (SCRA), active duty military members and their families are protected from legal action relating to rental agreements, security deposits, prepaid rent, eviction, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, automobile leases, life insurance, health insurance and income tax payments.
The United States Department of Justice (USDOJ) recently announced that military service members will receive more than $123 million for unlawful foreclosures, which will affect approximately 952 service members and their co-borrowers.
The SCRA caps interest rates on most loans, including home mortgages and credit cards, at six percent and postpones foreclosures and debt collection lawsuits while a service member is deployed. This settlement is the result of a national settlement for violation of the SCRA between the U.S. Government and five of the United States’ largest mortgage services, including JP Morgan Chase Bank, Wells Fargo Bank and Citibank.
Read here for more information: http://www.justice.gov/opa/pr/service-members-receive-over-123-million-unlawful-foreclosures-under-servicemembers-civil
Atkins & Ogle Law Offices, LC offers its sincerest gratitude to all of our nation’s servicemen and women.
In Tuesday’s post on Collecting Corporate Debts, we discussed the least sophisticated consumer standard. This week in the news, Attorney John Rossman expands on that concept on insideARM.com. This standard is an established tenet in FDCPA law, as it suggests that all debt collection communication must be approached this way.
However, many practitioners also recognize that the exception to this rule is collection communication with a consumer’s attorney. This has been debated in the past, but recently the 11th Circuit Court of Appeals stated that “statements in a proof of claim filed in a Chapter 13 Bankruptcy are subjected to the least-sophisticated consumer standard” in the Crawford decision.
While the Crawford decision is most widely known for its interpretation of the crossroads between bankruptcy law and the FDCPA, the implications regarding communications between consumers and attorneys are also notable. For more information, visit: http://tinyurl.com/mm6y2r6.
DriveTime Automotive Group, Inc. has recently been accused of debt collector harassment and agreed to an $8 million settlement to reconcile charges of violating the Fair Debt Collection Practices Act (FDCPA). The charges brought against the company after an investigation by the Consumer Financial Protection Bureau (CFPB) alleged that they lacked an adequate written policy for their bill collectors, which led to collector harassment, as well as inaccurate reporting of current balance information on accounts, timings of repossessions and dates of first delinquency.
The report issued stated that DriveTime, which has dealerships across the country, had only two employees assigned to handle up to 22,000 disputes each year. Accusations of calling consumers at work and after receiving cease contact requests were also included in the charges.
Read more here: http://www.lawyersandsettlements.com/articles/Bill-Collector-Harassment/debt-collector-lawsuit-bill-19-20461.html#.VOykQvnF__F