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Consumer Law

California Credit Law Blog

Covers California Consumer Law, including news and events dealing with Consumer Law.
By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

Post Frequency: 0.8/day

Last Entry: November 16, 2009 at 20:06:05

Really Free Credit Scores

Posted on November 16, 2009
Consumers are being bombarded with "free" offers for credit reports and credit scores, but there is usually a catch. The consumer may find the free report means being subscribed to requires monthly charges unless he or she remembers to opt out. Or in order to get a free report, there is a fee for the credit score...

Consumer Attorneys Fight for Consumers

Posted on November 12, 2009
George Washington once said: Discipline is the soul of an army. It makes small numbers formidable; procures success to the weak, and esteem to all. Letter of Instructions to the Captains of the Virginia Regiments [July 29, 1759]. The advocates of consumer rights, viewing the resources of defense firms and corporate defendants, can relate to the trepidation felt by the out-numbered and out-gunned Continental Army...

Reporting Identity Theft to U.S. Postal Inspectors

Posted on November 05, 2009
Identity theft victims are often required to obtain a police report in order to help prove they really are victims of identity theft. A problem is that some police departments will not take such reports and the great majority never take any action to solve the crime...

Court Holds Statute of Limitations for Telephone Bills is Only Two Years

Posted on October 12, 2009
A federal statute, 47 U.S.C. Section 415 (a), provides that the statute of limitations for civil actions to collect on unpaid telephone bills is two (2) years. Most state statute of limitations are much longer. California's statute is four (4) years for debts based on contracts...

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FTC Proposes to Restrict Credit Bureaus Ads for "Free" Credit Reports

Posted on October 10, 2009
Federal law requires the credit agencies to make everyone's credit reports available at no charge on a single website. The feds allowed the three major credit agencies to design the site. Predictably, the credit agencies designed the website, www.annualcreditreport...

WSJ Report on What You Need to Know about Credit Scores

Posted on September 09, 2009
What you need to know about credit scores is covered in the Wall Street Journal published 9/9/09. The article points out that there are really many credit scores besides the best known--FICO--and your credit score may not accurately reflect your financial condition...

Debt Collectors Can't Add Interest to Dishonored Check Debts

Posted on August 12, 2009
Merchants sometimes contract with check guaranty services that pay the merchant for dishonored checks. These services then attempt to collect the face value of the dishonored check. California Civil Code 1719 allows collectors to add a $25 service fee for the first check dishonored and treble the amount of the check if the check writer does not pay within 30 days after notice...

Credit Checks May be Unfair to Job Applicants

Posted on August 09, 2009
The NY Times reports that employers are increasingly running credit checks on job applicants. While that may make sense if the applicant is going to be handling money or guard a Brinks truck, it makes no sense in the case of jobs that do not involve a risk of loss of money...

AAA Exits the Consumer Debt Collection Business

Posted on July 22, 2009
The American Arbitration Association has announced it was dropping its arbitration program for consumer debts. This comes only a few days after the National Arbitration Forum announced it was dropping its consumer debt arbitration program. Most of the cases involved credit card and cell phone debts...

Arbitration Forum Exiting Credit Card Business

Posted on July 20, 2009
The Minnesota Attorney General sued the National Arbitration Forum alleging it was essentially a front for various large banks and collection agencies. NAF falsely held itself it out to be a neutral forum for processing creditors' claims against consumers...

Minnesota Atty General Suit Alleges the National Arbitration Forum Is Fraudulent

Posted on July 14, 2009
Today, the Minnesota Attorney General sued the National Arbitration Forum, the major arbitration firm that banks use to prosecute consumers who owe credit-card debt. The AG's complaint states that NAF represents to the public, the courts, and consumers that it is independent, operates like an impartial court system, and is not affiliated with any party...

Obama's Proposed Consumer Financial Protection Agency

Posted on July 03, 2009
A few days ago, the White House sent Congress a bill to create a Consumer Financial Protection Agency (CFPA). Everyone who favors consumer protection should support this bill. Georgetown University Law School Professor Adam Levitin argued the case for the creation of the CFPA in the "Credit Slips" blog that covers credit and bankruptcy...

Sites to Get Your Free Credit Scores

Posted on June 11, 2009
The three major credit bureaus charge fees for revealing consumers' credit scores. However, two new sites, www.creditkarma.com and www.quizzle.com, offer free credit scores based on Trans Union and Experian data. The sites allow you to compare your score to a sample of other consumers...

A Towed Car Does Not Establish A Credit Relationship Under the Fair Credit Reporting Act

Posted on April 30, 2009
A towing company towed our client's car from the public streets because the registration had expired. The towing company sold the car for nothing. Then it assigned its claim for the towing charge to a collection company, Pacific Creditors. Pacific Creditors pulled our client, Maria Pinto's credit report...

Banks Starting to Modify Mortgages Under U. S. Treasury Refinance Program

Posted on April 14, 2009
Throwing a lifeline to homeowners under water on their mortgage obligations, the U.S. Treasury announced its Home Affordable Refinance Program in mid-February. The program is supposed to facilitate mortgage servicers in modifying troubled homeowners' mortgages so that their monthly payment is reduced to no more than 31% of gross monthly income...

Most Credit Cards Are Unfair according to Study

Posted on April 03, 2009
A report by the Pew Charitable Trusts found that most credit cards include ?unfair and deceptive? practices as measured by new Federal Reserve guidelines that go into effect in 2010. Reviewing consumer credit cards issued by the 12 largest companies that represent 88% of outstanding credit card debt, the study found: ? 100 percent of cards allowed the issuer to apply payments in a manner which, according to the Federal Reserve, is likely to cause substantial monetary injury to consumers...

Statute of Limitations Defense to Debt Collection? Not So Fast

Posted on April 02, 2009
In May 2006 a debt collector sued an Oregon consumer--in Oregon--for a credit card debt. The consumer had made her last payment in November 2001 before she defaulted. The credit card agreement said that New Hampshire law would apply to the agreement. In New Hampshire, the statute of limitations for an action on a credit card is three years...

Banks Walking Away From Foreclosed Properties, Leaving Displaced Homeowners Holding the Bag

Posted on March 31, 2009
We often receive calls from panicked homeowners who need advice about the ballooning mortgage they can no longer handle. The government was supposed to set up agencies for help with that sort of problem, but reports indicate the success rate is dismal...

Sometimes A Splurge Is Good For Your Health

Posted on March 27, 2009
The economic pundits couldn't disagree more on how to fix the economy. Most agree, however, that at least part of the crisis was due to consumer overspending and under-saving. Folks thought the equity in their houses would continue to rise forever, so they used that equity, often with disastrous results...

Credit Card Companies Are Now Canceling Cards Due to Not Enough Use!

Posted on March 19, 2009
Charging too much on your credit cards is a good way to get into financial trouble. So, in this economic climate, it's best to keep those cards in your wallet, right? According to an article in MSN Money, not necessarily so. Banks are apparently taking a hard look at customers who don't use their credit cards -- or who don't use them anough -- and simply canceling those cards...

Senate Takes Up Prof Warren's proposed Financial Product Safety Commission

Posted on March 16, 2009
Law Professor Elizabeth Warren proposes that Congress create a Financial Product Safety Commission to help protect consumers from predatory and deceptive financial products. To illustrate the need for such a commission, Prof Warren points out that if a consumer goes into an appliance store looking for a toaster that has a 1 in 5 chance of exploding, you won't find one...

Debt Collectors Specializing in Deceaseds' Debts

Posted on March 05, 2009

Capital One Settles With Identity Theft Victim

Posted on March 04, 2009

Rickenbacker Collections and Experian Victimize Consumers

Posted on February 28, 2009

Experian FICO Scores No Longer Available to Consumers

Posted on February 18, 2009
Experian just announced that it will no longer allow public access to FICO scores based on its credit reports, as Public Citizen's blog reported February 16 and the New York Times reported earlier. The other two credit reporting agencies, Equifax and Trans Union, will continue to allow the public to view their FICO scores...

New Report on Credit Bureaus' Electronic Dispute System & How it Frustrates Consumers

Posted on January 28, 2009
Inaccuracies plague the credit reporting system. The FCRA established a process to enable consumers to dispute the inaccuracies and force the credit bureaus and companies that provide the data to investigate the disputes and make corrections. A new report from the National Consumer Law Center shows that the system is a travesty...

Credit Crunch Means Higher Scores Necessary to Get Best Rates

Posted on January 06, 2009
In its January 4, 2009, edition, the Wall Street Journal reports that it now takes a 760 FICO score to get the best rate on a 30 year mortgage, 740 for the best rate on 15 year mortgages, and 720 for the best 3 year auto loan rate. Formerly, 720 would get the consumer the best rates on these loans...

The Five Components of Your FICO Credit Score

Posted on January 01, 2009
Your credit score, also often referred to as a FICO score, is a three-digit number that is designed to gauge your creditworthiness. Lenders use it to assign interest rates on things such as auto loans, mortgages and credit cards, among other borrowings...

New Edition of Credit Scores Credit Reports

Posted on December 18, 2008
Evan Hendricks is a leading expert on credit scores and credit reports. His book, aptly named Credit Scores & Credit Reports, How the System Really Works, What You Can Do, 3d Edition, is now available in paperwback on Amazon. Anyone interested in how the credit bureaus operate should read this book...

Inquiries their Effect on Your Credit Score

Posted on December 18, 2008
When a consumer seeks credit, the lender will report an inquiry on the consumer's credit reports. When a bank sends out a pre-approved loan application or makes an account review, the bank reports that event as an inquiry. The former inquiries are known as hard inquiries and the latter as soft inquiries...

How to Deal with Zombie Debt

Posted on November 20, 2008
WikiHow, a how-to-manual that you can edit, has excellent advice on dealing with zombie debt-old debts that cannot legally be collected through lawsuits. Companies buy the debt for pennies on the dollar and then use nefarious tactics to get consumers to pay...

Credit Bureaus Won't Let You Add Credit History

Posted on October 07, 2008
The NY Daily News reports on an individual who noticed his credit reports did not show all his credit cards. He gathered his credit card documents and sent them to the credit reporting agencies asking them to add them to his credit history with the idea it would improve his credit standing...

Consumers Who Filed for Bankruptcy Get Help with Old Debts on their Credit Reports

Posted on September 30, 2008
A recent court order in a class action will help millions of consumers who filed bankruptcy but have been plagued with old debts showing up on their credit reports. The old debts, which are typically forgiven by the courts in a bankruptcy filing, are still being reported as active on many consumers' credit reports...

NY Times Reports on the High Cost of a Free Credit Report

Posted on August 05, 2008
The NY Times reports that Experian is spending $70 million per years advertising its FreeCreditReport.com site where many consumers log on deceived into believing they will get a "free" credit report. For example, one person provided his credit card information thinking it was needed for identification only to find Experian charged him $14...

Prof Elizabeth Warren Talks About Credit Reporting on NPR's Fresh Air

Posted on July 09, 2008
Last week, Prof Elizabeth Warren talked about credit reporting on the NPR program Fresh Air with Terry Gross. Ms Gross' husband had to hire an attorney to convince the credit bureaus that someone else's bad debts listed on his reports did not belong to him...

Banks Are Increasing Credit Card Rates & Fees and Pushing Lousy Products to Make Up for Mortgage Related Losses

Posted on July 05, 2008
In an interview on NPR's Fresh Air with Terry Gross, Prof Elizabeth Warren warns consumers that banks are increasing interest rates and fees on credit cards for no other reason other than that they need revenue to make up for losses in other lines of their business...

Credit Monitoring Services Are a Waste of Money -- Free Alternatives Are Available

Posted on June 15, 2008
Writing in the San Francisco Chronicle, Kathleen Pender demonstrates that the credit monitoring services offered by the credit bureaus and other companies at a cost of $60 to $200 a year are a waste of your money. The services won't detect many types of identity theft and it is pretty easy to check your credit reports for identity theft for free...

Credit Bureaus Sell Consumers' Data

Posted on April 26, 2008
Consumers might assume that Experian, Trans Union and Equifax restrict the the information they collect to creditors to whom consumers have applied for credit. On the contrary, the credit bureaus sell personal and financial information to various companies...

More Chatter About the San Francisco City Attorney's Suit Against The National Arbitration Forum

Posted on April 10, 2008
The San Francisco City Attorney apparently has some enthusiastic cheerleaders for its recent suit against the National Arbitration Forum (NAF), which we discussed here. Credit Slips is a terrific credit and bankruptcy blog which contributors are mostly law professors with deep knowledge about their topic...

National Arbitration Forum Sued by San Francisco City Attorney

Posted on April 10, 2008
Our consumer law firm has learned that if a potential client's dispute is covered by an arbitration clause, we generally won't take the case. There are several reasons. First, the company on the other side uses the arbitrator frequently. Since the company wouldn't continue to use the arbitrator without good results, the arbitrator has an incentive to rule for the company...

New Credit Score Formula for 2008

Posted on January 21, 2008
Credit scores are determined using formulas designed to predict how likely a consumer will pay his or her bills. Fair Isaac is the leader having created the FICO credit-scoring formula. Fair Isaac has announced its formula will be revised this year. The new formula will deemphasize the effect of one late payment on your credit score on an otherwise unblemished record...

Identity Theft Mostly Caused by Lost Laptops, Third Parties

Posted on November 28, 2007
Identify theft affected somewhere between 8 and 15 million Americans in 2005, according to Tom Abate's article in today's San Francisco Chronicle. One report just issued by the Federal Trade Commission estimated that identity theft struck about 4% of all adult Americans in 2005...

How To Handle Student Loan Debt? A New Website Provides Resources

Posted on November 28, 2007
Students graduating from college have a few months to savor their accomplishment before worrying about repaying their student loans. But what happens when they have problems making their payments? A new website, Student Loan Borrower Assistance, includes information on repayment options, avoiding and getting out of default, dealing with collections agencies, and much more...

Mortgage Holders Can't Foreclose on Consumers Without the Proper Documents, According to Ohio Court

Posted on November 16, 2007
Consumers who are sued by debt collectors can defend in court by demanding that the debt collector prove it is entitled to collect the debt. Particularly when the debt collector is not the original creditor, the debt collector is frequently unable to prove it owns the debt...

Consumers Are Targets of Skyrocketing Numbers of Debt Collection Suits, Most By Debt Buyers

Posted on November 13, 2007
Consumers in New York City are faced with unprecedented numbers of debt collection suits, according to a new study by the Urban Justice Center (UJC), a provider of free legal services to low-income working poor New Yorkers. The study's results are shocking...

Lenders Charge Homeowners Questionable Servicing Fees to Add to Bankruptcy Burden

Posted on November 06, 2007
Loan servicers tack on all kinds of bogus fees and charges to consumers going through Chapter 13 bankruptcy and whose homes are being foreclosed upon, according to an article in today's New York Times. Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question...

Debt Buyers Continue to Relentlessly--and Illegally--Pursue Consumer Debt Discharged in Bankruptcy

Posted on November 05, 2007
This post linked to BusinessWeek's fine article about consumers who file bankruptcy under Chapter 7 and are supposed to have their debts erased. Many post-bankruptcy consumers were finding that debt collectors were continuing to pursue them for debts already discharged in bankruptcy...

Fee-Harvester Cards: Credit Cards That Are Really Just Fee-Generating Scams

Posted on November 02, 2007

Credit Repair Scams: How To Spot Them

Posted on November 01, 2007
Consumers with poor credit naturally want to clean up their credit reports. But as Michelle Singletary reported in her Wahington Post column last week, there are credit repair scammers out there that are perfectly willing to take consumers' hard-earned cash and then fail to do anything useful...

Equifax Extends Credit File Freeze Option to All States

Posted on October 26, 2007
Victims of identity theft may opt to have their credit files frozen--meaning no one, not even creditors, may access their credit reports without the victim's consent. Laws in 39 states, including California, have mandated this option. The credit reporting agencies have opposed these laws, but on October 25, 2007, Equifax announced it would extend the right to freeze consumer files to all 50 states according to its press release...

Countrywide Says it Will Help 80,000 Consumers Keep Their Homes

Posted on October 25, 2007
Millions of consumers are facing foreclosure due to risky adjustable-rate mortgages. Countrywide, one of the nation's largest mortgage lenders, has gotten a ton of bad press lately for its high-profile role in the crisis. Yesterday Chris Arnold reported in a story on National Public Radio that Countrywide planned to refinance or modify some $16 billion worth of loans for more than 80,000 borrowers who will soon hit an unaffordable rate reset, or those who have already fallen behind after their payments rose...

How to Order Free Credit Reports

Posted on October 24, 2007
The Fair Credit Reporting Act requires the nationwide credit bureaus to provide everyone copies of their credit reports at no charge once a year. One way to order your free credit reports is to go online to www.annualcreditreport.com. But another and perhaps easier way to order the reports is to call 1 877 322 8228 and use an automated procedure set up for this purpose...

When Can a Creditor Pull a Consumer's Credit Report? The Ninth Circuit Ignites a Controversy

Posted on October 22, 2007
Last month the Ninth Circuit Court of Appeals decided an important consumer protection issue concerning when creditors trying to collect consumer debts can permissibly pull consumers' credit reports. The Court held that creditors can only pull credit reports if the debt involves a "credit transaction," in which the consumer directly participated and voluntarily sought credit...

Credit Card Industry Targets College Students to be "Credit Pushers"

Posted on October 05, 2007

Judge Says Experian Is Liable For Mis-Reporting Information in a Court File

Posted on September 26, 2007

Deceptive "Free" Credit Reports to Avoid

Posted on September 04, 2007
Consumers Union has released a report on the "free" credit reports available on the Internet that are not really free. The study looked at 24 sites were consumers are enticed to obtain free credit reports but only if they agree to pay for their credit scores and other services at the same time...