Consumer Law

Minnesota Attorney General Sues Midland Funding for Robo-Signing

Posted on March 28, 2011
Today the Minnesota Attorney General sued Midland Funding, one of the country’s largest debt buyers, for robo-signing thousands of affidavits in Minnesota. I think AG Lori Swanson best sums up what Midland Funding was doing: The company put its thumb on the scale of justice to unfairly tilt the collection process in its favor...

Iowa Attorney General Wins $33.5 Million Judgment Against Vertrue

Posted on March 24, 2011
Preacquired account marketing means charging you for things you don’t buy. These are the Free trial membership!!! offers you get in the mail or see in magazines, or the $9.99 text messages that keep coming if you don’t text back a special code to stop them...

Minnesota Consumer Attorney Randall Ryder Joins the Caveat Emptor Directory

Posted on March 23, 2011
Randall Ryder is a consumer rights attorney in Minnesota. I am especially pleased to welcome Randall to the Caveat Emptor directory because I have worked with him extensively, and I know him to be an excellent lawyer and consumer advocate. Randall is an even-tempered but aggressive consumer advocate who gets great results for his clients...

California Bankruptcy Attorney Malcolm Ruthven Joins the Caveat Emptor Directory

Posted on March 14, 2011
Malcolm Ruthven is a bankruptcy attorney in the San Fransisco Bay Area, and now a member of the Caveat Emptor bankruptcy attorney directory. Malcolm is a solo practitioner, and deals with all his clients directly. He is also passionate about what he does: I like seeing the relief in the eyes and manner of my [...

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How MERS Grew from a Solution Into a Problem

Posted on March 09, 2011
MERS, the Mortgage Electronic Registry System, is a legal fiction that—on paper—owns about half the mortgages in the United States. It was created in 1995 as a solution to the problem of slow-moving county property records offices. Banks and investors needed mortgages to move faster, so they registered once with the county in the name [...

Companies Don?t Spend Money To Give You Things

Posted on March 09, 2011
View the full-size comic at XKCD. Related posts:Why DRM sucksSteal This Comic | XKCD... Pay your bills with awesomeThis check is apparently from Randall Munroe, who draws the... Update: save your money; Citibank will not reopen your HELOC even if you spend $600 on an appraisalAccording to Glenda, she paid $600 to get her home...

Debt Collection & Bankruptcy News Roundup, Week of March 7th, 2011

Posted on March 07, 2011
Debt collection and bankruptcy news has been piling up in my queue, and since I can’t hope to give each post the attention it deserves, here is a grand roundup. It should be no surprise that a bad economy leads to increased bankruptcy filings, but the economy’s health and bankruptcy filing rates are not inextricably [...

Tell the Consumer Financial Protection Bureau What You Want From It

Posted on March 05, 2011
The Consumer Financial Protection Bureau is in its infancy, and in danger of de-funding, but it’s in full startup mode, and looking for input from consumers. Related posts:Consumer Financial Protection Agency must have teeth and be flexibleEarlier this week, President Obama announced his plan to create...

Minnesota State Senator Linda Scheid v. Consumers

Posted on February 28, 2011
This past week, Minnesota Senator Linda Scheid resurrected a stupid, anti-consumer bill she also co-sponsored two years ago. I had hoped we saw the last of the bill when Representative Thissen pulled his support two years ago, but Senator Scheid seems determined to see it done...

Egregious Debt Collection Abuse Videos

Posted on February 25, 2011
In these videos, a debt collector posing as a police officer threatens arrest and imprisonment over a debt the consumer apparently doesn’t owe. I’m sure the creditor bar would consider this entrapment. (Huffington Post, via Consumerist) Related posts:Debt Collection Abuse on DisplayNew York Attorney General Andrew Cuomo sues some of the...

High Interest Rates Only Work if You Hide Them

Posted on February 24, 2011
In the wake of the CARD Act, credit card interest rates are rising. This should not be a surprise, since the CARD Act forces lenders to put the true cost of a credit card front-and-center. Credit card issuers cannot advertise a low rate and then use fees to jack up the true cost of the [...

Pennsylvania Puts a Stop to Debt Buyer Robo-Signing

Posted on February 24, 2011
The secondary debt market—credit cards and mortgages included—has relied on made-up legal terms and suspect justifications for years in order to turn the usually slow-moving court system into a speedy tool of business. It worked, probably because few consumers put up a fight...

5 Great Questions to Ask a Debt Collector

Posted on February 09, 2011
Minnesota debt collection defense attorney John Rossman wrote this breathless warning for debt collectors for InsideARM: An army of Debtors—fully equipped with scripts drafted by consumer attorneys and recording devices—are using their telephones as weapons to wage war on unsuspecting Debt Collectors across our nation...

Current Balance vs. Payoff Amount

Posted on February 08, 2011
Payoff amount is how much you would actually have to pay to satisfy the debt. It is not the same thing as the current balance that shows up on your statement, but is not necessarily the amount you owe. This is not obvious, but the difference between current balance and payoff amount is crucial when [...

Budgeting for Bankruptcy

Posted on February 01, 2011
Bankruptcy makes sense when two things are true: You cannot afford to pay your debts; and You could afford to live within your means if you got rid of your debt. Chapter 7 bankruptcy can wipe out your debt, but it can’t make you cash-flow positive all on its own...

Does An Unread Disclosure Somehow Lead to Consumer Justice?

Posted on January 28, 2011
Most consumer law and regulations are—basically—an attempt to level the playing field between those with knowledge and power and those without knowledge, or power, or both. I mean corporations and consumers, of course. The general idea is that since consumers are generally clueless about things like amortization, APR, and most financial jibber jabber, they can [...

Predatory Lenders Target American Soldiers

Posted on January 25, 2011
Members of the armed forces bear some heavy burdens, but those burdens don’t always take the form of terrorists and enemy combatants. In recent years, soldiers and veterans have faced plenty of adversity on the home front, too, from healthcare issues to combat pay questions...

The Mortgage Modification Catch-22

Posted on January 19, 2011
If you want a mortgage modification, most lenders will tell you to stop making mortgage payments before they will consider you for modification. Of course, if you stop making payments and you don’t get a mortgage modification, you will end up in foreclosure...

Mortgage Securitization Flowchart

Posted on January 11, 2011
This is how one mortgage—the mortgage of the creator of this chart—was securitized. It’s simple, really. Or not. Here’s the big-enough-to-read version, if you think that will help. Don’t miss the black hole: (Thanks, Consumerist!) Related posts:Securitization (or, why you can’t work out a lower mortgage payment)“Securitization” is a hot word in money circles, but [...

Bankruptcy Terms: Cramdown

Posted on January 10, 2011
Cramdown is a court-ordered debt reduction in a Chapter 13 bankruptcy. According to North Carolina bankruptcy lawyers Terry, Damon, and Melissa Duncan, a cramdown means the debtor only has to pay the value of the thing financed—a car or a appliance, for example—and not the amount owed...

Right of Rescission may be Rescinded by the Federal Reserve

Posted on January 07, 2011
Rescission is the right to undo a fraudulent loan—usually a mortgage. The bank gives back the interest and fees, the borrower pays back what remains of the original amount of the loan—and keeps the house—and everybody pretends the loan never happened...

Massachusetts Supreme Court Stops Wells Fargo and US Bank Foreclosures

Posted on January 07, 2011
Today, the Massachusetts Supreme Court decided that if Wells Fargo and US Bank couldn’t keep track of their property, the court wasn’t going to help them take that property away from the consumers living in it. In other words, the “produce the note” strategy not only works, it is the law...

Return of the Zombie Debt Collector

Posted on January 06, 2011
Martha Kunkle is making the rounds again. The Billings Gazette first wrote about Martha Kunkle in November 2009. That didn’t stop the Wall Street Journal from writing about her just last week, over a year later. A zombie story about a zombie debt collector...

Don?t Carry a Balance on Store Charge Cards

Posted on January 05, 2011
Many retail stores constantly push you to sign up for a store card. They offer great discounts on your first purchase, and promise future discounts. They also charge interest rates of up to 29%, which means store charge cards are a terrible deal if you carry a balance...

New Mexico Rule Requires Debt Collectors to Disclose Time-Barred Debts

Posted on January 03, 2011
Debt collectors contacting New Mexico consumers must tell the consumer if the statute of limitations has expired. In other words, if a debt collector wants to collect a time-barred debt in New Mexico, she will have to say “we can’t sue you” first...

Could Banks? HAMP Shenanigans Put a Kink in Their Foreclosures?

Posted on January 01, 2011
The Indiana Court of Appeals have suggested that banks that do not comply with Fair Housing Act servicing guidelines may not be able to foreclose a property until they do. HAMP—the Home Affordable Modification Program—is not much different in character than the FHA servicing guidelines, so the Indiana court’s decision might provide a way to [...

Lawsuits Become Investment Vehicles

Posted on December 17, 2010
Wall Street is now underwriting plaintiffs in everything from divorces to class actions, bringing justice—and controversy—within the reach of more Americans than ever before. This implicates a term often bandied about by plaintiffs’ lawyers: “a right without a remedy...

From Robo-Signing to Forgery, the Foreclosures Continue

Posted on December 14, 2010
At least robo-signers actually sign their names, even if they have no idea what they are signing. Some foreclosure law firms have a room full of clerks signing attorneys’ names to foreclosure documents. Bank of New York attorney Gary McCafferty said “many documents his firm submitted to court with his signature had in fact been [...

One Solution to Robo-Signing: De-fund Legal Aid?s Foreclosure Defense Attorneys

Posted on December 10, 2010
It turns out that a lot of mortgage servicers haven’t been taking legal process very seriously. Robo-signers are employees whose jobs are to sign their name to as many affidavits as possible without reading them, and robo-signing is all the rage among mortgage servicers these days...

I Can See Russia and Lots of Credit Card Debt

Posted on December 07, 2010
Alaska, where you can allegedly see Russia from, has more consumer credit card debt per person than any other state in the nation, according to a new study. On average, every American citizen has $5,165 in debt. Alaska is well above that number—the average Alaskan owes $7,135...

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