Consumer Law

Overdrafts Generate Big Bucks For Banks

Posted on October 07, 2009
An estimated 45% of the country’s banks make more from overdraft fees than they do from credit card fees(!). They will generate $27 billion in covering overdrafts on checking accounts this year. Proposed legislation, however, may at least put in dent in that healthy source of bank revenue...

Stop Telemarketing Calls (and Sue if They Keep Calling)

Posted on October 05, 2009
If you do not already know about the National Do Not Call Registry, hie thee hither and put your name down. Once you are on the registry, telemarketers may not call you for five years. There are a couple of exceptions. Businesses may call you for 18 months after you have bought something from them [...

Link Roundup, week of 9.21.09

Posted on September 25, 2009
Here are an assortment of juicy consumer links I haven’t had time to write about: Old Debts Under $100 Don’t Matter Under FICO ‘08 | Consumerist Bank Of America Reaches Out To Angry YouTube Star | Consumerist Congress Seeks To Move Up Credit Card Act Implementation To December 1st | Consumerist Fight begins over new consumer protection agency | [...

Strategic Mortgage Defaults on the Rise

Posted on September 25, 2009
Strategic default—walking away from your home and mortgage—is getting more common. The interesting part is who is doing it: according to a recent study, people with good credit. For such consumers, strategic default may be the best of a range of bad options...

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Three Debt Assistance Companies Sued by the Minnesota Attorney General

Posted on September 24, 2009
The Minnesota Attorney General took action against three companies that promised to lower customer’s interest rates on credit cards for high fees. Swanson filed suit against Priority Direct Marketing, Clear Financial Solutions, and Moneyworks, LLC...

FDPCA & FCRA Lawsuits On the Rise

Posted on September 23, 2009
The number of FDCPA and FCRA lawsuits filed in 2009 is well ahead of both 2008 and 2007. In July 2009, the 5000th suit was filed. In 2008, that benchmark was not hit until the second week of October; in 2007 it took until early December. So what is behind the surge? Here are my best [...

Debt Collection Cheatsheet

Posted on September 17, 2009
The FTC has a great, four-page overview of consumer rights relating to debt collection. Some of their tips include: Debt collectors can only contact you between the hours of 8AM and 9PM. If you want to stop debt collectors from contacting you, you must make a request in writing...

Money, Credit, and the Law ? Know Your Rights

Posted on September 17, 2009
That?s the title of a valuable new video narrated by Professor Richard Alderman, director of the Center for Consumer Law at the University of Houston Law Center. The video, consisting of easily digestible short chapters, provides help managing personal finances, dealing with credit problems and debt collectors, responding when sued by a creditor, seeking credit counseling, [...

University of Minnesota Freshmen Will Learn Financial Literacy

Posted on September 09, 2009
The University of Minnesota will require all 5,400 incoming freshmen to attend a session on financial literacy. The school intends the session to be a “fun” one, with advice from older students. /* U of M offering incoming students advice on financial literacy | MPR

Practical Effects of NAF?s Exit From Arbitration

Posted on September 09, 2009
National Arbitration Forum’s recent withdrawal from consumer arbitrations has cast a dark shadow on the use of arbitration as an alternative dispute resolution process and created ripples throughout the system. For example, Bank of America has dropped its arbitration requirement for all consumer transactions...

Debt Collectors Can Still Use Robocalls

Posted on September 03, 2009
As of September 1, 2009, telemarketers cannot make prerecorded commercial calls to customers without obtaining written permission in advance. Debt collectors, however, do not fall under the new FTC rule, because their calls are apparently “informational messages...

Cash for Dishwashers!

Posted on September 03, 2009
The government is rolling out another stimulus package this fall—and energy-efficient appliances are the latest to get subsidized. The new program will authorize $50-$200 rebates for consumers who purchase new, energy-efficient machines. (But consumers will not have to turn in their old machines...

Support the Small Businesses You Love

Posted on September 02, 2009
When the economy goes sour, big businesses get all the attention and government money. But I am far more concerned with keep my favorite coffee shop and restaurant open, and making sure my handyman stays in business. I could care less whether Bank of America goes bankrupt...

Consumer Complaints in 2008: the Top 10

Posted on September 01, 2009
The National Associaion of Attorneys General released their list of the top 10 sources of consumer complaints for 2008, and the winner is: debt collectors! No surprise there, after all, what other profession has been the bane of the poor since before Christ? Evil enough that Shakespeare took time to write about one in Venice...

Private Student Loans: A Last Resort That?s Too Often Used First

Posted on August 31, 2009
Private student loans are more expensive, riskier, and come with fewer borrower protections than federal student loans.  Nevertheless, almost two-thirds of the undergraduates who took out private student loans during the 2007-2008 school year did so without first obtaining the maximum federal loans for which they were qualified...

Federal Trade Commission Accepting Public Comments on Debt Collection Litigation

Posted on August 27, 2009
On Tuesday, the FTC will hold a free roundtable in San Francisco, open to the public, on debt collection litigation and arbitration. The FTC is seeking public comments in advance of the event, and some of the existing public comments are, well, interesting...

Phishing Simplified

Posted on August 25, 2009
Explain Phishing To Your Grandma | Consumerist

Debt Collection Abuse on Display

Posted on August 21, 2009
New York Attorney General Andrew Cuomo sues some of the most abusive debt collectors. The first consumer did not even owe the debt, but ended up paying $900 just to make the abuse stop! Embedded video from CNN Video This kind of behavior is why the Fair Debt Collection Practices Act exists...

Wells Fargo Sued For Reducing Home Equity Credit Lines

Posted on August 21, 2009
In Illinois class action complaint (PDF), a homeowner alleges Wells Fargo violated federal regulators’ warnings by reducing credit limits on all accounts in a geographic area without assessing the value of the actual houses. The homeowner accuses Wells Fargo of using “unreliable or inaccurate analyses” to determine property values—using computer models to predict home values—rather than [...

Bankruptcy: The Best Argument For a Public Option

Posted on August 21, 2009
A recent study published in the American Journal of Medicine (PDF) reviewing personal bankruptcies found that medical bills contributed to 62.1% of all bankruptcies in 2007; 92% of these debtors had medical debts over $5,000. The rest met criteria for bankruptcy because they had lost significant income due to illness, or mortgaged a home to [...

Clunker Problems

Posted on August 20, 2009
Under the Cash for Clunkers program, dealers give buyers an instant rebate, then the dealer gets compensated by the government. The government is currently overwhelmed by the number of dealer requests and is having problems processing the requests quickly...

New Credit Card Rights For Consumers

Posted on August 20, 2009
Starting today, credit card holders have more rights: More time to pay. Credit card companies have to mail bills 21 days in advance of the billing date. More time to reject changes. Card holders now have up to 45 days to reject rate increases. More time to pay off existing balances...

Clunkers Still = Cash

Posted on August 19, 2009
Regardless whether you are for or against the controversial “Cash for Clunkers” program, it just received an additional $2 billion dollars from the government—enough cash to fund it at least through September. If you want to take advantage of the rebates, here are some things to pay attention to: Act fast...

Debt Collection Scammers Often Worse Than the Real Thing

Posted on August 17, 2009
The Better Business Bureau (BBB) has put out an emergency alert regarding bogus debt collectors that have recently been praying on consumers. The fake debt collectors are often just as nasty as real debt collectors can be, if not worse. If you are contacted by a debt collector and think it is a scam, here are [...

Insurance Whistleblower Questions Industry?s Trustworthiness

Posted on August 13, 2009
Former Cigna executive Wendell Potter says the insurance industry is playing dirty in an effort to manipulate public opinion. He said “I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry...

Bank of America Drops Mandatory Arbitration Clause

Posted on August 13, 2009
Bank of America just announced that it will no longer require consumers to arbitrate disputes concerning credit cards and other consumer accounts. Great news! The collapse of pre-dispute, mandatory binding arbitration continues. Hopefully other credit grantors will follow suit...

Lenders Drop the Ball on Refinancing Plan

Posted on August 06, 2009
The government’s “Financial Stability Plan” is still viable, but the Treasury Department admits that only a fraction of people eligible are receiving new mortgages. Only 9% of eligible borrowers have received modified mortgages. The biggest offenders? Wells Fargo only modified 6% of their loans, Bank of America only modified 4%...

Consumer Complaints Up, But Resources Are Down

Posted on August 05, 2009
The latest survey of front-line consumer agencies shows that while complaints went up, the resources to help consumers went down. 62% of the agencies reported that they received more complaints in 2008 than in 2007, and 47% of the agencies suffered budget cuts just prior to or during the survey period, with one being eliminated [...

Debt Collectors and Wrong Numbers: How to Handle a Case of Mistaken Identity

Posted on August 05, 2009
Debt collection is something that everyone has to deal with. Case in point: a debt collector once left a message on my mom’s answering machine, where I had not lived for eleven years. My credit report was squeaky clean—I checked—but apparently there is another Sam Glover out there with worse luck...

Served By a Debt Collector? What To Do Next

Posted on August 04, 2009
Getting served with a lawsuit is one of the more upsetting things that can happen to you. When a process server hands a summons and complaint to you or to someone “of suitable age and discretion” who answers your door, they are dragging you into the legal system...

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