Consumer Law

Force-Placed Insurance: Another Mortgage Servicer Ripoff

Posted on December 06, 2010
Force-placed insurance is an insurance policy your mortgage service picks out when your homeowners insurance policy expires. It can cost up to ten times more than a regular homeowners policy, in part because mortgage servicers are often getting kickbacks and other incentives due to self-dealing...

Externalized Costs = E-Waste Everywhere

Posted on December 05, 2010
Waste from electronics doesn’t just pollute, it makes workers across the world sick. In corporate speak, this is called externalizing costs. Instead of spending money to build non-toxic, durable electronics, manufacturers let workers and consumers bear the costs of the e-waste: sickness, cancer, miscarriages, and worse...

How Not to Defend a Debt Collection Lawsuit

Posted on December 01, 2010
When I worked as a collection attorney, I would see the same erroneous defenses over and over again. Here are some of the most common: You don’t have a signed contract Somewhat surprisingly, creditors are not required to produce a signed contract to prevail in court...

Dislike? Collector Contacts Debtor?s Relatives Through Facebook

Posted on November 30, 2010
Facebook can be a wonderful way to keep in touch with old friends that live in faraway places. The danger, of course, is that if your privacy settings are not correct, all kinds of people can track down and view your digital identify—including debt collectors...

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The Kardashian Kard, Explained

Posted on November 29, 2010
I’ve been trying to decide whether to add my voice to the chorus of consumer advocates who are slamming the Kardashian Kard, a prepaid debit card aimed at kids that hides more transaction fees than I thought possible. Instead, I’ll let Asian animation house NMA explain: (Thanks, Consumerist!) Related posts:FTC teaches kids about consumer issuesSet [...

?Deceased Collection? May Get New Regulations

Posted on November 22, 2010
“FTC proposes new guidelines for collecting debt from dead people“, reads the Washington Post’s headline. As it turns out, debts don’t die with the debtor, and debt collectors don’t let a little thing like a funeral slow them down...

Gift Card Dangers

Posted on November 21, 2010
Gift cards are an easy gift, which makes them extremely popular, especially at the last minute. But gift cards frequently go unused, and may come with hefty penalties. Before you give a gift card, consider the risks. For starters, $8.2 billion in gift cards go unredeemed every year...

Class Action Attorneys Give Up Over $1 Billion in Claims for $20,000

Posted on November 18, 2010
Class action lawsuits are an extremely important tool, but the case of Seraji v. Capital Management Services is an example of a class action handled very badly. Capital Management Services is a debt collection agency that, according to the complaint, left—potentially—millions of voicemail messages that violated the Fair Debt Collection Practices Act...

Foreclosure Lawyer Investigated For Mortgages with Clients

Posted on November 15, 2010
Last week I wrote about the various ways that consumers can afford a foreclosure defense attorney. New York has passed a law allowing consumers to recoup attorney fees and at least one attorney in Florida is allowing clients, under certain conditions, to take a mortgage with his firm...

New Mortgage to Pay Foreclosure Defense Attorney?

Posted on November 08, 2010
Even before a number of big banks stopped foreclosure proceedings because of issues with robo-signers, consumers with money were fighting foreclosures across the nation. New York recently passed a law (effective next year) that allows consumers to recoup their attorney fees if they fight a foreclosure and win...

Debt Collectors Will Hunt You Down On Social Networking Sites

Posted on November 04, 2010
We found out earlier this year that debt collectors are using social networks to find and harass debtors, but now at least one collections training center is offering a class on using social media in collections, to “maintain a good customer base, keep good paying customers on track, and find and collect from past due [...

Debt Collector Allied Interstate Pays $1.75 Million Fine

Posted on November 01, 2010
In an effort to resolve federal allegations, debt collector Allied Interstate has agreed to pay a $1.75 million dollar fine. Allied Interstate was accused of collecting on debts that people did not actually owe, contacting third parties, and threatening legal action that it did not intend to take...

Robo-Signers at Debt Buyer Firms Overwhelm Courts

Posted on November 01, 2010
The foreclosure mess got messier over a month ago, when GMAC, Bank of America, and others were caught faking (essentially) affidavits supporting their foreclosure lawsuits. The irony of banks acting irresponsibly with their finances was not lost on the media...

The Monster: the Subprime Mortgage Meltdown and the Jerks who Caused It

Posted on October 26, 2010
The subprime mortgage meltdown, it turns out, makes for riveting reading. I was up until 4 a.m. reading The Monster, a page-turning account of the subprime lending binge that precipitated the collapse of the world economy. The Monster would make a great heist movie, except that, instead of stealing piles of money from a casino, [...

Stop Debt Collection Calls and Letters

Posted on October 15, 2010
Getting a debt collector to “cease and desist” is easy, thanks to the Fair Debt Collection Practices Act (FDCPA). If you are getting calls or letters regarding a consumer debt (credit card, medical debt, rent, etc.), and you want them to stop, all you have to do is send a letter to the debt collector [...

Illinois Gets $23.7 Million Judgment Against Debt Collection Law Firm

Posted on October 12, 2010
In a somewhat surprising role reversal, the state of Illinois was awarded a $23.7 million dollar judgment against the law firm of Friedman & Wexler and two attorneys from the firm. The state had previously used the law firm to collect debts on behalf of the state...

Biggest Source of Consumer Debt? Student Loans

Posted on October 05, 2010
When people think of consumer debt, they think of credit card debt. According to the Federal Reserve, however, student loan debt has now surpassed credit card debt among consumers. Over $829 billion in student loan debt Consumers now allegedly owe $829...

The Affidavit Faking Continues: Chase Suspends 56,000 Foreclosures

Posted on September 30, 2010
While judges were looking the other way, a new fad was apparently sweeping the mortgage lending industry: robo-signers. A robo-signer is a person whose job is to put their signature on an affidavit, regardless whether they know what they are signing or whether it is true...

Franken Seeks End of Abusive Debt Collection

Posted on September 29, 2010
Senator Franken of Minnesota is set to introduce a bill this week with the hopes of stopping abusive debt collection practices. In many ways, the bill is designed to compliment and enhance the FDCPA, which is over 32 years old. More protection for consumers Franken’s aim is to offer more protection for consumers...

Debt Buyers Fake Affidavits, Too

Posted on September 28, 2010
Last week, GMAC basically stopped evicting homeowners and foreclosing homes in 23 states when it got caught filing affidavits without any personal knowledge. That’s good news, but here’s what rubs me the wrong way: debt buyers do the same thing, and nobody seems to care...

Minnesota State Fair Attendees Sound Off on Debt Collection Lawsuits

Posted on September 24, 2010
Every year, at the Senate Fair Booth at the Minnesota State Fair, Minnesotans can vote on the issues of the day. This year, one of the questions was: Do you think debt collectors should be required to verify they have the correct debtor and the correct amount of the debt before filing a lawsuit against [...

North Star Capital Acquisition Offers Settlement of FDCPA Claims

Posted on September 23, 2010
North Star Capital Acquisition, a Minnesota debt buyer, threatened one of my clients, called him repeatedly, and used profanity in several of the phone calls. For example: “You can do anything you f**cking want, but we are going to get this money from you one way or another...

Elizabeth Warren Wants CFPB to Level the Playing Field for Consumers

Posted on September 21, 2010
The Consumer Financial Protection Bureau will be a success if it accomplishes nothing more than this: The time for hiding tricks and traps in the fine print is over. That, in a nutshell, is Elizabeth Warren’s vision for the CFPB, the formation of which she will supervize, at President Obama’s direction...

GMAC Caught Faking Affidavits, Stops Foreclosures

Posted on September 21, 2010
GMAC, a large mortgage lender, has been foreclosing like mad, apparently without bothering to check its facts. Here is an excerpt from a deposition of GMAC employee Jeffrey Stephen: Q. So other than the due date and the balances due, is it correct that you do not know whether any other part of the affidavit [...

Debt Settlement Companies Made (Slightly) Better by the FTC

Posted on September 20, 2010
Many consumers who end up drowning in debt turn to debt settlement companies for help. The problem is, many debt settlement companies don’t really help; they just take the money and run. I guess they figure poor consumers are unlikely to complaint...

Avoid Debt Collection After a Divorce

Posted on September 13, 2010
In most divorces, the ex-spouses agree that one of them will assume some or all credit cards, which were probably joint cards. Unfortunately, a divorce decree does not bind the creditors, who can still collect the debt from either account holder. Often, the spouse who agreed to assume the credit card debt has a hard [...

Complaining Will Get You Nowhere

Posted on September 07, 2010
Nearly every news article on debt collection harassment advises readers to file a complaint with the Federal Trade Commission, the Better Business Bureau, and/or the state Attorney General. While this advice is not harmful, it is useless. None of these organizations are likely to do anything to help...

Billfloat: Payday Loans by Another Name

Posted on August 31, 2010
Payday lending is legalized loan-sharking. Actually, the Mob gives better interest rates. But sometimes people just need credit, and damn the interest rates. Compared to a payday loan, Billfloat is a steal. Instead of paying, say, 360% interest, Billfloat may be only 150% (see Billfloat’s chart, at right)...

FTC Responds to Senator Al Franken

Posted on August 27, 2010
Background: Minnesota debt collectors sue like crazy and manipulate the courts to land debtors in jail. The Star-Tribune’s Chris Serres tells it like it is. Senator Al Franken gets pissed and tells the FTC to get with the program. A month later, the FTC responded to Senator Franken’s letter...

Consumers Annoyed by Car Dealers and Foreclosure Relief Consultants

Posted on August 25, 2010
Topping the list of things that consumers were pissed off about last year were an old consumer predator and a new one. Car dealers stayed comfortably at the top of the list. But foreclosure relief consultants, a symptom of the foreclosure epidemic, moved the “credit/debt” category up into second place...

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