• Consumer Protection Law and Advocacy — Chicago, IL

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Another Scandal Over Excessive And Unnecessary Fees

Another grave scandal over excessive and unnecessary fees has erupted.  Wells Fargo now admits it wrongly charged auto insurance to its loan customers and at extremely high rates.  As reported last week in the New York Times:

More than 800,000 people who took out car loans from Wells Fargo were charged for auto insurance they did not need, and some of them are still paying for it, according to an internal report prepared for the bank’s executives.

The expense of the unneeded insurance, which covered collision damage, pushed roughly 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions…

Read the full story, available at https://www.nytimes.com/2017/07/27/business/wells-fargo-unwanted-auto-insurance.html

Wells Fargo charged duplicate high auto insurance rates, even to its auto loan customers who already maintained and paid for their own insurance.  After the consumers’ accounts became delinquent because the wrongly assessed insurance fees weren’t paid, Wells Fargo ordered the repossessions of tens of thousands of vehicles.  According to the Times piece:

Here is how the process worked: When customers financed cars with Wells Fargo, the buyers’ information would go to National General, which was supposed to check a database to see if the owner had insurance coverage. If not, the insurer would automatically impose coverage on the customers’ accounts, adding an extra layer of premiums and interest to their loans.

When customers who checked their bills saw the charges and notified Wells Fargo that they already had car insurance, the bank was supposed to cancel the insurance and credit the borrower with the amount that had been charged.

This scandal highlights the need for consumers to check and double-check each monthly billing statement.  Even if you pay your bills online or by auto-deduct, you must review the bill itself to ensure you aren’t paying unnecessary fees.  It’s also important to make sure you respond to any letter you receive from your finance company which indicates it may not have a record of your insurance.  Either fax or send via certified mail (return receipt requested), proof of insurance to make your best case against the company.  Don’t ignore delinquency notices or rely on phone conversations with account representatives – make your complaints in writing and keep proof that you lodged your dispute or that your finance company agreed to credit your account.

Consumers need to step up and continue complaining, filing reports, and reporting misconduct.  Only with intense public pressure will finance companies be forced to remain accountable.

Fair Credit Reporting & Consumer Law - Bardo Law PC

Credit Reporting Agencies — Beyond the “Big 3”

Credit reporting agencies go beyond the “Big 3” — Equifax, Experian, and TransUnion. In fact, dozens of other companies also prepare consumer reports. These companies furnish information about your credit worthiness to landlords, employers, and banks. Known as “specialty” consumer reporting companies, they collect and furnish information relating to:

  • Your bank accounts (including bounced checks or overdrafts)
  • Your apartment rent payments
  • Your auto insurance claims
  • Your homeowners and renters insurance claims
  • Your employment history
  • Your medical bills and payments

Because these specialty companies are not widely known, you won’t know about negative entries just by monitoring your Equifax, Experian, and TransUnion reports. Therefore, you have the right to request a report from all credit reporting agencies, including the specialty companies, once per year. If you are thinking about applying for a new job, a new apartment or a new bank account, request your report from the specialty companies covering the particular market. The Consumer Financial Protection Bureau published a list of specialty companies, available at https://www.consumerfinance.gov/ask-cfpb/what-are-specialty-consumer-reporting-agencies-and-what-kind-of-information-do-they-collect-en-1813/. The Bureau lists each area (employment screening, tenant screening, etc.) and the corresponding specialty companies.

If you don’t request your specialty credit report before your application, you can still dispute the information if your application is denied. Upon denial, you should be provided the name of the company who prepared the report. Send a letter to that company requesting a full copy of your credit report so you can evaluate whether the negative information is accurate or not. If you have questions about the various credit reporting agencies, a credit denial, or your rights to view your reports, contact a consumer law attorney.

Homeowner Rights & Tenants Rights - Bardo Law PC

Home Repair Fraud – How to Avoid It

Home repair fraud lawsuits are often hard to file because the contractor has skipped town.  So what do you do to minimize your chances of falling victim to a home repair scam in the first place?

  • Beware of any contractor that comes to your home unannounced and promises home repair work in a very short time and at a low cost.  If it sounds too good to be true, it usually is.
  • Before signing any home repair contract, do an online search for any complaints against the contractor.  It’s also a good idea to check the Circuit Court of Cook County website to make sure other homeowners haven’t sued that contractor or the company.
  • Be cautious about paying cash.  If the contractor skips town and the work isn’t done, your money is likely gone for good. However, if you pay by credit card, you may be able to dispute the charge with your credit card company.  Check your credit card’s terms and conditions to see how long you have to dispute a charge and follow the instructions for disputing that charge in writing.
  • Do not pay on any home repair or remodeling contract over $1,000 unless the contractor gives you a copy of the “Home Repair: Know Your Consumer Rights” pamphlet.  This pamphlet will explain what every home repair contract must include, namely: (1) the contractor’s full name, address, and telephone number; (2) a description of the work to be performed; (3) starting and estimated completion dates; (4) the total cost of work to be performed; (5) the schedule and method of payment, including down payment, subsequent payments, and final payment; and (6) a provision stating the grounds for termination of the contract by either party.

What are other telltale signs of possible home repair fraud?  A contractor who changes payment terms during the project, demanding “progress” payments that were not originally agreed to.  This can mean the contractor is short on cash and is using your money to pay for materials needed on another project. Also, if you pay for materials, make sure the contractor gives you a release of lien showing the subcontractor or store was paid.  Don’t be stuck paying the contractor for materials that he doesn’t pay for.

Home repair and remodeling projects can be so rewarding if done by the right team of contractors. Make sure to do your homework and don’t be pressured into a job if you have any doubts.

New Mortgage Disclosures coming to help Americans

Spring Cleaning and Home Buying

Spring cleaning and home buying — it’s that time of year again.  The sun is shining longer, flowers are starting to bloom, and many of us are emerging from our winter hibernation wanting a fresh start.  It’s no coincidence that this is the busiest time of year for new home purchases and there are some important things you should do before you start looking.

  • Check your credit report.

Before you apply for a mortgage, it’s important to examine your credit report.  Go to https://www.annualcreditreport.com/index.action and request copies of your report from each of the three major credit bureaus.  If you see data that doesn’t look right, initiate a dispute but be sure to support your dispute with written proof of the mistake.  If you dispute prior to applying, you can avoid delays or even lost purchase opportunities should something erroneous be listed on your report.

  • Consider the ratio of your available credit to used credit.

Do you have open credit cards or home equity lines of credit with high balances?  Don’t close credit lines but instead, think about paying down debt on revolving accounts so that you have a good ratio of used credit to available credit.

  • Verify any liens that may be on your current home.

If you currently own a home you’re thinking of putting on the market, visit your local recorder of deeds’ office and verify no liens exist.  Working to remove or pay off liens after you’ve started the buy/sell process may be too late.

  • Beware of re-finance offers that appear to good to be true.

Banks and mortgage companies (online or “brick and mortar”) frequently send solicitations promising certain rates.  But these offers have fine print and usually require an appraisal to qualify.  Don’t wait for a denial letter because your home isn’t worth what you thought it was — check local listings, speak with a qualified home appraiser, and have the data before you respond to a credit solicitation.

Make your home buying (or selling) experience a bit easier and be armed with the knowledge you need about home values, your credit, and your overall finances.  Happy Spring!

Practical Tips For Trading In Your Car

Trading in your car can be an issue if you don’t have great credit.  You need to be especially careful when trading in your car that still has an outstanding balance owed.

Why?  Because auto dealers often “spot deliver” cars.  That means the dealer gives you the keys to a new (or new used) car and lets you drive it home, but you haven’t been financed yet.  If your financing application ends up rejected, the dealer likely won’t pay off the balance on your trade-in.  So what should you do?

First, if you have an upcoming car payment due on your trade-in, pay it.  This will protect your credit rating if the new car loan falls through and you have to pay off the old car.  Just make sure you get credit for all the payments you make.  Don’t let the dealer finance you on a larger balance than what you actually owe.

Second, know what your car is worth before you consider trading it in.  Check out auto valuation reports and think twice before trading in a car that has “negative equity” (you owe more than it’s worth).  The dealer will end up adding those payments to your monthly obligations on the new car.  Check out https://www.consumer.ftc.gov/articles/0257-auto-trade-ins-and-negative-equity for more tips if you owe a significant balance on your trade-in.

Finally, keep your old car and don’t take the new car home.  Until you receive financing confirmation on the new loan, don’t leave your trade-in at the dealership.  Tell the dealer you want to wait until you have financing approval before taking delivery.  To do this, make sure you visit dealership’s early in the day – don’t arrive in the evening when most banks and lenders are closed and you won’t have confirmation of financing until the next day or even beyond.

But most importantly, don’t be rushed or intimidated by a dealer trying to make a fast sale.  You may be making payments for as long as 72 months and you should be sure you fully understand what you’re agreeing to.  Take your time.  Ask for copies of everything you sign.  And don’t listen to a dealer who tells you trading in your car is the best option, especially if you still owe on the loan.


Debt Collection Abuse, Consumer Law Services at Bardo Law PC

Alternative Energy Suppliers

Alternative energy suppliers allow residential utility customers to pick the company that supplies their electricity or natural gas.  Find the current list of Illinois alternative suppliers at https://www.pluginillinois.org/suppliers.aspx.  These suppliers often offer big savings but the results have been decidedly mixed.  Suppliers promise lower prices for consumers because electricity or gas is purchased wholesale and then resold in a “competitive” environment.  But numerous complaints have been filed demonstrating these low price promises have not been met.

For example, in Zahn v. North American Power & Gas, LLC, the consumer plaintiff alleged that she never received the low advertised “New Customer Rate.”  Instead, there were times when she was charged nearly triple what ComEd would have charged — http://law.justia.com/cases/illinois/supreme-court/2016/120526.html.

The energy supplier argued the consumer’s claim failed because energy price complaints could not be filed in court.  The Illinois Supreme Court disagreed.  While pricing claims against public utility companies must be filed before the Illinois Commerce Commission, alternative suppliers are not public utilities.  Therefore, false advertising and unfair pricing claims can now be filed in court.

The Zahn decision is an important one because consumers will now have additional redress available to them if their suppliers do not live up to their promises.

Wrongful debt? Bardo Law can help you deal with credit fraud, wrongful debt and defense.

Debt Collection Update

A new debt collection update was published earlier this week.  Unfortunately, consumers continue to struggle to resolve their collection issues.  Here are some highlights from the CFPB’s January 2017 report:

  • Approximately 1 in 3 consumers with a credit record report they have been contacted by at least one creditor or debt collector during the year prior to the survey.  72% of those consumers reported being contacted about two or more debts;
  • Past due medical bills, credit cards, and student loans are the most common types of debts in collection;
  • More than 50% of consumers contacted about debts did not recognize them — they report that either the debt is not theirs or they do not agree with the balance;
  • While 1 in 7 consumers contacted about a debt were sued on it, only 26% reported attending a court hearing;
  • More than 1/3 of consumers contacted about a debt receive at least four collection contacts per week, with 17% of that group reporting at least eight contacts per week; and
  • Only 1 in 4 consumers reported success in having collection contacts stop after making such request.


What does this teach us?  First, there is still a high incidence of incorrect debt collection efforts.  More than half of surveyed consumers did not owe the debt, were contacted about a debt owed by a family member or needed to challenge the amount of the debt.  Second, consumers are not protecting themselves by appearing in court when sued.  We need to continue to educate consumers about the need to defend themselves.  At minimum, if a debt is properly being collected, settlement is often a far better option than risking a judgment.  Consumer debt judgments can remain on credit reports for ten years, and can lead to garnishment and other citation proceedings.

Finally, as noted by the Consumerist:

Although ensuring that consumers are treated fairly when it comes to repaying debts is a priority for federal regulators, the way in which debt is sold and transferred among collectors is a growing concern.


The fact that a sampling of these sold debts show most were purchased for cents on the dollar, the personal data shared about consumers is cause for some concern.  According to the CFPB, debt portfolios often contain names, Social Security numbers, account numbers, and dates of birth and, “In some instances, the CFPB’s review of 298 debt portfolios found unencrypted, identified personal information had been available to any visitor to a debt marketplace website.”

There must continue to be heightened scrutiny over debt purchasers to ensure compliance with consumer privacy rights.

Be Wary of Year-End Collection Calls!

As 2016 winds down, debt collectors making collection calls tend to get more aggressive.  Companies are trying to close out their books and write off accounts as “bad debt.”  Calls start to increase this time of year and you should be prepared in case you get one.  So, what do you need to know before talking to a debt collector?

  • Ask for proof of the alleged debt in writing and make sure you know who you allegedly owe.  Get the name, employee ID, telephone number or e-mail address of the collector who called you. Don’t ever agree to make a payment unless you have something in writing from the collector.
  • Find out what the alleged debt is for.  Do you recognize the account?  Do you recognize the amount?  Check your credit report after the call to see whether the debt is being reported.  Your credit report may also help you figure out how old the debt is and what the outstanding balance is.
  • If you recognize the debt, go back through your bank records to see when you last made a payment.  It’s important that you do NOT re-start the statute of limitations (the deadline for filing a lawsuit).  A $5, $10, or $25 payment on an old debt can make the entire balance due and owing again.  Talk to a lawyer about what statutes of limitations may apply on your accounts.
  • Take notes on what the collector says to you.  Did the collector threaten to mark your credit report or sue you?

If you have any questions about collection calls you may be receiving, talk to a lawyer in your state.  The National Association of Consumer Advocates has a “Find an Attorney” resource, available at http://www.consumeradvocates.org/find-an-attorney.

You can also submit a complaint against collection agencies with the Consumer Financial Protection Bureau online at http://www.consumerfinance.gov/complaint/.  There are state and federal laws (namely, the Fair Debt Collection Practices Act) that require collectors treat you fairly.

Try not to give in to high pressure tactics.  It’s important to know your rights BEFORE it’s too late.

Fair Credit Reporting & Consumer Law - Bardo Law PC

Credit Repair Scams

Credit repair scams are widespread and many consumers don’t realize they can (and should!) try and fix credit reporting errors themselves.  Watch out for companies that claim they can “guarantee results,” or “erase bad credit.”  These companies often charge steep fees and make promises they can’t keep.  Watch out for any credit repair company that demands fees before performing any work or tells you to dispute information that is correct.  Even though it may seem unfair, if you do have a negative payment history, time and debt repayment will help raise your credit score over the years.  You should watch out for companies that tell you to dispute 30, 60 or 90-day late payment records if those payments are accurately reported.

How can I fix my credit report myself?

  • If you have applied for credit, a job or insurance, and you’ve been denied, you’re entitled to receive a free credit report.   Make sure you ask for your report within 60 days of receiving notice you were denied.
  • You’re also entitled to a free copy of your credit report every year from the nationwide credit reporting companies — Equifax, Experian, and TransUnion.  To order your report, visit annualcreditreport.com, or call 1-877-322-8228.
  • It is FREE to dispute mistakes or outdated items on your credit report.   So once you receive your reports through either method above, review them and circle any problems.  Then, write to the credit reporting company and the company who reported the information to tell them what the error is and why they should fix it.  Because the credit reporting companies and the information reporter must provide accurate information, and must correct inaccurate or incomplete information, there is no reason to pay anyone to handle this dispute for you.
  • The Federal Trade Commission has a sample letter you can use to help you write your dispute — https://www.consumer.ftc.gov/articles/0384-sample-letter-disputing-errors-your-credit-report.

If I did use a credit repair company, how do I know if it’s legitimate?

  • A credit repair company MUST tell you your legal rights in writing, exactly how much the repair services will cost, and how long the process will take.
  • If you do sign a contract, you have a 3-day right to cancel it.
  • Check out the Credit Repair Organizations Act or call an attorney.  The Act bars companies from demanding advance payment and gives consumers the right to file a legal dispute if they have been defrauded.

Consumer Protection In 2017 And Beyond

With the election behind us, there are many questions about what consumer protection role the Consumer Financial Protection Bureau (CFPB) will have going forward.  Today’s edition of The Consumerist notes: “Even before the CFPB launched in 2011, it’s been opposed by many in the financial industries, and by the lawmakers they back.”  Many banks, debt collectors, and payday loan lenders have already paid back millions to consumers as a result of the CFPB’s work and investigations so a diminished role could have a negative consumer impact.

Every six months, the CFPB releases its semi-annual report that highlights its important work.  According to the Spring 2016 report:

In the six months covered by this report, our supervisory actions resulted in financial institutions providing more than $44 million in redress to over 177,000 consumers. During that timeframe we also announced orders through enforcement actions for approximately $82 million in total relief for consumers who fell victim to various violations of consumer financial protection laws.

So, what can you do to ensure the continued viability of the CFPB?

  • Talk to your U.S. Representatives and Senators.  Contact my office if you would like specific information on your district’s representatives and who to call or write.
  • File a consumer complaint online with the CFPB at http://www.consumerfinance.gov/complaint/.
  • Learn more about other advocacy organizations, such as the National Association of Consumer Advocates and National Consumer Law Center.

Most of all, stay informed and encourage your friends and family to do the same.  Don’t ignore collection letters, be sure to monitor your credit report, and feel free to report bad acts to the Better Business Bureau and your local Attorney General.  The more we let our political leaders know consumers need assistance, the harder it will be to chip away at those protections.  It’s a long road ahead but together, we can continue to battle injustice.