• Consumer Protection Law and Advocacy — Chicago, IL

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Arbitration rules are stacked against consumers

An Important Week for Consumers

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For more than a decade, big business has waged a battle against consumers — access to the courts. When we buy cell phones, apply for credit cards, and purchase vehicles, most of us are signing away our rights to file a lawsuit and have our dispute decided by a jury of our peers. How? These contracts we’re signing contain arbitration clauses that require us to file claims in front of arbitrators (not judges and juries), often paid by the businesses we are complaining about. Arbitrators’ decisions are not public record, access to discovery is limited, and it’s virtually impossible to appeal. What’s more, arbitration clauses often contain class action bans, meaning that you can’t ever file a claim seeking to represent other consumers who were similarly damaged.

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This week, we received some great news. After conducting a study on arbitration’s impact, the CFPB announced an initial proposal focused on prohibiting class action bans. Director Richard Cordray’s announcement can be read here:

Director Cordray’s remarks echo my own litigation experiences. I have unfortunately turned down numerous cases because of the expense, risk, and lack of transparency in arbitration.

We still have a long way to go to ensure access to justice and the courts. But this is an important step in the right direction.

New Mortgage Disclosures coming to help Americans

New Mortgage Disclosure Rules Coming…

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For years, consumer advocates have pushed for new, easier to understand disclosures. When you buy a home, the paperwork is overwhelming and, let’s be honest, almost impossible to understand. When you’re presented with papers at a real estate closing, there is never sufficient time to read, review, and process the mountain of documents you’re being asked to sign. The Consumer Financial Protection Bureau understood this problem and has announced new guidelines. Visit http://www.consumerfinance.gov/know-before-you-owe/

“The CFPB’s mortgage initiative is designed to help consumers understand their loan options, shop for the mortgage that’s best for them, and avoid costly surprises at the closing table.”Homeowner Rights and Tenant Rights - Consumer Law at Bardo Law

“Consumers will face less stress when applying for most mortgages after October 3, when our new disclosure rule takes effect. The new rule and disclosures ease the process of taking out a mortgage, help you save money, and ensure you know before you owe.”

Ask A Consumer Lawyer - Bardo Law PC

Consumer Law Q&A: What if I can’t afford an attorney?

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Over the years, I’ve spoken with many consumers who want to hire an attorney but assume they can’t afford to hire one.  This couldn’t be further from true.  Many consumer protection statutes have “fee-shifting” provisions within them.  What does that mean?  Well, in simple terms, it means the company we sue may have to pay your attorney’s fees and costs in addition to the money they pay to you.  As explained by the American Bar Association:

Fee-shifting statutes and rules vary, sometimes requiring the loser in a legal matter to pay for the legal fees and costs of the prevailing party. But in some circumstances, the fees are unilaterally shifted so that losing defendants must pay the plaintiff’s reasonable attorney fees and costs. These provisions are designed to attract lawyers to public interest cases that otherwise would not seem worth the investment. The “American Rule” requires each party to bear its own attorney’s fees in litigation absent a statutory or contractual exception. Fee-shifting provisions are the exceptions to that general rule. The clients do not pay advance fees or retainers; attorneys collect payments through the fee-shifting provision or a settlement agreement. The threat of paying attorney’s fees can add pressure to the opposing party to settle the case and settle it quickly.

If you have a claim, and that claim can be brought under a fee-shifting consumer statute (such as the Fair Debt Collection Practices Act or Fair Credit Reporting Act, to name just a few), your attorneys can seek approval of a reasonable fee from the court or from your opponent, not from you.  So don’t hesitate to call an attorney just because you think you won’t be able to pay  him or her.  Both Congress and the Illinois legislature anticipated this problem, and passed laws to prevent it.

CFPB scores a win for consumers

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CFPB scores a win for consumers - Financially vulnerable consumers have for years been the target of businesses promising debt relief. This month, the Consumer Financial Protection Bureau (CFPB) scored an important victory against several such entities. A federal district court in Florida granted the CFPB's request for an injunction, which includes an asset freeze, a receiver appointment, and disablement of the companies' websites.

Debt Collector Harassment

Debt collectors using deceptive practices must refund consumers

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The Consumer Financial Protection Bureau announced this week that they have taken action against two large debt buyers for deceptive practices against consumers. Encore Capital Group and Portfolio Recovery Associates allegedly pressured consumers to pay unsubstantiated or out-of-date debts with false statements and churned out lawsuits using robo-signed court documents. The two companies must now refund consumers $61 million and pay penalties of $18 million. Encore Capital was found to have harassed consumers with repeated or continuous calls with the intent to annoy, abuse, or harass them into paying.

“Encore and Portfolio Recovery Associates threatened and deceived consumers to collect on debts they should have known were inaccurate or had other problems,” said CFPB Director Richard Cordray. “Now, the two biggest debt buyers in the market must refund millions and overhaul their practices. We will continue to take action to protect consumers from illegal and obnoxious debt collection practices.”

Unfortunately, these actions are all too common among debt buyers. If you’ve been the victim of harassing robo calls or deceptive practices from debt collectors, we offer a free consultation to seek legal help.