• Consumer Protection Law and Advocacy — Chicago, IL

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FTC Announces Fair Credit Settlement

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The Fair Credit Reporting Act requires companies to inform consumers if they are being offered less favorable credit terms than those offered to consumers with higher credit ratings.  The Federal Trade Commission announced yesterday that Sprint will pay $2.95 million in civil penalties to settle charges it did not give proper notice to lower credit score consumers who were charged an extra monthly fee.

According to the FTC’s complaint, certain Sprint customers were required to pay a monthly fee of $7.99 in addition to regularly imposed charges for cell phone and data services.

“Sprint failed to give many consumers required information about why they were placed in a more costly program, and when they did, the notice often came too late for consumers to choose another mobile carrier,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.

Under the settlement, Sprint must pay a $2.95 million penalty and provide certain notices going forward.  This decision highlights the importance of the Fair Credit Reporting Act as an information tool for consumers and is an effective cautionary tale for businesses.

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

How to Fight Wrongful Debt Collection

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Debt collection comes in many forms – phone calls, letters, text messages, lawsuits, and lines on your consumer credit report.  Not surprisingly, with today’s mobile society, you may even receive calls or texts intended for someone else and be facing a wrongful debt.

Here are some simple steps to follow

If you are being wrongly harassed for a debt that isn’t yours:

  • Tell the debt collector you are not the debtor
  • Ask the debt collector to send you proof of the debt — when you receive it, you’ll have the debt collector’s business address and/or fax number to send a letter back
  • Send a fax or certified mail letter explaining this is not your debt and all further collection conduct should cease
  • Check your credit report — if the unrecognized account appears, send a dispute letter to Equifax, Experian, and TransUnion via certified mail
  • Send a copy of the credit report dispute letter to the debt collector
  • If this doesn’t work, or if you think you have been the victim of an identity theft, contact an attorney for further assistance

If you are receiving collection calls or text messages on your cell phone:

  • Tell the debt collector you are not the debtor
  • Advise the debt collector that he/she does not have authority to call your cell phone
  • Follow any opt-out instructions on a pre-recorded voice or text message
  • If the calls or texts continue, keep track of who is calling and the dates and times of the calls, and consult an attorney

If you have been served with a debt collection lawsuit:

  • Pay attention to all deadlines on the court papers and act before those deadlines pass
  • Do not ignore a court date even if you speak with the debt collector
  • Call an attorney — if you have been sued on a debt that isn’t yours, the court may order your fees and costs reimbursed
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.