• Consumer Protection Law and Advocacy — Chicago, IL

Ask A Consumer Lawyer

Q & A with Stacy Bardo, founder of Bardo Law, P.C., answering common questions from consumers in need of legal help.

New Mortgage Disclosures coming to help Americans

Spring Cleaning and Home Buying

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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!

Consumer Protection In 2017 And Beyond

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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.

Be Wary of Recurring Auto Debits

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Consumers should be cautious when authorizing recurring auto debits.  Nearly every company — from your most aggressive bill collector to your local gym — now ask that consumers permit automatic monthly withdrawals from their checking accounts.  While this may be convenient and “eco-friendly,” it can lead to problems.  Be aware that a federal law called the Electronic Funds Transfer Act grants you rights when you agree to auto debits.  For example, the Act requires that the terms of your agreement be provided to you when you sign up or before the first auto debit occurs.  You must also be given notice of your right to stop the auto debits and the steps for doing so.

To ensure consumers are aware of these rights, the Consumer Financial Protection Bureau (“CFPB”) recently released a bulletin alerting companies that they must obtain authorization before automatically debiting a consumer’s account.  The CFPB also published a series of letters consumers can use to cancel any recurring auto debit, available at http://www.consumerfinance.gov/blog/you-have-protections-when-it-comes-to-automatic-debit-payments-from-your-account/.   According to the CFPB’s November 23, 2015 press release:

The CFPB is concerned that some companies may be failing to meet the legal requirements for obtaining authorizations from consumers for recurring auto debits. Also, through its supervisory work, the CFPB observed that one or more companies provided consumers with a notice of the terms for preauthorized auto debits that failed to disclose critical information, such as the amount and timing of the payments the consumer agreed to. If consumers are not given clear information on the terms of auto debits, they may not be able to manage payments or ensure their account balance is large enough to avoid being hit with overdraft or non-sufficient fund fees. In some cases, consumers have also reported companies not obtaining proper authorization to auto debit an account.

Don’t feel pressured to agree to monthly auto debits and if you do agree, keep close track of your monthly bank statements.  Verify the correct amounts are being debited and don’t hesitate to ask for written confirmation of your agreement.  Auto debits should be convenient, not a source of anxiety or confusion.

Fair Credit Reporting & Consumer Law - Bardo Law PC

Consumer Law Q&A – Employment Credit Checks and the FCRA

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During the holiday season, many people apply for part-time and seasonal jobs.  Your employment application may be rejected because of poor credit – but employers must follow the law before doing so.  Unfortunately, employment credit checks are permitted under the Fair Credit Reporting Act (“FCRA”).  The FCRA allows employers to request credit reports on job applicants and existing employees.  However, employers must comply with three requirements:

  • Notify the applicant prior to running a credit report;
  • Advise the applicant that he/she may be rejected from employment based in whole or in part on information contained within the credit report; and
  • Provide a copy of the credit report and a written summary of the applicant’s dispute rights.

If you apply for a job and think you’ve been rejected because of your credit, you may have a legal claim.  The FCRA protects you if you were not properly notified or if you were rejected based upon credit report information that is incorrect, false or outdated.

Employment credit checks can be an unfair barrier to finding work so try to be proactive in managing your credit report before you apply.  For more information, visit http://www.consumer.ftc.gov/articles/0157-employment-background-checks.  The FTC has more helpful links on employment credit and background check issues.

What if I get a Citation to Discover Assets?

Consumer Law Q&A: What happens after judgment?

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If you were sued on a consumer debt and a judgment is entered against you, Illinois law still provides you with rights to make sure that judgment is being collected fairly. One method a judgment creditor will use to try and collect from you is called a “Citation to Discover Assets.”

If you are served with a Citation, it is best to speak with an attorney first. Organizations such as CARPLS https://www.carpls.org/ and Illinois Legal Aid Online http://www.illinoislegalaidonline.org/ have resources available that may assist you. But here are some general tips.

If you receive a citation, you will be asked to appear in court on a particular date and discuss your assets. You may be asked to bring certain documents with you (such as pay stubs or tax returns). You will be asked questions such as: Do you own a home? A car? Do you work full-time? Do you have checking and savings accounts?

You must answer these questions honestly but if you feel like the collector is badgering you or going on a true “fishing expedition,” and asking irrelevant questions that do not have to do with your ability to pay the judgment, ask the Judge for help.

Also, if any of your income comes from Social Security, disability or child/spousal support, make sure to let the collector know right away. Unemployment compensation, public assistance benefits, veteran’s benefits, pensions, and other retirement benefits are some of the types of income and property that may be exempt from collection.

Remember – collectors cannot take more from you than the law allows so don’t be intimidated from exercising your rights to claim exemptions.

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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.