Author: zamparolaw

Stay in control: Being a better consumer by keeping prepared for debt collectors

It is not easy being a consumer sometimes, especially when you owe creditors money and the debt collectors start calling you. Knowing your rights under the law is important, but that is just half the battle. The best debt collectors, and best meaning they collect the most money due, are the ones who have a way of getting you to pay, despite ethics and sound business practices. Many of them completely ignore consumer laws. For some, we often wonder if their business model assumes they will have to pay a few fines here and there when smart consumers catch them doing wrong. When you do know the law, there are additional steps you can take and practice becoming a better defender of your rights. Keeping good records and following the steps in this article can help you bring a case against an unscrupulous collector. When more consumers who stand up for their rights, collectors may take notice. Class action lawsuits particularly affect the bottom line for companies in the business of collecting. The Zamparo Group is advocating for consumers and helping fight back against predators engaging in bad acts.

There are few things you should do to prepare for talking to collectors to best protect yourself.

Wherever you manage consumer business from your home and office, consider creating and managing individual file folders for everyone with whom you enter into financial and credit transactions. Keeping a notebook or notepad and a pen nearby is important so you can take notes of each and every phone call. Always ask for the name or operator identification number of everyone you talk to and note the date and time of the call. It can be helpful and empowering later to tell a supervisor who you spoke with, at what time, and exactly what they said. You may also want to keep a recording device nearby and record the telephone calls, on an app on your phone, for example. Be careful however, when it comes to recording others, as the laws are different in every state when it comes to recording conversations and whether you need consent of the other person to record them. Here is a link to Illinois law on recording conversations. Please feel free to contact us to learn more.

Learn the basics of the consumer laws written to protect consumers from unfair debt collectors.

The Fair Debt Collection Practices Act (FDCPA) is the federal statute that protects consumers by limiting what a creditor can do when working to collect a debt. It might be helpful to print and keep the FDCPA basics nearby, to use as a reference when on the phone, or when making notes about what you think may be a consumer law violation.

The FDCPA prohibits debt collectors from:

  • Calling you before 8 a.m. and after 9 p.m.
  • Intentionally annoying or harassing you
  • Calling you at work if your employer does not allow personal office calls
  • Calling or communicating with you after you request them not to in writing
  • Using abusive language or threatening lawsuits they could not legally file or initiate

These are the common violation signs to watch for, and there are additional violations listed in the FDCPA text, published by the Federal Trade Commission (FTC) website. If you believe a collector is doing something that violates the law, we can review your notes and information about the communications and determine what action, if any, can be taken against the collector.

How would you know if they are in their rights to file a lawsuit against you?

First, if a debt collector says they are a lawyer and that is not true, there may be a violation. If someone tells you they have a lawsuit ready to file and they are not a law firm, there may be a violation. Another common concern of consumer attorneys are the collectors or law firms calling for a collector about a lawsuit that is barred by the statute of limitations to sue on a debt. Every state has its own set of limitations laws that prohibit a collector from filing a lawsuit to collect on a debt after a certain time. The best practice for a smart consumer is to make notes of any threats or comments about lawsuits when talking to a collector.

Before you pay, get the proof you need to know you actually owe a collector money.

Collection companies frequently buy lists of debts and try to collect. When the collectors are unable to collect, they might make notes on the list and move on to the next consumer. These lists can be bought and sold many times, and all it takes is one instance of human error and you may receive collection calls, years later, when you do not owe any money. If you paid a debt, keep records of the payment, and demand proof that you owe the debt. It is not on our short list above, but the FDCPA requires a debt collector to send you written proof that you owe a debt.

Prepare for phone calls and communications with debt collectors, and refuse to let them anger you.

Why do debt collectors often call during breakfast, lunch and dinner time? They know if you are busy, there is a better chance your guard will be down and they can push you around. It may be a judgment call for another to make if a collector is abusive or harassing, so good notes of what they say can be important later. If you are cooking or working or otherwise busy, feel free to tell the collector it is not a good time to talk and ask when you may return their call when it is convenient. When you call them back or take their original call, it is a good idea to sit at a desk so you can take notes and treat the phone call like an important business call. Remember that they are likely recording your conversation, and it is important to be careful what you say, because it could come back to haunt you later. When preparing for the phone call, try taking some notes of what you want to ask the collector about the debt. This is helpful if you are working with them to negotiate a reasonable payment arrangement.

Remember that any process of collection takes time and so do legal actions. Do not be worried that the collector is going to run to court the same day, obtain a judgment against you and garnish your wages or seize your bank accounts if you do not pay them immediately over the phone. If anyone tells you that, your next call should be to the Zamparo Law Group!

The Zamparo Law Group is advocating for consumers and sharing information about protecting against unethical and abusive debt collectors who violate the law. When more people stand up for their rights, consumers can win. Together we can protect one another from the wolves in sheep’s clothing.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

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Avoid buying a stolen car or truck, but what happens if you do?

Internet and social media technology opened the door to new marketplaces where consumers can buy just about everything, including cars and trucks. There are popular Facebook groups where people buy and sell new and used vehicles. There are cost benefits to buying directly from individual sellers, such as avoiding dealership fees and higher prices. Buyers with experience purchasing used cars and trucks may ask the seller if they can take the car to a local mechanic or have one come by and inspect the vehicle before they buy it. An experienced mechanic can inspect and offer their opinion on the condition of a car or truck, but they may not be able to know anything about its ownership history, much less knowing whether it was stolen. An advantage to buying from a reputable auto dealership may be their offer of a Carfax Report, which lists the known vehicle history. Despite the appearance of safely knowing what you are buying, even from a well-known dealership, they could mislead you, right into the front seat of a stolen car or truck.

Who steals and sells stolen cars and trucks?

From individuals looking to make a hot profit to organized crime rings, there are countless people involved in the illegal theft and sale of automobiles. Cars and trucks may disappear and quickly be shipped out of state or overseas. Likewise, stolen vehicles can be smuggled into the U.S. and end up for sale anywhere from big dealerships to local neighborhood car lots and the guy across town offering an amazing deal on the car or truck you really want.

While many of us think about the expensive import and sports cars as being the most likely to be stolen, that is not the case. The most stolen cars are also the most common vehicles you might see in average middle-class American driveways; they are easier to steal, have more valuable parts and higher resale values.

The National Insurance Crime Bureau (NICB) is a not-for-profit working with insurance companies to track, report and offer education about fighting fraud and crime. In its recent report, “Hot Wheels,” the NICB identified a list of the 10 most-stolen cars and trucks in the U.S. in the year 2014[i]:

  1. Honda Accord
  2. Honda Civic
  3. Ford Full Size Pickup
  4. Chevrolet Full Size Pickup
  5. Toyota Camry
  6. Dodge Full Size Pickup
  7. Dodge Caravan
  8. Nissan Altima
  9. Acura Integra
  10. Nissan Maxima

What can you do to prevent accidentally buying a stolen vehicle?

The NCIB offers a free vehicle identification number (VIN) check. Using the website https://www.nicb.org/vincheck you can enter the VIN of any vehicle you are considering purchasing and research the vehicle history. Specifically, the VINCheck database will tell you whether the VIN is reported as stolen, and whether the vehicle was listed as a total loss, following an insurance claim. So if the vehicle was reported stolen, its VIN should be on the NCIB database. However, if for some reason the vehicle was not reported as stolen, it may appear that the vehicle was legitimately acquired and offered for sale, despite the possibility it was stolen.

The CARFAX reporting system should have the information on every vehicle registered and on the road. If http://www.carfax.com/ does not have a report on the vehicle, you could either start asking questions or move onto another vehicle. You can purchase individual Carfax reports for $39, or for $49 you can get up to 5 reports, and for $54 you can obtain unlimited VIN reports for up to 60 days.

Despite your best consumer efforts, you still end up with the stolen vehicle, now what?

A few years back a Chicago area woman was more than surprised when local police and a tow truck arrived at her house to seize her Lexus SUV. The woman had absolutely no idea it had been stolen from another state, and its VIN switched out from another Lexus that was totaled in a junk yard. To add insult to injury, the woman stilled owed money to the lender who financed her purchase of a stolen car.

If you knowingly purchase a stolen vehicle you can be charged criminally. Most people do not know and have no reason to suspect the car is stolen, except for when the price is shockingly different from the fair market value of the vehicle, or the VIN is noticeably not the original, for example.

The day you become aware that you own a stolen vehicle, your first call should be to an experienced consumer law firm. The Zamparo Law Group, for example, can advise you of your rights and what recourse may be possible. If you bought the vehicle from a large dealership or local car company, their insurance may pay your claim for reimbursement for the money you paid in a fraudulent car purchase. If they don’t pay, a lawsuit may be filed and settled out of court or proceed to a court judgment. If you purchased the car from an individual seller, they could be long gone, and not likely to answer your calls or correspondence.

The Zamparo Law Group is advocating for consumers and sharing information about how to be more vigilant when buying a new vehicle, avoiding the stolen cars and trucks that might be sitting on the lot down the street or a neighbor’s driveway.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

 

[i] NCIB’s Hot Wheels: America’s 10 Most Stolen Vehicles, published Aug. 31, 2015

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Credit Bureau Reporting: New rules require more transparency and information management

The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC), establishes rules for credit reporting agencies (CRAs) directing how consumer information must be reported. CRAs include agencies like the major credit bureaus, tenant screening companies and check verification services. The information used in consumer credit reports is used by third parties in making determinations about a consumer’s eligibility for credit, insurance rates, employment and housing.[i] The Furnisher Rules for information collection and use in connection with the FCRA is codified in a section of the Code of Federal Regulations (CFR), titled, Part 660 – Duties of Furnishers of Information to Consumer Reporting Agencies.[ii] The Furnisher Rules require CRAs to establish and implement reasonable policies and procedures for consumers to make direct disputes of information, as well as policies to ensure the accuracy and integrity of furnished information.

About the National Consumer Assistance Plan

The three major credit reporting bureaus, Equifax, Experian and TransUnion are participants in the National Consumer Assistance Plan, which is designed to improve the collection of complete and accurate consumer information, as well as to make the process of information collection and management transparent to consumers. The plan includes provisions for updates to the mandatory reporting requirements and procedures for collecting consumer data.

The plan impacts the organizations who furnish data to the credit bureaus, namely collection agencies, debt buyers and as well, those who are reporters of authorized user data. Some of the new rules under the plan take effect on June 15, 2016, and others are effective September 15, 2017.[iii] The plan rules and changes were provided to data furnishers in March to help in transitioning to the new requirements to accomplish accuracy and transparency goals in the best interests of consumers.

Examples of new requirements on credit bureaus

Collection agencies and debt buyers are required to implement data reporting changes before the effective dates as follows:

  1. Report the name of the Original Creditor and Creditor Classification Code – 06/15/2016
  2. Do not report a debt that did not arise from a contract or agreement to pay – 06/15/2016
  3. Report a full file monthly – 06/15/2016
  4. Do not report Medical Debt collection accounts less than 180 days old – 09/15/2017
  5. Report a delete for accounts that are being paid or were paid in full through insurance – 09/15/2017

Additionally, all data furnishers must report using the newly established minimum reporting requirements for consumer personally identifiable information before September 15, 2017, and as well before that date, all reporters of authorized user data must report the full date of birth for new authorized users on all accounts.

Click here for the link to the detailed grid of furnisher rules and effective dates.

The impact of the new rules on CRAs

Changes under the Plan rules should reduce the number of consumer complaints and lawsuits filed against CRAs. The new rules help direct the CRAs to be in compliance with the FCRA requirements. The more transparent process and accuracy measures can prevent the mistakes and credit reporting violations that cause harm to consumers, leading to litigation and FTC investigation and enforcement.

New rules and policy directives often draw critics and the National Consumer Assistance Plan is no exception. Critics of the plan suggest that the implementation of the rules by the CRAs may involve confusion and error in direction. The unintended consequences of new policies and rules often present challenges to organizations working to achieve compliance with rules. Some CRAs could refuse to comply with the rules or purposely make their own interpretations suiting their perceived best interests.

In the event you as a consumer, detect that a CRA such as a collection agency is violating the new rules and the FCRA, you may have a right to sue them and file a complaint with the FTC. The Zamparo Law Group is advocating for consumers whose information is not kept or recorded correctly as required by consumer laws.

As consumer laws change, the Zamparo Law Group publishes articles and resources to help consumers better understand the laws designed to protect them from harm. When the credit bureaus fail to follow the law, the Zamparo Law Group is there to help consumers fight for their rights and recover after harmful violations by the bureaus and other CRAs.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] FTC website, FCRA’s Furnisher Rule: It’s all about accuracy and integrity.

[ii] CFR, Duties of Furnishers of Information to Consumer Reporting Agencies, Title 16 → Chapter I → Subchapter F → Part 660

[iii] Furnisher Data Reporting and Process Requirement Changes, To All Data Furnishers March 2016.

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Rite Aid wants TCPA (pre-recorded phone call) lawsuit dismissed

Rite Aid pharmacy patients were mad as Hell over pre-recorded phone calls they received on their cell phones, reminding them to get a flu shot for the upcoming influenza season. A law firm filed a punitive class action lawsuit against the major pharmacy chain, for violating the Telephone Consumer Protection Act (“TCPA”) for using the pre-recorded calls to promote the sale of flu shots to pharmacy consumers. Notice how different it sounds when you compare “notifying patients of a healthcare condition” versus “advertising flu shots to pharmacy consumers.” Rite Aid officials defend their actions, arguing they did nothing wrong, and are protected by exceptions to the TCPA law prohibiting automated and pre-recorded communications to cell phones. Whether the argument that an exception should apply to Rite Aid is a matter for a jury, and the outcome may influence how other healthcare pill and product vendors conduct their business.

What is the Telephone Consumer Protection Act?

The TCPA, passed by Congress in 1991 limits the use of automated dialing equipment, artificial and pre-recorded phone messages used in commerce, without prior written consent[i]. The TCPA also covers the use of text messages and fax machines. The TCPA specifically prohibits solicitors from calling people’s homes during certain hours, from calling people on the National Do Not Call Registry, from calling homes using pre-recorded or artificial recordings, for example. Violations of the TCPA may be worth $500 per violation when consumers and subscribers report and take action against companies and entities that ignore the TCPA.

When Rite Aid made pre-recorded phone calls to its customers, attorneys representing those customers, argue that Rite Aid violated the TCPA provisions prohibiting pre-recorded calls by using them to sell flu shots. Rite Aid representatives disagree, stating that even if the pre-recorded calls were used for a marketing purpose, they are shielded from TCPA liability under the healthcare-related exception, making the calls permissible and not against the law.

A Healthcare Rule exemption to the TCPA rules prohibiting pre-recorded phone solicitation

The Federal Communications Commission (FCC), the agency that created the TCPA rules, created an exception to the application of the rules against pre-recorded phone calls and the other covered activities, where they apply to the healthcare industry. Health care messages may be sent without prior written consent. To be covered, the “health care messages” must be consistent with the HIPAA. The only problem is that the HIPAA privacy rule does not specifically define, “health care messages.” Despite the lack of a clear definition of “health care messages” there are several accepted subjects of communication that fall within the Healthcare Rule exception.

Healthcare messages regarding patient appointments and examinations, hospital instructions, lab results, prescription notifications and instructions for home healthcare have been accepted as appropriate health care messages. These activities are either logistic or instructional and are based on current or recent healthcare services. These are not marketing messages. The issue before the federal court, regarding Rite Aid’s use of pre-recorded messages is whether the pre-recorded calls were related to or necessary for healthcare services, consistent with HIPAA, and whether the exemption for health care messages applies to a reminder to obtain a flu shot.

Do you think Rite Aid’s messages were health care messages, within the exemption?

In a recent news article about this case it is reported that Rite Aid responded to the lawsuit and argued, “that immunization reminders, such as the one at issue, are the precise healthcare messages to which the Healthcare Rule applies.[ii]

Rite Aid also argues that even though it believes consent was not required to place (what it is calling) a healthcare-related call, that it otherwise had consent because the people called had previously given the Rite Aid pharmacy their phone numbers and by signing for prescriptions when they had them filled, they were giving express written consent to being notified.

If the federal district (trial court level) court finds that Rite Aid acted beyond the Healthcare Rule exemption, there could be significant punitive fines in the class action lawsuit. The determinations as to what constitutes health care messages are tricky, and if you allow one type of communication, what will happen with others – for example, so long as there is a reasonable tie to health care, are other marketing calls to be allowed?

As the telecommunication laws catch up with technology, the Zamparo Law Group will keep following and writing article summaries to keep us all up to date so when we see something wrong, we can say something and report it to the proper agencies and authorities.

If you are the victim of a violation of a consumer rights law, such as the TCPA, take good notes and call the Zamparo Law Group for a case review to find out if you have a legal right to recovery of damages. The lawyers at the Zamparo Law Group are advocating for consumers like you!

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227

[ii] Lexology, Is Rite Aid Immune from TCPA Liability? Jun. 8, 2016.

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The CFPB seeks new rules for payday lenders, protecting consumers from unfair lending

Nobody likes payday loan shops, unless they are the one who owns it and gets rich off the people they prey upon. Many years ago when people borrowed money from the mob, they got hurt if they didn’t pay. Today, some folks under water with payday loan shops might prefer physical injury over the incredible fees and charges they pay for the convenience of a short-term loan. The Consumer Financial Protection Bureau (CFPB) focuses its latest in a series of efforts to give relief to consumers who suffer from the after effects of payday loans. The proposed rulemaking follows a 2014 CFPB study of payday lending practices which highlighted the frequency in which borrowers we able to extend their repayments, repeatedly, and owed more money in fees than the principal amount they originally borrowed. Meanwhile, payday loan industry representatives speak out against the CFPB and its proposed new rules.

Is there a significant trap in the payday loan process? The CFPB reports suggests so.

The 2014 payday study, CFPB Data Point: Payday Lending, conducted by the CFPB Office of Research, notes that more than half of payday loans are due within two weeks of the issuing date, with an annual interest rate of approximately 390 percent; most of the consumers repeatedly extend their repayments, incurring more debt and owing more fees than they borrowed. In 80 percent of the auto title loans, where borrowers secure the loans by putting their vehicles on line, the borrowers have to extend the loans because they cannot afford to pay them. Half of all the loans are renewed and the borrowers are in loans more than “ten loans long.” Key findings of the report also state that the majority of monthly payday loan borrowers are government benefit recipients.

The people who can least afford high interests rates are already facing financial difficulties that lead them to payday loans. These borrowers may not have the credit rating or access to affordable loans that others may enjoy.

The CFPB assesses data regarding payday loans to better highlight the realities of higher risk lending. The opening language of the study states that the CFPB is focused on “providing an evidence-based perspective on consumer financial markets, consumer behavior, and regulations to inform the public discourse.”

The CFPB proposed rules set forth objectives in counteracting predatory payday lending practices.

There are two main loan categories considered in the proposed rules, loans shorter than 45 days and loans longer than 45 days, that have more than a 39 percent all-in annual percentage rate, and are either secured by the borrower’s vehicle or the payments are automatically deducted from their account or income. For both these loan categories, the new rules would require the lender to independently determine whether the borrower can afford to repay the loan.

Abusive and unfair short term and payday loan practices would also be identified under the proposed new rules. In addition to identifying bad practices, the rules would restrict lenders from loaning money to borrowers who already have outstanding loans. Additional restrictions would prevent lenders from making multiple payment attempts, trying to draw the payment from the borrower’s account, after two consecutive payments that declined when processed, and this saves already unable-to-pay borrowers from additional fees and charges from the payday lender.

Lenders say the rules would cripple their industry and block the access to money that borrowers need, often in emergencies.

The negative economic impact of the proposed new rules on payday lenders could be significant. Recent news articles noted, ““Thousands of lenders, especially small businesses, will be forced to shutter their doors, lay off employees, and leave communities that already have too few options for financial services,” said Dennis Shaul, the chief executive of the Community Financial Services Association of America, a trade group for payday lenders. According to the group’s website, “More than 19 million American households count a payday loan among their choice of short-term credit products.”[i]

With an average fee of $15 on every $100 borrowed, payday lenders have significant fees at stake and as lender experts suggest, the new CFPB rules run some payday lenders out of business. Those with financial interests in the outcome of the proposed new rules may be keeping a close eye on the presidential election, as the Democratic presidential candidates generally support stricter consumer finance rules and restrictions.

The Zamparo Law Group follows several rulemaking propositions and developments with the CFPB and will frequently share news that affects consumers, in particular, the development of rules for better practices in the short term and payday lending industry.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] New York Times, Payday Loans’ Debt Spiral to Be Curtailed, By Stacy Cowley, Jun 2, 2016.

Image Source Payday Loan Giant May Go to Prison for Racketeering http://bit.ly/1UkqCV8

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New CFPB rulemaking on arbitration clauses may be delayed by the House

The Consumer Financial Protection Bureau (CFPB) has a government block to the new rulemaking that would carve out specific language allowing consumers access to the courts, instead of otherwise being bound by mandatory arbitration agreements in contracts among consumers and financial institutions. The House Financial Services Appropriations Subcommittee is marking up the bill to fund the CFPB,[i] Until spending bills are passed, the CFPB is prohibited from issuing the final rulemaking language in its regulations regarding mandatory arbitration agreements.

As we reported in our article last week, THE CFPB ANNOUNCES NEWS OF POSSIBLE RULEMAKING TO GET AROUND ARBITRATION AGREEMENTS, the CFPB “was considering whether to ban arbitration agreements from being used to compel arbitration of consumer class actions and whether to require the reporting of certain information concerning consumer arbitrations to the Bureau to facilitate monitoring.[ii]

CFPB Rulemaking is on hold due to the House Appropriations Committee, its process and requirements.

In the draft of the Appropriations Committee spending bill, there are certain requirements the CFPB must satisfy before any proposed new rules can be issued. The Appropriations Committee also wants the CFPB to change its current form of governance, from a single agency director, to a board of directors, which has been previously proposed.

The proposed new rule would allow consumers to file lawsuits against financial institutions, including credit unions, if they engage in wrongdoing. The rule cures the current problem where consumers are limited to binding arbitration clauses, making litigation and class action lawsuits unavailable as stated in the arbitration clauses many consumers never read nor knew they were accepting.

Some challenge the CFPB and its motivation for arbitration rulemaking, opening the door for consumers to sue financial institutions.

There are disagreements among legal scholars as to whether arbitration is more or less helpful to consumers, when other options include joining class action lawsuits. While critics cite the smaller dollar amounts awarded to consumers when they join together in suing a financial institution, individual arbitration decisions are more like a cost of doing business, than they are a legitimate threat to a large financial institution. Class action lawsuits have the teeth to affect these big banks and can force them to change their conduct and policies.

The CFPB conducted its own studies and released them to Congress: Arbitration Study, Report to Congress, pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act § 1028 (a). The 728-page study examined data concerning the pre-dispute arbitration process, to determine whether consumer rights and remedies are unfairly restricted.

Critics of the CFPB’s proposed rules, suggest that its report to Congress is slanted to favor the CFPB in allowing more consumers to sue financial institutions through the Bureau, whose job is to enforce consumer rights laws and take action against predatory companies. Meanwhile, supporters of the new rules agree that allowing consumers to join class actions or individually sue financial institutions is the proper way to facilitate justice, as opposed to being restricted by arbitration agreements preventing individuals from having their day in court.

While the Appropriations Committee works on its markup of the spending bill and the requirements of the CFPB in arbitration rulemaking, financial institutions continue using arbitration clauses to block access to courts. The new CFPB arbitration rules are likely to take effect in 2017.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] Credit Union Times, House Bill Would Delay CFPB Arbitration Rules, By David Bauman, May 24, 2016

[ii] Consumer Financial Protection Bureau, Spring 2016 Rulemaking Agenda, Current Initiatives, Arbitration

Image Source: House Appropriations Committee http://1.usa.gov/1ptJEtv

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The CFPB announces news of possible rulemaking to get around arbitration agreements

Customers and banks do not always get along. When the customer feels wronged, they have few options to fight back to hold the bank accountable. A customer who believes the bank over charged them with fees for overdrafts and other charges could file a lawsuit against the bank but the cost and effort involved may outweigh the potential recovery. If however, the bank engages in over charging fees to a large group of customers, that group can join a class action lawsuit. Class actions can force banks to change their practices and the financial penalties the banks face are substantial. Before running to the nearest consumer law attorney to join a class action lawsuit, beware of binding arbitration clauses that may be a barrier to fighting for your rights. When you began your relationship with the bank, or afterwards if you accepted their notice of amended terms of service, you may have agreed to your disputes against the bank settled in binding arbitration, not a traditional court of law where you can join a class action lawsuit.

The Consumer Financial Protection Bureau (CFPB) proposes new rules to address arbitration in response to consumer advocacy efforts to help individual consumers who are being limited to access to the courts.

News of the injustice done to consumers by banks and financial institutions using arbitration agreements as shields from consumers, and a few U.S. Supreme Court Decisions urged consumer advocates to call for action to address the threat of harm and lack of legal options for consumers. In 2011 and 2013 the Supreme Court upheld the widespread use of arbitration agreements in the fine print of consumer and bank agreements, holding consumers to the decisions of the arbitration panel often provided by the very bank the consumer opposes. For more information, read our article, Arbitration clauses prevent consumers from suing in court, but might not end the fight.

The CFPB made an announcement on May 5, 2016, that it proposed making its own rules to limit the use of arbitration clauses in contracts for customers of banks and finance companies under the legal oversight of the CFPB.

Here are some excerpts of the proposed new rules:

  • “Arbitration could not block class actions without court action. First, the proposed rule “would prohibit providers from using a pre-dispute arbitration agreement to block consumer class actions in court and would require providers to insert language into their arbitration agreements reflecting this limitation.”
  • Companies would be required to submit arbitration claims filed and awards issued to the CFPB for review and possible publication. Second, “the proposal would require providers that use pre-dispute arbitration agreements to submit certain records relating to arbitral proceedings to the Bureau. The Bureau intends to use the information it collects to continue monitoring arbitral proceedings to determine whether there are developments that raise consumer protection concerns that may warrant further Bureau action. The Bureau intends to publish these materials on its website in some form … to provide greater transparency into the arbitration of consumer disputes.”[i]

The CFPB publishes a section of its website dedicated to its power to make rules to enforce federal consumer financial laws, “to ensure that all consumers have access to markets for consumer financial products and services that are fair, transparent, and competitive.[ii]” The CFPB states that the process through which rulemaking occurs, takes into account the experiences and needs of consumers. Policy making and advisory groups and panels review information and make reports to one another up the chain of authority. The CFPB outlines its rulemaking plans with respect to arbitration blocking consumers’ access to courts in their May 5, 2015 blog article, CFPB proposes prohibiting mandatory arbitration clauses that deny groups of consumers their day in court.

The proposed CFPB rule affecting arbitration with financial institutions is important news and The Zamparo Group will continue a review the new rule and news regarding its potential adoption and implementation in further consumer news articles on this site.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] Mondaq, CFPB Proposes New Rule on Mandatory Consumer Arbitration Clauses, By Lisa M. Ledbetter and Sanjay Narayan, May 18, 2016.

[ii] Consumerfinance.gov (CFPB website) Rulemaking.

Image Source: www.autoremarketing.com, Cordray Reiterates CFPB Rulemaking Process http://bit.ly/1NyvYj4

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CFPB shuts down law firm using automated lawsuit generator

The automated lawsuit generator used by the debt buying collection firm and a law firm makes automated dialers seem like going on a walk in the park with an old love interest. The Consumer Financial Protection Bureau (CFPB) had no love for these law firms when it issued a Consent Order, on April 25, 2016, stopping them in their tracks. What is being called a high-volume lawsuit machine, violated the Consumer Financial Protection Act (CFPA), the Fair Debt Collection Practices Act (FDCPA), was not supervised by any lawyers, and it did not produce reliably credible lawsuits. The order was issued to stop the debt buying law firm of Pressler & Pressler, LLP and New Century Financial Services, Inc., who have both engaged in firing off automatic lawsuits at creditors for years, often based on “flimsy or nonexistent evidence.[i]

Collection efforts and lawsuits filed near the statute of limitations

States have limitations on the time in which they can file a lawsuit to enforce a debt, seeking an enforceable judgment, with which the law firm can go after your bank accounts, assets, income and tax refunds to collect on the judgment amount. We often hear stories about collection agencies making threats of lawsuits, something they cannot do if they are not lawyers. In this case, however, the lawyers were the ones who bought up and tried to collect on debts.

Stated in a recent Time article, “For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray in a press release. “Debt Collectors that file lawsuits with not regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.[ii]

Automated lawsuit generators undermining the integrity of the legal system

If a debtor fails to pay by a set due date, a computerized system can automatically populate the name, address and vital data necessary to produce a summons and complaint for the amount the computer believes is owed, and these lawsuits can be printed in bulk, filed online, and otherwise populate the court docket, all without a lawyer reviewing everything to make sure the lawsuit is proper.

The law firm filing automatically generated cases did not ensure an attorney reviewed the petitions before they were filed with courts, rather they used, “untrained support staff, which spent less than 30 seconds a piece in some cases to verify the claims of each lawsuit.[iii]” When activity like this is allowed to occur, where lawyers are not reviewing lawsuits being filed, and a computer makes the judgment call to file the lawsuit, there is a breakdown in the integrity of the legal system because no reasonable person could rely on the authenticity of the documents or proceedings.

The CFPB found violations of the FDCPA and the CFPA 

After investigating and reviewing the allegations against and practices of Pressler & Pressler law firm and its debt-buying firm (collectively “respondents”), the CFPB issued a consent order, in agreement with the respondents, setting forth the findings, penalties and the further orders of the CFPB.

The CFPB findings state, “Respondents’ debt-collection litigation activities relied substantially on a non-attorney support staff that far outnumbers the Firm’s attorneys, along with a proprietary collection software system that the Firm uses to automate, review, and ensure compliance with its processes for receiving and preparing new lawsuits for its clients.[iv]

Finding that the respondents engaged in deceptive practices, the CFPB enjoined and restrained the respondents from continuing certain activities, such as:

  1. Prohibiting Debt-Collection Litigation Activities Without a Reasonable Basis;
  2. Prohibiting the Use of Deceptive Affidavits;
  3. Prohibiting Certain Pre-Judgment Discovery Practices; and
  4. Additional Conduct Provisions

The CFPB ordered fines to be paid to the bureau in the amount of $1 million for the law firm and $1.5 million for the debt buyer. In addition to the fines, there are significant and ongoing reporting and compliance requirements the respondents must satisfy.

The CFPB and the Zamparo Law Group are advocating for consumers and fighting back against deceptive and abusive collection firms that use tactics like computerized lawsuit generators.

If you believe a bill collector is trying to collect a debt you do not owe, and if you are receiving what seem like improper threats of lawsuits and documents that look like court filings, you might be a victim of a consumer law violation. The Zamparo Law Group can advise you of your rights and whether you have a case and what it may be worth.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] Time.com, Money, It Just Got Harder for Debt Collection Agencies to Auto-Sue Borrowers, by Ethan Wolff-Mann, Apr. 25, 2016.

[ii] See HNi above.

[iii] See HNi above.

[iv] US CFPB Administrative Proceeding, In the Matter of: Pressler & Pressler, LLP, Sheldon H. Pressler, and Gerarld J. Felt, Apr. 25, 2016.

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Drivers Privacy Protection Act: High-speed license plate readers, legal but concerning

High-speed license plate cameras and the storage and use of license plate data causes concern for privacy. Law enforcement and privately contracted individuals with high-speed cameras are able to drive by, scan the immediate area, and locate license plates on vehicles that may be part of a criminal investigation or a hotlist of stolen vehicles, for example. Storing and sharing the data cases many people to ask whether this activity is legal. The Drivers Privacy Protection Act is the primary consumer protection law that would apply, but in many instances, there is no violation of the law. However, as the use of this type of technology expands and is applied to other uses, some against the interests of consumers, the laws could be updated to cover high-speed cameras used to scan, save and share collected license plate information.

High-speed cameras can be used to solve crimes and repossess vehicles.

Police cars and repossession spotter vehicles equipped with special high-speed cameras may be watching and taking pictures of your license plate. As reported in a recent article examines this technology, “There might have been dozens of other cars in your lane, too many for an ordinary camera to snap a picture of every one. But the police camera got them all. Even if your car was just parked at a curb, the camera would have grabbed that picture and recorded it when it was taken.[i]

License plate readers (LPRs) on police vehicles could help law enforcement find stolen vehicles; locate suspects and persons of interests, in their criminal investigations, for example. Repo drivers with a hotlist of vehicles on their list can quickly be alerted when they drive past the vehicle with a license plate match. Insurance companies may also benefit from LPRs when investigating garage fraud, the practice of registering vehicles other than where they are actually kept, such as a relative’s address in the suburbs or out-of-state where the insurance rates are less.

The purpose of Driver’s Privacy Protection Act is the protection of drivers’ private information.

Adopted in 1994, following the stalking and murder of actress, Rebecca Schaeffer, the Driver’s Privacy Protection Act was enacted to protect the privacy of a drivers’ identity. Schaeffer’s killer obtained her address through the California Department of Motor Vehicle records.

The Driver’s Privacy Protection Act (DPPA)[ii] of 1994 is part of the Violent Crime Control and Law Enforcement Act, and it governs the privacy and disclosure of personal information gathered by state motor vehicle and driver licensing departments. The DPPA also applies to the authorized recipients of personal information under the law and it requires recordkeeping requirements. The “personal information contained in an individual’s motor vehicle records can include the driver’s name, address, phone number, Social Security number, photograph, height, weight, gender, age, certain medical or disability information, and in some states, fingerprints.

For more information on the DPPA, please read our article, The Driver’s Privacy Protection Act Helps Prevent People from Tracking You Down.

Should high-speed license plate data collection be illegal under the Drivers’ Privacy Protection Act?

Advocates for the use of high-speed cameras in license plate data collection state that license plate cameras, LPRs, gather information on license plates and vehicles, not people. Executive chairman of Digital Recognition Network, Todd Hodnett, stated in a recent news article, “There are plenty of parties out there that are opposed to LPRs for various privacy issues. Never once have I ever seen one of them come forward with the fact that connecting license plate-recognition data to personally identifiable information is protected by law.[iii]

Consumer rights advocates may disagree with representatives from data collection companies using high-speed cameras to collect license plate data. The link between a license plate number and its owner may be the subject of future litigation and legislation, as more consumers stand up for their privacy rights and in opposition to state and private companies engaged in this form of data collection. Once the data is collected, it could fall into the wrong hands. Once a hacker or insider opens the bridge between license plate information and the owner (and their private information), we all have cause for concern.

Right now, the DPPA does not concern repo drivers, when they are hired by banks to repossess vehicles, where the bank already knows the names of the borrowers and all the information they voluntarily submitted to the bank when applying for an auto loan. Repo drivers aside, the privacy and security risks associated with high-speed license plate recognition and data collection are still compelling.

The Zamparo Law Group follows news and trends that affect consumers and our rights under state and federal laws. Advocating for consumers is our mission at the Zamparo Law Group.  

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] The Buffalo News, High-speed license plate cameras spark privacy concerns as they help solve crimes, by Matthew Spina, Apr. 10, 2016.

[ii] Drivers Privacy Protection Act. 18 U.S.C. § 2721 et. seq.

[iii] The Buffalo News, License plate camera data’s private use raises questions, Apr 10, 2016.

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Roger Zamparo Jr., appears on legal podcast on identity theft issues and remedies

Identity theft awareness and education is increasing due to the efforts of consumer law attorneys and the agencies charged with policing consumer credit and debt management and collection, such as the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB). Identity theft has evolved with technology and it is easier than ever for thieves to hack computer systems and gain access to your private financial and personal information. The days of dumpster diving may soon be in the past. Meanwhile, the damage caused by identity thieves can linger for years if the identity theft victim fails to take proper action when they discover identity theft.

Use the link to listen the original article with the published link to the podcast, hosted by the Illinois Licensing Consultants and the Chicago health law and litigation firm, Michael V. Favia and Associates, P.C.

Spotting identity theft and taking action with Roger Zamparo

Podcast subject matter:

  • How do identity thieves operate and what do they do with your information?
  • What are some of the new ways thieves use technology to steal identities?
  • How much damage can identity theft cause, in addition to credit problems?
  • What legal remedies are available to credit theft victims and how does it work?
  • If we learn identity theft happens when it is too late, how can we be safe?

Roger explains identity theft and the Zamparo Law Group’s comprehensive response and action plans for clients who learn that someone stole their identity. Roger stresses the importance of ordering quarterly credit reports from www.AnnualCreditReport.com, the official and free service consumers can use to spot and respond to errors in their credit report. Roger states that the Zamparo Law Group does not charge clients for the initial and sometimes very intensive research into the identity breach. Clients learn how and what to do in requesting the credit reporting groups properly reflect your accurate credit history and eliminate any negative marks in connection with identity theft. There are many credit reporting agencies in the marketplace, and some are specialized and few people know about them. If these credit reporting agencies fail to correct your credit report, the Zamparo Law Group can sue them and get paid by them, not you.

The Zamparo Law Group helps men and women fight back against identity theft. Zamparo Law Group attorneys fight and win in court, individually and in consumer rights class action lawsuits.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

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