Debtors Bar Seminar Materials Available Here

Yesterday I had the pleasure of presenting on consumer law issues for the Debtors Bar of West Michigan at their annual Martin Luther King, Jr. Day seminar.  My co-panelist, Amanda Narvaes of Drew, Cooper & Anding, and I managed a fairly thorough exposition of Fair Debt Collection Practices Act issues and the Fair Credit Reporting Act, but had to compress the Telephone Consumer Protection Act segment a bit in favor of lunch.  It was a successful event, and I met a number of attendees who are dedicated, as I am, to representing individuals facing serious legal and financial problems.  They confirmed that debtors’ bankruptcy attorneys do in fact frequently spot instances of consumer abuse in their bankruptcy practices.

The seminar packet contained a version of our presentation slides – the link below includes those slides as well as many other links and resources.

I encourage any debtors’ bankruptcy lawyers–whether seminar attendees or otherwise–to get in touch with me if they have questions concerning potential claims they have spotted or are interested in either a potential co-counsel arrangement or referring clients with consumer issues to Westbrook Law.

TJW

www.westbrook-law.net/dbwm

Spam Text Messages and the Telephone Consumer Protection Act

Nearly every bulk text (SMS) message sent to a cellular phone in the United States violates federal law – specifically, the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227.  Enacted in 1991 primarily to constrain the growing scourge of invasive telemarketing calls, the TCPA has more recently been applied to cases of mass marketing, or “spam,” SMS text messages.  In 2016, the U.S. Supreme Court confirmed that such unsolicited text messages fall within the TCPA’s prohibitions on automatic telephone dialer calls.  Yet bulk text messages remain a commonplace nuisance for most people who rely on cellular phones.

The TCPA provides serious remedies to consumers who receive bulk text messages without their consent: $500 per message, or $1,500 per message for willful violations of the TCPA. These penalties quickly add up given the often repetitive nature of spam text messages.

The TCPA and its penalty provisions were designed to encourage consumers and consumer lawyers to act as “private attorneys general,” effectively assisting the Federal Communications Commission to enforce limitations on telephone system abusers.  If you receive unsolicited bulk text messages, do not just delete them.  Westbrook Law PLLC can assist you to determine whether the law has been broken, enforce the law and, in the process, pursue a monetary recovery for you under the TCPA.

Contact us to arrange a free consultation.

Junk Faxes Violate Federal Law

Most businesses and individuals who maintain dedicated telephone lines for fax machine use have experienced the common annoyance of the junk fax.  The machine beeps, picks up a call, and proceeds to print out an unwanted message from a solicitor that quickly finds its way into the recycling bin.  The practice of junk faxing not only ties up fax lines and wastes paper and supplies; it also violates the federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b)(1)(C).  Recognizing this pervasive problem and the fact that each junk fax does a measurable but very small amount of damage, to discourage this practice, the TCPA provides for “statutory damages” in the amount of $500 per junk fax, or $1,500 per junk fax for willful violations.  These amounts quickly add up when multiple faxes are received.

Our office has developed expertise in tracking down the elusive origins of junk faxes and in enforcing the TCPA.  If your business or personal fax machine receives junk faxes, DO NOT THROW THEM AWAY.  Keep them, and contact us for a free consultation.

Certification Granted in FDCPA Class Action Babbitt v. ClearSpring Loan Services, Inc.

Today, the United States District Court for the Western District of Michigan issued an order granting class certification in a Fair Debt Collection Practices Act (“FDCPA”) case against default mortgage servicer ClearSpring Loan Services, Inc.  Westbrook Law PLLC member Theodore J. Westbrook, along with veteran consumer lawyer Phillip C. Rogers, were appointed class counsel.

The case, filed by Mr. Westbrook in late 2015, alleges that ClearSpring engaged in a pattern and practice of violating the FDCPA through failing to disclose on its monthly loan statements that ClearSpring was a debt collector.  The FDCPA, 15 U.S.C. Section 1692e(11), specifically requires all debt collectors to make such a disclosure in each communication with a debtor, in an effort to minimize consumer confusion.  As a default mortgage servicer–a company that obtains the right to collect payments after the loan is delinquent or otherwise in default–ClearSpring is a debt collector that must comply with the FDCPA.

The specialized default servicing industry has been growing along with large lenders’ eagerness to offload non-performing loans.  With it, the likelihood of servicers failing to understand or comply with debt collection laws may also be on the rise.  As more class actions are certified, industry players will be forced to bring their practices in line with the strict requirements of the FDCPA.

Experian’s “Suspicious Request” Letter Violates the Fair Credit Reporting Act

One of the three major consumer credit reporting agencies, Experian Information Solutions, has recently undertaken an apparent effort to stymie credit repair organizations and consumer lawyers by refusing to investigate consumer disputes regarding credit report inaccuracies.  Under the Fair Credit Reporting Act (“FCRA”), Experian and the other CRAs are given 30 days to investigate consumer disputes, and may only refuse to investigate if the dispute lodged by the consumer is “frivolous.”  However, Experian has recently begun rejecting consumer disputes based on the fact that they are “suspicious.”  Although Experian’s “suspicious request” letter does not define what is suspicious about the consumer’s dispute, consumer advocates believe Experian is engaged in a pattern of rejecting disputes in this matter when it appears that the consumer was assisted in drafting the dispute by a credit repair organization or an attorney.  This practice violates the FCRA, robs consumers of the protections the FCRA is intended to afford, and potentially has serious negative consequences to consumers’ credit histories.

If you have had a credit reporting dispute rejected by Experian or any other credit reporting agency, contact us for a free consultation.

An Unwelcome Pokemon Go Terms of Service Surprise, and How to Opt Out

Most mobile app users do not take the time to read the terms of service that typically accompany opening and using the app for the first time.  Doubtless, most of the 7.5-plus million people who have downloaded the Pokemon Go! smartphone app are typical in this sense.  Getting into the fine print, however, reveals a problem for users who agree to the terms: a forced arbitration clause which (1) eliminates the user’s ability to sue the game’s developer publicly in court, instead requiring private arbitration of any dispute; and (2) eliminates the user’s ability to participate in any class action.  This is of concern for any consumer product, but particularly in the case of an app which presents potential privacy and data security risks.  In short, frequently the only efficient way to hold a corporation accountable for breaches of privacy or data security is through a class action lawsuit.  This is because: (1) the investigative costs involved in this type of litigation are immense; (2) the harm to each individual affected user may be very small; and (3) the overall harm to all affected users may be many millions of dollars.

Forced arbitration has been a growing phenomenon in large corporations’ terms of service for decades.  From the consumer advocate’s perspective, these clauses and procedures are pernicious.  The Consumer Financial Protection Bureau agrees, and after finding that such clauses in bank and financial institution contracts are unfair and unconscionable as a whole, has proposed a regulation outlawing forced arbitration clauses in consumer financial services contracts.  Of course, this regulation would not affect Niantic, the developer of Pokemon Go!, since its business is computer software and not financial services.

The silver lining is that the Pokemon Go! terms of service allows users to opt out of the forced arbitration clause, as long as they do so within 30 days of first agreeing to the terms of service.  All the user needs to do is email Niantic at termsofservice@nianticlabs.com and clearly state that the user is opting out of the arbitration clause in the terms of service.  Our recommendation is that all Pokemon Go! users preserve their legal rights in this way.

Debt Collection Lawsuits May Break the Law

Huge numbers of lawsuits are filed by debt collectors and debt buyers in Michigan’s district courts every day.  Some of the larger debt buyers may file hundreds of lawsuits per year in a single district court.  These are relatively small-dollar cases, seeking anywhere from $100 up to $5,000 or more, typically on past due credit card accounts that have been written off and sold by the original creditor (in the case of a legitimate debt), to a debt buyer, and then possibly re-sold to a string of other debt buyers.

Many people who have been sued by debt collectors do not know what to do.  The debt may seem legitimate, or may even be legitimate.  Frequently these defendants simply do not contest the lawsuit, a default judgment is entered against them, and ultimately their bank accounts or wages are garnished to pay the debt collector.  The problem is that the plaintiff–the debt collector who filed the lawsuit–might have broken the law when it filed the lawsuit, or might not even have had the right to any payment at all.

The Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., prohibits debt collectors from making false or misleading statements or using unfair methods to collect consumer debts.  This includes statements made and methods used in lawsuits to collect debts.  If the plaintiff claims amounts are owed that are not actually owed, that is unlawful under 15 U.S.C. § 1692e.  If the plaintiff has filed a time-barred claim–which is typically the case if no payments have been made on the debt in six or more years–that is also a violation.  Debt collectors’ legal complaints frequently contain deceptive and misleading statements that could give rise to defenses to the debt, as well as counterclaims for monetary damages.

The following common practices among debt buyers are all grounds for relief under the FDCPA:

  • Misrepresenting the original creditor to whom the debt was owed;
  • Seeking more money than what is actually owed;
  • Including non-recoverable fees and costs in the amount sought in the lawsuit;
  • Improperly including certain fees and costs in garnishments;
  • Misrepresenting that the complaint was prepared by an attorney of law firm, when in fact it was prepared by a non-lawyer;
  • Providing false or misleading contact information;
  • Including false, misleading or fabricated documentary evidence as support for the complaint.

Many consumers sued by buyers of old defaulted debt feel they cannot afford an attorney to defend their case.  This is not necessarily true, particularly when a consumer lawyer finds that there is a viable counterclaim against the debt collector under the FDCPA.  This is because, as a remedial consumer protection statute, the FDCPA provides for the payment of attorney fees by the debt collector if a violation is proven.

If you have been sued by a debt collector, contact us for a consultation free of charge.