Voluntary Surrender or Repossession: Which is Better for Your Credit Score?

If you fall behind on your auto loan payments because of a lost job, unexpected medical expenses, or simply not enough income, you may consider voluntary surrender of your vehicle. But what that means, and how it affects your credit score compared to repossession can be something of a mystery. Here are some things to consider.

How to Make Your Facebook Profile Less Vulnerable to Identity Theft

Facebook’s Mark Zuckerberg appeared before Congress on April 10 and 11, 2018, to answer questions about the app’s privacy and security settings. The testimony suggests the company’s policies may be changing, but is there anything you can do to make your Facebook profile less vulnerable to identity theft?

Did an IRS Contractor Violate Consumer Protection Laws?

This year, the IRS has begun to outsource its tax debt collections to private contractors. But the National Taxpayer Advocate and several senators are asking whether one IRS contractor’s debt collection methods violate federal consumer protection laws.

Car Repossessed? Watch Out for Debt Collectors

If you have fallen behind on your auto loan, you could end up having your car repossessed. You may assume that will be the end of your problems. But in fact, debt collectors could force you to pay thousands more on a car you no longer own.

Collections Lawsuit? A Lawyer Helps

No one wants to go to court to avoid paying creditors. Unfortunately, thousands of people every year face collections lawsuits. Find out what to expect, and what an attorney can do to help.

Demand Letters Are Lead-Ins to Court

If you receive a demand letter from a collections agency, sometimes also called a validation notice, it is the first sign that you may be headed to court. Under the Fair Debt Collection Practices Act (FDCPA), before a creditor can file a collections lawsuit against you it must first send you a notice that states:

• The amount you owe
• The name of the creditor
• That you have 30 days to dispute the debt or the collector has the right to assume it is valid
• That if you dispute the debt in writing within 30 days you are entitled to receive a verification of the debt and its amount
• That you are entitled to the name and address of the original creditor upon request during that initial 30 days

If you receive this letter, you should contact a collections defense attorney right away. If you wait for the 30 days to go by you could be giving up valid legal defenses.

Inability to Pay Is Not a Defense

Many people choose to represent themselves in collections lawsuits based on their lack of available funds to pay their debts. There are many defenses to a collections lawsuit, but inability to pay is not one of them. If all you have to say is that you don’t have the money to pay, you will most likely end up with a judgment against you.

Instead of going in with nothing but your empty pockets, you should speak to an experienced debtor’s rights attorney before appearing in court. Many creditors violate laws and court rules in attempts to get paid. A lawyer can help you prove to the court:

• That the debt is not yours
• That the amount is wrong
• That interest has been applied improperly
• That you did not receive proper notice of the debt or the lawsuit
• That the collections agency cannot prove the alleged debt exists
• That the collections agency violated the law by harassing you for payment
• Other legal defenses based on your specific facts

Many defenses must be raised within the first few weeks of a collections lawsuit. They must be included in a formal “Answer to Complaint” that is filed with the court. It is important that you talk to a collections defense attorney right away to preserve these defenses and make the best of a bad situation. 

Dani K. Liblang, at The Liblang Law Firm, PC, in Birmingham, Michigan, has been representing debtors in collections lawsuits for over 30 years. She knows how to make the facts work for you. At the first sign that you are headed to court, contact The Liblang Law Firm, PC, for a free consultation.

How to Fight Creditor Harassment

Do you have creditors who won't leave you alone? Michigan has clear rules about what collection companies are and are not allowed to do. But that doesn't mean they are followed. Find out what you can do to help fight creditor harassment and get the collection companies off your back.

Bipartisan Bill Would End Mandatory Arbitration Agreements, But Only for Service Members

Mandatory arbitration agreements have hit the news. Consumers and lawmakers alike are becoming aware of the abuses happening in the collections industry that have been covered up by the arbitration process. Now federal legislators have proposed a bill that would protect consumers' right to court, but only for service members.

Mandatory arbitration agreements show up in everything from mortgage contracts to credit cards agreements. They require consumers to submit any dispute – from billing to illegal collections processes – to private arbitration, rather than going to court.

Large corporations like cell phone companies and collections agencies use mandatory arbitration agreements to cover over a multitude of sins. Often arbitrators are chosen, and paid, by the corporations. That can make it difficult for the lawyer-arbitrators to be neutral and independent.

Other times, the harm done to an individual, and their potential for recovery, are not large enough to justify the cost of preparing for and attending arbitration with an attorney. When consumers try to use a class-action lawsuit to correct the company's poor business practices, mandatory arbitration provisions can destroy the suit before it even begins.

Now legislators on both sides of the political spectrum are recognizing the problem with mandatory arbitration agreements. Democratic senator Jack Reed from Rhode Island and Republican Lindsey Graham of South Carolina have teamed up to co-sponsor a bill that would allow consumers to opt out of arbitration and challenge repossessions or foreclosures in court.

But only for service members.

The bill would amend the Servicemembers Civil Relief Act to make arbitration agreements signed before a dispute arises invalid and unenforceable. Senator Reed told the New York Times:

“Often service members sign contracts that include arbitration clauses buried in the fine print, and this eliminates their access to the courts, which can limit their ability to assert their rights and reach a fair resolution.”

All of that is true. But it is just as true for civilian citizens as servicemen and women. There is nothing about serving in the nation's military that makes soldiers more or less susceptible to the tactics of the collections industry.

Commentators do not believe Senate Bill 2331 is likely to become law. It was referred to committee on November 19, 2015, but is unlikely to succeed there. If the purpose of this bill was publicity of the issue, rather than passage, there is no reason the bill's sponsors could not have called for protections for all Americans, not just service members. At best, this bill will represent an incremental improvement in a system that will need further reform before it provides adequate consumer protection.

Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C. She defends consumer against harassment by collections companies. If you or someone you know is facing a collections action, contact The Liblang Law Firm, P.C., for a free consultation.

CFPB Calls Fowl on 2 Biggest U.S. Debt Collectors

The Consumer Financial Protection Bureau recently ordered the nation's two biggest debt collectors, Encore Capital Group and Portfolio Recovery Associates, to stop using deceptive tactics to collect bad debts. The order sends millions of dollars back to the nation's citizens and gives a clear warning to other debt collectors.

Why You Shouldn't Give Your Cell Phone Number to Your Creditors

 

Mr. Hill was fed up. He had received nearly 500 calls from his creditor on his cell phone, some of them automated. He thought the Telephone Consumer Protection Act would protect him against these abusive collections practices. But he didn't realize, by giving his cell phone number to his creditor, he opened himself up to more than he bargained for.

The Telephone Consumer Protection Act is designed to respond to consumer complaints of creditors using technology for abusive collections practices. The law prohibits collections companies from calling a debtor's cellphone "(other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice."

But Mr. Hill had provided "prior express consent." He had told his original lender to use his cell phone, rather than an outdated home phone number. Then he gave the number to the collections company, knowing that they would use it to contact him about his debt. What he didn't realize was that by providing that number to his creditor he was also opening himself up to the use of automatic dialing and automated messages by the credit company and any later collections company that was put in charge of recovering payment on the loan.

That's why you should never give your cell phone number to a creditor or debt collection company. You may think you are just making it easier for them to reach you, but you are also stripping away important consumer protections against abusive electronic telephone collections practices.

Collections companies can be aggressive enough without debtors giving them the green light. If you are being harassed by creditors who have crossed the line, contact Dani Liblang and the consumer protection team at The Liblang Law Firm PC today for a free consultation.

Ally Financial to Pay $98 Million For Discriminatory Auto Loans

In the largest settlement of any auto-loan discrimination case, Detroit-based Ally Financial has agreed to pay $98 million in fines and damages after regulators discovered discriminatory auto loan practices by its dealerships.

Ally Financial, formerly GMAC, has settled regulatory claims by the Department of Justice and the Consumer Financial Protection Bureau (CFPB). The claims said African-American borrowers were being charged an average of $300 more than their non-Hispanic white counterparts for their auto loans. Hispanics paid about $200 more.

In March 2015, the CFPB announced it would begin regulating non-bank auto lenders like Ally. These lenders make up 40 percent of the auto-loan market, lending to over 7 million consumers every year. The goal of the regulation was to crack down on “dealer financing” - where the car dealers act as middlemen between the buyer and the lender.

In Ally's case, the lender arranged loans through its dealers who were allowed to quote higher rates to their customers beyond what their credit history would indicate. Because Ally Financial did nothing to keep its dealers from charging minority buyers higher rates, it was responsible for the costs charged to its 235,000 minority consumers.

Because of its discriminatory auto loan policies, Ally Financial has agreed to pay $98 million in fines and consumer costs. Of that amount, $80 million will go to African-American, Hispanic, and Asian Americans, and Pacific Islanders who got auto financing through Ally Financial between April 2011 and December 2013.

The team at The Liblang Law Firm, P.C., are ready to take your calls about Ally Financial's discriminatory lending practices. The Equal Credit Opportunity Act (ECOA) prohibits creditors from discriminating against minorities in its loan applications and lending rates. Consumers whose rights are violated can sue the lender directly.

The Liblang Law Firm, P.C., has also represented consumers in “yo-yo lending” cases – where a dealer delivers a vehicle to the consumer, leading him or her to believe their loan has been approved, only to demand it back a week or so later because the “financing fell through.” Michigan law requires dealers to honor a consumer's written contract, even if they are later unable to sell the financing contract to the anticipated lender. If the dealer cancels the contract or tries to raise the rate, the consumer may have a case against the lender.

Dani K. Liblang at The Liblang Law Firm, P.C., is a consumer protection attorney with over 30 years' experience. If you have been harmed by Ally Financial's discriminatory lending policies, she may be able to help you file your claim. Contact the Liblang Law Firm, P.C., to find out if you you qualify.

Unfair Collections Practices: 5 Things to Watch For

If you have had a debt turned over to a collections agency, you probably have been subjected to unfair collections practices. But if you don't know what to watch for, how will you know?

Watch Out for Robodialer Collection Calls

If you are behind on your payments, you usually know it. Even if you don't, the collection companies aren't likely to let you forget. But when collection calls use a robodialer or recorded messages, you might have a claim against them later on.