Federal Agency Says Creditors' Rights Law Firm Uses Unfair Collections Practices

Consumer advocates have known collections company lawyers often can't prove their cases for years. Now the Consumer Financial Protection Agency says one creditors' rights law firm's tactics actually violate consumer protection laws by using unfair collections practices.

The Consumer Financial Protection Bureau has filed a lawsuit against one of Georgia's largest “Creditors' Rights” law firms, claiming the firm's lawyers weren't meaningfully involved in their cases and that their processes violated the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act (CFPA).

So-called Creditors' Rights law firms sue consumers for past due debts on behalf of the collections companies. In the case of the Georgia-based law firm defendant in the lawsuit, the firm's eight to 16 attorneys had filed over 350,000 lawsuits in four years. According to the Bureau, the attorneys relied on support staff and automated systems to do everything from researching cases to preparing filings – spending no more than one minute reviewing each document.

The Bureau's complaint also claimed that the lawyers for the collections companies knew the debts they were suing to collect had been purchased by debt buyers, so no one at the companies had personal knowledge of how the debts came to be. According to the Bureau, this means the lawyers knew or should have known that they wouldn't be able to prove their cases when they were filed. This could explain why the firm voluntarily dismisses about 155 collections cases every week.

This month, the federal judge refused a request to dismiss the Bureau's lawsuit. That means that the creditor's rights firm could be financially liable for filing lawsuits it knew couldn't win and misrepresenting their lawyers' involvement in the cases they file. It could fundamentally change how collections law works across the country.

The single best way to defend against these kinds of collections harassment lawsuits is to hire a lawyer as soon as you are contacted by a collections firm. Consumer advocates like the attorneys at The Liblang Law Firm, P.C., know the tactics of creditor's rights attorneys, and they know how to fight them. The Bureau has found, “consumers who retained attorneys were almost four times more likely to have their cases dismissed.”

According to Michigan consumer protection attorney Dani K. Liblang:

“It is great to see the CFPB taking an interest in cleaning up these practices. These days, when one’s credit history is used not only to judge creditworthiness but, also, to determine such other life necessities as insurance rates and employment eligibility, protecting the integrity of the system is even more important than ever.”

The consumer protection attorneys at The Liblang Law Firm, P.C. are ready to defend you against the harassing tactics of creditors' rights firms trying to collect on your debt. If you have been the victim of collections harassment, contact The Liblang Law Firm, P.C., 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.

FCC Tightens Protection Against Robocalls

The U.S. Federal Communications Commission is tightening restrictions that prevent telemarketers from using robocalls and automatic dialers to reach consumers. This could open the door for class action lawsuits against auto-dialing companies.

Cell Phone Providers to Pay for Cramming Schemes

Have you ever gotten horoscope readings, sports scores, or medical alerts texted to you? Did you pay for them? If so, you could see a credit on your cell phone bill. These "cramming" schemes recently resulted in two nationwide settlements that could put money back in your pocket.

Safety Administration Calls Out Fiat Chrysler

The National Highway Traffic Safety Administration has called Fiat Chrysler to appear at a public hearing tomorrow, July 2, 2015, to address safety concerns. The administration says the Michigan auto maker didn't issue recalls fast enough to address key safety issues.

The NHTSA is in charge of monitoring automotive manufacturers selling cars in the United States to make sure they build their cars safely and respond to reports of defects appropriately. But according to the NHTSA, Fiat Chrysler hasn't done either. According to a public notice released ahead of tomorrow's hearing:

"NHTSA has tentatively concluded that Fiat Chrysler has not remedied vehicles in a reasonable time and has not adequately remedied vehicles."

At the public hearing, Fiat Chrysler will have to answer how it met its duty to send vehicle owners notice of safety issues and recalls. At issue are 22 safety campaigns, including 20 different recalls applying to 11 million vehicles. The recalls cover everything from ignition switches to fuel tanks, air bags to axles. Some of the safety issues could affect the way Fiat Chrysler vehicles steer, brake, and handle.

This isn't the first time that the NHTSA has called Fiat Chrysler out for safety issues. After the administration sent the automaker 12 pages of questions earlier this year, Fiat Chrysler provided over 5 million pages of safety documents. The manufacturer asserts that this documentation eliminated the need for any hearing. According to Fiat Chrysler spokesperson Eric Mayne:

"The initiatives described in our response to NHTSA's Special Order reflect a deep commitment to thorough investigation and the timely remedy of safety defects. . . . While this commitment has helped FCA US LLC achieve positive results, we will not be satisfied until we firmly re-establish the trust our customers place in us."

But the mountain of documents does not explain why Fiat Chrysler failed to notify owners of safety concerns within the 60 day window provided by the NHTSA. In one case, notices in an air bag recall were over five months late. In at least 2 recalls, notices have yet to go out at all.

If the NHTSA isn't satisfied with Fiat Chrysler's responses at the Washington hearing scheduled for 10:00 a.m. tomorrow, the administration could require the automaker to pay over $700 million in fines and to replace or buy back defective vehicles.

By failing to provide prompt recall notices to its auto owners, Fiat Chrysler put millions of drivers at risk. Accidents caused by these defective vehicles could cost motorists thousands of dollars, and even their lives.

Attorney Dani K. Libliang of The Liblang Law Firm, P.C., is an auto accident attorney with a passion for protecting the victims of automotive defects. If you or someone you know has been in a serious auto accident, contact The Liblang Law Firm, P.C., today for a free consultation.