Thursday, January 5, 2017

Payday Lender Fined for Deceptive Ads and Collection Letters

Moneytree, a payday lender, has been fined for deceptive advertising and collection letters.   Moneytree is alleged to have misled consumers with its online ads regarding charges to cash income tax-refund checks.  Some of the ads stated 1.99, which led customers to believe it would cost $1.99, when in reality, it would cost 1.99% of the total refund.
 
Moneytree sent debt collection letters to consumers who were delinquent on their loans stating Moneytree would repossess their cars and trucks.  However, the consumers did not use their cars and trucks as collateral.  Once Moneytree realized its mistake, it sent letters telling consumers to disregard the letters, but 151 people had already made payments on their loans because of the letters.

The Consumer Financial Protection Bureau fined Moneytree $250,000 for the violations.  An additional $255,000 was charged to Moneytree for refunds to the consumers affected by these errors.

Friday, April 29, 2016

NJ Law Firm Fined for Abusive Debt Collection Practices

The law firm of Pressler & Pressler of Parisppany, New Jersey has been fined $1 million for filing debt collection lawsuits without thoroughly investigating the evidence.  Many of the cases were based on flimsy or non-existent evidence.

The debt collection lawsuits were filed by the law firm on behalf of New Century Financial Services, which also has been fined and ordered to pay $1.5 million to the U.S. Consumer Financial Protection Bureau’s Civil Penalty Fund.

Between 2009 and 2014, the law firm is accused of using non-attorney support staff and computer programs to determine which customers to sue.  Attorneys generally spent less than 30 seconds reviewing each case.  Many of the lawsuits did not have the necessary documentation to support the claims, which is a violation of the Fair Debt Collection Practices Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Wednesday, January 13, 2016

Consumers Sued Over Old Debts Cannot File Class Actions Due to Arbitration Clauses


Corporations are using arbitration clauses in consumer contracts to ban class action lawsuits, anticipating that individual consumers cannot afford to bring cases to court against large corporations.  Generally, the arbitration clauses are in the contracts made with the original lenders, and not with the debt collectors. Often times, the debt collectors cannot produce copies of the arbitration agreements in court. Consumer advocates argue that the arbitration agreements should not be enforced since they are entered into with the original lenders and not with the debt collectors.

Midland Funding, part of the Encore Capital Group, garnished consumer bank accounts collecting on old debts.  In some cases, the debts were not even owed.  When the consumers tried to file a class action lawsuit in 2013, Midland Funding had the lawsuit dismissed.  The consumers were left with arbitration as the only recourse.  Since class action claims are not allowed in arbitration proceedings, each individual consumer would need to file separately.  Unfortunately, many consumers cannot afford to arbitrate their claims, so the debt collectors avoid accountability.  Records show that Encore only faced 38 arbitration cases from 2010 to 2015.

According to the New York Times, more than 67,000 collection cases were filed in 2014 in New York state by consumer debt collection companies trying to collect debts from consumers.

For more information, go to http://www.nytimes.com/2015/12/23/business/dealbook/sued-over-old-debt-and-blocked-from-suing-back.html?_r=0

Wednesday, September 16, 2015

World Law Group Sued for Debt Relief Scheme



World Law Group is accused of failing to provide legal representation to help consumers negotiate debts with creditors, while collecting illegal upfront fees.  The company misled consumers by telling them they would be represented by local attorneys.  In addition, the company failed to negotiate debt settlements and rarely settled consumers’ debts.

World Law Group allegedly told consumers to stop paying their debts and make monthly payments to World Law Group, which the lawyers would use to negotiate settlements with consumers’ creditors.  The company promised at least 21,000 consumers and collected $67 million in fees before providing any services and performing any negotiations.  Consumers were subjected to collection calls, lawsuits, late fees, and lower credit scores.

The Consumer Financial Protection Bureau obtained a preliminary injunction against World Law Group to halt operations and freeze its assets while the case is pending.  The lawsuit also names Derin Scott, David Klein, and Bradley James Haskins, who control World Law Group.  In addition, the individual defendants control Orion Processing, LLC d/b/a World Law Processing, WLD Credit Repair, and World Law Debt; Family Capital Investment & Management LLC a/k/a FCIAM Property Management; World Law Debt Service, LLC; and World Law Processing, LLC.

A copy of the complaint can be found at:

http://files.consumerfinance.gov/f/201509_cfpb-complaint-orion-processing-llc-world-law.pdf