Blog
New Debt Collection Scam
We have been informed of a new scam in which consumers are receiving telephone calls from fake debt collectors who are impersonating law enforcement officers in an effort to extort money related to an alleged internet payday loan. Please click here to read an alert from the Kansas Attorney General regarding this scam. We have heard of consumers receiving calls from these scammers in Kansas and several other states so please be alert.
0 Comment | Posted in Complaints,Consumer Protection,Fair Debt Collection Laws
August 15, 2010
Send Credit Report Disputes To Bureaus & Furnishers
Whenever disputing a credit report with a credit reporting agency, consumers should also send a written dispute to the creditor or other furnisher (e.g., a debt collector) of the information. Under the Fair Credit Reporting Act, a furnisher’s investigation obligation arises only when it receives notice of the consumer’s dispute directly from the credit reporting agency (Trans Union, Equifax or Experian). When challenged, furnishers likely will claim that they did not did not receive the required notice from the credit reporting agencies. Consumers should ensure such argument is of little value to the furnisher by sending it the same information the consumer sent to the credit reporting agencies.
The importance of notifying the furnisher of information is premised, in large part, on the nature of the credit industry’s Automated Consumer Dispute Verification (ACDV) system. In essence, disputes sent to the credit reporting agencies are reduced to a one-page, electronic ACDV message, with the underlying dispute reduced to a code. In some instances, the credit reporting agency will add a one-line summary of the agency’s interpretation of the consumer’s dispute (e.g., “Consumer says account is not his.”). That’s it. If you want the furnisher to get a complete picture of the basis for your dispute, you need to make sure it happens and not rely only on the credit reporting agencies to do so.
0 Comment | Posted in Credit Reports,Fair Credit Reporting Laws
August 14, 2010
Home Equity Lines of Credit (“HELOCS”)
While home equity lines of credit delinquencies fell in the second quarter of 2010, the delinquency rates still stand at extremely high levels. In a severely declining housing market, a home equity loan essentially becomes unsecured debt because the collateral (the equity in the home) is gone. In many ways, it is akin to credit card debt. While the lenders are in a predicament, having made a loan that gambles on home prices continuing to rise and a strong job market, borrowers may be in a good position to settle the balance on their home equity loans. Many lenders are selling delinquent home equity loans to third party collectors for pennies on the dollar. Please contact us if you have an issue involving a home equity line of credit.
Extension Fees Under Automobile Loans
In today’s economy, making monthly payments on a car loan taken out several years ago can be increasingly difficult. More and more, consumers need additional time to make a payment.
We sometimes are presented with the question: Can a creditor charge a fee for extending or deferring a payment under an automobile loan? Yes, but only if the agreement for such extension or deferment is in writing and signed by the parties to the contract. Otherwise, the creditor cannot charge a fee.
The obvious follow up question is: How much can the creditor charge for extending or deferring a payment? It depends. If the contract includes a finance charge determined on the precomputed basis (i.e., the “Rule of 78s”), the charge may not exceed an amount equal to 1% per month simple interest on the amount of the payment or payments extended or deferred for the period of extension or deferral. If the contract includes a finance charge determined on the simple-interest basis, the charge may not exceed the lesser of $25 or 10% of the then outstanding principal balance of the contract.
We have brought a class action against a lender in California for allegedly violating the laws regulating extension/deferral fees. Feel free to contact us with your issue related to extension/deferral fees, or any other consumer matter.
0 Comment | Posted in Automobiles,Class Actions
July 29, 2010
Identity Theft Is No. 1 Consumer Complaint
According the Federal Trade Commission, identity theft replaced debt collection as the top subject of complaints by consumers in 2009. According to a recently published report, the FTC received more than 278,000 complaints related to identity theft. In previous years, debt collection had ranked number one, but it is now number two. Debt collectors apparently are still causing massive problems for consumers, as more than 119,000 complaints were lodged in that area.
0 Comment | Posted in Complaints,Consumer Protection,Federal Trade Commission,Identity Theft
June 17, 2010