Amankonah v. Bridgecrest/Coastline Recovery. Los Angeles Superior Court. This case alleges that Coastline, a repossession agency, entered a consumer’s closed and locked underground garage, without permission, which is a breach of the peace. In addition, the case alleges that Bridgecrest violated the Consumer Credit Reporting Agencies Act by inaccurately reporting that the plaintiff owed a deficiency balance, when in fact no deficiency balance was owed due to Bridgecrest’s violations of the post-repossession notice requirements of the Rees-Levering Act.
The Trueblood Law Firm, based in Los Angeles, California, has recently filed the following consumer protection cases.
Capitello v. Coastline Recovery Services, Inc. United States District Court, Central District of California Case No. 2:16-CV-03169-CAS-SS. This case alleges that Coastline, a repossession agency, entered a consumer’s closed and locked underground garage, without permission, which is a breach of the peace. In addition, the case alleges that Coastline failed to mail required notices after the repossession to the consumer. If your vehicle was repossessed by Coastline and you did not receive notices in the mail after the repossession, please give us a call, for you may be an important witness.
Gomez v. Glendale Nissan. Los Angeles Superior Court Case No. BC 615975. This case alleges that Glendale Nissan engaged in “yo-yo” financing and an illegal repossession. The allegation is that Glendale Nissan could not obtain financing on the contract, made harassing phone calls and illegal threats, including impersonating government officials, to try to coerce the consumer into signing a new contract, and then illegally repossessed the vehicle when the consumer was current on her loan.
Jordan v. LAW Recovery. United States District Court, Central District of California Case No. 2:16-CV-03381-RSWL-AS. This case alleges that LAW Recovery sent two agents to repossess the plaintiff’s vehicle, one of whom was unlicensed, who then entered a secured underground garage after being denied permission by the apartment manager, then falsely told the consumer that that if he did not hand over the vehicle immediately and assist in moving a blocking vehicle, he would not be able to reinstate his contract by paying the past due amounts, but would instead have to pay the entire loan balance to get his vehicle back. The complaint alleges that this was untrue, because in California consumers whose vehicles have been repossessed generally have a right of reinstatement.
Nguyen v. CARS Recovery. United States District Court, Central District of California Case No. 16-CV-06811-FMO-MRW. This case alleges that CARS Recovery, a repossession agency, entered a consumer’s secured, gated apartment complex, without permission, which is a breach of the peace.
Thorpe v. Statewide Recovery Services, Inc. United States District Court, Central District of California Case No.16-CV-06859-ODW (GJSx). This case alleges that Statewide, a repossession agency, entered a consumer’s secured, gated apartment complex, without permission, which is a breach of the peace.
The Trueblood Law Firm was class counsel in a class action lawsuit brought against VW Credit, Inc. in the United States District Court, Central District of California, entitled Sharma v. VW Credit, Inc., Case No. CV-11-08360 DDP (Ex). The complaint alleged that Volkswagen Credit violated California’s Rees-Levering Automobile Sales Finance Act by issuing defective post-repossession notices to consumers who had their cars repossessed. The action settled on an individual basis, without any determination by the court as to whether VW Credit, Inc. violated the law.
Now, the Trueblood Law Firm is investigating whether VW Credit, Inc. is still violating the post-repossession notice laws. If you entered into a contract to purchase a vehicle in California, and your vehicle was repossessed during the period April 14, 2010 through the present, you could give us valuable information about VW Credit’s current repossession practices. We are offering a free consultation and evaluation of your post-repossession notice. If your notice was not compliant with the law, the law provides that you do not owe any deficiency balance to VW Credit, and you might be able to have any derogatory credit reporting removed from your credit reports.
May 21, 2016. A consumer in the Maryland courts just obtained a $38 million verdict against LVNV Funding, LLC, the largest judgment against a debt collector in Maryland history. The award will reportedly be split among 1,589 people. The case was a class action which alleged that LVNV had taken judgments against consumers without obtaining the required collection agency license. “What we asked the jury to do was to not just return the illegal money that was taken, but to also return the profits that were made from that money,” said Phillip Robinson, an attorney with the Consumer Law Center LLC. Here is a link to a summary of the case. http://www.wbaltv.com/money/jury-hits-debt-collector-with-38m-judgment/39657226
The case is similar to a pending class action brought by the Trueblood Law Firm and the Law Office of Brandon A. Block, against a self-styled “repossession forwarder,” Par, Inc. dba Par North America. In the class action, our client alleges that Par, Inc. arranged and profited from car repossessions in California for years, without ever obtaining a repossession license with the California Department of Consumer Affairs. Par was involved in approximately 37,523 car repossessions in California between March, 2011 and March, 2015. Assuming that Par charged an average of $390 per repossession (an estimate based on what our client was charged), the lawsuit may require Par to disgorge over $14.5 million to consumers. The case is Clark v. Par, Inc., United States District Court, Central District of California, Case No. 15-CV-02322 MWF (FFMx).
Capitello v. Coastline Recovery Services, Inc., United States District Court Case No. 2:16-CV-03169-CAS (SSx). This complaint alleges that a repossession agency located in Gardena, California, Coastline Recovery Services, Inc., committed a breach of the peace by unlawfully entering a secured underground garage to repossess a vehicle. In addition, the complaint alleges Coastline failed to send the consumer a post-repossession notice, within 48 hours.
Gomez v. Glendale Nissan/Infiniti, Inc., Los Angeles Superior Court Case No. BC615975. This complaint alleges that Glendale Nissan, a car dealership in Glendale, California, severely harassed the buyer of a vehicle who was current on her payments, to try to force her to return the vehicle or sign a new contract, after the dealership failed to obtain financing. The complaint alleges that the harassment included a large volume of phone calls, false threats of arrest, and impersonation of government officials, and that when the consumer refused to sign a new contract, Glendale Nissan unlawfully repossessed the vehicle, even though the consumer was current on her contract.
Kile v. Santander Consumer USA Inc. This case, filed in the Los Angeles Superior Court, alleges that Santander failed to comply with the consumer’s “cease contact” letter, and continued contacting her after receiving it, which is a violation of the Rosenthal Fair Debt Collection Practices Act. The case also alleges that after a repossession, Santander sent the consumer a defective “Notice of Intent to Sell Motor Vehicle,” with the result that the consumer owed no money at all to Santander. However, Santander continued reporting the deficiency balance on the consumer’s credit reports, in violation of the Consumer Credit Reporting Agencies Act. If you have suffered a Santander repossession, please get into contact with us, as we are seeking information to assist in this lawsuit. In our opinion, the “Notice of Intent to Sell Motor Vehicle” which Santander is issuing to consumers is defective under the law. Our phone number is (310) 443-4139.
From the LA Times, May 17, 2016.
Payday loans aren’t the only type of expensive consumer credit that start out as a short-term financial solution but often turn into long-term debt traps, according to a report released Tuesday by the Consumer Financial Protection Bureau.
Consumers who take out auto-title loans often are unable to pay by the due date and refinance repeatedly to retain possession of their vehicles, the bureau found after analyzing millions of loans. Even then, about 1 in 5 borrowers lose their wheels, according to the analysis.
The report is the latest in a series of studies released by the federal agency as it pushes for a broad set of new rules governing companies that provide short-term consumer loans, typically at high interest rates. The bureau is expected to release proposed rules in the coming weeks.
Previous reports have focused on payday lenders and the consequences of payday loans, such as bank overdraft fees related to missed payments. The latest report turns its attention to a different, though similar class of lenders that would also be subject to the bureau’s proposed rules.
“Although these [auto-title] products are usually marketed for short-term financial emergencies, the long-term costs of such loans often just make a bad situation even worse,” CFPB Director Richard Cordray said during a Tuesday conference call with reporters. “These loans … present issues that are similar to those we have found with payday loans.”
The report focused specifically on single-payment auto-title loans, which are akin to payday loans in that they are expected to be repaid in a lump sum, typically after one month.
Compared with payday loans, auto-title loans tend to be larger and have slightly lower interest rates, though they come with a big catch: Borrowers have to put up collateral for these loans, giving the lender the right to take their car if they can’t pay.
Single-payment auto-title loans are available in 20 states, including Oregon, Nevada and Arizona, though they are not offered in California.
The report did not look at so-called installment auto-title loans, which are typically larger than single-payment loans and are structured to be paid off over time. CFPB researcher Jesse Leary said the bureau is also studying that type of loan, which is available in California.
The bureau examined about 3.5 million single-payment auto-title loans issued between 2010 and 2013. Those loans, on average, were for just under $1,000 and had annual interest rates of just under 300%. A previous CFPB report found payday loans averaged less than $400 with interest rates of about 340%.
The report found that when auto-title loans come due, borrowers had to take out new loans, often from the same lender, to pay off the old ones. Most took out at least three consecutive loans, and some took out 10 or more in a row, leaving them indebted for months instead of weeks.
That’s similar to the CFPB’s findings in reports about payday loans, which are structured to be repaid on the borrower’s next payday. Paying back the loan often leaves borrowers in the hole again and they can wind up borrowing multiple times over many months. The CFPB and consumer advocacy groups have called such loans “debt traps.”
Part of the attraction of auto-title and payday loans is that they offer cash in a hurry. A Pew Charitable Trusts report on auto-title lending found that customers choose lenders based not on their prices but on speed and convenience.
Some auto title lenders advertise that they don’t check a borrower’s credit at all, requiring only that borrowers own their cars outright and that the vehicles pass an inspection.
The coming CFPB rules probably would force lenders to change that practice.
A draft of the proposed rules released last year calls for requiring lenders to look at borrowers’ income and expenses to make sure they have enough income left over to afford loan payments. The rules also would limit the number of times a loan can be refinanced – a move that the industry contends would cut off credit to some borrowers.
The rules would apply to all loans that must be paid back within 45 days, as well as to longer loans that carry interest rates higher than 36% and are either backed by auto titles or repaid through automatic bank drafts.
The CFPB’s report on payday lenders questioned the practice of collecting payments directly from borrowers’ bank accounts using electronic debits. The report found that about half of all borrowers missed at least one payment, resulting in overdraft fees or other charges from their banks. On average, those borrowers paid bank fees totaling $185 over 18 months.
The CFPB’s proposal is expected to call for lenders to notify customers before trying to collect a payment from a bank account.
Dennis Shaul, chief executive of payday lending trade group Consumer Financial Services Assn. of America, told a congressional subcommittee in February that the CFPB’s rules would drive some lenders out of business and leave potential borrowers without access to quick credit they need for emergencies.
“The bureau seems unaware that these products emerged because customers have urgent needs, and that those needs will not disappear even if the lenders offering those products do,” Shaul said.
By F. Paul Bland, Executive Director, Public Justice
Banks and payday lenders have had a good deal going for a while: They could break the law, trick their customers in illegal ways, and not have to face any consumer lawsuits. Armed by some pretty bad 5-4 Supreme Court decisions, they could hide behind Forced Arbitration clauses (fine print contracts that say consumers can’t go to court even when a bank acts illegally), even when it was clear that the arbitration clauses made it impossible for a consumer to protect their rights.
But the free ride is coming to an end. After an extensive study, that proved beyond any doubt how unfair these fine print clauses have been for consumers, the CFPB is taking a strong step to reign in these abusive practices. In a new rule, the CFPB says banks can no longer use forced arbitration clauses to ban consumers from joining together in class action lawsuits. That means banks can no longer just wipe away the most effective means consumers often have for fighting illegal behavior.
This is a common sense rule that will go a long way in combating some of the financial industry’s worst practices.
In recent years, for example, if a bank systematically cheated 10,000 consumers in the same way, the bank could use its arbitration clause to stop those customers from going to court together. Each individual had to figure out the scam, figure out what their rights were and then spend time and money fighting the bank and its expensive lawyers. Everyone was essentially on their own. Under most arbitration clauses, one or two customers (at most) would have the means and ability to fight all the way through the arbitration system to get their money back.
In contrast, a class action could offer all 10,000 people a fair shot at justice.
Exempting the financial industry from the normal legal system has had far-reaching – and terrible – consequences. Predatory lending and dishonest practices have pushed millions of people right into desperation. Far too many Americans have been tricked into taking out loans that were far more expensive than they realized.
But help is finally on the way. The free ride is ending.
When it passed the Dodd-Frank Act, Congress required the CFPB to study the use of forced arbitration clauses and take action if those clauses undermined the public interest. So the CFPB undertook a huge, data driven empirical study, which it released in March of 2015. The study found that, when consumers could go to court as part of a class action, they recovered billions of dollars in relief. Banks had to refund over charges, erase illegal or inflated debts, and correct inaccurate credit reports.
When consumers were subject to forced arbitration, though, nearly all of those wins disappeared. Almost no consumers actually fought their way through the complex and biased corporate arbitration system. They just gave up. Predatory lenders generally kept whatever money they’d taken, and could operate in a Wild West manner, unless a government agency intervened on behalf of the helpless consumer.
How did arbitration get to be so unfair? In the past, many state laws were clear that if an arbitration clause that banned class actions would undermine a consumer protection law, then a court should strike it down. But in a pair of 5-4 decisions, Justice Scalia wrote opinions that swept all that law away. As a result, corporations could write fine print contracts that would override actual laws. These decisions – one in 2011 and one in 2013 – were unmitigated disasters for consumers and they transformed the Federal Arbitration Act – in place since 1925 – into a Federal Predatory Lender Immunity Act.
But today, things are changing. The CFPB is living up to its name — the Bureau really is protecting consumers. CFPB Director Rich Cordray is probably the most effective agency head in the federal government. He is not afraid to stand up to huge and politically powerful corporations on behalf of the American people. He’s worked hard to ensure the agency lives up to the vision that Elizabeth Warren had when she was advocating for its creation. It’s no wonder why politicians who get huge campaign contributions from large banks hate the agency so much. Many House Republicans attack the CFPB almost as often as they try to repeal the Affordable Care Act.
Today’s action is probably the biggest step forward for consumers since Dodd-Frank itself. It’s a huge step forward in the fight for common-sense protections. It’s a new rule that says the financial sector doesn’t get to re-write – or break – the rules anymore.
The firm successfully defended our client against three lawsuits involving student loans, brought by National Collegiate Student Loan Trust, in the Los Angeles Superior Court (Main Case No. BC 588089). The cases together sought over $60,000 against our client, who had guaranteed the student loans of her ex-boyfriend while in college. When the ex-boyfriend defaulted years later, NCSLT sued our client, who had never benefited from the loans. The statute of limitations analysis was complicated in this matter by the fact that three different states were involved, with five possible statute of limitations periods. We determined that the correct statute was California’s four-year statute of limitations, raised the defense, and noticed NCSLT’s deposition. NCSLT and its lawyers Patenaude & Felix then abandoned the case, and dismissed. Our client walked free of $60,000 in alleged student loan debt, demonstrating how important the statute of limitations can be.