By Kevin S. Ranlett – Mondaq
The spate of class actions under the Telephone Consumer Protection Act (TCPA) isn’t ending anytime soon. And the risks to businesses have just increased in the Third Circuit, thanks to that court’s recent ruling that the TCPA permits consumers to retract consent to receiving calls on their cell phones placed by automatic telephone dialing systems.
The TCPA prohibits making any call to a cell phone “using any automatic telephone dialing system or an artificial or prerecorded voice” unless (among various exceptions) the call is made with the “prior express consent of the called party.” 47 U.S.C. § 227(b)(1)(A)(iii). Courts have upheld various ways of demonstrating “express consent,” including:
- verbally, such as when the consumer orally provides a cell phone number as a contact number (Greene v. DirecTV, Inc., 2010 WL 4628734 (N.D. Ill. Nov. 8, 2010));
- in writing, such as when a contract authorizes cell phone calls (Moore v. Firstsource Advantage, LLC, 2011 WL 4345703 (W.D.N.Y. Sept. 15, 2011)); and
- through a third party, such as when a spouse authorizes cell phone calls (Gutierrez v. Barclays Bank Group, 2011 WL 579238 (S.D. Cal. Feb. 9, 2011)).
But once consumers have consented to receiving these calls, can they rescind their consent? The TCPA’s text is silent on the subject. And although the FCC’s 1992 TCPA Order indicates that consumers who provide their cell phone number can give “instructions” that they don’t agree to receive autodialer calls, the order doesn’t address whether the consumer can give those instructions long after initially providing the cell phone contact number. [read more]
By Chris Morran – Consumerist
When a mortgage servicer forecloses on a home, it becomes responsible for the maintenance of the property (though banks don’t always live up to that obligation), and will often hire an outside firm to determine if a property is vacant and to handle the upkeep until the building is sold. However, a lawsuit filed by the Illinois Attorney General accuses the nation’s largest foreclosed-property maintenance company of illegally evicting homeowners and tenants in that state by, among other things, breaking in and changing the locks so that the residents can’t get back in.
Additionally, the lawsuit [PDF], filed by Illinois AG Lisa Madigan in Cook County Circuit Court alleges that the company, Safeguard Properties, was shutting off homeowners’ utilities well before foreclosures were finalized and removed personal property.
Even if a homeowner in Illinois has completely stopped making payments on his mortgage, he has a legal right to stay in the home until the foreclosure process is complete. Likewise, rental tenants in buildings facing foreclosure have the right to remain until after the foreclosure, and even then the lender or new owner must still go through the process of legally evicting the tenant.
“Despite these legal protections,” reads the complaint, “Safeguard has ignored and severely curtailed the rights of occupants of at-risk properties, properties in foreclosure, and REO [bank-owned] properties by illegally breaking into homes, removing occupants’ personal property, locking out occupants, turning off utilities for legally occupied property, refusing to allow re-entry into these properties, and making coercive and deceptive representations to legal occupants.” [read more]
By Jessica Silver-Greenberg – The New York Times
Barry Tatum returned to his home in Chicago in December to find that his front and back doors had been torn from their hinges, leaving his possessions exposed to the frigid winds that whipped through his neighborhood.
Terrified that he had been robbed, Mr. Tatum, who had fallen behind on his Bank of America mortgage, raced inside only to discover an unlikely source of the break-in, he said: a subcontractor for a property management firm hired by the bank. A letter from the subcontractor informed Mr. Tatum that the bank had the right to enter and secure the property, according to a copy reviewed by The New York Times.
“It’s the most depressing thing,” said Mr. Tatum, who ultimately got the management firm, Safeguard Properties, to replace the doors.
Faced with more than 10 million foreclosures that have piled up since the start of the mortgage crisis, the nation’s largest banks are turning behind the scenes to property management firms, with the Ohio-based Safeguard the largest, to help them navigate the wreckage, determine the occupancy of the troubled properties and preserve them until the homes can be resold.
But the firms are coming under fire for using questionable and possibly illegal tactics. The scrutiny threatens to ensnare JPMorgan Chase, Bank of America, Citibank and other lenders that depend on the firms. Legal aid offices in California, Nevada, Florida, Michigan and New York say calls about Safeguard’s aggressive tactics rank among the top complaints.
On Monday, Illinois became the first state to take on the property management firms legally, contending in a lawsuit that Safeguard wrongfully dispossessed hundreds of homeowners in the state. In suing Safeguard, Lisa Madigan, the attorney general, contends that the company broke into homes despite stark evidence that homeowners still lived in them, bullied tenants into leaving even though they had no legal obligation to do so and, in some instances, damaged the very homes they were sent to protect, according to the suit. [read more]
By Michael Sallah, Debbie Cenziper and Steven Rich – The Washington Post
On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.
Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.
All because he didn’t pay a $134 property tax bill.
The retired Marine sergeant lost his house on that summer day two years ago through a tax lien sale — an obscure program run by D.C. government that enlists private investors to help the city recover unpaid taxes.
For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.
But under the watch of local leaders, the program has morphed into a predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts — then foreclosed on homes when families couldn’t pay, a Washington Post investigation found.
As the housing market soared, the investors scooped up liens in every corner of the city, then started charging homeowners thousands in legal fees and other costs that far exceeded their original tax bills, with rates for attorneys reaching $450 an hour. [read more]
By David Dayen – Salon
What Michael Winston knows about corporate crimes will horrify you. That’s why financial giants want to destroy him
You may know Michael Winston’s story from a series of articles by Gretchen Morgenson in the New York Times, or from a celebrated Frontline episode, “The Untouchables,” about the lack of prosecutions on Wall Street. He was a Ph.D. who rose to the corporate elite, with stints at Lockheed Martin, McDonnell Douglas, Motorola and Merrill Lynch. He was recruited to mortgage originator Countrywide Financial with the promise that it wanted to become the “Goldman Sachs of the Pacific,” a full-service global financial corporation.
“They talked about the importance of ethics and principles, and they said they heard I was a high-integrity guy,” Winston tells Salon, noting his father had a vanity plate that read “HONOR.” Winston initially succeeded as enterprise chief leadership officer at Countrywide, getting promoted twice in 14 months and building a team of 200 working on corporate strategy.
But he could not ignore the rot at the heart of the company’s profitmaking approach.
So now, a successful high-level executive for 30 years, he has been embroiled in seven years of lawsuits with Countrywide and the company that bought it, Bank of America. His determination to speak out against multiple violations of law at Countrywide earned him retaliation, and eventually, he was frozen out of corporate boardrooms, unable to find a new job. He won a jury verdict in his case, but after two and a half more years of fighting, an appellate court reversed the ruling in highly unusual circumstances.
“I keep hearing about whistle-blower protections,” he tells Salon, exasperatedly. “It certainly didn’t happen for me.”
Now, Bank of America wants to gouge Michael Winston one last time, demanding an interest payment on money awarded to him that he never received.
“Thus far, the person who did the right thing got punished, and the person who did the wrong thing got rewarded,” Winston said. The chilling case shows that the greatest enemy for Wall Street is the man or woman who actually tries to expose its secrets. [read more]
By Danielle Douglas – The Washington Post
The Office of the Comptroller of the Currency said Friday that EverBank Financial will pay $43.3 million to borrowers and housing groups, a deal that addresses accusations that the Jacksonville, Fla.-based bank mismanaged foreclosures.
EverBank was one of 16 mortgage servicers that struck a deal with the OCC and the Federal Reserve in 2011, after homeowners accused it of using forged and shoddy paperwork to rapidly foreclose, a practice known as “robo-signing.”
The servicers agreed to an independent review of their foreclosure files, a process that was scrapped a year later by most of the firms once regulators realized it was not helping borrowers.
EverBank, however, continued with the process of reviewing each mortgage file. No homeowners received any compensation during the bank’s review, prompting regulators to encourage EverBank to abandon the process, according to the OCC.
Under the terms of the new agreement, EverBank will provide about $37 million in cash payments to more than 32,000 mortgage borrowers. People whose homes were in any stage of foreclosure from 2009 to 2010 will receive cash payments ranging from $1,050 to $125,000.
Eligible borrowers, who will be contacted by a third-party agent that has yet to be named, will receive compensation whether or not they filed a request for review. Accepting compensation does not preclude borrowers from taking additional legal action against EverBank. [read more]