Jul 17

By Thomas Dominczyk – insideARM

Addressing what it termed “a deluge [that] has swept through U.S. bankruptcy courts of late” the 11th Circuit Court of Appeals in Crawford v. LVNV Funding, LLC last week held that filing a proof of claim on time barred debt is conduct that violates the Fair Debt Collection Practices Act (FDCPA).

The last payment on the underlying debt was made in 2001 and subject to Alabama’s three year statute of limitations. The debtor filed for relief under the Bankruptcy Code in 2008 during which the current owner of the debt filed a proof of claim. Neither the debtor nor the Chapter 13 Trustee objected to the claim and the Trustee distributed payments to the creditor during the pendency of the bankruptcy case.

Four years later, the debtor filed an adversary complaint in the bankruptcy case alleging that the filing of the proof of claim on the time barred debt violated the FDCPA. The Bankruptcy Court dismissed the complaint in its entirety and the District Court affirmed the dismissal on appeal.

The 11th Circuit reviewed the ever growing number of cases to hold that filing suit on a time barred debt is a violation of the FDCPA and reasoned that filing a proof of claim on a stale debt “creates the misleading impression to the debtor that the debt collector can legally enforce the debt.” The court rejected the creditor’s arguments that filing a proof of claim was not collection activity that was subject to the FDCPA applying the broad definition of debt collection like so many courts before it. [read more]

Jul 16

By Danielle Douglas – The Washington Post

Law firm Frederick J. Hanna & Associates filed tens of thousands of lawsuits against people behind on their bills claiming that attorneys reviewed and signed off on the cases. But federal authorities started to raise questions when they noticed the same name on 130,000 debt collection lawsuits over a two-year period.

It turns out that the firm was actually churning out lawsuits through an automated process, without any meaningful involvement of lawyers, while misrepresenting itself to consumers in violation of the law, according to a lawsuit filed Monday by the Consumer Financial Protection Bureau.

The government watchdog has accused the Georgia-based law firm of using illegal tactics to intimidate consumers into paying debts they may not even owe. It claims the firm used sworn statements from people who couldn’t possibly know the details of the consumer debts. Officials at the CFPB said the firm, when challenged, dismissed more than 40,000 lawsuits it had filed in Georgia alone because it couldn’t substantiate the claims.

“The Hanna firm relies on deception and faulty evidence to drag consumers to court and collect millions,” CFPB Director Richard Cordray said in a statement. “We believe they are taking advantage of consumers’ lack of legal expertise to intimidate them into paying debts they may not even owe.”

Cordray said the bureau is seeking compensation for victims, a civil fine and an injunction against the company and its partners. [read more]

Jul 16

By Carlos Miller – PINAC

A Miami police officer pulled a car over for speeding last month, which turned out to be a plainclothes internal affairs lieutenant who shoved the door open on the officer after refusing to provide his drivers license, leading to a struggle on the side of the road that was caught on camera.

As the two were on the ground wresting, another three Miami cops who just happened to be in the area pulled up and piled on the screaming driver– only to pull off when they realized the man at the bottom was an internal affairs lieutenant from their own department.

That was when the officer Marcel Jackson, the cop who initiated the stop, was sent to his patrol car and internal affairs Lieutenant David Ramras assumed control of the situation.

Realizing the outranking officer with more than two decades of seniority over him was going to turn him into the aggressor, Jackson pulled out his cell phone and began taking photos of the officers that began arriving.

But then a cop ordered him to stop. And another cop later ordered him to delete the photos.

However, unknowing to the other officers at the time, Jackson had video recorded the entire incident with his GoPro camera, which he had attached to his dash, but shoved in between seat after realizing they were turning against him, keeping it recording to capture the ensuing conversations. The department does not use dash or body cams, so it’s not something they would expect. [read more]

Jul 15

By Lauren Gensler – Forbes

In another sign that the payday loan industry is increasingly under siege, the CFPB reached a settlement Thursday with one of the nation’s largest payday lenders for $10 million over its illegal debt collection tactics.

The lender, ACE Cash Express, “used false threats, intimidation, and harassing calls to bully payday borrowers into a cycle of debt,” said CFPB Director Richard Cordray. “This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back.”

For example, the CFPB says consumers faced the threat of extra fees, being reported to credit reporting agencies and criminal prosecution if they didn’t make payments. Some collectors repeatedly called consumers, their offices and even their relatives, disclosing information about their loans.

A graphic pulled from the ACE Cash Express training manual shows how new employees were taught to contact the customer after he or she “exhausts the cash and does not have the ability to pay.” Employees were instructed to “create a sense of urgency” when calling delinquent borrowers.

Of the $10 million total that is owed, $5 million will be paid to consumers in the form of refunds and $5 million will be paid as a penalty to the CFPB. ACE Cash Express is also ordered to end illegal debt collection threats and harassment and stop pressuring borrowers into taking out repeated loans. [read more]

Jul 14

By Bernie Suarez – Activist Post

Very recently I came across a scenario in the streets of Hollywood, California. The big scene seemed a bit striking to the average person walking by as it was the middle of the day in a crowded busy Hollywood street. A closer look caused me to be even more intrigued – there was a gentleman being arrested. He was in handcuffs and surrounded by three or four armed officers. Or were they really officers?

A closer look surprised me even more. The “officers” were not police. They were not Sheriffs department or California Highway Patrol (CHP). They all wore a logo on their sleeves and a logo on an otherwise unmarked car that read “Andrews International Security Services” nothing else. They otherwise had all black uniforms and all were armed like police officers, looking scary and aggressive.

After getting a photograph of their logo (which earned me a dirty look from them) and investigating them with the LAPD, I was told by an LAPD officer that this private security company is part of a program called “Business Improvement District” (BID). The officer explained that they’ve been putting these security entities on the streets for at least a few years to his knowledge. Ultimately, the officer agreed with me that this was a very serious situation saying it was a “very interesting” concept in light of the Constitutionality and legality of it.

These “Business Improvement Districts” go by many other names which all interestingly happen to have three letter representations (like government agencies making them sound official) including the Business Improvement Area (BIA), the Business Revitalization Zone (BRZ), Community Improvement District (CID), Special Services Area (SSA), and the Special Improvement District (SID). All of these groups are similar types of BIDs operating nationwide. [read more]

Jul 14

By Thomas Ahearn – ESR Check

A Fair Credit Reporting Act (FCRA) class action lawsuit filed in a Georgia federal court alleges that a rent-to-own retailer ran background checks and credit reports on employees and job applicants without providing copies of the reports and took adverse employment action against applicants and employees without giving them access to the reports or informing them of their rights under the FCRA. A copy of the Complaint is available at http://thejordanfirm.com/wp-content/uploads/2014/07/1-main.pdf.

According to the Complaint filed July 3, 2014, the Plaintiff, Daniel Antoine, individually and on behalf of a class of similarly situated individuals, brought this class action lawsuit against the Defendant, Aaron’s, Inc., a Georgia corporation, for willful violations of the FCRA. The class action lawsuit accuses Aaron’s of allegedly failing to provide pre-adverse action notices required under the FCRA to job applicants and employees – including a copy of the background check report and a summary of FCRA rights – prior to taking adverse action.

The FCRA was enacted to promote the accuracy, fairness, and privacy of consumer information in files of consumer reporting agencies (CRAs) to protect applicants for employment and employees from adverse employment action taken as the result of inaccurate information. Employers who use consumer reports on applicants and employees are required to provide express disclosures and a summary of rights before taking adverse employment action based on information contained in the background check reports. [read more]