Consumer Financial Protection Bureau (CFPB)

On Thursday, September 18, I attended a field hearing the CFPB held in Indianapolis on auto finance. I also was invited to a private community roundtable meeting with Director Cordray prior to the hearing. I must say that I was extremely encouraged. I believe Director Cordray and the CFPB staff are doing their best to look out for and protect the interests of consumers. There is no doubt they face significant hurdles and opposition. And I'm sure there will be times where we, as consumer advocates, will be disappointed with the actions or inaction of the CFPB. But I left the meeting with Director Cordray and his staff with the belief that the CFPB truly is attempting to do what its name says: protect consumers' financial interests from unfair business practices. What a breath of fresh air!

The other thing I learned of note is that the CFPB actively works to resolve consumer complaints and THEY WANT CONSUMERS TO FILE COMPLAINTS WITH THEM. That was news to me. In Indiana, the consumers I speak with often file complaints with the Better Business Bureau and the Attorney General's Office. These entities will take the complaint and then solicit a response from the business, but if the business maintains they did nothing wrong the consumer will generally get a letter saying "we've done all we can, to pursue this further you may need to consult an attorney." But my understanding is that the CFPB will, when it believes the consumer has been treated unfairly, push the business to correct the situation. I haven't gone through the process personally, nor have I spoken with any consumer who has (as of the time of this writing), but I am anxious to see if it really works like that. If so, this will be a tremendous resource for consumers in Indiana and throughout the United States.

Complaints can be submitted at http://www.consumerfinance.gov/complaint/ or by calling 855-411-2372. They are even set up to take complaints over the telephone in over 175 different languages!

Finally, I want to conclude with a brief word of caution. If you believe you have a significant claim worthy of a lawsuit, I would encourage you to speak with an attorney before taking any action yourself (like filing a CFPB complaint). The attorney can advise you concerning what actions to take and how to take them so that you don't do anything to compromise a potential claim that you might have.

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Uptime Systems Review

I am a consumer lawyer. I recently decided to move my practice to the cloud from my local server. Because I am an AbacusLaw user, there was one logical choice: Uptime Systems. Uptime Systems had a relationship with AbacusLaw and together they operated Abacus Sky. Perhaps because I trusted AbacusLaw, or perhaps because I felt like they were the only option, I went with Uptime Systems without exploring other options. Big mistake. I wish I had seen a review like this one that could have warned me what I was in for. My dealings with Uptime Systems were (yes, I moved on after a few very looong months) just short of a nightmare.

Continue reading "Uptime Systems Review" »

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How To Be A Good Consumer Lawyer

I have a personal story to tell. Recently I had a serious neck injury. I lost much of the use of my right arm because the nerve that controls the deltoid muscle coming from my spinal cord had been pinched where it passes through my cervical vertebrae. The first doctor I saw told me I needed surgery right away. Although I tried to schedule surgery, I was unable to get it scheduled immediately. Meanwhile, I sought a second opinion. I also began to try to educate myself on the medical issue and who were the best doctors in Indianapolis that treat it. The second opinion I obtained agreed that I needed surgery. I was convinced that I needed surgery.

I had heard that Dr. Terry R. Trammell, a doctor at Orthopaedics Indianapolis, was the best. It was difficult to get in to see Dr. Trammell, but I persisted. I am so glad I did. You can probably guess by now that Dr. Trammell told me that I don't need surgery, at least not right now. Honestly, however, that has nothing to do with why I feel so blessed to have been able to see Dr. Trammell. The awesome thing about him was that he took the time to talk with me and to explain in as much detail as I wanted about my body, the injury, the surgery, what I could expect in the future and what I could and could not do physically and when. He spent about half an hour with me and I learned 100 times more in that half hour than I had in the previous six weeks of dealing with this issue. The doctors before had done virtually nothing to explain the details to me - they just said "you need surgery." I guess I was just supposed to take their word for it - I'm so glad I didn't. No one wants to have to undergo surgery unless it is absolutely necessary.

My recovery has been steady since the very beginning. With what Dr. Trammell has told me, I'm now optimistic that it will continue and I will eventually be back to where I was without the need for surgery. We will see. Of course it's still possible I will need surgery, but even if I do I feel much more comfortable with it now that I have a better idea of what's going on. Thank you, Dr. Trammell.

What does this have to do with consumer law? I see a couple of lessons here. First, I want to model my practice after Dr. Trammell. I know Dr. Trammell's time is very valuable. I know he is super busy and probably sees a ton of patients every day. But he took the time to talk to me, and I am so grateful for that. This medical issue has been dominating my life for the past six weeks. I'm not sure Dr. Trammell realizes how much of an impact that half an hour of his time had on my entire life, but it was huge. I, too, am incredibly busy at work. Much busier than I would like to be. But when people come to me with a consumer law issue, sometimes it is the dominant thing in their life at that time. The are being harassed by a debt collector, have been sued by a debt collector, were ripped off my a car dealer or have a credit report they can't get corrected because the credit reporting agencies won't listen. It is taking up all of their time, thoughts and attention. I want to be able to speak with them in person or on the phone and give them information - just like Dr. Trammell did for me - because that information will empower them - just like it did for me.

But there is also a lesson here for the consumer. Be proactive. Do research. Educate yourself. Get second opinions. Spend time on the purchase, repair or whatever it is in relation to how big of a deal it is. Spend seconds deciding which toilet paper to buy, spend hours or days deciding which car to buy or which attorney to hire. The investment of time will be worth it.

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National Consumer Protection Week 2008

National Consumer Protection Week is March 2-8, 2008. In honor of this highly publicized week (not), I am going to write today about the importance of being proactive rather than reactive.

Whether the issue is a lawsuit by a debt collector, fraud perpetrated by an auto dealer, credit report errors or any one of a number of other issues, I speak with Indiana consumers all the time who put off addressing the issue for far too long. I'm sure there are many reasons for this. One of the primary ones, I believe, is a feeling of helplessness. But KNOWLEDGE IS POWER and it's NEVER TOO LATE TO BECOME PROACTIVE. Some knowledge costs money, and I understand that, but there is a lot of knowledge out there on the internet on so many consumer issues that is totally free.

For instance, I give free initial consultations. I'm guessing, but I bet only 10-15% of the consumers I speak with become clients. Some I can't help, some I can help with some simple advice, some choose not to hire me and some I can help and they become a client. The point is that if you look hard enough for information, free information, it can be found. Now I know I am really preaching to the choir here, because if you are reading this blog entry chances are you are looking for information on the web on a consumer issue and are being proactive. But we all need to be reminded of how critical it is to take the bull by the horns, so to speak, including myself!

The reason it's so critical is that often the longer you wait the fewer the options that are available. Options are a good thing. So be proactive and keep your options open!

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"Car Sharing" - An Idea Destined to Go Nowhere

Here's another way to avoid buying a lemon vehicle. Don't buy a car. Heck, don't even own a car.

On a recent flight back to Indiana, I picked up one of those in-flight magazines. In it was an article about Zipcar.com. Zipcar is a car sharing company. What is car sharing? It involves the online reservation of a vehicle, located in an urban neighborhood, anywhere from minutes to months prior to needing the vehicle. Then you just show up, punch in a code, and drive away. The rates range from 8 to 11 dollars an hour.

It doesn't sound like you get a whole lot of car for that rate, either. The article mentions Mini Coopers, Toyota Priuses, Scion xBs and Honda Elements as some of the primary rental vehicles.

Zipcar, the largest company in the industry, currently has more than 2,500 cars and 80,000 members nationwide. The articles talks about how the companies are bullish on the possibilities of growth in the industry, but I'd be surprised to see this idea ever really take hold in the United States. First, it's only really viable in upscale urban areas with strong public transportation systems. That pretty much eliminates all of Indiana right there. Second, people love their cars. My grandfather always said cars were a "necessary evil," but I'm pretty sure many people wouldn't agree. Your car can be a statement about who you are in addition to providing transportation. And they are FREEDOM.

No doubt cars are expensive, especially when you factor in the cost of gas, insurance, maintenance, parking and other incidental costs. But to most they are worth it.

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Indiana Real Estate Appraisers and Agents Apparently Need More Oversight

Indiana Attorney General Steve Carter has issued a press release applauding the passage by the Indiana House and Senate of a measure that would make the Homeowner Protection Unit a permanent part of the Attorney General's Office. The Homeowner Protection Unit was created as an experimental unit two years ago. It's primary target: mortgage fraud. Homes are being appraised for thousands more than their actual worth, and the homeowner typcially doesn't realize they owe way more than the home's worth until they go to refinance or sell the home.

Apparently it's not just a few bad apples in Indiana, either. In less than two years, the Unit has filed disciplinary actions against 211 real estate appraisers and 76 real estate agents. And the Unit is investigating another 750 complaints. In addition to these disciplinary actions, the Unit has also filed a civil lawsuit against a credit repair organization that "purported to provide ‘foreclosure consultant’ services."

The Attorney General said:

“The benefit of the unit is that it allows the relationship between appraiser, real estate agent, and lender to be analyzed in a coordinated way,” Carter said. “Making this Unit permanent is an important step for Hoosiers. We’ve made good strides the last year and a half and want to keep the momentum going. By raising awareness of the Unit, we hope that more people will recognize that there is a place to turn to for help if they believe they have been the victim of, or suspect, questionable business practices by individuals or companies in these professions.”

I agree. It's also important to note that Indiana consumers have a way to pursue compensation for unlawful business practices by licensed real estate appraisers or agents. The Indiana Deceptive Consumer Sales Act applies to sales of real estate, and likely would provide for a private cause of action for many of the acts being challenged by the Homeowner Protection Unit. Unfortunately, though, I'm afraid many consumers will be left out in the cold because, under the terms of the Act, no lawsuit may be filed more than two years after the occurrence of the deceptive act (no matter when the deception is discovered). For those consumers, there would still remain other actions, like common law fraud, but they won't have many of the advantages of suing under the Indiana Deceptive Consumer Sales Act. One of those notable advantages is that the Act provides for the payment of the consumers' attorney fees by the defendant.

If you believe you have been a victim of the questionable business practice of an appraiser or agent, contact the Indiana Attorney General's Office and a reputable consumer law attorney.

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Indiana Consumer Lawyer Rant On Class-Action Lawsuits

I recently received an e-mail notice of the pending resolution of a class-action lawsuit against Experian, one of the big three credit reporting agencies. Experian had been sued "because of the way [they] advertised their credit scores and credit-monitoring products and because of certain information about credit that was contained on [their] websites." Experian was accused of violating the Credit Repair Organizations Act.

Credit repair organizations sprang up in droves in the '90's, particularly with the proliferation of the Internet. They often advertised almost miracle credit cures, and charged the most vulnerable of consumers hefty fees. These companies were almost always a big rip off. The bottom line: anything that a credit repair organization can legally do for you, you can do for yourself for free! Anyway, the Credit Repair Organizations Act was designed to curb some of the most flagrant abuses of the credit repair industry.

I apparently received the Notice of Proposed Class-Action Settlement because I had purchased a credit score from the Experian website during the relevant time period. The notice gave me a website to visit to learn more. I took the time to do that, and frankly, was horrified at what I found. What I found was a gigantic waste of time and money that only accomplished one thing: making lawyers money.

Continue reading "Indiana Consumer Lawyer Rant On Class-Action Lawsuits" »

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Indianapolis Foreign Auto Dealers Selling Safest Vehicles

The Insurance Institute for Highway Safety has announced its list for the safest vehicles of 2007. Not surprisingly, its "Top Safety Picks" did not include a single small car. Four cars, seven SUVs and two minivans made the list which, sadly, also did not include a single domestic brand vehicle.

Here are the winners:

1. Audi A6, large car
2. Audi A4, midsized car
3. Saab 9-3, midsized car
4. Subaru Legacy (equipped with optional ESC), midsized car
5. Hyundai Entourage, minivan
6. Kia Sedona, minivan
7. Mercedes M-Class, luxury SUV
8. Volvo, XC90, luxury SUV
9. Acura RDX, midsized SUV
10. Honda Pilot, midsized SUV
11. Subaru B9 Tribeca (equipped with optional ESC), midsized SUV
12. Honda CR-V, small SUV
13. Subaru Forester, small SUV

A couple notes about this list. Pickups were not eligible for the list because their side crashworthiness has not yet been tested.

More importantly, 2007 marks the first year that the Institute required a Top Safety Pick to have ESC, which stands for Electronic Stability Control. Using anti-lock brake technology, ESC uses a computer to assist the driver in maintaining stability during a turn or emergency maneuver by applying breaking to one or more wheels. The ESC system is designed to prevent sideways sliding or skidding.

An Institute study has shown that vehicles equipped with ESC are significantly less likely to be involved in a crash. In fact, according to the study, ESC could help save more than 10,000 lives a year.

The National Highway Traffic Safety Administration has announced a proposal to require that ESC be phased in to all passenger vehicles by 2012.

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Debt Forgiveness Can Be Costly

Many Hoosiers don't know that forgiven, or canceled, debt is considered income by the IRS and must be reported as such on an individual or business tax return. Let's say, for example, that you have $80,000 of credit card debt and are able to negotiate the payment of these accounts for fifty cents on the dollar. You refinance your home, take out $40,000 and pay off the credit cards. You have received $40,000 of income from the forgiveness of half the debt, and must report this income on your tax return.

You should receive a Form 1099-C Cancellation of Debt from the creditor. The creditor is also required to provide a copy of the 1099-C to the IRS.

There are a few limited exceptions. If the forgiveness was intended as a gift, the debt was canceled because of Hurricane Katrina, the student loan debt was canceled because of work you performed, or the price of property you purchased was reduced after the purchase, the forgiveness may not be considered income. There are a few other limited exceptions. For more information, consult IRS Publication 17, Chapter 12.

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Google Knows What?

If you watch much Court TV, you know that it's not uncommon anymore for police to seize an accused's computer and use information obtained from the hard drive against the accused. But the hard drive is not the only repository of information concerning the computer user's activities. I just read this excerpt written by Greg Beck in the Consumer Law & Policy Blog:

Although there is no indication in the court's opinion about how prosecutors in this case obtained the search data, Google has acknowledged that it can trace searches back to a particular computer or, in some cases, to a particular user. What exactly does Google know about you? Its privacy policy states that it automatically records information that your browser sends whenever you visit a website. This can include your search terms, IP address, date and time of your search request, and, if you have cookies enabled, possibly your personal identity. Google also acknowledges that it can track which links you click from its search results. In short, Google may have several years’ worth of your search activity stored in its databases, and it may be able to connect much or all of this activity back to you.

Now, I consider myself the epitome of the law-abiding citizen. But this information makes me go "Hmmmmm?" Even if I do some searches on my computer that I wouldn't want at least certain other people to know about, I suppose I probably don't have anything to worry about as long as I don't become a criminal defendant.

Hmmmmm. I wonder if I could ever get information from Google via subpoena? What if I represented a consumer who allegedly bought a flood-damaged vehicle from a dealership. I subpoena all searches conducted by the dealership's computers through the Google search engine. I suspect Google would fight the subpoena tooth and nail, but who knows? What if the results revealed that someone from the dealership did a search like: "how to avoid a salvage title?" Hmmmmm.

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