Enacted in 1978, the FDCPA is the most well-known federal consumer protection statute. Its primary purpose is to prevent third-party debt collectors from using abusive, unfair, false, or deceptive practices to collect debts. Violators of the Act may be liable for statutory damages, actual damages, and attorney’s fees. Entities collecting debt on their own behalf are not subject to the Act.
Because the Supreme Court has yet to define many aspects of the FDCPA, its impact and application vary across the nation. For example, within the Sixth Circuit Court of Appeals’ jurisdiction which includes Ohio, Michigan, Kentucky, and Tennessee, consumers may only be awarded one statutory damage recovery regardless of how many times a debt collector violated the Act.
We use powerful federal laws to hold lenders accountable and secure justice and monetary damages for homeowners and consumers. In the wake of the collapse of the housing market and foreclosure crisis caused by banks, mortgage companies, and predatory lenders, the federal government enacted tough laws designed to hold financial firms accountable when they harm homeowners and consumers. One important feature of the new statutes: victims are eligible to receive thousands of dollars in statutory and compensatory damages.
While every situation is different, the following issues may trigger liability under Regulations X and Z and produce statutory and/or compensatory damages of $1,000 to $4,000 per violation. In addition, servicers who violate the regulations may be liable to pay victims’ legal fees.
Failure to process loss mitigation applications, including loan modifications, deed-in-lieu of foreclosure applications and short sale requests in a timely manner.
Under the new laws, loan servicers must render a decision within 30 business days of receiving a complete loss mitigation package. Requests for additional information from applicants must be submitted within five business days.
Failure to properly apply mortgage payments.
Servicers are obligated to credit mortgage payments on the day they are received and to apply payments to principal, interest and escrow before late fees and other charges.
Failure to provide properly requested information in a timely manner.
Under TILA servicers must provide information about ownership or a note or mortgage within 10 business days and must provide information about loan payments, loan history, and other pertinent loan matters within 30 business days.
Dual Tracking, which is when a mortgage servicer continues to foreclose on a homeowner while simultaneously considering the homeowner’s application for a loan modification or other loss mitigation alternatives. Federal law restricts this practice.
Filing a loss mitigation application triggers a 120-day stay on any activity to advance a foreclosure. During this period servicers may not begin a foreclosure action, schedule a sheriff’s sale or foreclosure sale, move forward with motion for summary judgment in a judicial foreclosure proceeding, present evidence at trial or take any other action to advance judgment or sale
The information on your credit report impacts virtually every aspect of your financial life. It can determine whether or not you can obtain a car loan or a mortgage, whether or not you can rent an apartment, and even whether or not you get a job or promotion. Indeed, your credit score – calculated from a number of different factors – determines how much you’ll pay in interest rates and whether or not credit is even available to you.
You can experience dire consequences when your credit information is misused. Thankfully, you have protections under the federal Fair Credit Reporting Act. The FCRA regulates certain activities of employers, credit bureaus, and those that furnish information to credit bureaus. If you have experienced any of the following, you may be able to sue under the FCRA:
You were not told that information in your credit report was used against you
Your privacy rights were violated by someone illegally pulling your credit report
A credit bureau did not investigate after you disputed information in your credit report
A credit bureau did not notify creditors of a disputed debt
A credit bureau did not remove or correct inaccurate, incomplete, or unverifiable information
Your credit report contains negative information that is outdated, such as late payments more than seven years old or a bankruptcy more than ten years old
Your credit report contains debts that don’t accurately reflect your discharge in bankruptcy
You closed a credit account, but your credit report listed it as active
A creditor misreported a debt as charged off when you paid the debt
A creditor misreported a payment as being late when it was on time
Your credit file was intermingled with another person’s, such as someone with the same name
Someone fraudulently obtained your credit report
Your employer or potential employer obtained your credit report without your consent
A credit bureau disclosed your credit report to someone not authorized to receive it
Advocate Attorneys and their partner lawyers can assert your FCRA rights and can potentially recover actual damages or up to $1,000 in statutory damages, along with attorney’s fees and court costs. If the FCRA violation was willful, we can also argue for punitive damages. But time is of the essence. There is a statute of limitations for suing under the FCRA, so contact firstname.lastname@example.org for a consultation.
ECOA makes it unlawful for any creditor to discriminate against any applicant for any credit transaction on the basis of race, color, religion, national original, sex, marital status, age, because an applicant’s income is derived in any part from a public assistance program, or because an applicant exercised their rights under the Consumer Credit Protection Act/Truth in Lending Act. Any entity that regularly makes credit decisions such as banks, retailers, bankcard companies, finance companies, and credit unions are covered by the act. ECOA liability has not, however, been expanded to include mortgage loan modifications.
The Act is a powerful tool for consumers because civil penalties can include $10,000.00 in punitive damages, actual damages as well as attorney’s fees.
Signed into law in 1978, EFTA, which establishes the rights and responsibilities of all parties who participate in electronic funds transfer activities, is growing in significance due to the explosion in internet commerce. The Act governs matters related to ATMs, direct deposit, pay-by-phone, payments made via the internet, electronic check conversion and debit card transactions.
The Act requires financial institutions and companies that facilitate electronic fund transfers to provide consumers with the following:
A written summary of a consumer’s liability for unauthorized transfers;
A number consumers can call to report unauthorized transfers;
The fees associated with various types of transfers;
A summary of an institution’s liability to a consumer if it fails to make or stop a transaction;
The circumstances in which the institution can share a consumer’s information with a third party;
A process for reporting errors;
A notice about the fees that may be charged for using a third-party ATM.
The EFTA is administered by the Federal Deposit Insurance Corporation but consumers do have a private cause of action under the Act. Institutions that violate the EFTA may be liable for actual damages, statutory damages of up to $1,000.00, along with reasonable attorney’s fees and costs
Unfair and Deceptive Practice (UDAP) statutes exist in some form in every state, and can help to protect consumers against predatory business practices. These statutes vary significantly from state to state. By co-counseling with attorneys across the country, Advocate Attorneys has the expertise necessary to leverage your state’s consumer protection laws to your advantage – no matter where you’re located, we’re in your corner.
Normally, being harassed and sued by debt collectors isn’t a pleasant experience.
But if you’re buried under private student loans you can’t repay, being sued may actually be a good thing—if you handle the situation the right way.
Advocate’s experienced attorneys know how to turn the table on lenders and debt buyers like National Collegiate Trust (NCT), Navient, and TERI. If you’re being sued because you failed to make payments or defaulted on your private student loan, contact us. When we talk, we’ll be able to determine if we can help you.
Here are some things you should know:
For the most part, we can only help you resolve issues related to private student loans.
Unlike the federal government, private student loan lenders and debt buyers must sue you and win before they can garnish your wages or seize your property. No matter how many threats collection agencies make via phone or letter, they can’t touch your assets unless and until they win a judgment against you in court.
Being sued isn’t the same as having a judgment issued against you. When a lender files suit against you, they’re taking the first step in what may be a lengthy and complicated legal process that could end with the lender losing the case or agreeing to negotiate a settlement for less than you owe. That’s why being sued by your private lender may be a good thing—if you do the right things.
Class may we have your attention please…
This is where you need to pay attention because we’re going to discuss important issues related to the law and rules that govern court proceedings. Screw up and the opportunity to deal with your private student loan in a positive way will be gone in an instant, the blink of an eye, quicker than you can count to three.
Important dos and don’ts
Do respond if you receive a notice that your lender or a debt buyer like National Collegiate Trust has filed suit against you.
Don’t confuse a summons from a court saying you’re being sued with a letter from a collection agency threatening to sue. The summons from court means the lender’s pulled the trigger and the clock is running.
Do yourself a favor: open all the documents you receive from court and do what they say to do when they say to do it. When you receive the first letter notifying you that a suit has been filed you’ll have only 28 days to respond. Don’t wait until the last day. Take our word for it, we learned this in law school, the deadline to respond is not a suggestion, it’s a deadline, as in miss it and your ability to fight the suit is compromised.
Here’s a little secret: companies like NCT count on the fact that most borrowers are going to ignore notices from court. This makes them very happy. Try really hard to not make them happy.
Don’t live down to your lender’s expectations. If you do, a judge will issue a default judgment against you. You really don’t want this to happen. If it does, it’s game over. Your lender will have the legal right to dig into your pockets for years and believe us, that’s not where you want them to be. One other thing, the judgment won’t just be for the money you owe on your loan, it may well include interest, court costs and other charges.
If you take our free advice, which is worth way more than you paid for it, and don’t allow your lender to obtain a default judgment, here’s what you should do next: contact us. Seriously, you should, because we’ll give you some more advice on what to do going forward.
When you call, we’ll take some time to discuss your situation and determine if you have options. If you do, we’ll tell you what they are. We’ll also tell you how much we’re going to charge for helping you exercise them. Hey, we have student loans too and we have to make a living.
Here’s what we won’t do: we won’t tell you we can help if we can’t. We’ll say we feel bad for you and wish you the best, but we won’t charge you a dime for our time.
If we can help, you should look at our fee as an investment in the future—a future that may be free of the worry and anguish caused by your private student loans.
Can We Win?
While getting out from under your private student loan debt may seem like a hopeless cause, there are a number of effective defenses we use to win suits filed by lenders and debt buyers. Trust us, they can work:
The holder of your private loans waited too long to sue you.
You were the victim of identity theft and never agreed to pay the debt.
You paid what you owed on the loan, but the loan holder failed to credit your account.
The loan holder is suing you for more than you agreed to pay on the debt.
You were unable to finish your program of education because your school closed, or you qualify for another type of loan cancellation.
Your school fraudulently obtained the loans in your name.
You discharged the debt in a bankruptcy proceeding.
The loan holder failed to provide proof that it has the legal right to sue you to collect the debt.
And here’s something else: as we investigate your case we may discover that your lender or a debt collector violated the consumer protection laws in the course of trying to get you to pay. If they did, we’ll sue them and if we’re successful you’ll get some cash.
No Guarantees–well OK, one guarantee
You’ve probably noticed that we use the words “may” and “can” when we talk about what we can do to help you. We do that for a few reasons: first, because every situation is different we won’t know how strong a case you have until we talk to you; second, legal ethics, which we take really seriously around here, prohibit us from promising you a positive outcome; and third, because you should absolutely run away from anyone who does guarantee they will win your case. No one can or should make that type of promise.
There is, however, one thing we can guarantee: if you ignore the fact that your private student loan lender or a debt buyer has filed suit against you the situation is only going to get worse.
At the very least, give us a call at202-935-6990 or shoot us an email at email@example.com. We’ll be happy to talk to you so we can figure out if we can make things better.
Remember, calling or emailing won’t cost you a dime.
Advocate Attorneys can also help consumers who are facing a debt collection action or a judicial foreclosure.
Having a lawyer on your side can make a huge difference in the outcome of your case.
In many cases the Mortgage Company, Debt Buyer or Private Student Loan Holders who sue on a collection or foreclosure action do not have the necessary proof to win the case in court.
These companies count on the fact that most borrowers who are sued ignore notices from the court and don’t defend themselves. This allows creditors and to take a “default” judgment that will allow them to lien or sell your property, attach your bank accounts or garnish your wages.
There are cost effective ways to defend and negotiate these collection actions that will leave you in a better position at the end of the case.
Advocate Attorneys lawyers will evaluate a lawsuit that is filed against you and develop a plan to properly defend your case.
Marc Dann, a founding partner of Advocate Attorneys, has been certified to lead class action cases in state and federal courts. Class actions provide a mechanism to seek justice when a defendant like a mortgage servicer or debt collector injures a lot of people in the same way.
Our lawyers have litigated Consumer Class actions involving the following issues:
People injured when companies fail to protect private consumer information. These are generally referred to as Data Breach Cases.
Mortgage Servicers who fail to provide information about borrowers loans to borrowers.
Debt Collectors who are collecting debts without having the proper state licensing.
Companies who make false representations about the product or service they are selling.
Companies who systematically violate state or federal consumer protection laws.
What is a Class Action Lawsuit?
A class action lawsuit is a lawsuit in which a group of people with the same or similar injuries caused by the same product or action file suit against the defendant as a group. Other names for class action lawsuits include “mass tort litigation” or “multi-district litigation” (MDL).
What is the purpose of a class action lawsuit?
A class action lawsuit is used when a number of people suffer the same or similar injuries as a result of the use of the same product or the same wrongful action. Because many individual injuries are not worth enough to support a lawsuit, when they band together, the value of the lawsuit adds up. That’s when a class action makes sense.
Also, filing as a class allows for the consolidation of attorneys, evidence, witnesses, and other aspects of litigation to make the lawsuit more efficient.
The special federal rules governing class actions are found in the Federal Rule of Civil Procedure 23. Many states also have their own rules governing class actions filed in state court, most of which are modeled directly on the federal class action rules.
Examples of consumer class action lawsuits include:
A group of employees subjected to discrimination,
A group of patients who were prescribed the same drug causing injurious side effects,
A neighborhood of residents whose homes or families were injured by a toxic spill,
Consumers who purchased a defective product, or
Investors who lost their savings due to securities fraud.
How many people do you need to file a class action lawsuit?
Although it may help if several people are named as plaintiffs in the suit, a single person is generally enough to file a lawsuit as long as the attorney for the class has a good faith belief that a number of other people were injured in a similar way.
How are potential class members found?
Every person who could be affected by the class action lawsuit has a right to be notified that a lawsuit has been filed. While it is not possible to notify every person affected personally, they are entitled to the best notice possible. Often this notice to unknown class members is by television, ads in magazines, newspapers or posted flyers. The court handling the case will tailor the type of notice to fit the facts of each case.
Once identified, the members are told that they can join the group in the lawsuit (called opting-in) or decide to go on their own (opting-out). Generally, if the action has been filed over specified injuries caused by a particular defendant, such as an airplane crash, all those affected are automatically part of the class and must live with the outcome.