Articles Posted in consumer rights

Wells Fargo has repeatedly found itself answering to government regulators for violating consumer rights – most recently for overcharging military veterans on home finance loans.foreclosure attorney

Just one week before announcing the $108 million settlement it had reached with the federal government for this wrongdoing, the bank revealed it was paying out $80 million in compensation for wrongfully force-placing car insurance on some 570,000 consumers. A significant number of those customers their vehicles wrongly repossessed when they couldn’t keep pace with the artificially high payments – which impacted their credit scores too. And just before that, the bank was answering to allegations that more than 5,000 former employees opened 2 million unauthorized accounts in order to rake in sales and bonuses. The bank paid an $185 fine, plus another $142 million settlement following a class action in that case.

In the case of military veterans, it all stems from a 2006 lawsuit claiming the Interest Reduction Refinance Loans through the Department of Veteran Affairs – issued by Wells Fargo – should not have been eligible for guarantees through the VA because the bank was reportedly charging loan fees that weren’t authorized. The VA then paid claims after a number of those loans defaulted, and the government then sought redress from Wells Fargo. Continue reading

A internal report from executives at Wells Fargo has determined more than 800,000 people who took out loans for their vehicles were forced into buying unnecessary auto insurance. Some of those people are still paying for the coverage, and the expense has pushed a quarter million of them into delinquency. Additionally, some 25,000 people suffered wrongful vehicle possessions as a result of this practice. debt defense lawyer

The 60-page report was obtained by New York Times reporters, who noted that some of those affected included members of the U.S. military who were on active duty.

As our debt defense lawyers know well, this is not the first time Wells Fargo has landed in hot water for strong-arming customers into coverage or accounts they did not need. Most recently, the company incurred millions of dollars in fines when it was revealed employees generated millions of bank accounts and credit cards for which customers never asked. The fines were imposed on the bank just last year.  Continue reading

Tort reform supporters in Congress are fired up, gaining significant traction in recent weeks with a number of proposed measures that could substantially undercut consumer rights. people

One of the most troubling bills takes aim at class action lawsuits.

Misleadingly dubbed the, “Fairness in Class Action Act,” H.R. 985 passed 220-201 (largely along party lines), the measure might be more aptly named the Class Action Elimination Act.

The reality is this bill creates procedural and evidentiary burdens that some opine are so high, it will be nearly impossible to pursue class action litigation. That would be a huge blow for consumer rights because it’s a key tool consumers have to level the playing field against large companies for unfair dealings.  Continue reading

Esteemed Miami foreclosure lawyer Bruce Jacobs has been given the go-ahead to proceed with his lawsuit that aims to oust the new Florida Democratic Party Chairman Stephen Bittel. american flag

The lawsuit recently survived a motion to dismiss after Miami-Dade Circuit Judge Lisa Walsh ruled the complaint should be allowed to proceed. Walsh declined, however, too prevent the Democratic party from certifying the election of Bittel, as they had already done so.

Jacobs filed the lawsuit last month, along with Dr. Mae Christian, a civil rights advocate and president of Miami-Dade County’s Democratic Black Caucus. The lawsuit names as defendants Bittel, the Florida Democratic Party and the Miami-Dade Executive Committee chairman, Juan Cuba.  Continue reading

Target Corp. recently lost a $4.6 million personal injury lawsuit after a South Carolina woman alleged she was hurt when swatting a hypodermic needle away from her young daughter, who had picked up the dangerous device in the store parking lot. needle1

According to court records, the incident occurred in 2016 at a store in Anderson. The woman testified she was getting out of her car when she spotted her 8-year-old daughter picking up the needle. Instinctively, the mother knocked the needle from her daughter’s grasp. As she did so, the needle stuck her in the right palm. She walked right into the store and reported what had happened to an employee. That worker jotted down in an incident report that the woman “seemed worried.”

She was later transported to a local hospital, where she was tested for both HIV and hepatitis. Although she tested negative for both, she did undergo treatment that involved consuming a powerful medication that would prevent her from contracting HIV. This made her extremely ill, which prompted her husband to take an extensive period of time off work. She has thus far continued to test negative for these diseases.  Continue reading

Amid sharp criticism of its actions during the alleged sham accounts scandal – specifically the inaction to it – the board for Wells Fargo is clawing back some $41 million from its embattled CEO and chairman John Strumpf. That money comes from unvested stock awards. Stumpf is also going to forego his salary while the company delves into its own retail banking practices – specifically sales – that resulted in bank employees opening hundreds of thousands of pony accounts without customer approval. Those employees were reportedly trying to reach account goals set by the bank. money12

In addition to taking action against Strumpf, the bank’s previous head of community banking is giving up her unvested equity stock awards, which currently are valued at $19 million. She is also immediately retiring and also will not receive certain retirement benefits, valued in the millions. Neither is going to take home any bonuses for this year.

This practice of “clawing back” executive awards has been within the power of federal regulators. However, it was rarely tried because typically, it required a criminal conviction – or at least the  serious threat of one. However, it’s likely that this move by Wells Fargo is going to prompt other companies to think about doing the same. Reforms passed in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 asks for stronger clawback rules. Right now, the Securities and Exchange Commission is fielding public commentary on setting some new rules on the practice. If those new rules are finalized, the agency could force clawback action in many more cases beyond what constitutes as obvious, deliberate fraud. Negligence resulting in restated earnings could also prompt clawbacks.  Continue reading

For at least five years, Wells Fargo was engaged in a practice of secretly opening some 2 million phony credit card and deposit accounts in an effort to put multiple banking products in customers’ hands. That kind of growth strategy was central to the bank’s business, and employees were pressured to meet demanding quotas calling for each customer to have eight accounts with the bank. This prompted employees to cut corners. They started opening up accounts without customers’ Ok or knowledge.moneytower

This practice started at least as far back as 2011, but there is evidence to indicate it may have been going on even back in 2009. As a result, the bank was able to rake in at least $2.6 million in additional fees on accounts customers never wanted to begin with. In many cases, customers didn’t even know they existed, and the fees were simply being deducted from other legitimate accounts. Federal regulators got involved this month, and the bank quickly agreed to settle the case for $185 million. Thousands have been fired (though not the company CEO) and U.S. Attorneys have begun investigations. Sen. Elizabeth Warren (D, Mass.) lambasted CEO John Stumpf during a Senate Banking Committee. Although he apologized, Warren told him he was personally responsible, should resign and be criminally investigated.

But the question of why this took so long to uncover goes back to another practice that isn’t unique to Wells Fargo. It’s called an arbitration clause.  Continue reading

A federal jury has just awarded $2.5 million in punitive damages – on top of $6,100 in compensatory damages – to a man who sued Ocwen Loan Servicing and Equifax for allegedly willful violation of the Fair Credit and Reporting Act. gavel7

The original complaint was filed in 2014, after the firms reportedly failed to investigate an alleged error on plaintiff’s credit report – one that cost him a refinancing for which he was applying.

An element of the FCRA, codified in 15 U.S.C. 1681, requires that a company investigate all disputes. Plaintiff filed numerous disputes with the loan servicer after he got an Equifax credit report that indicated he was behind on his mortgage. Ocwen countered its investigation was sufficient, but even if it wasn’t, plaintiff hadn’t proven damages because he had other negative accounts that impacted his loan application standing.  Continue reading

Ocwen Financial holds the keys to some 17,500 defaulted home mortgage loans – and can’t continue to foreclose on a single one. stop

That is true at least for the time being, after the National Mortgage Settlement monitor announced the company is barred from foreclosure action after falling short of the required performance metrics.

The monitor announced the mortgage servicer failed on a key metric that requires the mortgage servicer to send a loan modification denial notification to the borrower. This notice needs to denote why the modification was denied, as well as the facts that weighed into this ruling by the servicer. It also must indicate a timeline in which the defaulted homeowner can offer evidence the decision was a mistake.

The National Mortgage Settlement office first announced the company wasn’t in compliance with this metric back in October. However, it’s now been seven months, and the company still hasn’t remedied the problem. That led the office to bring all of Ocwen’s foreclosures to a screeching halt.  Continue reading

A company that promises to protect consumers from identity theft has been accused of violating a federal court order that requires it to keep those promises and refrain from deceptive advertising. lock

The case against LifeLock dates back several years, but now,  the Federal Trade Commission (FTC) announces LifeLock has agreed to a $113 million settlement in the matter – the largest monetary award ever wrangled by the commission in an enforcement action.

The FTC first took action against the firm five years ago, when it alleged in the U.S. District Court for the District of Arizona that the company didn’t deliver on advertising claims promoting its identity theft services. The firm vows to keep consumers’ sensitive personal information shielded from thieves. But the FTC alleges the company failed to provide the kind of protection it promised, meaning it misled consumers with advertising that was deceptive. Continue reading