Articles Posted in Debt Defense

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

The student loan industry in many ways is mirroring that of the mortgage industry, and financial crisis may soon be on the horizon.debt defense

The only reason it hasn’t completely erupted up until this point is that despite the large number of student loan debts that are in default or delinquent, the share of their total debt did not balloon to the point of completely unsettling markets or setting public opinions alight. In fact, until recently many held the attitude that it was borrowers, saddled with mountains of debt they could not shed through bankruptcy, who had made their own bed. That could soon change, as companies purchasing distressed student loan debts – also known as “bundlers” – are finding themselves in the very same spot as many subprime mortgage companies did a few years ago.

Specifically, it’s being revealed in a number of pending cases that these student loan debt bundlers are not able to prove who actually owns the debt or when.  Continue reading

Private student loan debts – possibly tens of thousands of them, worth $5 billion – could be wiped away completely unless creditors start producing the proper paperwork.student loan debt defense

In a series of events that mirror that of the 2008 housing crisis and subsequent fall out, the troubled loans involve former students and graduates who have not been able to keep pace with their payments. Americans owe more than $1.4 trillion in student loan debt, which is spread out over some 44 million borrowers – far exceeding the $620 billion owed to U.S. credit card companies. The average graduate in 2016 has more than $37,000 in student loan debt – an increase of six percent from just one year earlier.

Meanwhile, the student loan delinquency rate, as reported by the Federal Reserve, is 11.2 percent. The Consumer Federation of America reports $137 billion federal student loans had not been paid for at least nine months last year, which is a 14 percent uptick in just a single year. Continue reading

The first U.S. Supreme Court opinion in which Justice Niel Gorsuch wrote may not be of much note for its eloquence. However, you will find it means a great deal to you if you ever have – or ever will be – on the other end of the line when a debt collector calls to harass you in the middle of the night. debt defense

The decision in Henson v. Santander gives bottom-feeder debt collectors a pass to violate consumer rights and basic protections. Of course, it’s not shocking that Gorsuch, appointed by President Donald Trump, would defer to the big business party in the case. However, it seemed lost on the conservatives of the court that this ruling could have real-life implications that favor financial predators.

It is the hope of our Miami debt defense attorneys that at this point, Congress will weigh in to repair the damage. However, given the makeup of the current power structure, that’s unlikely anytime soon.  Continue reading

Since 2010, there has been a rapid growth in the U.S. car loan industry. A new report from Bloomberg indicates borrower fraud is soaring, and we may soon near a bursting bubble, similar to what we saw with the housing crisis. car accident

It’s estimated as many as 1 percent of car loan applications in the U.S. contain some type of material misrepresentation, according to Point Predictive, a data analytics company cited by Bloomberg. That’s close to the just-over-1-percent of fraud we saw in U.S. mortgages back in 2009, when the housing market financial crisis was in full swing.

The good news is the economic fallout is likely to be much less earth-shattering (for most of us) because there is simply less outstanding debt on automobiles as there are on houses. Still, there are some uncanny parallels between the mortgage and auto industries in terms of the growth of this type of fraud. While we don’t know just how widespread the problem was prior to 2009 (lenders weren’t reporting information to each other and often weren’t investigating such incidents on their own), it does seem as if we may be on a similar track.

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The establishment of the Consumer Financial Protection Bureau came in 2012, following the fallout of the economic crisis set off by the collapse of the housing market and a massive wave of foreclosures. debt defense

As our Miami debt defense lawyers know well, the birth of the agency was an unprecedented effort to address and prevent the kinds of abuses by banks and other large financial institutions that led to the financial crisis. It also helps to keep fraud and debt collection abuses at bay.

But now, there are those who seek to severely undercut it with the introduction of the Financial CHOICE Act, which purportedly aims to curb excess regulation and enforcement (a non-existent issue in our opinion). The truth of the matter is those behind this measure are eager to scrap consumer protections because they are viewed as bad for business – even if the business itself is bad.  Continue reading

Nearly a dozen debt settlement companies in Florida were systematically defrauding consumers, leading the Federal Trade Commission and the state attorney general to recently shut down those operations.debt defense

Both regulators succeeded in obtaining a court order that requires the 11 companies (owned by three individuals) to stop marketing their debt settlement “services,” which in fact preyed on thousands of vulnerable people eager to stop creditor harassment and avoid bankruptcy. The case is a cautionary tale of why it’s best to avoid working with a non-attorney when you’re seeking a manageable debt settlement agreement.

According to the complaint, filed in the U.S. District Court in the Southern District of Florida, the companies conned consumers into believing they could avoid having to pay thousands of dollars in outstanding credit card bills. Instead, they were told to pay the debt settlement companies money every month, and those firms promised to negotiate a deal with the credit card companies. On the surface, this seems like a good deal – legitimate too. But Florida Attorney General Pam Bondi says it wasn’t, and some consumers, after paying hundreds or thousands of dollars, learned their credit card debts were never paid and their accounts were deeply in default. Their credit was completely decimated. Some had no choice but to file for bankruptcy. Others were sued.  Continue reading

Bank employees at Citigroup had suspicions for years that more than $1 billion in payments being sent over 30 million transactions to Mexico through its Banamex USA division were shady. Despite ample evidence, that generated some 18,000 suspicious transaction alerts, the company only initiated 10 investigations, filing just half a dozen suspicious activity reports with federal regulators.debt defense

Now, the California-based Banamex USA has conceded it violated criminal laws for its failure to have adequate anti-money-laundering safeguards in place. For its part, Citigroup admitted it didn’t maintain adequate oversight of Banamex. For this, it will pay $97.4 million, a settlement agreement that will steer it clear of criminal charges related to the inquiry.

Miami debt defense attorneys recognize this kind of action as revealing where the priorities of bankers truly lie. While large banks like Citigroup are quick to take consumers to task – sometimes even to court –  over a few missed credit card payments or a default mortgage after a job loss or on an underwater home, they turn a blind eye to what is clearly a viable source of income for violent criminal cartels. Continue reading

Illegal debt sales and debt collection practices have landed Citibank in hot water with federal regulators. In two separate actions, regulators ordered the bank to fork over $16 million in consumer relief, pay $3 million to the government in penalties and forego $34 million in collections from approximately 7,000 customers.business man

The Consumer Financial Protection Bureau finalized two actions against Citibank – one involving sales of credit card debt with inflated interest rates and not timely forwarding consumer payments to debt buyers. The second involved both the bank and two of the debt collection law firms that together reportedly falsified court records in debt collection lawsuits. For the first action, the bank is ordered to pay $5 million in consumer relief, as well as a $3 million federal penalty. For the latter, it is ordered to refund $11 million to customers and stop its pending debt collection actions against involved consumers.

CFPB’s director said the bank gave its consumers bad information when it sold their credit card debt, and then relied on shady law firms to change up court records to appear in the bank’s favor.  Continue reading