$1.26 million Jury Award Against Debt Collector that Garnished the Wrong Person’s Wages

A federal jury in New Mexico awarded $1.26 million to a woman against collection law firm for twice trying to garnish her wages for a debt she did not owe. The case started when Target National Bank assigned a credit card debt to a debt collector law firm. Ms Lucinda Yazzie told the law firm she never had a Target credit card and she often received collection calls looking for another persons with the same name. Nevertheless, the law firm sued her and obtained a garnishment order. Yazzie’s employer interceded and the law firm withdrew the order. But two years...

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Class Action Alleges Experian Illegal Access to Consumer Files

With exceptions, the Fair Credit Reporting Act requires credit reporting agencies to limit access to consumers credit files to persons with whom the consumer has a credit relationship. A credit relationship is one in which the consumer and a creditor agreed the consumer could defer payment. Persons who do not have a credit relationship with the consumer have no right to look at the consumer’s credit files. If a person’s car is towed and stored off the street without his or her consent, the tow company will typically give the owner a notice to pay the tow and storage bills....

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Debt Settlement Industry Rips Off Consumers

Some 250 “debt settlement companies” pray on consumers who are overwhelmed by debts. Consumers are lured by Internet and TV ads promising consumers their debt problems will cease if they just sign up. Typically, the companies require the consumer to make payments to the company while not making payments on their debts. The companies promise that once a pot of money accumulates in the consumer’s account, the company will settle the debts with the creditors by paying a percentage of the debt. In their sales pitches, the companies omit over the fact that they deduct outrageously high fees, that the...

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Debt Collectors Can’t Add Interest to Dishonored Check Debts

Merchants sometimes contract with check guaranty services that pay the merchant for dishonored checks. These services then attempt to collect the face value of the dishonored check. California Civil Code 1719 allows collectors to add a $25 service fee for the first check dishonored and treble the amount of the check if the check writer does not pay within 30 days after notice. Certain collectors add prejudgment interest to the debt. However, the California Supreme Court has decided these debt collectors have no right to add interest. Any debt collectors that have been adding interest to bounced check claims are...

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AAA Exits the Consumer Debt Collection Business

The American Arbitration Association has announced it was dropping its arbitration program for consumer debts. This comes only a few days after the National Arbitration Forum announced it was dropping its consumer debt arbitration program. Most of the cases involved credit card and cell phone debts. This is great news for consumers who could not get a fair hearing at AAA or NAF. Both had rigged their procedures in favor of the banks and corporations that paid their fees. Consumers lost 94% of the 214,000 cases processed by NAF in 2006.

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