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Consumer brought suit under the Fair Credit Reporting Act's provision prohibiting access of a consumer's personal and confidential credit information except upon having a permissible purpose under the law to do so. Wells Fargo Mortgage was the holder of the consumer's mortgage. Consumer filed bankruptcy and obtained a discharge of the mortgage and underlying note. Wells Fargo, for several years thereafter, continued to access the credit information of the consumer on the pretext of conducting "account reviews" . The law permits a creditor to periodically access a consumer's credit information with regard to any open or ongoing account it may own of the consumer. This is referred to as an "account review." Only, in this case the consumer filed bankruptcy several years earlier and the account supposedly owned by Wells Fargo no longer existed. When confronted with this fact, Wells Fargo gave the Court the lame excuse that since the title to the property continued to remain in the name of the consumer, it had a legitimate business need to continue to access the consumer's credit information. It failed, however, to tell the Court that it was the one responsible for the delay in transferring title to the real estate. The Court did not buy this and found that Wells Fargo violated the Act and, more importantly, there is no permissible purpose for an account review of an account that has been discharged in bankruptcy.
Consumer brought suit under the Fair Credit Reporting Act's provision prohibiting access of a consumer's personal and confidential credit information except upon having a permissible purpose under the law to do so. The suit charged his brother-in-law who, on 4 occasions on behalf of consumer's estranged wife, accessed his credit information from a computer terminal located at a business that he owned. Defendant was provided sufficient personal information by his sister which easily allowed him to access consumer's personal credit information from Experian. The excuse given by Defendant was creative. He claimed that he made a loan to sister and, naturally, this required knowledge of his brother-in-law's creditworthiness. Needless to say, this was not considered a permissible purpose under the law by the Judge.
The Court ruled that the truth-in-lending act which requires meaningful disclosure of all material credit terms at the time of consummation of any extension of credit was violated by this automobile dealer's spot delivery yo-yo scheme. The dealer had consumers sign a retail installment sales contract indicating that it was the "seller-creditor", that financing was approved and gave the vehicle to the consumers to drive home. Several weeks later the dealer contacted the surprised consumers informing them that it was unable to obtain financing and that they should return the vehicle.
In this class action suit defendant automobile dealer entered into a retail installment sales contract [RISC] with consumers and delivered a motor vehicle to them. At the same time consumers were also required to sign a separate agreement which the dealer titled "Limited Right to Cancel-Spot Delivery." This spot delivery agreement provided that the dealer may cancel the contract if it is unable to obtain financing or unable to sell or assign the RISC. Of course, this dealer previously informed the consumers that financing had already been approved at the time it delivered the vehicle to them. A short time later when the consumers returned to the dealer's location they were informed that there had been a "mistake" and that financing had been approved by a different lender and under different terms than disclosed in the original RISC. If consumers wanted to retain the vehicle they would have to sign a new RISC with terms more severe which they, in fact, signed. They later brought suit alleging that the initial disclosure made by the dealer violated the federal truth-in-lending act. The Court ultimately ruled in their favor in that the dealer's spot delivery agreement allowing it to cancel the the Retail Installment Sales Agreement with the consumer, effectively, made its disclosure of credit terms meaningless and, therefore, constututed a violation of the federal Truth-in-Lending Act.
Suit brought by consumer against a debt buyer and its attorney for filing a collection action where an account statement was attached as an exhibit to the collection complaint and made to appear as if the statement was prepared by the original creditor from whom the debt was purchased by the debt buyer. The object was to deceive the consumer into believing that the account was legitimate and, therefore, to discourage the consumer from challenging it. In reality, this was a bogus account statement prepared, not by the original creditor, but by the debt buyer itself. The trial judge dismissmed the suit finding that the least sophisticated consumer would not be deceived by this. The case was appealed to the Sixth Circuit which found otherwise and remanded the case to the lower court for trial finding that the least sophisiticated consumer could very well be fooled by this and that it was an issue to be determined by a jury.
Attorney Michael P. Margelefsky is the sole owner of the Law Offices of Michael P. Margelefsky, LLC under which he operates both a law office and a debt collection agency. Although these 2 businesses are physically adjacent to one another they maintain separate addresses, telephone numbers and bank accounts. The collection agency sends out thousands of collection letters on behalf of creditors on stationary which contains the letterhead of the "Law Offices of Michael P. Margelfefsky, LLC." which are not signed by anyone but contain the designation that they are from an "account reprensentative" of the Law Offices. Each of these letters instructs consumers to make their payment to the "Law Offices of Michael P. Margelefsky, LLC". Attorney Margelefsky who drafted the letters testified that he neither reviewed the letters nor were they even reviewed by an account representative. The FDCPA expressly prohibits a debt collector from falsely creating the impression or implication that any individual is an attorney or that any communication came from an attorney. In this class action suit filed in the Northern District of Ohio the consumer alleged that the letter she and others received described herein violated this prohibition. The trial judge disagreed and dismissed her claim stating the the use of the phrase account representative would not cause anyone to have the belief that the letter came from an attorney. On appeal the Sixth Circuit reversed and remanded the case. It found that the "Least Sophisticated Consumer" could conceivably believe that the letters came from a law office or from a lawyer. Additionally, the fact that Margerlefsky conceded that he did not review any of the letters mailed served to support the fact that, while the letters clearly implied that they were from an attorney, they did not come from one.
Defendant Lawfirm filed collection action against consumer and attached an affidavit from its client asserting that, by contract, it was entitled to recover attorney fees. Attorney fees are prohibited under Ohio law from being recovered in connection with consumer transactions. In a suit exclusively against the debt collector law firm the trial court found that the defendant violated the FDCPA using deceptive means by attaching
this affidavit and further that it threatened to take action that it could not legally take. Defendant appealed and the decision of the lower court was affirmed by the Sixth Circuit Court of Appeals.
Defendant debt-buyer, Asset Acceptance, filed numerous suits against consumers where it attached a sworn statement claiming that it was a "holder in due course" of accounts it had purchased and sued upon. A holder in due course requires that a debt buyer purchase accounts, not only for value, but without notice that the accounts were in default. The very essence of debt buying is to purchase accounts that are in default and, therefore, it was somewhat outrageous to have made such an assertion; especially, under oath. The Court found that this untrue and false assertion violated the FDCPA's prohibition that a debt collector claim it was "an innocent purchaser for value". One of the defenses asserted by Asset was that the false affidavit was entitled to "absolute witness immunity" which is what any witness would be entitled to receive who provided live testimony. This defense was clearly rejected by the Court.