While Alabama has a longer period for some debt, the general rule is:

Debt collectors lose the right in many states to sue consumers after three or more years. But there’s a loophole: If the consumer makes a payment, even against his or her own will, that can be used to try to revive the life of the debt.

And the loophole works by:

The efforts to collect on old debts often focus on getting consumers to reset the statute of limitations through a variety of means, including sending them credit cards that let them pay off their old debts or by allowing them to make a small payment to halt debt collection calls. The efforts have contributed to the flood of debt-collection lawsuits clogging courts across the country, consumer advocates say. In New York City, the number of debt-collection lawsuits surpassed 100,000 last year, compared with 47,000 in 2016, according to data from the New Economy Project, an advocacy group.

But good news for Texans:

Texas and Washington state passed legislation this year making it more difficult to revive debt past its statute of limitations, but the industry successfully fought efforts in other states, including New York. And consumer advocates worry that new rules proposed by the Consumer Financial Protection Bureau — the first major update to the Fair Debt Collection Practices Act in more than 40 years — could further bolster the industry.

One of the main problems is that debt collectors have major problems proving ownership and proper accounting of “new” debt. It is easier to just have a business model based on volume and hope the consumer does not make them prove their case. This is problem is greatly compounded with zombie debt since the evidence of the debt has disappeared.

The post Debt Collectors and Zombie Debt first appeared on John C. Hubbard, LLC.

TILA steps in to safeguard your rights and ensure that lenders or creditors play by the rules. If someone unlawfully uses your credit or financial information, TILA gives you the power to claim damages and, importantly, attorney’s fees if you need to go to court and win.

Why Attorney’s Fees Matter

If you’re a victim of unauthorized use and need to take legal action, the prospect of paying attorney’s fees might seem daunting. However, TILA understands this concern and takes steps to level the playing field.

TILA recognizes that when you’re wronged, pursuing legal action shouldn’t be a financial burden. That’s why it allows you to claim attorney’s fees as part of the damages if you succeed in your unauthorized use claim. This provision encourages people to stand up for their rights without worrying about the costs associated with legal representation.

General Criteria for Awarding Attorney’s Fees

1. Success in the Claim: First, you must prove that the unauthorized use indeed took place and that you were a victim. If the court rules in your favor, you’ve completed the first step.
2. Culpability of the Lender or Creditor: Next, you need to show that the lender or creditor bears some responsibility for the unauthorized use. If they didn’t take proper security measures or ignored suspicious activities, they might be held accountable.
3. Reasonableness of Legal Fees: Your attorney’s fees must be reasonable and in line with the complexity of the case. Courts typically consider factors like the complexity of the legal issues and the time spent on the case.

Your Path to Justice

In the grand tapestry of financial regulations, TILA is a shining thread that empowers individuals against the dark shadows of unauthorized use. Attorney’s fees, as provided under TILA, ensure that you have the means to stand up against unlawful actions without the fear of financial strain.

So, remember, if you ever find yourself facing the challenge of unauthorized use, know that the Truth in Lending Act is there to guide you. With the potential for attorney’s fees as part of the claim, justice becomes not just a dream, but a tangible reality for those who seek it.

The post Navigating Attorney’s Fees Under the Truth in Lending Act for Unauthorized Use Claims first appeared on John C. Hubbard, LLC.

Your credit report contains a lot of important financial information about you, and it’s used by lenders to decide whether or not they’d like to extend you a loan or some other type of financing. Unfortunately errors can occur on credit reports, inaccuracies that may result in otherwise qualified borrowers having difficulties obtaining the financial products they need. Persons who find errors or discrepancies in their credit reports may feel helpless and don’t know what type of legal recourse they have.

Under the Fair Credit Reporting Act (FCRA) consumers are able to file disputes with the major consumer reporting agencies — Equifax, Experian and TransUnion — to resolve any issues that exist regarding damaging information on their reports due to erroneous accounts or mistaken identity theft. Here we reveal how you can use this process successfully to correct your credit report so it accurately reflects your current financial standing.

The first step in the dispute process is to contact the consumer reporting agency that issued the credit report. You can contact them by mail, phone or online. When you contact them, provide as much information as possible about the item you are disputing, including why you believe it is inaccurate. It’s important to be specific and include any supporting documentation that may help prove your case.

Once you’ve contacted the consumer reporting agency, they are required to investigate your dispute and contact the creditor or other source of the information to verify its accuracy. The investigation should take no more than 30 days, and if it is determined that the information is inaccurate, it will be removed from your credit report. You may also want to consider filing a complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB is a government agency that helps consumers resolve disputes with financial institutions. They can help investigate your dispute and provide assistance in resolving it.

It is important to keep track of the dispute process and follow up with the consumer reporting agency if you do not hear back from them within 30 days. You can also contact the creditor directly if you are not satisfied with the results of the investigation. It is also important to keep records of certified mail receipts or whatever else was used to prove you made a dispute and it was received.

In conclusion, disputing inaccurate information on your credit report is an important step to take if you want to maintain a good credit rating and ensure that lenders have accurate information about your financial history.

The post Introduction to Credit Report Disputes first appeared on John C. Hubbard, LLC.

Knoxville’s WVLT has a couple of suggestions for why:

“I was say tax returns, for the most part, are probably one of the biggest reasons,” Hermes Conde said. ‘People get a couple thousand dollars back from their tax returns and they go put $2 or $3,000 down and get a car and maybe bite off mor than they can chew.”

Some economists suggest the surge in car repossessions can be traced back to COVID relief programs when people chose to buy cars with stimulus checks.

WCPO in Cincinnati shares a similar story:

“The national average that they’re expecting for repossessions for 2022 is around 2.2 million, so when you go back to 2019 at the 1.7 million mark, sure, that’s a relatively large increase,” said Chris Benson, vice president of collection at Ent, a credit union with around $7 billion in assets.

…

“You know, looking at the last two years, you have to take into consideration the government assistance programs that were available to members, repossession and foreclosure moratoriums, stimulus funds. I think that had a big impact on keeping delinquency charge off, repossession, and foreclosure at minimum,” said Benson

On the other hand, a story out of Fleet World says drivers may be taking a more proactive approach:

Instead, Shoreham Vehicle Auctions said that drivers who are behind with their monthly payments have been avoiding vehicles being repossessed by turning to a growing number of car buying service companies that will buy their used car online and settle all unpaid finances.

..

“It’s good news for drivers who have fallen behind with their car repayments, but this trend has contributed to the wholesale market being short of used cars,” explained Alex Wright, managing director of Shoreham Vehicle Auctions.

The post Consumer Auto Repossessions Continue to Rise first appeared on John C. Hubbard, LLC.

MarketWatch has a story regarding how auto purchases during the heights of COVID-19 are now leading to an increase in repos — especially by Buy-Here, Pay-Here type dealers. Of note, the story explains how these deals are designed and the built-in dangers with using these dealers:

“These car contracts are not for these borrowers to get a car,” Sanders said. “They are designed for a default.”

Also, there’s an upside for lenders not getting their monthly car payment, she said, because they “can get 25% of a paycheck” by garnishing a borrower’s wages, and then resell the vehicle to another borrower.

“It’s guaranteed easy-money.”

The story goes on the show how some consumers get deeper into financial trouble when the dead goes bad:

Lenders in Arkansas can pursue a borrower for up to five years on an outstanding balance left on their loans. “The lawsuits come with a lag,” Sanders said of the cases now rolling into her office.

While it has become common practice for lenders to roll over the unpaid balance of a previous loan into a new one, the “trade-in treadmill” leaves consumers deeper in unsustainable debt, Ed Mierzwinski, a senior director for the Federal Consumer Program at U.S. PIRG, told MarketWatch.

Another story on the inherent dangers of repos came out of San Diego where the SWAT team responded to a repo:

San Diego Police said a woman and a few others confronted the tow truck driver who was attempting to remove her vehicle near the intersection of Palm Avenue and Hollister Drive at about 1 a.m., according to NBC7 San Diego.

Finally, WXYZ out of Detroit describes the increase in auto repos:

“Absolutely. Absolutely. Everything seemed to change at the end of May around Memorial Day. We just did double what we normally would do for June and July,” Liagre said.

She points to the expiration of COVID-19 unemployment benefits last year and inflation.

The post August 2022 Repo News first appeared on John C. Hubbard, LLC.

The Consumer Financial Protection Bureau has issued a bulletin. It says the Bureau has seen a rise in illegal seizure of cars, sloppy record keeping, in turn unreliable balance statements, and ransom for personal property left in those vehicles. The CFPB writes that the current market conditions mean cars are being repossessed too quickly leaving families in dire straights. A sudden, unexpected car loss means lost wages when work is missed, or losing a job altogether, not to mention a wrecked credit report.

Let’s break it down. The government posted that servicers are repossessing vehicles where sufficient payment was made to stop the repossession. Servicers are failing to cancel repossession orders, in turn this leads to unreliable balances. It’s a domino effect. This means car owners think they’ve paid enough to hold off repossession when in fact they haven’t. Then to add salt to the wound, the personal property found in the car is behind held ransom until loan fees are paid off. And that’s illegal.

The report brings up several problems — improper records, failure to stop improper repos, and improperly withholding personal property. The last one is a problem even if the lender has a right to repo the car. They still have to give back personal property.

The story also acknowledges some of the problems having a car repo’ed can cause like missing work, negative credit reporting, and the lack of having the use of the personal property.

The post Illegal Repos Rise first appeared on John C. Hubbard, LLC.

“With today’s high car prices, auto lenders and investors might be tempted to seize vehicles for resale in the hot used car market,” said CFPB Director Rohit Chopra. “No American ever wants to wake up to see their car stolen. Auto loan servicers need to ensure that every repossession is lawful.”

…

Illegally seizing cars: Servicers are repossessing vehicles from borrowers who made payments sufficient to stop the repossession or who entered a payment plan. Given the high level of harm caused by wrongful repossessions, servicers must ensure that every single repossession is valid.

Sloppy record keeping: Incorrectly coded records or agents failing to talk to their colleagues about canceling repossession orders hurts consumers and is a violation of federal law. Servicers need to ensure proper communication between them and any third-party processing a repossession.

Unreliable balance inquiries: Inaccurate balances can lead to a borrower paying less than a sufficient amount to avoid delinquency, resulting in a repossession. People are also having their vehicles repossessed because their loan payments are processed in a different order than what they had been told.

Ransom for personal property: Servicers are still holding personal property found in repossessed vehicles hostage until the property owner pays a fee, a practice the CFPB has been cracking down on for years .

As the Washington Post Reports:

Without admitting or denying any wrongdoing, in 2020 the auto financing subsidiary of Nissan North America, which services auto loans and leases originated by Nissan and Infiniti dealerships, agreed to settle allegations by the CFPB that it illegally repossessed vehicles. The company agreed to a $4 million fine and to pay up to $1 million in restitution to consumers.

In other cases, the agency said some auto loan servicers have refused to release personal property found in vehicles unless delinquent borrowers paid a storage fee. Servicers have been slammed for sloppy bookkeeping in which consumers were incorrectly coded as being delinquent. Servicers have ignored bankruptcy rules that would have — at least temporarily — stopped a repossession.

Finally MarketWatch adds:

Used car and truck prices increased 40.5% in January from a year ago, according to government data, while helping drive consumer prices up 7.5% on a yearly basis to a 40-year high.

The consumer protection bureau said its examinations and investigations already revealed “examples of conduct” that may violate federal consumer financial laws, including fees that pushed some consumers into default and repossession, as well as other unfair, deceptive or abusive practices.

The post Federal Govt Seeks to Prevent Illegal Repos first appeared on John C. Hubbard, LLC.

Car and Driver has a story about a car being “repo’ed” by a car rental company. While not a repo in the classic sense, it provides an interesting look into what can happen. Most importantly is the reason it happened:

In the face of public pressure, Avis changed its tune and told Campbell they will refund the charges, including late fees. An Avis Budget Group representative sent Car and Driver this statement: “Following a review, we fully refunded and apologized to Mr. Campbell and offered a coupon for future use. Our internal findings indicate there was an incorrect tow triggered by an administrative error on a previous rental. Mistaken tows occur infrequently but we are taking steps to prevent situations like this from occurring at all in the future.”

Errors on previous accounts that improperly roll over are big problems in the car financing industry. As in this case, most people have no idea what happened when they walk out and see their car is gone even though they have made their payments.

Midland Daily News describes a story of an inherent danger in repos:

9:52 a.m. – Deputies were dispatched to an Ingersoll Township address. A repossession company called after a subject jumped into a vehicle the company was repossessing and refused to get out. Prior to the deputies’ arrival, the subject exited the vehicle and the deputies were told by the repossession company that help was no longer needed.

The post September 2021 Repo News first appeared on John C. Hubbard, LLC.

From the story:

Even the hint of COVID-19 exposure can spell financial ruin. That’s partially because anyone suspected of exposure to the novel strain of coronavirus faces a two-week quarantine, which will restart if anyone else in a household has a similar scare on the job. Test results also have been known to take about 14 days, he said, which adds up to some workers going a month or longer before collecting any back pay.

…

There were $250 billion of outstanding subprime auto loans that Wall Street packaged into bond deals and sold to investors at the end of 2019, or about 18.8% of all U.S. auto loans, according to the Federal Reserve Bank of Richmond. Proceeds from bond sales help lenders keep making new loans. Already this year, $21.6 billion of subprime auto bonds have been issued, according to Finsight data, which roughly is in line with annual issuance over recent years, despite it being the worst U.S. economic downturn since World War II.

In another story, the U.S. Department of Justice has filed a lawsuit in Dallas for violations of the Servicemembers Civil Relief Act:

A lawsuit filed Monday by the U.S. Department of Justice says United Tows unlawfully auctioned five vehicles owned by service members, including an airman who had told the business he was in basic training before his car was sold. Under the Servicemembers Civil Relief Act, tow companies must obtain a court order to sell vehicles owned by military members.

…

United Tows is accused of towing the car in September 2017. After learning through a friend that his car was towed, the airman called the company to explain he was unable to collect the vehicle during basic training, but the owner didn’t believe he was in the military, the lawsuit says.

The post Frontline Workers and Military Feel Brunt of Recent Repos first appeared on John C. Hubbard, LLC.

A resident whose car was repossessed late on April 14 called police to dispute whether the “repo” driver was performing an essential business under the guidelines of Ohio’s stay-at-home order in effect during the coronavirus pandemic.

The resident also did not think the repo man should be out and about conducting business at 11 p.m., and further claimed that the driver said he had a gun, which put the resident at risk.

In an earlier disturbance call related to the incident, the repo man complained that the resident was following his truck and at some point had attempted to flatten the tires on the car with a drill so it could not be towed.

Police later dropped off a statement form at the home.

Regardless of if the repo was or should be an essential business, the repo agent allegedly having a gun and the owner’s action is a bad situation that could have led to much worse.

The post Car Repos During Stay at Home Orders first appeared on John C. Hubbard, LLC.