Class Action Lawsuit Filed Against Experian for FreeCreditReport.com

Have you seen those catchy FreeCreditReport.com commercials on TV where a young man who cannot get the latest cell phone, desirable car or new home because of his poor credit score which he didn’t even know was poor because he never checked his credit report before? He goes on to sing his story and explain that he could have gotten his credit report “F-R-E-E / That spells ‘free’ / Credit report dot com, baby.” If you listen carefully at the fast spoken disclosure at the end (which isn’t sung to the same catchy tune) it states “free report with enrollment in Credit Advantage credit monitoring”. The fact that the F-R-E-E isn’t so free if you are charged month after month for credit monitoring if you missed the disclosure and it is exactly that fact that has Experian in trouble.

Experian own FreeCreditReport.com and airs those commercials. The way their free credit report works is you have to enroll in their monthly credit monitoring service which costs $14.95 per month. You are automatically enrolled in the service and have to call within nine days and cancel if you do not wish the service; however, after hearing the F-R-E-E commercials the monitoring service enrollment has been missed by many consumers. In fact the BBB has received more than 11,000 complaints about the FreeCreditReport.com service, so obviously the disclaimer has been missed by more than a few.

The lawsuit filed by a Wisconsin college student says it aims to “stop the fraud and seek compensation for the tens of thousands of consumers deceived by Experian’s FreeCreditReport.com to the tune of millions of fraudulently obtained profits.” Experian is no stranger to deceptive practices and has twice settled with the Federal Trade Commission over deceptive-advertising charges related to another of its credit-monitoring sites, Consumerinfo.com. Experian’s Concumerinfo.com paid the FTC more than $1 million in fines.

In this instance Experian is offering something that most consumers are legally entitled to a no-cost report once a year from each of the credit agencies - Equifax, Experian and TransUnion – anyway, without enrollment in any free programs. If you are interested in receiving a free credit report to check for its accuracy visit:

https://www.annualcreditreport.com/cra/index.jsp

If you have current or old outstanding delinquent debts which you would like to eliminate from your credit report by paying only a small portion of the balance contact www.CreditCardDebtNegotiator.com.

WV Attorney General Files Complaint Against Capital One For “Unconscionable Conduct”.

Attorney General Darrell McGraw has filed a lawsuit against Capital One Bank (USA), N.A. in the Circuit Court of Mason County, West Virginia, for unfair and deceptive acts and practices, unlawful debt collection practices, and unconscionable conduct in connection with their credit card lending and collection practices. The complaint alleges that Capital One sent consumers letters disguised as new offers of credit when in fact they were to enter into debt repayment plans of existing, charged off credit card accounts.

See complete complaint at http://www.wvago.gov/pdf/capitolonecomplaint.pdf

Under the terms of the offer, Capital One would provide the consumer $1.00 of new credit in exchange for the consumer’s agreeing to transfer the entire account balance of a charged-off account to the new credit card account. Transferring the old debt onto a new credit card allowed Capital One to charge interest, late fees, and over-the-limit fees on debt that were not subject to those fees otherwise. Capital One was then able to re-age the debts so that the statute of limitations period was set back to zero, meaning for example in West Virginia where a credit card company can only sue a consumer for five years from the last payment, the five year period reset, giving Capital One more time to sue the consumer for the delinquent debt.

In West Virginia alone it is estimate Capital One has a half of a million (500,000) card holders and the Capital One scheme was presented to consumer card holders in all states. This is a far reaching scam affecting millions of American consumers. Attorney General McGraw stated, "Capital One’s practice of offering nominal extension of credit, if and only if, the consumer agreed to pay off a debt too old to be sued on is tantamount to loan sharking."

In a time when so many consumers are hanging on by a thread financially, Capital One has taken advantage of those desperate individuals by trying to trick them into a less than beneficial situation. The underlying planning to create this proposal and implement the plot on consumers seems sinister. These are hard times for American consumers and businesses alike, however one difference is the banks received a bail-out and the consumer seems to be having to pay for it in more ways than one.

If you have a Capital One or any credit card which you want to negotiate to a small portion of the balance and get it paid off for good, contact the credit card debt negotiation experts at www.CreditCardDebtNegotiator.com or call (614) 453-5963 for a personal, confidential, entirely free consultation.

Court Rules in Favor of Consumer

Requesting validation of an alleged debt is common practice today and more and more consumers are aware of this right and exercising it in relation to all collection notices. The Fair Debt Collection Practices Act (FDCPA) under Section 1692g, et seq. requires that all debt collectors provide consumers with a “30-day validation notice” within five (5) days of their initial contact with the consumer, explaining the consumer has 30 days to request a validation of the debt from that collector. When a consumer receives a collection letter, under the FDCPA, the consumer has the right to request a validation of the debt, which basically means the consumer wishes the collector to contact the original creditor and check to make sure the debt is truly owned by him or her and that the amount stated due is accurate. The intent of the legislature is to make sure a collector is collecting from the correct consumer for the correct amount.

One catch is that the consumer must request this validation from the collector within thirty (30) days of the first collection letter received from that collector. Once the initial thirty days have passed the debt is basically assumed valid or accepted by the consumer. If a debt is disputed the collector must stop all debt collection efforts (phone calls, collection letters, etc.) until a validation is provided to the consumer. If the collector continues collecting without providing validation there has been a violation of the FDCPA and the consumer (if a lawsuit is brought against the collector and the consumer prevails) may be entitled to a $1000 statutory award.

Recently the Second Circuit Court of Appeals held in Ellis v. Solomon and Solomon P.C that the defendant violated the Fair Debt Collection Practices Act when it filed a collection lawsuit against a debtor during the 30-day validation period without providing additional explanation to the debtor about how the lawsuit affected the notice. Ellis had requested a validation and two weeks later received a collection lawsuit. The Second Circuit held that the validation notice in the original collection letter was “overshadowed” when the debt collector served Ellis with a summons and complaint during the validation period without explaining that the lawsuit has no effect on the information conveyed in the validation notice.

The courts held that even though collectors have a right to continue their efforts to collect debts during the validation period under the FDCPA, if they do not wait until the end of the 30-day period to file a lawsuit they must explain the lawsuit’s lack of impact on the previous disclosures to the consumer.

This ruling was in the Second Circuit, which consists of Connecticut, New York and Vermont.

The Ellis ruling is a small victory for consumers, making the notices and information clearer and more understandable. Debt collectors, including collection attorneys will go to any length to collect funds, whether it is from the correct consumer or within the law. There are a growing number of lawsuits against debt collectors for violations of the FDCPA. This is reflective of the growing number of “collect by any means” mentality of the collection business.

According to WebRecon, LLC, The number of FDCPA lawsuits against debt collectors is growing significantly each year.

2009: 8287 FDCPA
2008: 5188 FDCPA
2007: 3813 FDCPA
2006: 3220 FDCPA

Being in debt is never a good situation and hardly anyone does it on purpose. Life situations force us to take steps to survive and then we are left with the aftermath. This ruling at least helps to give consumers some additional protection against abusive debt collection tactics, especially for some consumers not as sophisticated and may not understand collection letters and their meanings.

If you have oppressive debts and would like a free debt consultation, contact www.CreditCardDebtNegotiator.com, or call (614) 453-5963.