The U.S. Court of Appeals for the Eighth Circuit affirmed a trial court’s judgment against a guarantor holding that a guaranty signed upon the advice of his financial advisor was binding even if he did not know the amount of the debt because he understood that he was signing a guarantee and the guarantor’s fraud in the factum defense required him to be deceived as to the type of document signed. A copy of the opinion in Radiance Capital Receivables Eighteen, LLC v. Concannon is available at: Link to Opinion. The plaintiff signed a general guaranty for the debts of a…
Posts published in “Consumer Financial Services Law”
On March 26, West Virginia Gov. Jim Justice approved House Bill 3143 which amends the state’s Consumer Credit and Protection Act. First, current law provides that a Regulated Consumer Lender License is required for: Making regulated consumer loans; or Taking assignments of or undertaking direct collection of payments from or enforcement of rights against consumers arising from regulated consumer loans (W. Va. Code § 46A-4-101). The amendment excludes from licensing under this section collection agencies that are licensed pursuant to the West Virginia Collection Agency Act. Second, the bill increases the dollar thresholds for certain loans to which maximum finance…
In a 5-4 ruling, the Supreme Court of the United States held that anti-steering provisions in agreements between a credit card company and merchants wishing to accept the card do not violate federal antitrust law. A copy of the opinion in Ohio v. American Express Co. is available at: Link to Opinion. The defendant credit card company required merchants who wanted to accept the company’s credit cards to agree to an anti-steering contractual provision. Under the company’s business model, and unlike other credit card companies, it earned most of its revenues not from collecting interest from cardholders but from merchant…
The U.S. Court of Appeals for the Third Circuit recently reversed the dismissal of a consumer’s complaint for unauthorized use of his credit card, holding that he stated claims for relief under the federal Fair Credit Billing Act’s correction of billing errors provisions, and the federal Truth in Lending Act’s unauthorized-use provisions. In so ruling, the Court held that: When “a creditor removes a disputed charge from a billing statement and later reinstates that charge, the 60-day period in which a consumer must file a written dispute begins when the consumer receives the first statement reinstating the charge.” “A cardholder…
In an important decision for the debt buying industry, the Massachusetts Supreme Judicial Court held that passive debt buyers are not “debt collectors” under the Massachusetts Fair Debt Collection Practices Act (MDCPA). A copy of the decision in Dorrian v. LVNV Funding, LLC is available at: Link to Opinion. An amicus brief filed by Receivables Management Association International and written by Maurice Wutscher attorneys in support of the appellant is available at: Link to Amicus Brief. In Massachusetts, “debt collectors” must obtain a license from the Division of Banks, the state agency tasked with regulating debt collection in the Commonwealth. Under the MDCPA,…
The California Supreme Court recently held that unnamed class members do not become parties of record under Cal. Code of Civil Procedure section 902, with the right to appeal the class settlement, judgment or attorney fees award, unless they formally intervene in the class litigation before the action is final. A copy of the opinion in Hernandez v. Restoration Hardware, Inc. is available at: Link to Opinion. In 2008, the plaintiff filed a class action law suit against the defendant, alleging the furniture company committed numerous violations of the California Song-Beverly Credit Card Act, Cal. Civ. Code § 1747, et seq.,…
The U.S. Court of Appeals for the Tenth Circuit recently held that a consumer had no claim under the federal Fair Credit Billing Act (FCBA) where he had already fully paid the balance of his credit cards, because after full payment there was no “credit outstanding.” A copy of the opinion in Hasan v. Chase Bank USA, NA is available at: Link to Opinion. The plaintiff consumer used a credit card from a bank (“Bank One”) to pay $689,176.92 to a company for the future delivery of wine. The consumer used another credit card from another bank (“Bank Two”) to…
The U.S. Court of Appeals for the Seventh Circuit recently held, over extensive objections by intervenors, that the trial court did not abuse its discretion in approving a class action settlement, despite alleged problems with the class notice and the fact that the attorneys’ fees award exceeded the total award to the class. In so ruling, the Court rejected the intervenors’ argument that the proponents of a class settlement must file briefs in support of settlement before the deadline to object. A copy of the opinion in J.G. Goodman, et al v. American Express Travel Related Services Co. is available…
The Supreme Court of the United States recently held that a state law penalizing merchants for charging a surcharge for credit card payments did not restrict the amount that a store could collect when a buyer paid by credit card (i.e., a regulation on conduct). Instead, the Court held that the state statute regulated how sellers may communicate their prices, and was therefore a regulation on speech subject to First Amendment scrutiny. As you may recall, in Dana’s R.R. Supply v. AG, 807 F.3d 1235 (11th Cir. 2015), the U.S. Court of Appeals for the Eleventh Circuit held that a…
The U.S. Court of Appeals for the Seventh Circuit recently reversed a trial court’s grant of class certification and remanded the case with instructions to dismiss the case with prejudice because the plaintiffs lacked standing to sue, having shown no injury in fact as required under Spokeo, Inc. v. Robins. A copy of the opinion Eike v. Allergan, Inc. is available at: Link to Opinion. A consumer plaintiff filed a putative class action against six pharmaceutical companies that manufacture eye drops to treat glaucoma. The complaint alleged that they violated the Illinois Consumer Fraud and Deceptive Business Practices Act and…
In an action brought by the Indiana Attorney General against a Florida-based foreclosure defense law firm and its owner-officer, the Supreme Court of Indiana recently held that none of the defendants were expressly or impliedly exempt from liability under four Indiana state consumer protection statutes. A copy of the opinion in Consumer Attorney Services, PA v. State, Ind is available at: Link to Opinion. A foreclosure defense law firm incorporated in Florida and its owner-officer subcontracted with at least five Indiana attorneys to provide local services through “of Counsel,” “associate,” and/or “Partnership” agreements with the law firm — prior to…
In a “doc prep fee UPL” class action, the U.S. Court of Appeals for the Eighth Circuit recently affirmed a trial court’s rulings as to class certification and application of a choice-of-law provision on a class-wide basis. In so ruling, the Court also reversed and remanded the lower court’s determination that the attorney’s fees for the class counsel should be paid solely from the common fund in light of the fee shifting provision in the contract. A copy of the opinion in Robert McKeage v. TMBC, LLC is available at: Link to Opinion. The named class plaintiffs purchased a boat…