In a world in which the practice of law has become so specialized, it is sometimes difficult to remember that every lawyer is ultimately representing people. Those people, in addition to their role in the workplace that may bring you in contact with them, are also consumers. It is also important to remember that we lawyers ourselves, and our families, friends and support staff are also consumers subject to the same protections that are available to others.
Because this column might be the only connection some lawyers have to trends in laws protecting consumers I thought it might be useful to identify trends in consumer protection claims in the event those people you come in contact with on a daily basis seek advice related to their own potential claims or problems they encounter in their personal lives as consumers. Here are some areas where emerging trends in consumer protection law might help your friends, family members, colleagues or even yourself.
The Telephone Consumer Protections Act
The next time you answer your cellphone to a recorded message of a steam ship horn followed by “This is the Captain Calling” you might want to remember the Federal Communications Commission has recently reiterated strong protections for individuals who receive unsolicited calls or texts on their mobile phones. The Telephone Consumer Protection Act 47 USC 227 et seq. (TCPA) restricts telephone solicitations and the use of automated telephone equipment. The TCPA limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages, and fax machines. It also specifies several technical requirements for fax machines, autodialers, and voice messaging systems – principally with provisions requiring identification and contact information of the entity using the device to be contained in the message.
If someone is calling, texting or faxing you or someone you know using an autodialer they may have a private right of action that can yield statutory damages of between $500 and $1,500. While debt collectors often violate this statute it is not limited to debt collectors and includes telemarketers.
Abusive Debt Buyers Unable to Prove up Their Claims or Suing Outside The Statute of Limitations
There has been an explosion of litigation by debt buyers who often quickly take default judgments against debtors in municipal court with little or no court supervision. Often these debts are previously paid, discharged in bankruptcy or are beyond the requisite statute of limitations. More often than not in our experience a plaintiff debt buyer and its counsel simply lack the ability to prove up its case in court. Simple steps to defend debt buyer claims could also yield a consumer claim of his or her own under the Fair Debt Collection Practices Act (15 USC 1692 et seq) or the Ohio Consumer Sales Practices Act (ORC 1345.01 et seq) both of which prohibit false statements in the collection of debts.
Difficulties Relating to the Transfer of Mortgage Servicing Rights
As the major banks in the country continue to systematically sell the servicing rights for home mortgage loans to smaller, more thinly-capitalized, non-bank loan servicers, we have seen an uptick in problems with the transfer of proper accounting records, discrepancies in escrow accounts for borrowers’ property tax and insurance payments and failures to honor or complete pending loan modifications. New Federal Regulation X under the Real Estate Settlement Procedures Act (12 USC 2601 et seq) and Regulation Z under the Truth in Lending Act (15 USC 1601 et seq) provide a mechanism to require loan servicers to correct errors within 30 business days or face liability by way of a private right of action by borrowers.
Loan Servicers Illegally Collecting Private Mortgage Insurance Premiums and Forced Place Insurance Premium
Related to, but not exclusive to, loans where servicing has transferred, a recent class-action lawsuit in Illinois alleges that at least one mortgage loan servicer has continued to collect private mortgage insurance (PMI) premiums from borrowers long after the original documents require. PMI can cost borrowers hundreds of dollars per month. Dozens of cases have already been settled relating to mortgage loan servicers purchasing overpriced forced place homeowners insurance often from their own subsidiaries, when a borrower’s own insurance remains in place.
I know the days of the general practice have come and gone, but it’s nice to be able to use our knowledge once in a while to help clients, family and friends understand some of the protections that are available to them under federal and state law. Marc Dann