Consumer Fraud/Consumer Protection

Reuter’s Reports: “B of A to Pay $410 million to Settle Over Draft Lawsuit”

February 6, 2011 | Peter S. Lubin and Patrick Austermuehle

A number of national banks have been facing class-action lawsuits for allegedly misusing over draft fees on checking accounts to generate hundreds of millions of dollars in extra revenues. The way the Banks have achieved this is by reorganizing debits from debit cards by the size of the transaction as opposed to in date order and also denying customers the option of turning the transaction down and then charging large fees for the overdrafts.

Reuters reports that Bank of America has agreed to pay $410 million to settle a class-action lawsuit that has been pending for a number of years which makes these very allegations. To read the full article click here.

Our Woodstock, Illinois consumer rights private law firm handles individual and class action predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. The Chicago consumer rights attorneys at Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

NPR Reports: “For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports”

January 4, 2011 | Peter S. Lubin and Patrick Austermuehle

Our Chicago consumer rights attorneys are pursuing and investigating class-action lawsuits against for profit trade schools that have allegedly duped students into taking classes even though there is little or no prospect of the students obtaining work in the field after taking the course. We have obtained class certification in one such case and seeking to file other cases under the correct factual circumstances.

If you have been duped into paying a subtantial sum to a for profit trade school only to find that it is impossible to find a job in the field, please contact one of our Chicago consumer rights lawyers online by clicking here. Lubin Austermuehle’s Oak Brook and Chicago consumer class action attorneys have been handling consumer rights and class action cases for over a quarter century. You can view the the types of cases we have handled at our website.

NPR Reports: “Holes in Monitoring System Let Lemons Get Resold”

January 4, 2011 | Peter S. Lubin and Patrick Austermuehle

Our Chicago auto-fraud lawyers focus on bringing suit for auto-fraud claims. We recently settled a suit involving purchase of $9,000 used car that was in reality 3 different cars welded together for $100,000. Our fees come from the recovery and we only get paid if we win or settle your case. We have has similar large six figure or near six figure settlements for clients who purchased certified used cars that in fact were rebuilt wrecks.

If you believe you purchased a motorcycle, car, rv or other product that is a lemon, have been a victim of auto fraud, auto dealer fraud, auto repair fraud or have been deceived into buying a flood car, rebuilt wreck or salvage vechicle Lubin Austermuehle may be able to help rectify the problem. We or experienced co-counsel are prepared to file suit in the right case in the Chicago area or anywhere in the country. For a free consultation on your rights as an employee, contact us today.

Our Auto Dealer Fraud, Auto Repair Fraud Auto Fraud, RV Fraud, Motorcycle Fraud and Boat Fraud private law firm and our affliated co-counsel handle individual and class action consumer rights, lemon law, and autofraud lawsuits that government agencies and public interest law firms may decide not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. Lubin Austermuehle is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to employee and consumer fraud and rip-offs, and in the right case filing employee or consumer protection lawsuits and class-actions you too can help ensure that consumers’ rights are protected from unscrupulous, illegal or dishonest practices.

Kentucky Supreme Court Affirms that Consumer Class Action Can Proceed as Class Actions

December 21, 2010 | Peter S. Lubin and Patrick Austermuehle

The Kentucky Supreme Court rejected a contractual ban on class actions by Insignt in a case regarding a mass shut down of consumer internet services

The Court held a class action “is often the only economically viable legal procedure” to address a large volume of very small claims, the court said in an opinion issued Thursday. For that reason, it said, a ban on class actions like the one in Insight’s contract “may effectively shield a company from liability for unlawful activity.” In the Insight case, consumers were seeking refunds on $40 bills and absent a class action that would not able to retain a lawyer to act as a private Attorney General to vindicate their rights and those of the other victims.

The Court provided this example:

Fifth District Reverses Decision to Deny Arbitration Clause in Fiduciary Duty Case

December 21, 2010 | Peter S. Lubin and Patrick Austermuehle

Our Illinois alternative dispute resolution lawyers noted an opinion from the Fifth District Court of Appeal reversing a trial court that declined to compel arbitration. In Hollingshead v. A. G. Edwards & Sons, Inc., No. 1-09-0067 (Ill. 5th Jan. 22, 2009), the court ruled there simply was not enough evidence to support the trial court’s decision to deny to compel arbitration. The case pits Carol Hollingshead, independent administrator of the estate of Selma Elliott, against Elliott’s investment company and Leonard Suess, an investment advisor there and Elliott’s son-in-law. Hollingshead sued the defendants for various causes of action related to financial mismanagement, but defendants moved to compel arbitration under several contracts related to the investment accounts. The trial court denied this motion without an explanation or an evidentiary hearing.

Elliott passed away in 2003 at the age of 101. During her lifetime, she had an account at A.G. Edwards, managed by Suess. Her power of attorney was granted to her daughter, Judy Suess, at the time of her death, so that Judy Suess could manage Elliott’s affairs. Those affairs included 11,000 shares of stock in the pharmaceutical company Merck, which had a value of $985,000 in 2001. Around 1994, defendants used that value to open up a margin account and buy other stock. Unfortunately, the value of her portfolio dropped significantly and the defendants began selling off the Merck stock to cover margin calls. Plaintiff claims this triggered tax liabilities that could easily have been avoided if the sale had happened after Elliott’s death. She sued them for breach of fiduciary duty, breach of contract and negligence.

However, Elliott had signed three contracts with Edwards before her death and Judy Suess as power of attorney had signed another, and all of them had an arbitration agreement. Defendants moved to dismiss the case and compel arbitration on this basis. The trial court heard arguments that did not get into the record on appeal, then denied the motion without comment. Defendants filed an interlocutory appeal. They argued that the contracts are the only evidence in the record and clearly apply to the lawsuit. The plaintiff argued in response that the arbitration agreements are substantively and procedurally unconscionable and the product of undue influence, all of which make them unenforceable. Defendants responded that this is a question for an arbitrator to decide.

The Fifth started with this last issue. It did not agree. Under caselaw, arbitrability is an issue for the courts unless the parties have specifically agreed otherwise, it wrote. The plaintiff is not challenging the validity of the contracts as a whole — indeed, she is relying on them in the breach of contract count.

Next, the court examined the plaintiffs’ arguments to invalidate the arbitration agreements. Under the Federal Arbitration Act, arbitration agreements are enforceable except “on such grounds that exist at law or in equity for the revocation of any contract.” This includes the plaintiff’s claims of unconscionability and undue influence. However, the court found that generally, there was no support in the record for the plaintiff’s arguments. To support the claims of unconscionability, the plaintiff made allegations in her complaint about Elliott’s age and the relationship between her and the Suesses, but did not provide any evidence, the court said. Nor do the allegations in the complaint, even if taken as true, support those defenses, it added. Under caselaw, advanced age is not enough in itself to show that a person is incapable of signing contracts, the court noted, and there is nothing per se procedurally unconscionable about having a relative for a broker.

Similarly, the Fifth found no evidence in the record to support the undue influence claim, aside from unsubstantiated claims about the familial relationship between Elliott and the Suesses. The plaintiff also made claims for substantive unconscionability, saying the $1,575 cost of arbitration is too high and the forum is biased. Again, the Fifth found, these claims are not supported by sufficient evidence in the record. It also dismissed a claim that waiving judicial review is inherently unconscionable, noting that this is directly contradicted by the FAA. For those reasons, the Fifth found that the trial court should not have declined to compel arbitration without an evidentiary hearing. It reversed that decision and remanded it to the trial court for further proceedings — including an evidentiary hearing, the Fifth said, if the plaintiff requests one.

New York Times Reports That New California Law is Preventing Consumers in Foreclosures From Hiring Attorneys Because too Many Lawyers in That State had Been Assisting in Foreclosure Assistance Scams

December 21, 2010 | Peter S. Lubin and Patrick Austermuehle

A fine balance exists between consumer laws which the government believes protect consumers from scams and interfering with the free market and access to justice. Credit repair organizations which take money in advance can perform a valuable service to help consumers get refinancing but many unscrupulous credit repair outfits simply charge a large fee in advance and then deliver little or no service. Federal law and many state laws forbid credit repair outfits to take money in advance but exempt lawyers. Our firm has prosecuted and defended class actions and Attorney General actions involving credit repair outfits who take money in advance.

Due to so many credit repair scams in that state for mortgage foreclosure modification services California passed a law forbidding lawyers for taking money in advance for foreclosure services, the New York Times reports.

The article states:

Elizabether Warren Outlines First Goal for Federal Consumer Protection Agency to Ensure Financial Products Terms are Disclosed in Plain English

December 13, 2010 | Peter S. Lubin and Patrick Austermuehle

Elizabeth Warren the head of the new Federal Consumer Protection Agency sat down with Michelle Singletary the Washington Post to explain the first goal of the new agency. Warren told Singletary the the Ageny’s first initiative would be to ensure that banks and finance companies compete on an even playing field on the interest rates and other terms they offer consumers rather than hiding those terms in a thicket of legalese. If pricing for financial products is clearly disclosed then more consumers will know what they are purchasing and will not get caught unawares by a teaser loan rate that suddently spikes making it impossible for them to pay their mortage or credit card bills. This will also encourage that banks and finance companies begin to compete more on pricing.

The article states:

But right now, Warren says her focus is on helping consumers understand how much they are paying for debt on everything from credit cards to mortgages. At a recent conference held by the Consumer Federation of America, Warren said the bureau’s initial goal isn’t to impose a series of “thou-shalt-not rules.” Instead, she said that first on the agenda is providing consumers with better and shorter credit disclosures. Although this goal may sound so simple, it has the potential to greatly reduce the financial burden for people, because they don’t fully comprehend how much their debt is really going to cost them. “There are a lot of financial institutions that make their money by keeping products confusing so the price isn’t clear until it’s way too late,” Warren told me. “They make money by concealing risk, which means that people can’t compare the products head to head.”

Courts Must Decide Admissibility of Questionable Expert Testimony Before Certifying Class

November 23, 2010 | Peter S. Lubin and Patrick Austermuehle

A recent decision by the Seventh U.S. Circuit Court of Appeals will have important implications for our practice as Illinois class action attorneys. In American Honda Motor Company Inc. v. Allen et al., No. 09-8051 (7th Cir. April 7, 2010), the Seventh ruled that trial courts must conclusively rule on the admissibility of expert testimony before certifying a class — when the testimony is essential to the class certification decision. The case is a proposed class action filed in the Northern District of Illinois by people who bought Honda’s Gold Wing GL1800 motorcycle. The plaintiffs claim there is a defect creating unusual amounts of “wobble,” or oscillation of the front steering assembly.

To support a motion for class certification, the plaintiffs used a report prepared by motorcycle engineering expert Mark Ezra. Ezra used a standard of his own devising to support his opinion that the Gold Wings’ wobble was beyond what was reasonable to avoid overcorrections or fear by the rider. He tested one such motorcycle, found it insufficient and suggested that Honda could fix the problem by using a different shape of ball bearings. Honda moved to strike this report, claiming it was unreliable and that the testing based on one motorcycle was not reliably applied.

The district court agreed that Honda had raised some important concerns, and that class certification rested largely on Ezra’s report, but declined to exclude the report entirely so early in the case. It dismissed Honda’s motion without prejudice and certified two classes. Honda appealed the class certification decision, and the Seventh found the appeal appropriate, because the issue is “heavily contested” and has not been addressed at the appellate level.

The Seventh wrote that the district court started off correctly by starting an analysis of the expert testimony as provided by Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). Despite the detail in its analysis and the several troubling flaws it noted, however, the district court declined to exclude the report entirely “at this early stage of the proceedings.” By ruling in this way, the district court left an open question about which aspects of the report would be excluded, and ultimately, whether the plaintiffs met the standards for class certification. That was so insufficient that it was an abuse of discretion, the appeals court said.

Furthermore, the court wrote, the record shows “exclusion [of Ezra’s report] is the inescapable result when the Daubert analysis is carried to its conclusion.” The record shows Ezra’s report fails several tests laid out in Daubert and is “unreliable,” the Seventh wrote, which means it should not be admitted. And without admission of that testimony, the plaintiffs do not have enough evidence to show that their class meets standards of class certification. Thus, the Seventh vacated the lower court decision to grant class certification and remanded the case for further proceedings. In general, the court wrote, when the testimony is essential to the class certification decision, as it is here, a district court must conclusively rule on any challenge to the expert’s submissions or qualifications.

AT&T Case Heard By Supreme Court and Most Media Outlets Predict Consumer Victory Based on State’s Rights Principles

November 11, 2010 | Peter S. Lubin and Patrick Austermuehle

Slate published an excellent article handicapping that the Supreme Court in the AT&T case will vote in favor of consumer class actions continuing. The article explains in in plain English what is at stake in the case and the arcane legal issues on which the decision will turn. You can view the entire article by clicking here. This article like most of those written by the major newspapers, media outlets and blogs, such as the Wall Street Journal, New York Times, ADR Blog, predicts a consumer victory based on deference to state’s rights and California’s right to invalidate an unconscionable class action ban in an arbitration agreement.

The Slate article states:

In plain English, the Supreme Court needs to decide whether Corporate America can make ordinary slobs like us, who sign take-it-or-leave-it contracts, give up our right to file class-action suits. And in case you’re wondering why class-action suits matter to us ordinary slobs, consider this: Not a lot of lawyers are willing to take on AT&T for $30.32. Sometimes the only way to police misconduct—particularly small differentials in pay (based on, say, race or gender) or itsy bitsy fraudulent representations—is by pooling litigants together and suing together as a class.

Indiana Attorney General Warns About Extended Warranty Fraud

November 7, 2010 | Peter S. Lubin and Patrick Austermuehle

Our Chicago automobile fraud attorneys focus on bringing suit for auto-fraud claims. We recently settled a suit involving purchase of $9,000 used car that was in reality 3 different cars welded together for $100,000. Our fees come from the recovery and we only get paid if we win or settle your case. We have has similar large six figure or near six figure settlements for clients who purchased certified used cars that in fact were rebuilt wrecks.

If you believe you purchased a motorcycle, car, rv or other product that is a lemon, have been a victim of auto fraud, auto dealer fraud, auto repair fraud or have been deceived into buying a flood car, rebuilt wreck or salvage vechicle Lubin Austermuehle may be able to help rectify the problem. We or experienced co-counsel are prepared to file suit in the right case in the Chicago area or anywhere in the country. For a free consultation on your rights as an employee, contact us today.

Our Auto Dealer Fraud, Auto Repair Fraud Auto Fraud, RV Fraud, Motorcycle Fraud and Boat Fraud private law firm and our affliated co-counsel handle individual and class action consumer rights, lemon law, and autofraud lawsuits that government agencies and public interest law firms may decide not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. Lubin Austermuehle is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to employee and consumer fraud and rip-offs, and in the right case filing employee or consumer protection lawsuits and class-actions you too can help ensure that consumers’ rights are protected from unscrupulous, illegal or dishonest practices.