Chicago Business Litigation Lawyer Blog

Summary Judgment Stands for Consumer Class Alleging Unfair Debt Collection Practices, Seventh Circuit Rules

March 15, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

In a consumer protection and debt collection case, the Seventh Circuit has decided that a Wisconsin trial court was correct to grant summary judgment to a class of Cingular Wireless customers. Seeger v. AFNI, Inc., No. 07-4083 (7th Cir. December 8, 2008). The Cingular (now AT&T) customers had sued AFNI, Inc., a debt collector for Cingular, alleging it was charging a collection fee that consumers hadn’t agreed to and that was not permissible under Wisconsin law. Responding to a summary judgment motion by a certified class of consumers, the trial court found that AFNI violated both the Fair Debt Collection Practices Act (FDCPA) and the Wisconsin Consumer Act.

The plaintiffs were Cingular customers in Wisconsin. Each had signed a contract agreeing to pay the fees of a collection agency. They fell behind in their payments and eventually received letters from debt collector AFNI, which had bought their debt from Cingular, saying they owed a collection fee of 15% of the original debt. A second letter included the 15% fee in its total balance due. The plaintiffs sued, saying neither the contracts nor Wisconsin law allowed a separate collection fee for the owner of the debt (as opposed to a third-party debt collector). The trial court granted summary judgment to AFNI on one state claim and to the plaintiffs on another state claim, as well as the FDCPA. AFNI appealed.

The appeals court first rejected AFNI’s argument that its debt collection practices fall under Wisconsin laws allowing wronged parties to collect damages for breach of contract. If it could prove this, the court wrote, it would also need to prove that the 15% fee reflected its actual costs. However, the court pointed out that AFNI presented no evidence that would prove this, and general debt collection industry practices don’t support any such assumption.

Motion to Dismiss Denied in Proposed Federal Class Action on Alleged Fraud by OnStar and Four Automakers

March 11, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

Lubin Austermuehle DiTommaso is pleased to announce that we are part of a large auto dealer fraud class action lawsuit that recently survived a dismissal motion in the Eastern District of Michigan. In Re: OnStar Contract Litigation is a proposed class action consolidating lawsuits from around the nation against OnStar Corporation and four automakers that include the company’s technology in their new vehicles.

Along with other attorneys, our auto dealer fraud lawyers represent consumers who purchased vehicles with a version of OnStar that relies on analog cellular phone technology. The FCC voted in 2002 to phase out that technology and replace it with digital by Feb. 18, 2008. The “sunset period” was intended to allow companies time to phase out products based on analog technology and replace them with digital products. Nonetheless, our consolidated suit alleges, OnStar and the car manufacturers continued to sell analog OnStar to consumers allegedly without notifying them of the phase-out. When allegedly it did belatedly inform analog customers that their product would no longer work, it offered them a chance to pay for an upgrade to digital technology.

The case was consolidated in the U.S. District Court for the Eastern District of Michigan. On Feb. 19, 2009, the court considered the defendants’ motions to dismiss. In its opinion and order, the court started by rejecting the defendants’ request for a choice-of-law determination, saying it is inappropriate to make a choice this early. Thus, it declined to consider motions related to choice of law. However, it did order limited discovery on the choice of law to allow the court to determine class certification.

United States Postal Inspection Service Website Offers Important Tips For Avoiding Mail Fraud, Ponzi Schemes and Identity Theft

March 10, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The website for the United States Postal Service outlines many tips to avoid becoming a victim of mail fraud or ponzi schemes or indentity theft. You can click here to link to the website. The website has this to say about investment fraud and ponzi schemes:

Investment Fraud (Ponzi Schemes)

Fraudulent investment schemes are often marketed by telephone salespersons armed with high pressure and sophisticated selling techniques. Some swindlers surround themselves with the trappings of legitimacy — rented office space, a receptionist, investment counselors, and professionally designed color brochures describing the investment.

Best Websites to Learn About Consumer Law Issues — Our DuPage, Lake, and Cook County, and Chicago Consumer Attorneys Can Assist You in Junk Fax, Privacy Rights, TCPA and Other Consumer Rights Lawsuits

March 7, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

One of the best websites especially for lawyers to learn about consumer law issues and to review first rate legal briefs prepared by the top attorneys in the country who focus on consumer rights issues is the website of Trial Lawyers for Public Justice.

The website contains a section with briefs prepared by Trial Lawyers for Public Justice on a number of important consumer law issues that have nation impact. You can click here to look at that section and read any of the briefs contained in that section. The website also has a page with descriptions of some key cases and landmark consumer rights victories by Trial Lawyers for Public Justice.

Our consumer rights private law firm handles individual and class action cases that government agencies and public interest law firms such as Trial Lawyers for Public Justice may not be able to pursue. Class action lawsuits our 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 DiTommaso 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 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 corporate misdeeds.

FBI Website Provides Tips For Avoiding Internet Fraud

February 28, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The FBI maintains a number of web pages on fraud and internet fraud topics. The FBI web page on internet fraud provides tips for avoiding those scams “to protect yourself and your family from various forms of Internet fraud.” The following are the tips provided on the FBI’s web page:

Avoiding Internet Auction Fraud

Understand as much as possible about how the auction works, what your obligations are as a buyer, and what the seller’s obligations are before you bid.

National Fraud Center’s Internet Fraud Watch Website

February 27, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

The National Fraud Center’s Internet Fraud Watch Website provides alot of useful information to help consumers and businesses identify the latest internet fraud. The website has this to say about internet fraud:

The Internet offers a global marketplace for consumers and businesses. But crooks also recognize the potentials of cyberspace. The same scams that have been conducted by mail and phone can now be found on the World Wide Web and in email, and new cyberscams are emerging. It’s sometimes hard to tell the difference between reputable online sellers and criminals who use the Internet to rob people. You can protect yourself by learning how to recognize the danger signs of fraud. If you are a victim or attempted victim of Internet fraud, it’s important to report the scam quickly so that law enforcement agencies can shut the fraudulent operations down.

If you are a victim of internet fraud, consumer fraud, unfair debt collection practices, or purchased a lemon automobile, rv or boat our Illinois based internet fraud, consumer fraud and class-action private sector lawyers may be able to assist you obtaining redress if the FTC, Illinois Attorney General or other government agency is unable to help you get your money back.

Advertising is Excluded from ‘Professional Services’ in Insurance Coverage Dispute, Second District Decides

February 22, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

As business litigators and class action defense attorneys in Illinois, we recently noted an appellate decision on the subject favorable to the defense. An insurance policy that excludes coverage for “professional services” does not cover damages in a junk fax class action, the Second District Court of Appeal has decided. Westport Insurance Corporation v. Jackson National Life Insurance Company, No. 2-07-1205 (Ill. 2nd Dec. 19, 2008).

Stonecrafters, Inc. is the lead plaintiff in a class-action lawsuit over unsolicited faxes sent by Handleman Insurance Agency, Inc. Handleman sells health insurance policies as an agent for Jackson National Life Insurance Company. Jackson, in turn, has liability insurance from Westport Insurance Corporation. After Stonecrafters settled its suit with Handleman, Handleman assigned its insurance rights to the class, including its insurance from Westport (through Jackson). Westport then filed for a declaratory judgment that these damages are not covered by its contract. The contract covers losses “for damages… arising out of the conduct of the business of the insured agent in rendering services for others as a licensed… health insurance agent.”

Westport argued that the faxes — which advertised group health insurance — did not constitute business activities of an insurance agent. The trial court agreed and granted summary judgment in its favor. Stonecrafters appealed, saying the advertisement was a service to clients and should therefore be covered. The Second District disagreed. It used an analogy to a Texas case, Atlantic Lloyd’s Insurance Co. of Texas v. Susman Godfrey, L.L.P., 982 S.W.2d 472 (Tex. App. 1998), in which the insurer disputed coverage for a law firm that had allegedly defamed a doctor in its advertising. The Texas court found that the letter did not constitute “professional services” as used in the firm’s insurance policy because no legal advice or services were provided.

FTC “Consumer Sentinel” Database Relies on Individual Consumer Complaints to Monitor and Stop Consumer Fraud

February 22, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

If you believe you are the victim of a consumer fraud or scam that is harming many other individuals you should file a report with the Federal Trade Commission. The FTC maintains a Consumer Sentinel database which can be used by law enforcement authorities all over the world to fight consumer fraud. Click here if you want to learn more about that database or want to make a complaint with the FTC.

The FTC has this to say about its Consumer Sentinel database:

Your complaints can help us detect patterns of wrong-doing, and lead to investigations and prosecutions. The FTC enters all complaints it receives into Consumer Sentinel, a secure online database that is used by thousands of civil and criminal law enforcement authorities worldwide. The FTC does not resolve individual consumer complaints.

Best Websites to Learn About Consumer Law Issues — Our DuPage and Cook County, and Chicago Consumer Lawyers Can Assist You in Junk Fax, Privacy Rights, TCPA and Other Consumer Rights Lawsuits

February 15, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

One of the best websites to learn about junk fax law issues and the Telephone Consumer Protection Act (“TCPA”) and to find lawyers in your region who focus on junk fax lawsuits is the website of TCPALaw.com.

The website contains comprehensive information about the TCPA and junk fax case law and lawsuits. There is no better place on the internet to learn about the TCPA and junk fax issues.

Our firm has actively pursued junk fax class action and individual cases for a number of years. We have sucessfully prosecuted and settled junk fax class-actions resulting in subtantial settlements for the victims who have had the opportunity to collect much of their statutory damages through a claims process. We are currently prosecuting and investigating class actions in Chicago, Maryland and throughout the country involving violations of statutory privacy rights involving other federal statutes such as the Fair Credit Reporting Act (“FCRA”).

Best Websites to Learn About Consumer Law Issues — Our DuPage and Cook County, and Chicago Consumer Lawyers Can Assist You in Your Lemon Law, Auto and RV Fraud, Unfair Debt Collection, Unfair Wage Practices Claims and Other Consumer Rights Lawsuits

February 1, 2009 | Peter S. Lubin, Patrick Austermuehle and James V. DiTommaso

One of the best websites to learn about consumer law issues and to find lawyers who focus on consumer rights issues is the website of the National Association of Consumer Advocates.

The website contains numerous links to sections on Auto Fraud, Lemon Law, Predatory Lending Practices, Credit Reporting Problems and Debt Collection Abuse.

Class action lawsuits our 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 DiTommaso 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 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 corporate misdeeds.