Class Action Lawsuits: Banning Arbitration Unfavorable for Consumers

The Consumer Financial Protection Bureau (CFPB), created in the wake of the 2008 financial crisis, is typically portrayed as a federal agency that protects the little guy from powerful big banks. But reality looks much different. Read the full article…

Comments from Cary Flitter:

The financial crisis of 2008 brought on a recession and drove the U.S. economy to the brink of collapse. Much of this was caused by the repeal, over a period of years, of laws and regulations governing Wall Street and the spread of Forced Arbitration. Consumers and the public can take a step to rein in Wall Street excesses through Class Action Lawsuits. 

In a class action, one consumer can sue on behalf of a larger group of consumers who were harmed in the same way. This allows them to hire top lawyers at no cost, and to spread the expense. Banks and other lenders never liked class action lawsuits because they can require banks to refund millions over a large group of consumers. They would rather each individual consumer be forced to try to find a lawyer and sue for a refund of say, $50.

For over fifteen years, banks have been abusing the Arbitration law by inserting an arbitration provision into many, or most, loan agreements, credit card applications, and all manners of consumer contracts. (Arbitration clauses almost always ban class action suits.) 

A 2010 financial reform law permitted the Consumer Financial Protection Bureau to study – and if warranted, to ban – forced arbitration in certain consumer contracts. The CFPB study revealed what most had thought: banks and other lenders use Arbitration to get immunity from class action suits. And Wall Street isn’t at all happy that their party is coming to an end soon.

Forbes and other Wall Street publications can pick on the class action lawyers, but these specialized consumer attorneys take a great risk, usually over many years, to achieve justice, and often refunds, for large groups of consumers that would never occur otherwise. So, applause please for the CFPB and its Director Richard Cordray for standing up to Wall Street and, hopefully soon, restoring your legal right to go to court as a group to enforce your rights as a consumer.

Why was my Credit Application Denied?

Applications for new credit go through an approval process. The prospective lender has criteria that is considered when reviewing a credit application.  Factors such as the items listed below may have been examined:

–   Your credit and payment history
–   Your income
–   Your total debt to income ratio
–   Multiple applications for credit within a short period
–   Had you filed for bankruptcy
–   Your age
–   Do you need a co-signer

While specific qualification criteria may vary from one creditor to another, a determination is made whether to extend or deny the application. When a credit application is denied, the applicant will receive a letter from the creditor with an explanation of why the credit was declined. Here are some possible reasons behind your credit denial:

Errors on your Loan Application
Your application had errors.  Review your loan application to see whether information was incomplete or misspelled.  Check your identifying information closely for your full name, address, social security number, and birth date. Remember that multiple applications in a short amount of time could also hurt your ability to be approved.

Errors on your Credit Report
Within 60 days of a credit application denial, you may request a free credit report from each of the credit bureaus  —  Transunion, Experian and Equifax. Write to the bureaus for a new report.  Review them for listings that may be inaccurate.  If you see errors, such as duplicate negative listings, accounts that you do not recognize, or incorrect reporting, you must send written disputes to the credit bureaus.  Your dispute letter should include documents that illustrate why the error should be corrected.  Send your letter by Certified Mail, Return Receipt to the credit bureau.  They have 30 days to respond to your dispute.  If the bureaus continue to list the error, you may need to send a second dispute.

Employment History
Review your employment information. Make sure the listings for your employer(s) are accurate.  If there has been a lapse in employment, it could be a factor that was considered for the credit denial.

Credit Payment History
Erratic payment history can also lead to credit denial. Late or missed payments and charged off accounts reflect negatively on your payment history. High balances, collection accounts, and repossessions could also lead to denial.  Also, no credit history could be reason for denial. Creditors may be unwilling to offer credit if you don’t have a well-established credit score.

Public Records
Review your report to see if there are public records listed for bankruptcy, judgments, or tax (or other) liens.  If any of these items have been satisfied, you will need to dispute the listing with the credit bureau and provide documentation showing the obligation has been paid.

Financial Problems
Financial struggles can also be the root of credit denial. Collection accounts and a high debt to income ratio will reflect negatively on your credit history. A high number of credit inquiries are another negative.

Seek Legal Help


How Does Your Credit Grade Stack Up?

Good grades are not just for students. Do you know how your credit grade stacks up? You may want to buy a car, refinance your mortgage loan, or simply need a loan to pay off existing obligations. If you haven’t looked at your credit reports lately, now is a good time.

And it goes without saying, the higher your credit score, which is a numerical calculation based on your credit reporting history, lenders will offer more favorable credit terms.

When Can I Get a Free Credit Report?

You can obtain one free credit report from Transunion, Experian, and Equifax every twelve months, or under the following circumstances:

  • You have been denied credit within the past 60 days
  • You are a victim of identity theft
  • You are on public assistance
  • You are unemployed and plan to seek employment within 60 days

To request a credit report, the bureaus ask that you provide for security purposes proof of identity, such as a current driver’s license, pay stub or utility bill. It may take 10 to 15 days to receive your reports by mail. As well, you could request reports online by visiting:, or call:  877-322-8228.

How to Dispute Credit Report Errors

Common credit reporting errors include mixed credit files, stale data, misapplied payments, reports of judgments or bankruptcies that are not yours.  After reviewing a current credit report, if you see an inaccurate listing, you must dispute it promptly in writing.  Enclose documents that will illustrate the error. Send your dispute letter to the bureaus by Certified Mail, Return Receipt so that you have proof your letter was received.  The bureaus have 30 days to respond to your dispute.  If the error has not been corrected, you may need to send a second dispute.

Seek Legal Advice

Flitter Milz is a consumer protection law firm that represents people with problems involving credit reporting privacy and accuracy issues, contact from abusive debt collectors and wrongful vehicle repossessions by banks and credit unions.  Contact Us for a free evaluation of your legal concern.


Don’t Let Scammers Ruin Your Summer Vacation

As summer approaches, families and friends are busy making vacation plans to popular travel destinations. Most vacations go as planned, full of fun and sun. However, everyone has heard a vacation nightmare story. To avoid a horror story, consumers need to be extra cautious when renting a home or apartment for their trip. Scammers lurk online to fool innocent vacationers out of thousands of dollars.

Online classifieds are a favorite place for scammers to target victims. They often tap into listings for legitimate rental properties and make themselves the contact person in hopes that consumers will pay for the full rental or give a deposit up front. Sometimes vacation rental scammers create a completely fake rental listings for a popular vacation spot and ask consumers to make a deposit to hold their reservation, lying to people and stealing their saved up vacation funds.

To avoid falling victim to a vacation rental scam, it is important to do some research before agreeing to anything. You should research the rental property and the rental company to make sure it exists. Checking online for customer reviews and information from the Better Business Bureau are also good ideas when looking into a rental property. It is also best to avoid anyone who asks you to wire them money and pay with a credit card instead. If there is a problem with the rental, you can dispute the charges with your credit card company and request they reverse they charge.

Be sure to check and double-check details and background information about the property before you make any payments. The Federal Trade Commission and AARP have some more helpful tips to avoid these horrible summer trip scams.

IRS Warns of Identity Theft Scams

Identity theft remains a top priority for the Internal Revenue Service (IRS) this year. Identity theft is among the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS.
Taxpayers can encounter identity theft that involves their tax returns in several ways. Identity thieves try to file fraudulent refund claims by stealing and using another person’s identifying information.
Here are some tips to protect yourself from becoming a victim of refund fraud or identity theft this tax season:

  • Don’t carry around your Social Security Card or information with your Taxpayer Identification Number.
  • Don’t give a business your SSN or ITIN just because they ask – only give this information when required.
  • Check your credit report every 12 months.
  • Secure personal information and financial documents at home.
  • Protect your personal computers by using firewalls and virus software.
  • Change your passwords and pin numbers regularly.
  • Don’t provide personal information over the phone, through the mail or on the internet unless you know exactly who you are dealing with. Beware of doing this if someone has called you requesting financial, banking, or identification information. This could be scam. For example, the IRS does not call consumers to collect taxes or payments. They communicate through the mail or in person.

You may be a victim of identity theft if:

  • More than one tax return was filed for you.
  • IRS records indicate you received more wages than you actually earned.
  • Your state or federal benefits were reduced or canceled because the agency received information about an income change.
  • You have a balance due or collection actions taken against you for a year you did not file a tax return.

Anyone who receives a notice from the IRS and suspects their identity has been used fraudulently should respond immediately to the contact phone number provided on the notice.

If you did not receive a notice from the IRS, but still believe you’ve been the victim of identity theft, contact the IRS Identity Protection Specialized Unit at (800) 908-4490, ext. 245