Wrongful Credit Damage, Identity Theft and Debt Collection Abuse Blog

Hello all, sorry I haven’t written for a while.

My next big credit damages trial comes up in April against HSBC, formerly known as “Household Bank”. I suppose they formerly called themselves “Household” because that’s what they would grab, in its entirety, whenever you were late on a payment to them.

Our current case indeed shows their rapacious ways. It turns out HSBC is the actual credit card retailer and provider behind several retail stores, which HSBC does not disclose to the stores’ customers. In the current case, it was the former electronics store The Good Guys! HSBC was the actual credit card provider, and owned all of the credit accounts, for all of The Good Guys! customers.

My client, Stewart, had an established relationship with The Good Guys! in purchasing electronics on a “same as cash/no monthly payments” basis, and in fact had made four such previous purchases and had never defaulted on any of his obligations. On his fifth and final transaction with The Good Guys!, however, The Good Guys! clerk offered him the exact same terms but entered the purchase into The Good Guys!/HSBC’s system as “same as cash/minimum monthly payments required.” One month later, HSBC send my client a bill for a monthly payment, using The Good Guys! letterhead on the bill. There is no mention whatsoever of HSBC. My client disputes it, but rather than risk damage to his credit, he pays off the entire credit account, in full, figuring that would take care of it.

But Stewart did not realize which bank he was dealing with. Rather than accept the payment in full of the entire account, HSBC accelerated the entire account (Stewart had not finished paying off two of his previous transactions, as the time for final payment had not yet arrived) and charged him a hefty late fee. HSBC also dinged his credit. HSBC then adopted the terrorist tactic of “refusing to negotiate”. Stewart had to hire me to get anywhere with them.

HSBC’s defense, which I’m confident a jury would love, is that a “bill stuffer” which HSBC had sent around to its customers contained a whole bunch of small-print terms & conditions which essentially stripped Stewart, along with every other HSBC account holder, of all of his rights. Stewart never had to read and sign this bill stuffer (which identified itself as having come from HSBC, not The Good Guys!, further concealing HSBC’s role in this rip-off), because the bill-stuffer declared that if he’d used his card for any reason, or made a payment, following the mailing of the bill-stuffer, this was the same as signing off on the agreement. The bill-stuffer is about 14 pages long and has tiny, tiny print. It would take a trained lawyer a half-day to read it. Like we all have a half-day to read this crap when all we’re doing is buying some electronics?

Anyway, HSBC filed a bunch of motions to have the case thrown out of court, but the San Diego Superior Court said that Stewart gets a trial in this case. Trial is set for early April. Should be interesting. I’ll keep all & everyone updated on the progress of the case. Hopefully, a jury will see it our way & teach HSBC a good lesson about this kind of anti-consumer conduct.

Thanks for reading & hope you’re doing well.

Hello,

For some time, my clients have known that my firm consistently opposes efforts by big corporations, car dealers, credit card companies and the like to deprive consumers of their rights to have their disputes decided in a court of law with “binding arbitration agreements” often hidden in consumer finance and purchase contracts. You rarely see the binding arbitration agreement in anything you sign; in fact, sometimes big corporations trick consumers into “signing” binding arbitration agreements by putting them into fine-print bill-stuffers so they’re not read. These “agreements” provide that you have agreed to binding arbitration and a waiver of any class action remedies if you even use your credit card after having received the bill-stuffer for a single charge. Fair? Hardly.

Big corporations have for years argued that binding arbitration is really fair, and that’s why big corporations are really doing everyone a favor by depriving them of their right to choose to go to court. Mind you, my firm is not opposed to choice: if a consumer wants to go to binding arbitration with a single arbitrator or retired judge, and wants to go there voluntarily, we’re happy to go that route, but we always insist that the client should have the choice.

Binding arbitration agreements deprive consumers of the choice to go to court. That’s precisely what they’re designed to do, and that’s why big corporations, car dealers, etc. hide them in small print in the midst of the multi-page consumer contracts that they force people to sign.

Some of my clients, however, have posed the question to me: what is unfair about binding arbitration? The arbitrator is supposed to be fair, right? Well, the answer is no. Corporations usually use captive arbitration providers, such as JAMS, NAF (National Arbitration Forum) or AAA (American Arbitration Association), where the corporation, NOT the consumer, is the repeat customer. The judges know that their paychecks and their repeat business comes from the corporations, not from the consumers, so these forums are hardly impartial.

If you have any remaining doubts about whether these forums are impartial, consider one of their biggest proponents: Dick Cheney. Our venerable Vice President has done pretty much everything within his power, and quite a few things very much outside of his power, to make a mockery of our system of justice. His recent refusal to comply with legal and congressional subpoenas is but a “tip of the Cheney iceberg,” towards which our ship of state is sadly headed.

Cheney’s distaste for pesky little things like constitutional guarantees, the Bill of Rights and due process of law date back to his Halliburton days, if not before. In the 1990’s, when Cheney was CEO of Halliburton, he tricked all of the employees of Halliburton and its subsidiaries into “signing” binding arbitration agreements simply by showing up to work. In other words, the company sent out a fine-print notice indicating that by the simple act of showing up to work, you had consented to waive your right to trial by jury and consented to having any disputes against Halliburton decided by in a binding arbitration. Halliburton has a long history of terminating workers who have filed worker’s comp claims and has a reputation of firing or laying off “the old, the sick and the halt,” so it’s little wonder Halliburton decided that none of its employees deserved any right to a jury trial.

Fast forward to 2005, and Jamie Leigh Jones, an employee of Halliburton subsidiary KBR, goes to Iraq and encounters a slightly upsetting employment situation: she is drugged and gang-raped by her fellow employees, who then lock her in a shipping container and warn her that if she tries to go for medical treatment, she’d be fired. The US Embassy eventually had to free her from the shipping container. Jamie had evidently managed to contact her father, who, after having no luck pursuing her daughter’s protection or safety with KBR or Halliburton, called his US Representative, Ted Poe. Representative Poe similarly had no luck with calling the company, so Rep. Poe had to involve the US Embassy. Obviously, there are embassy witnesses to the allegations.

When Ms. Jones tried to sue in court…SURPRISE!!! Halliburton invoked its binding arbitration clause, and Ms. Jones cannot pursue her claims against her employer in a court of law.

All thanks to Dick Cheney.

So, if you ever ask me in the future why I oppose involuntary binding arbitration, or if I detect that you might be buying the corporate PR messages about how wonderful it is, I’ll simply respond: would you want your consumer dispute against a corporation decided by Dick Cheney?

I would certainly hope not.

Have a wonderful Christmas and you’ll hear from me in the New Year.

Bob Brennan

I often write my own posts to this blog but my clients and contacts often write their own. This is just in from Arizona:

“I am not writing to you seeking advice as I live in Arizona and have consulted an attorney here. My son has been sued by Arrow Financial Services. Nevermind the details of his debt, but they have named as a defendant in the lawsuit. My guess is that either they think I am his spouse or they are extending scare tactics in my direction. I am not a cosigner/ joint holder on this account. I’m sure they were annoyed when I wouldn’t give the process servers Eric’s address. I was annoyed with process servers that identified themselves as “employees of the State of Arizona” that could not produce supporting ID.

“Anyway, I just want to tell you that I couldn’t agree more with the following statement that you had made and that I found while researching AFS cases:

“’America no longer creates any new products. All it creates any more is debt. The key product of our economy is debt, plain and simple, and the debt collectors and major banks use debt to control, and destroy, our entire lives. I’m picking up more and more discontent from consumers because of this debt-driven economy and how we’re all hamsters in hamster-wheels working our tails off just to pay interest to debt collectors and big banks. One day, it’s all gonna break and it just might be a good thing when it does.’”

“I am truly disgusted by this whole junk debt buying industry. This week I am in the middle of final exams, but when they are finished I plan to find out how I can become more involved in this issue. Although I don’t have credit issues, I do have a lot of debt and nothing has been more motivating to me to pay it off than what I see this industry has done to young people, their parents and this country.

“Thank you for doing what you do.”

If any of you, my faithful readers, out there would like to write up something to put onto my blog, write it to me at rbrennan@brennanlaw.com. If it’s appropriate, I’ll put it up & leave your name out unless you specify that you’d like it up there.

Thanks for reading!!!

Bob Brennan

Dear Readers,

Thanks again for tuning in to this channel. I hope each of you had a wonderful Thanksgiving. Now it’s Christmas time, the time when families most go into debt during the year.

Here’s my Christmas wish for each of you:

1. Avoid going any more into debt than whatever debt load you already have.
2. If your kids want something that it would be tough for you to afford, sit them down and explain to them that you don’t have the money. Believe you me, you will not “scar” them. Many, many great men and women in this country came from modest means, and had to develop the fortitude to stand up to their more financially fortunate friends. It’s part of character.
3. Know in your heart that many of your kids’ “more financially fortunate friends” only appear that way because they are taking on MASSIVE amounts of debt to maintain a false appearance. Sure, there are some rich and fortunate people in this culture, but they are growing more scarce with each passing week as banks and finance companies hire business school graduates to do nothing but sit around 14 hours a day to dream up ways to get honest working people to take on more debt.
4. You declare that, beginning NOW (not on January 1st), you are going to be an exception. You are not going to let the debt vultures run your life any more. Period.
5. You then rearrange your life and your spending habits so you can actually afford your lifestyle. If your kids object, tell them to get a job. That certainly will not hurt them. They’re young kids? Well, can they babysit or help the neighbors with yardwork?
6. About the greatest gift you can give your kids this Christmas is the gift of financial responsibility. Have them read, “The Richest Man in Babylon,” which is inexpensive and available in any major bookstore. Teach them about a budget. Sure, some kids out there might have a pout on their faces when they don’t get their X-Box under the tree, but believe me, that pout will turn into an anguished wail over time if they don’t learn to put tough and dedicated controls in on their own finances.

Here’s a little message I received today from a lady I helped out with a simple referral. I dare say her little message applies to just about all of us:

“Thanks Robert for all the assistance with referrals…I have scoured the Internet and people like you and your colleagues are tough to find and no doubt very busy in your practice.

“Waking up from a 7 year semi-comatose state and looking at the reality of my life has been an “eye” opener in many regards. For many many years I worked overtime, became a slave to debt and wanting to do the “right” thing as I created the debt, but became exhausted just trying to keep up with the demands of paying credit cards and student loans; scared of the phone calls and what other people would say if they only ‘knew” what was really going on behind the facade–cutting myself from friends and family and feeling like a criminal. I now have the wherewithal and confidence not to be intimated, but it came out of my own painful journey and I now understand many people’s plight–I appreciate people like you that take on the the institutional “machines” that can grind people right into the ground physically, mentally, emotionally and most of all spiritually.”

Thanks for reading. Have a truly wonderful Christmas season.

Bob Brennan

13 November 2007

The biggest single commodity in our country is no longer oil or gold. It’s debt. There is a seemingly never-ending market for debt.

For those of you who are not familiar with this, let’s go over just a few facts to support my observation. Mortgages are “debt instruments”, i.e. ultimately these are security for paying a debt. Mortgage brokers who initially get approval for loans are never the ones who actually hold the mortgages and service them. The brokers pass mortgages off to banks and other big lenders, which in turn “securitize” them into big pools of mortgage loans which in turn are traded amongst the Wall Street giants like blocks of stock in any major corporation.

That’s just mortgage debt. Essentially the same activity can occur with credit card debt, car loans, student loans, medical debts or any other kind of debt out there. Debt equals cash flow, or, in other words, stream of income. The ability to collect a debt equals the ability to raise cash and increase the value of a portfolio of debt.

Obviously, debt has different “grades”, and Wall Street recognizes this. First mortgages would have a higher “grade” to a potential investor than, say, old medical bills. At the very least, a mortgage is secured by the collateral of real property somewhere, so there’s a far greater chance that the owner of the property will continue to pay on the debt, i.e. continue to create that cash flow for the owner of the debt instrument. For an old medical debt, the owner of the debt faces the possibility that the consumer will declare bankruptcy and either discharge the debt (eliminate or cancel it in bankruptcy proceedings) or have it reduced substantially under a “Chapter 13” debt repayment arrangement.

The competition for debt has become one of the biggest financial features of our current economy. So-called “junk debt buyers” will buy absolutely anything out there. Thus, we are getting more and more calls from persons being subjected to debt collection efforts by debt collectors who have purchased 20-year old debt, as outrageous as this seems.

However, the truly outrageous situation is where the junk debt buyers buy debt which has been discharged in bankruptcy. I know, that’s against the law. However, it is not stopping the junk debt buyers from buying this debt and attempting to collect it. They’re even credit-reporting it. After all, the consumer frequently declares bankruptcy only as a last resort, after years of financial stress and struggle, and with the specific intention of finally buying some peace and “starting over”. Well, with the new Bush-backed bankruptcy bill coupled with junk debt buyers buying up any debt they can lay their hands on, there is no more “starting over” in this economy, unless you’re a big corporation.

IF YOU ARE A CONSUMER WHO HAS DISCHARGED A DEBT IN BANKRUPTCY PROCEEDINGS AND A DEBT COLLECTOR IS NOW ATTEMPTING TO COLLECT ON THAT DEBT, WE ARE INTERESTED IN REPRESENTING YOU. First things first: provide the debt collector with a copy of the bankruptcy schedule, showing that the debt is discharged. If that does not stop collection proceedings, or if they continue to credit-report the debt on you, then call us promptly. Not only will we put an end to the collection proceedings but we’re also pretty confident we’ll be able to get you a judgment or settlement for your damages as well, plus our fees would be paid by the debt collector.

Thanks for reading. Pass this article around to your friends.

Bob Brennan

Hi all,

It’s a glorious day for consumer protection not only in the Western states but throughout the country! The Ninth Circuit Court of Appeals, which is the Federal Court of Appeals for California and for some other western states, decided Dennis v. Experian yesterday strongly in favor of consumer rights under the Fair Credit Reporting Act.

I know that this may sound a bit legal at this point, but hey, I’m a lawyer, but I’ll try to describe this in non-legal language. Dennis v. Beh was a decision rendered by the Ninth Circuit about six months ago or so. Among other things, Dennis v. Beh held that a credit bureau, such as Experian, had a complete right to rely strictly on the information being provided to it by the credit information furnisher without having to conduct its own independent investigation of the facts.

Dennis, the tenant, reached a settlement agreement with Beh, his landlord, over unpaid rent on an apartment. The settlement agreement included that the landlord would not enter a judgment against Dennis. Experian credit-reported that Beh had a judgment against Dennis, and Dennis disputed with Experian, repeatedly, by providing them with documents showing that the settlement agreement called for no judgment to be entered. Experian, however, had had its court checking service go to the courthouse, where there was an erroneous entry about a judgment which was later corrected. No matter. Experian positively refused to change the credit-reporting, and thereby damaged Dennis’ credit report and credit score.

In the first Dennis case of about six months ago, the Court of Appeals had ruled that Experian was allowed to rely on its court check service and on Beh, and did not have to conduct its own independent investigation of disputed credit items. This obviously would be a huge windfall for Experian and a huge defeat for consumers, for it would have allowed Experian and all other credit bureaus to completely disclaim responsibility for the contents of their credit reports, even if demonstrably false and damaging.

However, the latest Dennis decision positively reverses on a credit bureaus’ obligations to conduct its own independent investigations of disputed credit information. No longer can credit bureaus sit back, with utterly no responsibility, while false and damaging credit information builds up in their files. A credit bureau has a positive duty to conduct a reasonable investigation.

What is a reasonable investigation? I would not leave it to chance. If you’re disputing information in your credit report, include copies of any and all information which would help the credit bureau do the right thing. This could include copies of court papers or judgments, declarations from your creditors, any documentation to show the credit bureau that your dispute is sincere. Obviously send copies only, not originals, and keep a copy of anything you send. If you have to hire our firm later on to help you remove the false credit information, having copies of what you’ve sent to the credit bureaus is often the most important part of any case.

Thanks for reading!

Bob Brennan

On August 30, 2007, the Superior Court in Rancho Cucamonga, San Bernardino County, California ordered Wells Fargo Home Mortgage to pay fees and costs of $283.594.45 in addition to a damages award of $765,000 to Reed and Mary Ann Fisher of Oceanside. The Fisher’s allegations against Wells Fargo arose out of a two-year uncorrected pattern of false and inaccurate credit reporting which damaged the Fisher’s credit scores and which also resulted in credit denials. The Fishers were represented by Robert F. Brennan of Brennan, Wiener & Associates in La Crescenta, widely regarded as the leading consumer protection and credit damage law firm in Southern California. Reed & Mary Ann Fisher v. Wells Fargo Home Mortgage, Case No. RCV 074 822, San Bernardino Superior Court, Rancho Cucamonga Courthouse.

Rancho Cucamonga, CA (PRWeb) September 18, 2007—In March, following a seven-day jury trial, a civil jury in Rancho Cucamonga ordered Wells Fargo Home Mortgage to pay consumers Reed and Mary Ann Fisher $765,000.00 in actual and punitive damages in a lawsuit arising out of alleged false credit reporting by Wells Fargo over a two-year period. On August 30, 2007, Judge Martin Hildreth assessed attorney’s fees and costs against Wells Fargo in the sum of $283,594.45, bringing the total judgment to $1,045,594.45. Reed & Mary Ann Fisher v. Wells Fargo Home Mortgage, Case No. RCV 074 822, San Bernardino Superior Court, Rancho Cucamonga Courthouse.

Plaintiffs’ counsel Robert F. Brennan indicated that this was one of the largest verdicts of its kind in California history.

“I know that there have been a handful of judgments over $1 million in California for false credit reporting, but probably not enough. The credit reporting industry needs to get the message that false credit reporting can ruin a consumer’s life and that extra precautions need to be taken to prevent false credit reporting, and to promptly fix it when it does occur.”

In this case, Wells Fargo had two years of false credit reporting which effectively ruined the plaintiffs’ lives. In the spring of 2001, San Clemente residents Reed and MaryAnne Fisher had their home red-tagged because of land instability. They thought the biggest nightmare would be dealing with their red-tagged home, but this proved to be the lesser of their nightmares over the next two years.

The Fishers contacted Wells Fargo Home Mortgage, their mortgage servicer, and obtained a forbearance agreement so they did not have to make mortgage payments while their home was red-tagged. Ultimately, Wells Fargo transferred the mortgage to Freddie Mac, the mortgage holder, and Freddie Mac charged off the loan with a zero balance and no negative credit marks. The Fishers had always been current on their home mortgage payments, and had otherwise spotless credit.

Wells Fargo, however, continued to report false negative credit information to the credit bureaus that the Fishers were between 30 and 90 days late on their mortgage payments. Wells Fargo also began foreclosure proceedings on the Fisher’s home when it no longer even had the right to do so, because it had transferred the loan to Freddie Mac.

The negative credit entries from Wells Fargo made it extremely tough for the Fishers to get another living situation and to pick up the pieces of their lives, having been denied their good names and credit by Wells Fargo’s false credit reporting. This went on for two years. Wells Fargo would, on the one hand, send a letter to the Fishers stating that the credit information was being cleaned up, then on the other hand continue to report the negative credit information to the credit bureaus. Wells’ negative credit information damaged the Fisher’s credit scores.

The Fishers retained prominent Southern California consumer protection and credit damage attorney Robert F. Brennan of La Crescenta, to file a lawsuit to finally get Wells Fargo to stop the credit reporting. But with two years of negative credit reporting ruining their lives, the Fishers proceeded to trial to obtain their damages as well as a permanent court judgment showing that Wells Fargo had acted improperly.

On Tuesday, March 6, 2007 at 11:30 a.m., a Rancho Cucamonga jury gave them a judgment against Wells Fargo for $765,000 in actual and punitive damages. The court then added the sum of $283,594.45 in fees and costs in August. The Fair Credit Reporting Act allows consumers to recover their attorney’s fees and costs in the event of a favorable verdict.

“This is yet another example of how the big players in the credit reporting industry really ignore and neglect the consumers they’re supposed to protect,” says Brennan. “The Fishers tried for two years to clean up their credit by themselves, only to have the door slammed in their faces repeatedly. Only when they hired an attorney and filed a lawsuit did things start to improve. But by then a lot of damage had been done.”

Mr. Brennan also criticized Wells Fargo for acting as if the credit information belonged to Wells Fargo and not to the Fishers. “So often in these cases, you see an attitude that big banks like Wells Fargo believe that a consumer’s credit information belongs to the bank. It does not. If nothing else, I hope Wells Fargo learns from this verdict that a consumer’s credit information belongs to the consumer, and a bank has a sacred trust to protect it from wrongful damage.”

Contact Information: Robert F. Brennan, Brennan, Wiener & Associates, 3150 Montrose Ave., La Crescenta, Ca. 91214, (818) 249-5291. Mr. Brennan and his firm are the leading consumer protection and credit damage attorneys in Southern California. Mr. Brennan has been selected as a “Southern California Super Lawyer” for two years running, for both 2006 and 2007.

There’s a disturbing trend among credit card companies these days. They’re specifically targeting people just coming out of bankruptcy and using fraud and trickery to get them to “reaffirm” debts they’ve previously discharged in the bankruptcy proceedings.

It works like this. Let’s say you have a Visa card with a $5,000 debt on it when you declare bankruptcy. That debt is discharged forever, unless you “reaffirm” the debt. “Reaffirmation” refers to the process whereby a consumer agrees “voluntarily” to recognize the validity of a debt and pay it, although it has previously been discharged in bankruptcy.

After your bankruptcy, Visa decides to trick you into reaffirming your debt. Visa offers you a new credit card, but if you were to read the fine print, you would realize that in signing up for and accepting the new card, Visa is rolling the discharged debt of $5,000 into the new card. Viola! You need credit to begin your life again after bankruptcy, and you’ve just reaffirmed $5,000 of debt you’ve previously discharged.

Quite a trick, no? Well, the question becomes, how do you prevent this from happening. The answer is simple: when you come out of bankruptcy, be very careful about re-establishing your credit. Do it sort of like a teenager would who’s just beginning his or her credit life. Start with low-balance cards you can afford and keep the balance low, and obviously make the payments regularly and pay more than the minimum payment. Do that for a while (year or so) and the credit card company will likely accept any request from you to start raising your credit line. However, you will need to avoid what got you into credit trouble in the first place. Limit your credit cards and also limit your use of credit cards. Pay with cash or checks. It may take a bit of time but once you’re out of bankruptcy, you don’t want to return there ever and it takes some discipline to start running your life better. And, over time, you’ll have excellent credit because, ironically, you’re not using all of your credit and that which you are using, you’re using responsibly.

I hope this short note finds you well and please continue to have a good summer. Thanks for reading.