Picture this: you are served with a lawsuit by a debt collector for a credit card debt you do not owe. After fighting the suit in court, you discover the debt collector has mistaken you for someone of the opposite gender with a similar name. Despite uncovering this mix-up, the collector continues to prosecute the case against you for another year.
Maria Guadalupe Mejia recently found herself living this nightmare, trapped in a lawsuit by the lawyers representing the national debt buyer Portfolio Recovery Associates, LLC.
After nearly two years of harassment, however, Mejia flipped the script and countersued Portfolio for malicious prosecution. It seems the jury saw things her way: earlier this month, it awarded her $252,000 in real damages and $82,990,000 in punitive damages, or "punishment" damages, as a warning to Portfolio Recovery not to use this tactic with other debtors. Punitive damages are reserved for the most egregious collection abuses possible, and are intended to deter future harassment.
As for its part, Portfolio has expressed it incredulity at the size of the judgment. In an email to Credit.com, a spokesman for Portfolio said: "this outlandish verdict cannot stand. We hope and expect the judge will set aside this inappropriate award." My goodness, they hope and expect it!
As of this month, Portfolio has posted first-quarter net income of $58.1 million, beating market expectations.
Law graduates sitting for the bar exam last summer met an unhappy surprise when ExamSoft, the software program used to administer the two-day test, broke down completely after the first day, forcing thousands of frustrated test-takers to stay up late the night before the second day fretting away over a computer problem rather than sleeping in a pile of couch pillows and take-out Thai food like any self-respecting bar examinee with a full day of testing yet ahead of them. Because of this, last week a class action settlement against ExamSoft for $2.1 million was submitted to the court for approval, which comes out to about $90 per person.
Considering that taking the test on ExamSoft (rather than on pen and paper) costs test-takers an extra payment of between $100 and $150, was anything short of a full refund fair? No. This settlement is partially fair. A full refund would have been adequate. A full refund and $90 would have been fully fair. It seems the class lawyers took what they could get here.
Derived from 2011 US Census data (and reported here in the Motley Fool), the self-reported median net worth over time--if accurate--suggests a population simply not prepared for retirement, and heavily reliant on about $150k of home equity by retirement age. Making this statistic worse is the tendency to overvalue one's homestead and the expense/difficulty of transitioning that real estate asset to usable, liquid assets when need arises. Non-homestead median net worth is estimated at approximately $43,921 in the population between 65-69 years old. Assuming the average social security distribution of about $1333/month, somewhere around half of America is setting itself up to live on less than $20,000/year.
Jonathan L. R. Drewes is an attorney at Drewes Law, PLLC who defends against debt collectors and foreclosure. He can be reached by email at firstname.lastname@example.org.
Following up on the blog below, Minnesota's Governor signed Senate bill 1147 on May 1, 2015. Upon its effective date, foreclosing lenders will no longer be required to post notice of a foreclosure near the property being foreclosed upon. How does something like this not outrage more people? See more here.
The Fair Debt Collection Practices Act (FDCPA) lays down basic rules for debt collectors. Don't lie about the amount a person owes, don't make illegal threats, don't publicly embarrass someone for owing money. But do these rules apply within the rigid confines of bankruptcy court? The Supreme Court refused the chance to clarify this session.
In Crawford v. LVNV Funding, LLC, the 11th Circuit held that, yes, the FDCPA does regulate collectors even in bankruptcy. On one hand, collectors are generally still trying to collect debts even when a debtor files bankruptcy, and the 11th Circuit sees no reason that collection rules shouldn't apply just because the regulatory circumstances are now more complicated. Other circuits agree. On the other hand, the bankruptcy code requires debt collectors to follow a whole different set of rules, and collectors argue that it is difficult if not occasionally impossible to comply with both sets of laws at the same time. But the Supreme Court will not be settling this dispute anytime this year.
Banking advocates lobby for the right to publish foreclosure notices somewhere other than a newspaper "likely to give notice in the affected area."
The Minnesota House and Senate passed state legislation on Friday, May 1, 2015, (SF 1147) as a gift to banks (and other foreclosing parties) that would rather not be bothered with Minnesota's current requirement that foreclosure notices actually be published "in a qualified newspaper... likely to give notice in the affected area." Minn. Stat. 331A.03
The new legislation makes publication "sufficient" if it is "in a qualified newspaper... located in the county," or, in some instances, "located in an adjoining county."
The legislation was advocated by attorneys representing banks through the foreclosure process, as it will allow banks to dispense with having to identify a local newspaper for each foreclosure in favor of simply looking for the cheapest newspaper within the same county.
This became an issue recently in Olmsted County, as well as other counties with a mix of urban and rural areas--where publication in rural newspapers may be cheaper than in city newspapers. In two different lawsuits concerning Rochester, MN homes foreclosed upon via publication in the distant and rural "Stewartville Star," Judge Birnbaum and Judge Williamson indicated that the foreclosures were not conducted in a fair and legal manner.
As someone who grew up in St. Louis County (Duluth), I find it repugnant that Duluthians will now be subject to foreclosure by publication in the Ely Echo or Chisholm Tribune Press. You can find your own county's ridiculous foreclosure publication scenarios here: list of legal newspapers.
Neighbors that may want to assist a struggling community member, community groups, churches or even local attorneys will no longer be able to rely upon the local newspaper to find out where foreclosures are happening in the local community.
This legislation reduces transparency and is BAD for MINNESOTA. Feel free to speak out if you feel similarly: "Who Represents Me?"
Full disclosure: This firm is involved in a similar case involving the Belle Plaine Herald purportedly giving notice on an Elko foreclosure--though this legislation will not affect the current standards for that case.
Drewes Law represents homeowners in foreclosure. If you or a friend is facing foreclosure, please contact an attorney for advice about homeowner rights: 612-285-3051.
Noting that "innocent people are routinely stopped, searched, harassed, bullied into compliance and humiliated every day," the American Civil Liberties Union released "Mobile Justice" in several states this week, an app designed to make sure records of encounters with police actually survive the encounter. The app automatically upload videos of police officer encounters, along with any notes on the encounter, directly to the ACLU for review, a useful tool considering the occasional practice of officers smashing cell phones when filmed.
The ACLU's website includes the following description of Mobile Justice's capabilities (the app is state-specific; this is from the version of the app specifically for Missourians):
Whether anyone recording a police encounter will use this app rather than just their their iPhone and YouTube account remains to be seen. Regardless, it is an interesting reflection of the modern state of technology, social media, policing, and justice.
The attorneys of Drewes Law have access to post and edit the blogs. Attorney Bios.