Justia Consumer Law Opinion Summaries

Plaintiffs, four Maryland consumers, filed suit against Santander and its agents, alleging that defendants violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.1692-1692p, by engaging in prohibited collection practices when collecting on plaintiffs’ automobile loans. The court affirmed the district court's grant of Santander's motion to dismiss on the ground that the complaint did not allege facts showing that Santander qualified as a “debt collector” subject to the FDCPA. The court concluded that the FDCPA generally does not regulate creditors when they collect debt on their own account and that, on the facts alleged by plaintiffs, Santander became a creditor when it purchased the loans before engaging in the challenged practices. View "Henson v. Santander Consumer USA, Inc." on Justia Law

Plaintiff filed a putative class action against Delbert alleging that Delbert violated debt collection practices. The district court granted Delbert's motion to compel arbitration under the Federal Arbitration Act (FAA), 9 U.S.C. 4. The court concluded, however, that the arbitration agreement in this case is unenforceable where it purportedly fashions a system of alternative dispute resolution while simultaneously rendering that system all but impotent through a categorical rejection of the requirements of state and federal law. The court went on to conclude that the FAA does not protect the sort of arbitration agreement that unambiguously forbids an arbitrator from even applying the applicable law. Accordingly, the court reversed and remanded for further proceedings. View "Hayes v. Delbert Services Corp." on Justia Law

Plaintiff filed suit against Wells Fargo, alleging that his mortgage agreement, providing him with a loan far in excess of his home’s actual value, was an “unconscionable contract” under the West Virginia Consumer Credit and Protection Act, W. Va. Code 46A–1–101 et seq. The court agreed with the district court that the amount of a mortgage loan, by itself, cannot show substantive unconscionability under West Virginia law, and that plaintiff has not otherwise made that showing. The court concluded, however, that the Act allows for claims of “unconscionable inducement” even when the substantive terms of a contract are not themselves unfair. Accordingly, the court remanded so that the district court may consider this issue in the first instance. View "McFarland v. Wells Fargo Bank" on Justia Law

Plaintiff filed suit alleging that HRFC violated the Maryland Credit Grantor Closed End Credit Provisions (CLEC), Md. Code Ann., Com. Law 12-1001 et seq., breached a retail installment sales contract, and violated the Maryland Consumer Debt Collection Act (MCDCA), Md. Code. Ann., Com. Law 14-201 et seq. The district court granted summary judgment to HRFC. The court held that HRFC’s mere failure to disclose an interest rate below CLEC’s statutory maximum is not a distinct violation of section 12-1003(a) for which liability may be imposed; HRFC complied with section 12-1020’s notice requirement and HRFC did not fail to properly cure its error; and the court rejected plaintiff's contention that because the contract incorporates CLEC’s provisions, HRFC is liable for breach of contract for any deviation from CLEC, “regardless of whether HRFC properly cured the failure to comply” with the statute. The court held, however, that a jury could find that HRFC's conduct, at least in the aggregate, could reasonably be expected to abuse or harass plaintiff. Accordingly, the court reversed the district court's order in regard to the MCDCA claim. The court affirmed as to the CLEC and breach of contract claims. View "Askew v. HRFC, LLC" on Justia Law