Justia Consumer Law Opinion Summaries

Seeing an internet advertisement for a 1997 FLTHTC Harley‐Davidson motorcycle, Hahn visited City Limits dealership, test‐drove a 2004 motorcycle, took pictures, and made a downpayment. Days later, Hahn returned, paid the balance, and drove the 2004 motorcycle home. The bill of sale listed the VIN, year, and mileage for the 1997 motorcycle. The newer model had half that mileage. The next day, Hahn tried to purchase insurance and discovered the discrepancy. Hahn thought this was a scrivener’s error and called City Limits, which demanded more money and eventually called the police. After being contacted by an officer, Hahn took the motorcycle to the police station. Hahn claims that City Limits has not returned the $7,626.66. He filed suit, alleging that the police violated the Fourteenth Amendment by depriving him of property without due process and that the business violated the Illinois Consumer Fraud and Deceptive Business Practices Act. The Seventh Circuit affirmed dismissal. There is no allegation that the officer violated any state law by making telephone calls or by facilitating the return of the motorcycle; even with such an allegation, the federal constitution is not automatically violated every time the police fail to follow state or local rules. The court correctly declined jurisdiction over the state law claims. View "Zappa v. Smith" on Justia Law

P.F. Chang’s restaurant company announced that its computer system had been breached and some consumer credit- and debit–card data had been stolen. Kosner had dined at a P.F. Chang’s and paid with his debit card. Four fraudulent transactions were made with the card he had used; he cancelled it and purchased, for $106, a credit monitoring service to protect against identity theft, including against use of the card’s data to open new accounts in his name. Lewert used a debit card at the same restaurant (thought to be not among those breached) and had no fraudulent transactions, but claims that he spent time and effort monitoring his card statements and his credit report. Lewert and Kosner sought to represent a class of all similarly situated customers, under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2). The district court dismissed for lack of standing, finding they had not suffered the requisite personal injury. The Seventh Circuit reversed. At least some of the injuries alleged qualify as immediate and concrete injuries sufficient to support Article III standing; all class members should be allowed to show that they spent time and resources tracking down possible fraud, changing automatic charges, and replacing cards as a prophylactic measure. View "Lewert v. P.F. Chang's China Bistro, Inc" on Justia Law

Acceptance, a debt collector, purportedly acquired consumer debts purportedly owed by plaintiffs. The Fulton firm sent initial collection notices to the plaintiffs or their attorneys, identifying Acceptance as the “assignee” of the original creditors, but stating that the accounts had been “transferred” to Fulton. The letters did not explicitly identify Acceptance as the current creditor. Plaintiffs sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, which requires a debt collector to disclose to a consumer “the name of the creditor to whom the debt is owed,” either in its initial communication or in a written notice sent within the next five days. The court granted defendants summary judgment. The court found the letters ambiguous as to the identity of the current creditor, but held that plaintiffs needed to present extrinsic evidence of confusion, and that even with such evidence, the ambiguity would be immaterial to the Act’s objective of providing “information that helps consumers to choose intelligently.” The Seventh Circuit reversed. The district court correctly found that the letters were unclear, but erred in finding that additional evidence of confusion was necessary to establish a violation. Section 1692g(a) requires debt collectors to disclose specific information. If a letter fails to disclose that information clearly, it violates the Act; there is no additional materiality requirement, express or implied. View "Janetos v. Fulton Friedman & Gullace, LLP" on Justia Law

Sgouros purchased a “credit score” package from TransUnion. Armed with the number TransUnion gave him, he went to a car dealership and tried to use it to negotiate a favorable loan. The score he had bought, however, was useless: it was 100 points higher than the score pulled by the dealership. Sgouros filed suit, asserting that TransUnion violated the Fair Credit Reporting Act, 15 U.S.C. 1681g(f)(7)(A); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1; and the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010, by misleading consumers by failing to inform them that the formula used to calculate their purchased credit scores was materially different from the formula used by lenders. TransUnion moved to compel arbitration, asserting that the website through which Sgouros purchased his product included an agreement to arbitrate. The district court concluded that no such contract had been formed and denied TransUnion’s motion. The Seventh Circuit affirmed after evaluating the website and concluding that TransUnion had not put consumers on notice of the terms of agreement, as required by Illinois law, but actually distracted them from noticing those terms. View "Sgouros v. TransUnion Corp." on Justia Law

Bravo sued Midland for violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692. Midland agreed to forgive two of Bravo’s debts (GE/Lowe’s and Citibank/Sears) as part of a settlement agreement. Philipps, an attorney who specializes in consumer litigation, represented Bravo. After the settlement, Midland sent two letters addressed to Bravo at Philipps' office. The letters were received at Philipps’ business office and were basically identical. One requested the payment of the GE/Lowe’s account and the other requested the payment of the Citibank/Sears account. Philipps did not forward the correspondence to his client, but opened and reviewed the content of the letters. Bravo filed another claim, asserting that the letters violated sections 1692c,e of the FDCPA which prohibit contact with a consumer regarding debts once the consumer notifies the debt collector that she is represented by counsel, prohibit a debt collector from continuing to communicate a demand for payment to a consumer once the consumer has refused to pay, and prohibit false and misleading statements. The Seventh Circuit affirmed dismissal. The letters were not continued communication to a consumer and would not have deceived a competent attorney who was aware that the debts had been resolved. View "Bravo v. Midland Credit Mgmt., Inc" on Justia Law

In 2011, Nationwide Credit Corporation, a debt-collection agency - telephoned Gregory Leeb about an unpaid medical bill. Leeb mailed and faxed a letter to Nationwide disputing the debt. A few days later, Nationwide sent Leeb a letter asking him to provide additional information and instructing him to detach the upper portion of the letter and “return with payment.” The bottom portion stated that the communication was “from a debt collector attempted to collect a debt.” Leeb sued, arguing that Nationwide violated the Fair Debt Collection Practices Act (FDCPA) - which required Nationwide to “cease collection” until it verified the debt - by sending the letter. The district court granted summary judgment in favor of Leeb. The Seventh Circuit affirmed, holding (1) Nationwide’s letter, objectively viewed, was an attempt to collect the debt; and (2) Nationwide’s violation was not excused under FDCPA’s “bona fide error” provision. View "Leeb v. Nationwide Credit Corp." on Justia Law