Justia Consumer Law Opinion Summaries

Defendants appealed the district court's order granting Bank of America's motion for summary judgment on their counterclaims for rescission and statutory damages under the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. The court concluded that the district court did not err in determining that defendants' right to rescission had expired and that their rescission claim was time-barred under section 1635 because defendants notified Bank of America of their intent to rescind but failed to file a lawsuit within the three-year period. The court concluded, however, that defendants have offered evidence that Bank of America failed to deliver the TILA disclosures and notices. Therefore, there was a genuine issue of material fact regarding the failure to deliver the required documents. Accordingly, the court affirmed the grant of summary judgment to Bank of America on defendants' counterclaim for rescission; vacated the grant of summary judgment to Bank of America on defendants' counterclaim for statutory damages; and remanded for further proceedings. View "Bank of America v. Peterson, et al." on Justia Law

Target Guest Cards only permit purchases only at Target. Target Visa Cards are all-purpose credit cards that can be used anywhere. Target used different underwriting criteria and agreements for the cards. Between 2000 and 2006, Target sent unsolicited Visas to 10,000,000 current and former Guest Card holders, with agreements and marketing materials to entice activation of the new card. If a customer activated a new Visa, its terms became effective and the Guest Card balance was transferred to the Visa. If the customer did not activate the Visa, Target closed the account. The materials did not suggest that keeping the Guest Card was an option, but customers could opt out. A Guest Card holder could call Target to reject the Visa but ask to keep the Guest Card. If a holder attempted to use the Guest Card after the Visa was mailed, she was informed that the account had been closed but that she could reopen it. The credit limits on the Autosubbed Visas were between $1,000 and $10,000, and Target could change the credit limit. New customers had to open a Target Visa through a standard application, and cards could have credit limits as low as $500. The Autosub materials did not indicate that credit limits were subject to change; customers often had their credit limits reduced after activation. The district court rejected a putative class action under the Truth in Lending Act, 15 U.S.C. 1642, which prohibits mailing unsolicited credit cards and requires credit card mailings to contain certain disclosures in a “tabular format.” The Seventh Circuit affirmed. View "Acosta v. Target Corp." on Justia Law

Plaintiffs filed suit against Countrywide, alleging violation of the Missouri Second Mortgage Loan Act (MSMLA), 516.231 to 408.241 RSMo. On appeal, plaintiffs challenged the district court's dismissal of their claims as barred by the three-year statute of limitations of section 516.130(2). The court concluded that the MSMLA was subject to the three-year limitations period of section 516.130(2), not the six-year statute of limitations under section 516.420, pursuant to Rashaw v. United Consumers Credit Union. The court also concluded, under Missouri law, that the "entire damage" to plaintiffs was capable of ascertainment "in a single action" and the "continuing or repeated wrong" exception did not apply in this case. Accordingly, the court affirmed the judgment of the district court. View "Washington, et al. v. Countrywide Home Loans, Inc." on Justia Law

McMahon apparently did not pay a 1997 utility bill. In 2011, LVNV purchased the debt, then $584.98. LVNV retained a collection agency, Tate, which sent a letter that said nothing about when the debt was incurred or the four-year Illinois statute of limitations. The district court dismissed McMahon’s classwide allegations, but did not dismiss his individual claim. McMahon ignored two settlement offers. The court found that the proposed settlement offered McMahon complete recovery for his individual claim, that it was made prior to class certification, and that it had the effect of depriving McMahon of a personal stake in the litigation. The Seventh Circuit consolidated appeals and held that, in some circumstances, a dunning letter for a time‐barred debt could mislead an unsophisticated consumer to believe that the debt is enforceable in court, and thereby violate the Fair Debt Collection Practices Act, 15 U.S.C. 1692. The court also held that the McMahon case is not moot. View "McMahon v. LVNV Funding, LLC" on Justia Law

The FTC filed suit against defendant for engaging in deceptive internet advertising practices involving the use of a "scareware" scheme that tricked consumers into purchasing computer security software. On appeal, defendant challenged the district court's judgment enjoining her from participating in the deceptive practices and holding her jointly and severally liable for equitable monetary consumer redress. The court concluded that the district court had sufficient statutory power to award "complete relief," including monetary consumer redress, which is a form of equitable relief; the court held that one may be found individually liable under the Federal Trade Commission Act, 15 U.S.C. 41 et seq., if she (1) participated directly in the deceptive practices or had authority to control those practices, and (2) had or should have had knowledge of the deceptive practices; the court rejected defendant's evidentiary challenges; the district court did not clearly err in finding that defendant had authority to control the deceptive acts within the meaning of the Act nor did the district court clearly err in finding that defendant directly participated in the deceptive marketing scheme; and the district court did not clearly err in finding that defendant had actual knowledge of the deceptive marketing scheme and/or that she was at the very least recklessly indifferent or intentionally avoided the truth. Accordingly, the court affirmed the judgment of the district court. View "FTC v. Ross" on Justia Law

Plaintiff filed a putative class action against FreeScore under the Credit Repair Organizations Act (CROA), 15 U.S.C. 1679 et seq. The district court dismissed the claim, concluding that FreeScore was not a "credit repair organization" as defined in the CROA. The court held, however, that FreeScore was a credit repair organization because FreeScore, through the representations it made on its website and in its television advertising, offered a service, in return for the payment of money, for the implied purpose of providing advice or assistance to consumers with regard to improving the consumer's credit record, history, or rating. Accordingly, the court reversed and remanded for further proceedings. View "Stout v. FreeScore, LLC" on Justia Law

In 1989, Seamans received a Federal Perkins Loan of $1,180.00 from Temple University. The first payment was due in 1992. The loan was declared delinquent the following month. Nonths later, Temple notified Seamans that the account had been placed for collection. In 2010, Seamans enrolled at Drexel University. He sought a Pell Grant, but Drexel refused to provide with financial assistance until Seamans repaid the Temple Loan. In 2011, Seamans repaid that loan in full. Seamans then noticed a “trade line” on his credit report. The trade line may or may not have appeared on his credit report when the account was in default. Seamans formally disputed some of the information by contacting the credit reporting agency. Temple, had its loan servicer investigate, but resubmitted information virtually unchanged. Seamans again contacted Temple and credit agencies, to dispute the trade line. After a second investigation, Temple modified certain elements, but still did not report various details. There was evidence that Temple treated other disputes in a similar manner. Seamans sued, alleging that Temple negligently or willfully violated the Fair Credit Reporting Act, 15 U.S.C. 1681–1681x. The district court granted Temple summary judgment, finding that the Higher Education Act, 20 U.S.C. 1001–1155, exempted Temple from FCRA compliance because the credit instrument was a Perkins Loan. The Third Circuit vacated, stating that Seamans’s dispute appears to have merit and that failure to report the dispute may constitute a material inaccuracy on his credit report. View "Seamans v. Temple University" on Justia Law

Plaintiffs involved in, or wishing to be involved in the “death care industry” challenged Pennsylvania’s Funeral Director Law, 63 Pa. Stat. 479.1 provisions that: permit warrantless inspections of funeral establishments by the state Board of Funeral Directors; limit the number of establishments in which a funeral director may have an ownership interest or practice the provision; restrict the capacity of unlicensed individuals and certain entities to hold ownership interests in a funeral establishment; require every funeral establishment to have a licensed full-time supervisor; require funeral establishments to have a “preparation room”; prohibit service of food in a funeral establishment; prohibit use of trade names by funeral homes; govern the trusting of monies advanced under pre-need contracts for merchandise; and prohibit payment of commissions. The district court found several provisions unconstitutional. The Third Circuit reversed: invalidation of the warrantless inspection scheme; holdings on dormant Commerce Clause challenges to certain provisions; conclusions that disputed provisions violate substantive due process; a ruling that the Board’s actions unconstitutionally impair private contractual relations with third parties; and invalidation of the ban on payment of commissions to unlicensed salespeople. The court affirmed that the ban on the use of trade names in the funeral industry violates First Amendment protections. The court noted that antiquated provisions are not necessarily unconstitutional. View "Heffner v. Murphy" on Justia Law

Plaintiff filed suit against Spokeo, operator of a website that provides users with information about other individuals, for willful violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq. Because the district court had neither been divested of jurisdiction nor submitted this case to the jury, it was free to reconsider its own prior ruling. Therefore, the court concluded that the law-of-the-case doctrine did not limit the district court in its final order. The court also concluded that alleged violations of plaintiff's statutory rights were sufficient to satisfy the injury-in-fact requirement of Article III, and plaintiff had adequately pled causation and redressability. Accordingly, the court reversed and remanded the district court's dismissal, concluding that plaintiff adequately alleged Article III standing. View "Robins v. Spokeo, Inc." on Justia Law

Plaintiffs filed a putative class action against ACS, alleging that ACS's collection notice violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Plaintiffs argued that ACS's collection notice violated section 1692g(a)(3) by stating that debtors only could dispute the validity of their debt in writing. ACS argued that the collection notice complied with the FDCPA because section 1692g(a)(3) contained an inherent writing requirement. The court found, however, that section 1692g(a)(3) permitted consumers to dispute the validity of a debt orally, and it did not impose a writing requirement. Accordingly, the court reversed the district court's grant of ACS's motion to dismiss. View "Clark v. Absolute Collection Servs." on Justia Law