Consumer Fraud/Consumer Protection

Fallen Investment Bank Socked With Fair Debt Collection Practices Lawsuit

October 13, 2008 | Peter S. Lubin and James V. DiTommaso

Given all of the more recent high-profile financial failures, it might be easy to forget the fall of Bear Stearns, the first investment bank to go down in our current economic downturn. But we were interested to read recently that the firm recently settled charges that it violated the Fair Debt Collection Practices Act, a federal law our Chicago, Naperville and Oak Brook debt collection abuse prevention lawyers work with often in our Chicago consumer rights litigation practice. According to the Chicago Tribune, Bear Stearns and its mortgage debt collection subsidiary, EMC Mortgage, settled multiple FDCPA charges with the Federal Trade Commission for $28 million in September, and also agreed to change its loan servicing policies.

As with so much other economic news in 2008, the problem started with subprime and other non-standard mortgages. Bear Stearns was heavily invested in these (by buying them from the original lenders), a choice that is largely blamed for its failure. EMC serviced those mortgages, and according to the FTC, committed multiple violations of the FDCPA in its dealings with mortgage holders. The FTC complaint charged EMC with failing to check into the information provided by the original lenders on the mortgages, which led to incorrect charges and incorrect reports to credit bureaus that hurt the homeowners’ credit. EMC was also charged with:

• Charging fees homeowners never authorized, including a $500 fee for “loan modification”

Our Chicago, Aurora and Joliet Class Action and Consumer Rights Attorneys Can File Suit to End Debt Collector Abuse

October 12, 2008 | Peter S. Lubin and James V. DiTommaso

With our economy on the scids, debt collection abuse is on the rise. You can contact our Chicago area debt collection abuse prevention attorneys for a free consultation to advise you if you can stop debt collection abuse by filing suit. You can click here to see a copy of the Fair Debt Collection Practices Act, the federal law which prohibits debt collection abuse.

The FTC offers the following advice on preventing Debt Collector Harassment:

Fair Debt Collection

Marketing Fraud Costs Pharmaceutical Maker $62 Million for Settlement

October 10, 2008 | Peter S. Lubin and James V. DiTommaso

Illinois Attorney General Lisa Madigan and 32 other states’ attorneys general scored a victory for consumers Oct. 7 when they reached a $62 million settlement with drug maker Eli Lilly over claims of unfair and deceptive marketing. The Associated Press reported that states sued Lilly for marketing its drug Zyprexa for off-label uses not approved by the Food and Drug Administration. They also alleged that Lilly failed to fully disclose the drug’s side effects to doctors and patients. In announcing the settlement, Madigan’s office reported that Illinois will receive about $3.6 million.

Zyprexa (olanzapine) is an antipsychotic approved for patients with schizophrenia and manic depression. The FDA gives doctors the discretion to prescribe drugs for off-label uses, but requires that drug makers market their drugs only for the approved uses. According to the multi-state lawsuit, Lilly actively promoted the drug’s use for dementia in elderly patients, in children and in high doses, even though none of those uses are FDA-approved. In fact, one side effect of Zyprexa is an increased risk of death in elderly patients with dementia — the drug’s label carries a “black box” warning, the strongest warning possible in the U.S. Other side effects of Zyprexa include weight gain, diabetes, hyperglycemia and cardiovascular problems. Some of these side effects are the subjects of separate consumer protection lawsuits around the United States.

As consumer lawyers who handle health care fraud and deceptive advertising cases throughout the Chicago area, we are extremely interested in this consumer protection litigation. The dollar amount in this case is very large — though it could be larger, especially if claims about Zyprexa’s side effects are true. But more important even than the money are the non-financial terms of the settlement. Eli Lilly agreed to stop all off-label promotions for Zyprexa and to give its medical staff — not its marketing department — the final decision on all medical references and letters about the drug. It also cannot give samples of the drug to doctors and other medical practitioners who do not handle schizophrenia or manic depression.

Chicago Consumer Attorneys From DiTommaso Lubin Win Precedent in Missouri Class Action

July 9, 2008 | Peter S. Lubin and James V. DiTommaso

Our firm is proud to announce that name partner Peter Lubin won a victory for class-action plaintiffs in Missouri with Dale v. DaimlerChrysler Corp., 204 S.W.3d 151, 172 (Mo. App. 2006). Plaintiff Kevin Dale originally sued the auto manufacturer under the federal Magnuson-Moss Warranty Act, (MMWA) over a breach of warranty for defective power window regulators (the mechanism that raises and lowers the window) on Dodge Durangos. Despite eight repair attempts, Dale contended, Dodge had failed to repair or replace the defective power window regulator in his truck.

Dale’s suit asked the Circuit Court of Boone County, Missouri to certify a class of Dodge Durango owners who’d had similar problems. The court certified two classes: One national class that relied on the MMWA, and one limited to Durango owners in the State of Missouri, which relied on the Missouri Merchandising Practices Act (MMPA). DaimlerChrysler appealed the class certifications on multiple grounds under Missouri’s Rule 52.08, including numerosity and common-question-predominate requirements of the proposed class; typicality and adequacy of Dale as lead plaintiff; the implied definiteness of the class definition; and the superiority of a class action over other forms of adjudication.

The Missouri Court of Appeals for the Western District rejected all of these arguments, finding that the record was sufficient and DaimlerChrysler’s arguments insufficient to prove any of their claims. Two, however, were of interest to class-action attorneys. One had to do with Dale’s adequacy as a class plaintiff. Because Dale’s wife had worked for one of the law firms representing the class, defendants contended that he had an interest in maximizing attorney fees, a conflict of interests that should disqualify him. The judges disagreed, saying Dale’s wife didn’t necessarily stand to gain any extra pay from the case, and they declined to bar lead plaintiffs with such an indirect connection to the class attorneys. In fact, they wrote, “we believe that it should be a matter of discretion with the trial court, decided on a case-by-case basis.”

Our Chicago Consumer Attorneys Can Assist in Recovering Money Damages for Consumer Frauds– Federal Reserve Website Assists in Reporting Consumer Fraud to the Right Agency

May 31, 2008 | Peter S. Lubin and James V. DiTommaso

Are you a consumer with questions or concerns related to potential fraud and do not know what government agency to contact? The Chicago Federal Reserve Bank provides a web page that allows you to link to government agencies that may help you. The web page has links to federal and state banking agencies, federal and state securities agencies, and state insurance agencies located in Illinois, Indiana, Iowa, Michigan, and Wisconsin. You can also link to various useful financial , insurance, and banking tools, and to lists of financial services regulators, and consumer complaint filing information. Click here to link to the Chicago Federal Reserve Fraud web page.

If you need legal assistance in pursuing a civil lawsuit because government regulators cannot help you in recovering money lost due to fraud, our private sector lawyers can assist you by clicking here to contact us.

How to Avoid RV and Auto-Fraud — Chicago Consumer Attorneys Who Can File Suit to Recover Damages for RV and Auto-Fraud and Lemon Automobiles

May 29, 2008 | Peter S. Lubin and James V. DiTommaso

Our law firm helps Chicago area consumers who are victims of auto and RV fraud or who purchased vechicles that are lemons to pursue lawsuits to regain their lost investment. For more information about our Nationwide Consumer Rights lawyers click here.

There are many practical ways to protect yourself from auto and RV fraud or from purchasing a lemon vechicle.

The National Association of Consumer Advocates provides the following well thought out advice on how to avoid auto fraud:

Chicago Consumer Attorneys Who Assist in Stopping Debt Collector Abuse

May 29, 2008 | Peter S. Lubin and James V. DiTommaso

The National Association of Consumer Advocates provides the following advice about Debt Collector Abuse:

Debt Collection Abuse (FDCPA)

In spite of federal and state legislation, debt collectors continue to abuse consumers in order to unfairly pressure them into paying debts. These abuse tactics are often intended to scare or intimidate consumers, sometime with threats of violence or arrest. Other debt collectors will try to pile on illegal interest or fees to make the debt seem larger that it actually is. In some instances, these debts are time-barred, discharged in bankruptcy, or not owed for other reasons.

Midwest Insurers Have Duty to Defend in Junk Fax Class-Action Suits

May 25, 2008 | Peter S. Lubin and James V. DiTommaso

The Illinois Supreme Court handed a victory to plaintiffs throughout Illinois with its 2006 ruling in an insurance dispute over whether insurers must cover the costs of a junk fax class action lawsuit for an insured covered for an “advertising injury.” In Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 2006 Ill. LEXIS 1655, the state Supreme Court ruled that business insurers have a duty to defend “junk fax” class action lawsuits.

The underlying dispute in the Illinois Supreme Court case started when private investigator Ernie Rizzo filed a proposed class action lawsuit against Swiderski Electronics for sending him “junk faxes.” Unsolicited advertisements sent via fax violate both the federal Telephone Consumer Protection Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. Swiderski had an insurance policy from Valley Forge Insurance Company, which insured Swiderski against a personal or advertising injury that arises out of “Oral or written publication, in any manner, of material that violates a person’s right of privacy[.]” The insurer claimed that because the faxes had not revealed Rizzo’s own personal information, they did not invade his privacy and thus were not covered. They also claimed that sending information via fax does not constitute publication.

The insurer asked a trial court for a declaratory judgment stating it was not obligated to cover Swiderski; all parties filed cross-motions seeking summary judgment. The trial court ruled in favor of Swiderski, as did the appellate court and, eventually, the Illinois Supreme Court. That court rejected Valley Forge’s arguments, rejecting the claim that faxing is not “publication,” using the plain meaning of the word. It also ruled that privacy under the federal TCPA and caselaw includes the right to be left alone:

Seventh Rules Credit Must Be Firm, But Not Valuable Under FCRA

May 24, 2008 | Peter S. Lubin and James V. DiTommaso

The Seventh U.S. Circuit Court of Appeals recently issued an opinion limiting class-action lawsuits regarding “firm offers of credit” under the federal Fair Credit Reporting Act. In Murray v. New Cingular Wireless Services, 2008 WL 1701839 (7th Cir. April 16, 2008), the Seventh Circuit also limited the scope of its 2004 decision in Cole v. U.S. Capital, Inc., 389 F.3d 719 (7th Cir. 2004). In that decision, the court said that when companies offer “a token line of credit” along with consumer goods, that credit offer must have value to the customer.

Among the issues addressed by the court are:

* Under Cole, an offer of credit entangled with an offer of merchandise must be valuable. However, Cole does not apply to “pure offers of credit” not entangled with another offer. The FCRA requires only that an offer of credit be firm, not that it be valuable to most or all of its recipients.

The Chicago Consumer Attorneys at DiTommaso Lubin Win Precedent In Hotel Billing Fraud Case

May 23, 2008 | Peter S. Lubin and James V. DiTommaso

Our firm obtained a favorable verdict in a consumer fraud case with Terrill v. Oakbrook Hilton Suites & Garden Inn 788 NE2d 789 (2nd Dist 2003). In that case, our client, Cathy Terrill, was overcharged for a hotel room; her bill contained a charge for “taxes” that included an undisclosed non-tax charge for security services. This case was part of a set of class actions in Du Page County from 2000 to 2007 (Oakbrook Terrance Hotel Overcharge Class Actions), all of which alleged that hotels misled and overcharged their customers by including non-tax charges as “taxes” on their bills.

In Terrill, the Oakbrook Terrace Hilton moved for summary judgment at the trial court, claiming the Hotel Operators Occupation Tax Act (35 ILCS 145/3(f)) and Illinois Supreme Court precedent barred Terrill’s suit. The trial judge denied that motion and the hotel appealed. It claimed that because the security fees paid for extra security from Oakbrook Terrace law enforcement — a local government entity with the power to collect taxes — it had already paid the extra money to the state Department of Revenue and could not be sued.

The Illinois Second District Court of Appeal rejected that argument, calling it “untenable at best”: