Truth In Lending
Compliance Program
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This web site is informational and not advisory. This page does not constitute legal advice. No person or entity should act or forbear any act based on the information contained herein. You should always contact an attorney, authorized to practice law in your State, for specific legal advice. The information and materials are true to the best of our knowledge. You initiate a good faith dispute with the bank or the issuer of the credit card account. Then you start to collect through our instructions the violations by the bank. The Truth In Lending Act specifies that when you initiate a dispute, the Bank has to comply with the TILA and the Fair Credit Billing Act - or FCBA, (part of the TILA) which says they must do some things and they must avoid others.- like making collection efforts, or putting bad marks on your credit report. They violate these laws, AND THEY DO WITH IMPUNITY. They will ignore your letter, for example, and continue to send you statements that you owe this and that late fee etc. etc. These are violations. After you send in your dispute, you will start to collect, for 2 or 3 months, violations against the bank of the FCBA and the TILA. You will wait for the bank to put a negative mark on your credit report that says your 60 days late or 60 days overdue. When that happens we’re going to assist you in collecting those violations, in acquiring an attorney, and filing a complaint in Federal Court that the bank violated the TILA. The bank is now in a defensive position and you are in an offensive position, leaving you in an advantage. The facts are clear and plain. Not only does the law support the argument of the violations, but case law shows for 30 years that the courts have consistently, overwhelmingly, sided with the consumer when it comes to violations of this act. Not only can you collect damages for these violations, but you can collect multiple damages for multiple violations. The law shows that if the bank is in violation or crosses the line say 30 times has violated your rights, then you can collect damages 30 times. Many times up to $1000 in damages for each violation. So, for example, if you had a $10,000 debt on your credit card, then over 3 months collected as many as 30 violations, you could conceivably win and walk away with $30,000 in damages against the bank. The bank would pay you that amount, and if your were wise, you would pay off your $10,000 debt. Then you would pay 1/3 of that or another $10,000 to the attorney for his fees (he did not take anything up front) which means you have $10,000 left. There are a thousand different scenarios, and we cannot predict exactly the outcome of any of them. The example above is an accurate description of what could happen. In any challenge like this in the courts, there is always the possibility that you would not prevail as handsomely. But what you have on your side is the preponderance of case law – 30 years of consistent decisions where judges have sided with these issues with point on point arguments with the consumer in awarding damages. They don’t cut the banks a lot of slack on this. The arguments are so solid you can get an attorney who will give you his services on contingency without charging anything up front. An attorney will never take a case in that manner if he doesn’t think he can win. We’ve talked to loads of attorneys…we researched this for months before we introduced it…who are excited to have these cases filed and being able to represent our clients. Not every account is available for this program. The account has to be not more that $25,000 in debt; it needs to be a revolving credit account where when you pay down on the balance, your credit goes up…(the typical credit card); it has to be a consumer account NOT a business account.( and credit union accounts will work, too) What is the morality of this. Are we just taking advantage of a loop hole? There is a whole different perspective if you open up your mind. When Congress first passed the TILA – which was the first ever federal consumer protection act in 1968 – one of the things they realized was that there was no way the government could police this law to enforce it. In most lawsuits, in order to win, we have to show that you have been damaged. For example, just because you get in a car accident doesn’t automatically mean you’re going to get a lot of money – you have to get hurt. So, if you’re not suffering a lot of damages, you don’t really get that much. The exception is the consumer protection law, the TILA. You don’t even have to be damaged when the bank violates it. There are statutory charges double the damages up to $1000 per violation. Why did Congress do that? To give you an incentive to call the banks on the carpet when they violate your rights. They provided a remedy that would yield you enough to take on the action and to pay your lawyers. As it has been happening, it is cheaper for the Banks to violate the law that it is for them to comply because not that many people have been collecting on it. That’s partly because there used to be a premise that no matter how many times you were violated, you could get only one recovery. That all changed in 2002. Peter Belmont, a lawyer in NY, had his own case and he sued the bank. At the time he found 5 violations and he only got 1 award. He went back and looked at the law again, and made a motion for reconsideration. He showed the court, and the court agreed with his reasoning. The TILA made these kind of violations “stakable” – or multiple violations equals multiple recoveries. Now it makes it worthwhile to pursue these cases because what we are finding on average that the banks are making between 15 and 50 violations on a typical credit card account. And, $1000 each assuming you have $500 in interest charges in the past 12 months. So 25 violations is $25,000. Most of the credit cards we are dealing with are from $8000 to $10,000. That is most cases is enough to wipe out the credit card debt and put money in your pocket after you have paid your attorney fee. So where you can do well morally and ethically is take up the call from the government to police the banking industry for them because they simply cannot afford to have enough “policemen” You can actually be the enforcer and get a bounty for it. What is a violation? What is the basis of the violation? How can we/you claim there is a billing discrepancy? A billing error dispute is simply your request for documentary evidence. If you request certain documentary evidence, that qualifies by statute as a billing error dispute. From there on in, there are certain things that the bank a)must do and b) can’t do. And they usually violate both of those. Some of those they will do repeatedly. For example: Any amount that is in dispute, they can’t call you to collect on certain things, or even send you a collection letter or even send you a statement. If they send you a statement that doesn’t have certain qualifiying things on it as required by the statute, they are in violation. If they threaten to report you to the credit reporting agencies – that’s a violation. If they actually do report you for money you are withholding – that’s a violation. You usually get 3 or 4 violations every month – you get a violation on the statement because they are asking you to pay fees that are in dispute, they may send you a collection letter – another violation etc. If they call you, that is a violation. Every call. If they say certain things, that is more violations. These counts or violation can easily add up to 15 or 25 in 2 or 3 months. It is only the violations that take place after the dispute that count. You have to do the billing error dispute first, and it has to be done a certain way so that it qualifies as a billing error dispute. We have a format that will do that.
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TRUTH IN LENDING ACT CASE HOLDINGS
GENERAL:
“The purpose of the Truth in Lending Act is to promote the
‘informed use of credit’ by consumers.” Anderson Bros. v. Valencia, 101 S.Ct.
2266, 2274 (1981).
The Truth in Lending Act, originally enacted in 1968, was the first federal
consumer protection law. It is designed to protect and provide remedies for
consumers, and therefore must be construed liberally in favor of the consumer.
Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d 1060, 1065 (11th Cir. 2004);
Roberts v. Fleet Bank (R.I.), 342 F.3d 260, 266 (3rd Cir. 2003); Inge v. Rock
Financial Corp, 281 F.3d 613, 621 (6th Cir. 2002); Rossman v. Fleet Bank (R.I.)
Nat. Assn., 280 F.3d 384, 394 (3rd Cir. 2002); Kurz v. Chase Manhattan Bank, 273
F.Supp.2d 474, 477 (S.D.N.Y. 2003). The Truth in Lending Act is intended to be
construed liberally in favor of the consumer and enforced strictly against the
creditor. This means that when in doubt, the courts are required to rule in
favor of the consumer. Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d 1060, 1065
(11th Cir. 2004); Roberts v. Fleet Bank (R.I.), 342 F.3d 260, 266 (3rd Cir.
2003); Inge v. Rock Financial Corp., 281 F.3d 613, 621 (6th Cir. 2002); Rossman
v. Fleet Bank (R.I.) Nat. Assn., 280 F.3d 384, 394 (3rd Cir. 2002); Fairley v.
Turan-Foley Imports, Inc., 65 F.3d 475, 477 (5th Cir. 1995); Kurz v. Chase
Manhattan Bank, 273 F.Supp.2d 474, 476 (S.D.N.Y. 2003).
The Truth in Lending Act was designed to prevent unscrupulous and predatory
practices of creditors who take advantage of consumers through fraudulent or
otherwise confusing practices. Inge v. Rock Financial Corp., 281 F.3d 613, 621
(6th Cir. 2002); Ramadan v. Chase Manhattan Corp., 156 F.3d 499, 502 (3rd Cir.
1998); N.C. Freed Co., Inc. v. Bd. of Governors of Federal Reserve System, 473
F.2d 1210, 1214 (3rd Cir. 1973).
Congress designed the Truth in Lending Act to protect consumers from inaccurate
and unfair credit practices. Fairley v. Turan-Foley Imports, Inc., 65 F.3d 475,
477 (5th Cir. 1995).
DAMAGES:
Under the Truth in Lending Act, consumers do not have to prove that they were
actually harmed, misled or deceived by the creditor in order to prevail. Purtle
v. Eldridge Auto Sales, Inc., 91 F.3d 797, 799 (6th Cir. 1996); Kurz v. Chase
Manhattan Bank, 273 F.Supp.2d 474, 477 (S.D.N.Y. 2003).
If a creditor violates a provision of the Truth in Lending Act, then an award of
attorney fees is mandatory. Purtle v. Eldridge Auto Sales, Inc., 91 F.3d 797,
802 (6th Cir. 1996).
Under the Truth in Lending Act, the double finance charge penalty applies
automatically, meaning courts do not have discretion in deciding whether or not
to award that to the consumer. Purtle v. Eldridge Auto Sales, Inc., 91 F.3d 797,
802 (6th Cir. 1996); Williams v. Public Finance Corp., 598 F.2d 349, 359 (5th
Cir. 1979); Willis v. American Nat. Stores, 350 F.Supp, 173, 177 (N.D.Ga. 1972);
Ninth Liberty Loan Corp. v. Hardy, 368 N.E.2d 971, 975 (Ill. App. 1977). With
credit cards the penalty is $100 minimum and $1,000 maximum and is based on the
finance charged accessed and/or paid in the prior twelve months. Finance charges
include interest, late fees, over the limit fees, cash advance fees and annual
fees.
If a creditor commits multiple non-disclosure violations of the Truth in Lending
Act, the consumer is entitled to recover damages for each violation committed.
Belmont v. Associates Nat. Bank (Delaware), 219 F.Supp2d. 340, 345 (E.D.N.Y.
2002).
Once a court finds that a creditor violated the Truth in Lending Act, that court
is required to impose liability on the creditor, even if it is only a technical
violation. Barnes v. Fleet Nat. Bank, N.A., 370 F.3d 164, 171 (1st Cir. 2004);
Grant v. Imperial Motors, 539 F.2d 506, 510 (5th Cir. 1976); Kurz v. Chase
Manhattan Bank, 273 F.Supp.2d 474, 478 (S.D.N.Y. 2003); Shepeard v. Quality
Siding & Window Factory, Inc., 730 F.Supp. 1295, 1299 (D.Del. 1990); Owens v.
Magee Finance Service of Bogalusa, Inc., 476 F.Supp 758, 764 (E.D.La. 1979).
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TITLE 15 > CHAPTER 41 > SUBCHAPTER I > Part D > § 1666 |
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§ 1666. Correction of billing errors |
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(a) Written
notice by obligor to creditor; time for and contents of notice;
procedure upon receipt of notice by creditor
If a creditor, within sixty days after having transmitted to an
obligor a statement of the obligor’s account in connection with an
extension of consumer credit, receives at the address disclosed
under section
1637
(b)(10) of this title a written notice (other than notice on a
payment stub or other payment medium supplied by the creditor if
the creditor so stipulates with the disclosure required under
section
1637
(a)(7) of this title) from the obligor in which the obligor—
(1) sets forth
or otherwise enables the creditor to identify the name and account
number (if any) of the obligor,
(2) indicates
the obligor’s belief that the statement contains a billing error
and the amount of such billing error, and
(3) sets forth
the reasons for the obligor’s belief (to the extent applicable)
that the statement contains a billing error,
the creditor shall, unless the obligor has, after giving such
written notice and before the expiration of the time limits
herein specified, agreed that the statement was correct—
(A) not
later than thirty days after the receipt of the notice, send a
written acknowledgment thereof to the obligor, unless the action
required in subparagraph (B) is taken within such thirty-day
period, and
(B) not
later than two complete billing cycles of the creditor (in no
event later than ninety days) after the receipt of the notice
and prior to taking any action to collect the amount, or any
part thereof, indicated by the obligor under paragraph (2)
either—
(i) make
appropriate corrections in the account of the obligor,
including the crediting of any finance charges on amounts
erroneously billed, and transmit to the obligor a notification
of such corrections and the creditor’s explanation of any
change in the amount indicated by the obligor under paragraph
(2) and, if any such change is made and the obligor so
requests, copies of documentary evidence of the obligor’s
indebtedness; or
(ii) send
a written explanation or clarification to the obligor, after
having conducted an investigation, setting forth to the extent
applicable the reasons why the creditor believes the account
of the obligor was correctly shown in the statement and, upon
request of the obligor, provide copies of documentary evidence
of the obligor’s indebtedness. In the case of a billing error
where the obligor alleges that the creditor’s billing
statement reflects goods not delivered to the obligor or his
designee in accordance with the agreement made at the time of
the transaction, a creditor may not construe such amount to be
correctly shown unless he determines that such goods were
actually delivered, mailed, or otherwise sent to the obligor
and provides the obligor with a statement of such
determination.
After complying with the provisions of this subsection with
respect to an alleged billing error, a creditor has no further
responsibility under this section if the obligor continues to
make substantially the same allegation with respect to such
error.
(b) Billing
error
For the purpose of this section, a “billing error” consists of any
of the following:
(1) A
reflection on a statement of an extension of credit which was not
made to the obligor or, if made, was not in the amount reflected
on such statement.
(2) A
reflection on a statement of an extension of credit for which the
obligor requests additional clarification including documentary
evidence thereof.
(3) A
reflection on a statement of goods or services not accepted by the
obligor or his designee or not delivered to the obligor or his
designee in accordance with the agreement made at the time of a
transaction.
(4) The
creditor’s failure to reflect properly on a statement a payment
made by the obligor or a credit issued to the obligor.
(5) A
computation error or similar error of an accounting nature of the
creditor on a statement.
(6) Failure to
transmit the statement required under section
1637
(b) of this title to the last address of the obligor which has
been disclosed to the creditor, unless that address was furnished
less than twenty days before the end of the billing cycle for
which the statement is required.
(7) Any other
error described in regulations of the Board.
(c) Action by
creditor to collect amount or any part thereof regarded by obligor
to be a billing error
For the purposes of this section, “action to collect the amount,
or any part thereof, indicated by an obligor under paragraph (2)”
does not include the sending of statements of account, which may
include finance charges on amounts in dispute, to the obligor
following written notice from the obligor as specified under
subsection (a) of this section, if—
(1) the
obligor’s account is not restricted or closed because of the
failure of the obligor to pay the amount indicated under paragraph
(2) of subsection (a) of this section, and
(2) the
creditor indicates the payment of such amount is not required
pending the creditor’s compliance with this section.
Nothing in this section shall be construed to prohibit any action
by a creditor to collect any amount which has not been indicated
by the obligor to contain a billing error.
(d) Restricting
or closing by creditor of account regarded by obligor to contain a
billing error
Pursuant to regulations of the Board, a creditor operating an open
end consumer credit plan may not, prior to the sending of the
written explanation or clarification required under paragraph (B)(ii),
restrict or close an account with respect to which the obligor has
indicated pursuant to subsection (a) of this section that he
believes such account to contain a billing error solely because of
the obligor’s failure to pay the amount indicated to be in error.
Nothing in this subsection shall be deemed to prohibit a creditor
from applying against the credit limit on the obligor’s account
the amount indicated to be in error.
(e) Effect of
noncompliance with requirements by creditor
Any creditor who fails to comply with the requirements of this
section or section
1666a of this title forfeits any right to collect from the
obligor the amount indicated by the obligor under paragraph (2) of
subsection (a) of this section, and any finance charges thereon,
except that the amount required to be forfeited under this
subsection may not exceed $50.
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