NHS Job Shop: “Working for Health” in Kentish Town. Closed. (Photo credit: Wikipedia)
The Centre for Policy Studies has claimed that Britain’s escalating compensation culture is “bleeding the health and education services dry”. A new report from the think-tank says that the number of legal claims against the NHS and schools after accidents or mistakes has reduced the quality of services rather than improving safety or accountability. It points to a series of cases where local councils have been forced to pay compensation to school pupils injured in its care and says that many schools will now not take pupils on trips in case they are sued if something goes wrong.
Vintage Ad #1,807: The Dapper Debt Collector (Photo credit: jbcurio)
The Federal Trade Commission, the Department of Justice, and the Consumer Financial Protection Bureau filed a joint amicus brief in the U.S. Supreme Court supporting consumers’ ability to protect their rights under the Fair Debt Collection Practices Act by suing debt collectors.
The amicus brief urges the Supreme Court to overturn a decision of the U.S. Court of Appeals for the Tenth Circuit. In this case, a consumer, Olivea Marx, sued a debt collector, General Revenue Corporation, that had contacted her employer to get information about her employment status. Marx believed that the debt collector’s conduct had violated the Fair Debt Collection Practices Act, but she lost the case. The Tenth Circuit ruled that Marx was responsible for paying more than $4,500 to cover the debt collector’s litigation costs, even though she had brought the case in good faith.
The amicus brief argues that the Tenth Circuit’s decision was inconsistent with the terms of the Fair Debt Collection Practices Act, which specifies that consumers who win lawsuits against debt collectors may recover their litigation costs from the defendants, but that consumers who lose these cases must pay defendants’ litigation costs only if the consumers sued in bad faith or for purposes of harassment. Theamicus brief also argues that these provisions of the Act advance Congress’ intent to help consumers deter abusive debt collection practices by bringing private enforcement actions in good faith. By contrast, the Tenth Circuit’s ruling would create a disincentive to prosecute private enforcement actions, the brief states.
Of all the bad practices of the mortgage boom and collapse, robo-signing was among the worst. Unsubstantiated and at times fraudulent foreclosure documents submitted by banks affected more than a 138,000 US homeowners. Following the great series by the American Banker’s Jeff Horwitz, the NYT‘s Jessica Silver-Greenberg reports that some of the same tactics are being employed collecting credit card debt:
As they work through a glut of bad loans, companies like American Express, Citigroup and Discover Financial are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases.
Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers…
“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Noach Dear, a civil court judge in Brooklyn, who said he presided over as many as 100 such cases a day.
Americans may be reducing their outstanding credit card debt, but an overhang of unpaid loans remains. And lenders are looking for ways to maximize the value of those loans: JP Morgan is settling claims that it improperly raised minimum credit card payments, and then charged borrowers a fee if they couldn’t pay the new, larger amount. The Consumer Financial Protection Bureau may force American Express to refund customers who paid for “identity-theft protection services” without actually receiving the services. It has already won $140 million in refunds from Capital One for selling add-on products customers “didn’t understand, didn’t want, or in some cases, couldn’t even use”. That money fully compensated customers for their losses, which is a far better deal than penalizing a firm $4.8 million after costing customers $300 million. – Ben Walsh