Lobel Financial Repossession Class Action Settles

By Nancy Barron on April 2, 2010

Post-repossession notices are the subject of a series of class actions coordinated in Sacramento Superior Court (LOBEL FINANCIAL Auto Cases, Case No.  JCCP 4563). On March 26, 2010,  Judge Michael P. Kenny issued preliminary approval of a class action settlement  collectively resolving the matters. Lobel Financial had originally sued borrowers Ivon Lara and Jaime Penuela, filing separate complaints against them in Sacramento and Contra Costa Counties, respectively. Kemnitzer Barron & Krieg answered those actions and filed nearly simultaneous class action cross-complaints challenging the post-repossession notices on which alleged debts were based.

Although Lobel Financial denies any wrongdoing, it will provide significant relief to the settlement class. According to the declaration of general counsel Gary Lobel, there are 9,159 members of the class whose outstanding deficiency balances total approximately $43,808,147. The settlement halts all collection activity on those accounts. Lobel has collected approximately $407,563 in deficiencies from class members already to date. Those class members who paid money toward their deficiencies and file a claim as set forth in the class notice will get a refund of  the amount they paid.  In addition, Lobel Financial will waive and extinguish the  entire $43,808,147 in alleged deficiencies and instruct credit reporting agencies to delete the Lobel Financial tradelines of all settlement class members.  In other words, with respect to this debt, the slate will be wiped clean. 

The class is defined as all persons:  who purchased a Motor Vehicle in California and as part of that transaction entered into a Conditional Sales Contract assigned to Lobel Financial; whose Motor Vehicle was repossessed in California; who were issued an NOI by Lobel Financial from July 7, 2004 to October 1, 2008; who were assessed a deficiency balance ; and against whom Lobel Financial had not obtained a judgment as the settlement date.

Class Notice is to be mailed to all settlement class members around April 20, 2010.  Nancy Barron and Bryan Kemnitzer, of the law firm Kemnitzer Barron & Krieg, along with Alexander Trueblood of the Trueblood Law Firm, are class counsel. If you have any questions concerning this case, feel free to contact us.

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Categories: Class Actions

Alliant Credit Union Settles Class Action Concerning Repossession Notices

By Nancy Barron on March 29, 2010

In a case involving post-repossession notices, Alameda County Superior Court has issued preliminary approval of a class action settlement. Alliant Credit Union has agreed to settle the case of Veronique McCoy and Bernardo Castro v Alliant Credit Union, Case No. RG 09-444283, with significant benefits to settlement class. Representative plaintiffs Veronique McCoy and Bernardo Castro alleged that Alliant Credit Union failed to provide post-repossession notices that comply with California law. Although it denies the allegations, Alliant will provide substantial relief to the 640 class members, including a promise to stop collection of approximately $7,370,853 in outstanding deficiency balances and to refund the full amount that class members have already paid on their deficiencies, if any. The aggregate refund is $139,660.54. There is no claims process.

Bryan Kemnitzer and Nancy Barron of the San Francisco office of Kemnitzer, Barron & Krieg, and Mark Chavez, of Chavez & Gertler, Mill Valley, California, represent the class.

The case arose out of the plaintiffs’ purchase of vehicles from dealers who arranged financing through Alliant Credit Union. Veronique McCoy purchased a 2005 Mazda on July 21, 2004 from Enterprise Rent-A-Car and Bernardo Castro purchased a 2004 Chevrolet Avalanche on November 16, 2007 from Sacramento Auto Plaza.  Each borrower eventually fell behind in their  payments and their vehicles were repossessed – McCoy’s on September 5, 2008 and Castro’s on October 11, 2008. Thereafter Alliant Credit Union sent them a “notice of intent” to sell the vehicle. Plaintiffs contend that this NOI failed to provide the borrowers certain information that would enable them to know exactly what they had to do to reinstate or redeem the contract in time to get their vehicle back and avoid  auction.

The Class includes borrowers to whom Alliant Credit Union mailed an NOI between April 1, 2005 and May 1, 2009. If you are a member of this class, you should receive a class notice shortly after April 9, 2010.

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Categories: Class Actions

Court Orders Notice of Settlement with ACC Consumer Finance

By Nancy Barron on March 29, 2010

On March 24, 2010, Judge Robert B. Freedman of Alameda County Superior Court issued preliminary approval of a class action settlement in a case involving repossession notices. The lawsuit is entitled Paul Meza and Jay Pelkey v ACC Consumer Finance LLC, et al Action No. RG09458893 on March 24, 2010.

Defendant ACC Consumer Finance has agreed to resolve the case, with significant benefits to settlement class. Representative plaintiffs Paul Meza and Jay Pelkey alleged that ACC Consumer Finance failed to provide post-repossession notices that comply with California law. Although it denies the allegations, ACC Consumer Finance will provide substantial relief to the 1,595 settlement class members, including a promise to stop collection of approximately $15,319,728.96  in outstanding deficiency balances and to refund the full amount that class members have already paid on their deficiencies, if any. The aggregate refund is $75,329.14. There is no claims process and the benefits will be automatic after final approval by the court.

 Bryan Kemnitzer and Nancy Barron of Kemnitzer, Barron & Krieg, and Mark Chavez, of the law firm Chavez & Gertler, Mill Valley, represent the class.

The case arose out of the plaintiffs’ purchase of vehicles from dealers who arranged financing through ACC Consumer Finance. Paul Meza purchased a 2004 Nissan Sentra, which was later repossessed when he fell behind in his monthly payments. Jay Pelkey bought a 2004 Ford Mustang, which was also repossessed. On April 24, 2008 ACC Consumer Finance sent Mr. Meza a post-repossession “notice of intent” to sell the Nissan  and on August 11, 2006 ACC Consumer Finance sent Mr. Pelkey a “notice of intent” to sell the Mustang. Among other things, plaintiffs contend that the form notices sent by ACC Consumer Finance failed to provide the borrowers certain information that would enable them to know exactly what they had to do to reinstate or redeem the contract in time to get their vehicle back and avoid  auction.

The Settlement Class is defined as all persons:  (1) who purchased a Motor Vehicle, and as part of that transaction entered into an agreement subject to California’s Rees-Levering Automobile Sales Finance Act, Civil Code §2981, et seq.; (2) whose contract was assigned to ACC Consumer Finance; (3) whose Motor Vehicle was repossessed or voluntarily surrendered; (4) who were issued an NOI by ACC Consumer Finance during the Class Period (June 22, 2005 to the present); and (5) against whose account a deficiency balance was assessed in any amount. If you are a member of this class, you should receive a class notice shortly after April 19, 2010.

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Categories: Class Actions

Court Certifies Class Action Against Public Storage, Inc.

By Nancy Barron on March 28, 2010

 

The court certified a class action involving the Public Storage Tenants Insurance Program (“PSTIP”) on March 11, 2010. Bang, et al. v United States Fidelity and Guaranty Company, et al., Alameda Superior Court Case No. RG06-273805.  

Plaintiffs Elizabeth Bang, Maggie Johnson and the class allege that Public Storage has sold insurance with its storage unit rentals – going all the way back to 2002 – without a license and without rate approval required by the California Department of Insurance. The court further certified the California-wide class on the claim that Public Storage deceptively failed to disclose that it controlled the insurance program even though the PSTIP was ostensibly underwritten by a series of insurance companies, including United States Fidelity & Guaranty Company, Discover Property & Casualty Insurance Company, and Traveler’s Indemnity Company. Class claims were also certified against the insurer defendants for unlawful and unfair offering of insurance lacking rate approval.

The case arose out of plaintiffs’ rental of storage units at Public Storage facilities. At the time of the rental, Public Storage employees urged them to buy PSTIP insurance. Maggie Johnson and Elizabeth Bang agreed to insure their personal goods with a PSTIP policy and the premium was added to their monthly bill. Not long afterwards, each of them suffered a burglary at the Public Storage site, and yet each had her claim denied. It turns out that Public Storage was not even licensed to sell insurance and the rates charged were not approved by the DOI. Yet, much of the profit from the PSTIP goes right back to a Public Storage captive entity.

The Court defined the class as follows: All persons who, at any time from June 8, 2002, through March 31, 2010, purchased coverage under the Public Storage Tenants Insurance Program at a Public Storage facility located in California.

This class includes hundreds of thousands of California consumers. Plaintiffs seek restitution of unapproved and excessive insurance premium charges, among other remedies.  A trial date has not been set, but is expected to be held in 2011.

The class is represented by the Law Offices of Kim E. Card, Bryan Kemnitzer and Nancy Barron of  Kemnitzer Barron & Krieg, and Philip Prince of San Francisco.

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Categories: Class Actions, News & Notices

Repossession Class Action Refund Checks Mailed

By Nancy Barron on March 28, 2010

Settlement in the consumer class action entitled Ford Motor Credit Company v O’Neal received final approval from the San Diego Superior Court on January 8, 2010, and the 60-day waiting period for appeals has expired. This paves the way for distribution of refunds to those class members who are entitled to their money back pursuant to terms of the settlement.  If you filed a claim form before the November 13, 2009 deadline, your settlement check should arrive in the mail around April 1, 2010.  Be sure to cash the check promptly.  If you did not pay any money toward a deficiency FMCC claimed you owed, but you received class notice, you are still entitled to significant benefits from this settlement.  FMCC agreed to extinguish and stop collection of approximately $110,810,774.00 in outstanding deficiency balances. Class members should order a credit report in April to make sure the negative trade line concerning the repossession account has been cleared.

Bryan Kemnitzer and Nancy Barron, of the law firm Kemnitzer Barron & Krieg LLP, along with Alexander Trueblood of Los Angeles and Lilys McCoy of San Diego, represent the class.  If you have questions concerning this case, the information hotline is 1 (877) 435-4072.

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Categories: Class Actions, News & Notices

Home Marketing Schemes Attract Scam-Artists

By Nancy Barron on March 16, 2010

There is nothing like a bad economy to bring out the con artists. Cheap advertising on local TV has prompted new versions of an old ploy, seller-assisted marketing scams. The pitch goes something like this: In exchange for up-front fees for sales leads (or software or inventory), you can make thousands of dollars a month just working at home. This offer is irresistible to the unemployed. Buyer beware!  Most of these programs are a total fraud.

“Fraudulent marketing schemes change over time, but they share one thing in common: they all involve the use of deceptive or unfair practices to separate consumers from their money,” Robert Pitofsky told Congress in 1998 when he was then Chairman of the Federal Trade Commission. A full transcript of his testimony is available here.

There are many variations on this theme, sometimes called “business opportunity fraud.”  Some of these schemes promise to provide leads to seniors who need home care facilities or tenants for group homes. The landlord must make an up-front payment of about $500 for “membership” on a list, a list which may in fact exist nowhere but the bottom of a virtual filing drawer. Leads never materialize.  Promoters just rake in the “membership” fees.

Others are pyramid sales schemes, in which the target must sign up friends to become sales “associates,” those must find others, and on and on.  So-called “endless chain” schemes are illegal. They not only violate California’s Business & Professions Code and other consumer protection laws, but criminal statutes as well. The prospect may have to contribute more money to the promoter at each level just to stay in the game. This “pay-to-play” feature is particularly insidious, because the scheme hooks people who can least afford it and would never get started if they knew the total cost.

Referring to companies that pitch home-based business opportunities, the Fresno Bee recently quoted current Federal Trade Commission Chairman David Vladeck saying, “Virtually all of them are scams.”

Unsuspecting targets are lured with self-help standards like, “Whatever you can conceive, you can achieve,” or “Have faith in prosperity.”  Con artists take cruel advantage of the power of positive thinking just to make a fast buck for themselves.

California laws protect consumers against these scams. For example, certain seller-assisted marketing plans are required to file with the Attorney General’s Office, and in many cases there is a 3-day right of cancellation. Over the years, the California AG has investigated pyramid sales schemes for inventory as diverse as cleaning products and lingerie. The FTC and AG have recently taken an admirably aggressive stand against these bogus business opportunity scams. But the job is simply too big for cash-strapped government to handle alone. Many of these deceptive practices can be challenged through private lawsuits.  If you have been cheated by this sort of thing, contact us.

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Categories: Rip-offs & Recalls

My Car Is Part of A Recall – Now What?

By Nancy Barron on February 24, 2010

What should you do if your car is part of a recall?  First, if you get a recall notice in the mail, check your registration to make sure your vehicle make, model and year is in fact part of the campaign. Phone a nearby authorized dealer of the manufacturer to arrange an appointment for repairs. Ask how long it will take. Follow any other specific instructions in the notice. You should not have to pay for the recall repairs.

The recall notice should identify the affected vehicles, name the defective component or condition, explain the consequence of the defect (e.g., crash, stall, etc.) and announce the proposed fix. The notice should also have a recall “campaign”  number issued by the National Highway Traffic Safety Administration’s Office of Defects Investigation (ODI). The NHTSA Campaign number is an important piece of information. Keep the notice in a safe place. If you want more information, visit the NHTSA website.

What if you heard about a recall in the news, but you didn’t get a notice in the mail?  This could be due to a variety of things, most commonly a move or a change of ownership. A safety recall may occur later than the warranty expiration date, so the manufacturer may not have the most up-to-date information.  If you do not have the recall notice, search the NHTSA website for repair information by make, model and year of your car or truck.  Download and print out the reach results, and use that as a notice when you make your appointment. You can also contact the ODI hotline at 1-888-327-4236.

You usually do not have to contact a lawyer about a recall. The manufacturer is already offering a free repair.  However, if you have been in an accident or have taken the vehicle in for repair of that defect on previous occasions, only to be told there was “no problem found” or the condition you complained of was “driver error,” you may have a good warranty or other product defect claim. Then you need good legal advice.  The California lemon law requires the consumer to give the manufacturer a reasonable opportunity to repair the vehicle through its authorized repair shops. What is “reasonable” often depends on the circumstances.  Recall investigations can provide information that was hidden before.  And, if the recall remedy does not fix the problem on a widespread basis, the botched recall may give rise to a class action lawsuit.

Most importantly, do not ignore a safety recall notice. NHTSA does not issue these things lightly, and manufacturers sometimes take pains to prevent an expensive recall campaign. Toyota is in the hot seat now, but it is not the first car maker alleged to have influenced NHTSA investigations. If you get a recall notice, assume there is a good reason for it and set up your repair appointment without delay.

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Categories: Rip-offs & Recalls

NANCY BARRON JOINS FTC PANEL ON FAIR DEBT COLLECTION

By Nancy Barron on February 6, 2010

In 2009, the Federal Trade Commission held a series of significant debates. The FTC invited consumer advocates, academics, arbitration providers and debt collectors.   These recorded roundtable discussions, entitled “Debt Collection: Protecting Consumers,”  were held in Chicago, San Francisco and Washington, D.C.  The vigorous debate was intended to stimulate and inform the FTC’s role in regulating the debt collection process.  Nancy Barron was invited to join the panel discussion on September 29, 2009, as a consumer advocate.  She argued for protecting consumers’ access to the courts, which is inhibited by mandatory binding arbitration whereby consumers may be subjected to unaffordable fees, lose their right to a jury trial, have limited discovery of documents needed to prove their claim, and lack legal representation.   Transcripts of the discussion can be found at http://www.ftc.gov/bcp/workshops/debtcollectround/index.shtm#090805.

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Categories: News & Notices

Toyota Sudden Acceleration

By Nancy Barron on January 29, 2010

Toyota has known for months that it has a problem with sudden acceleration in some models of both Toyota and Lexus brands. Sudden acceleration is a serious safety condition. When the accelerator pedal sticks, the driver can experience the horror of being out of control.  Sometimes drivers report a surge of speed even when the accelerator pedal does not seem to remain depressed. Several deaths and many injuries have been reported. Some consumers have contacted us and KBKlegal is investigating. (more…)

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Categories: Rip-offs & Recalls

Federal Court Issues Approval Order in BMW Financial Class Action

By Nancy Barron on January 29, 2010

BMW Financial Services has agreed to settle a class action involving its repossession practices. Bryan Kemnitzer and Nancy Barron joined with Mark Chavez of the law firm Chavez & Gertler in litigating the matter. On September 23, 2009, the Honorable Phyllis Hamilton, judge of the U.S. District Court for the Northern District of California (San Francisco) ordered conditional certification of a class and preliminary approval of the class action settlement reached between BMW Financial Services and class representative Derek Friedrichs.  On January 20, 2010, the settlement obtained final approval. The court found that plaintiffs had obtained substantial benefit to the class.

The class is defined as all buyers: (1) who purchased a motor vehicle in California and entered into a conditional sales contract with any person or entity that was assigned to BMW Financial; (2) whose motor vehicle was repossessed or voluntarily surrendered in California, and was not reinstated or redeemed; and (3) who were issued an NOI by BMW Financial between August 25, 2004 and September 5, 2008. Excluded are those persons who have filed bankruptcy proceedings, accounts of individuals who are deceased, those persons who signed releases with BMW Financial from any liability for Deficiency Balance payments on their accounts, and those against whom BMW obtained judgments. (more…)

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Categories: Class Actions, News & Notices
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