In a non-shocking turn, Citibank and one of its harrassment/debt collection agents is getting sued for violating the Fair Debt Collection Practices Act (FDCA):
“Kelly Fosen filed suit against Rausch, Sturm, Israel, Enerson & Hornik and Citibank N.A. on Oct. 9 in the Eastern District of Texas, Sherman Division.
According to the lawsuit, Citibank sent Fosen a letter in December 2011 that discussed if Citibank could not contact her about the outstanding credit card loan they may file a lawsuit to collect a judgment. Citibank hired RSIEH to collect on the alleged debt. Under the federal laws, Fosen disputed the debt and requested validation with Citibank’s lawyers in Jan. 2012. She states she did not receive a response.”
Who or what is RSIEH? They are a law firm, to whom a ANOTHER law firm has a web page devoted, because they violate the FDCA so often! Continuing…
“In July 2012, RSIEH filed a lawsuit against Fosen in an attempt to collect the debt in the Justice Court of Collin County.”
Prepare to contain your shock…
“Fosen was never served with the petition. The case was dismissed without prejudice in August 2012.”
According to Business week, Vikram Pandit (aka “Bandit”), abruptly (but maybe unsurprsingly) turned in his walking papers, leaving Citibank to find a new CEO:
“Pandit walked into a job that made him the poster boy for the bank bailout, and in his tenure at Citibank was never able to shake the bailout stigma. In his first two years he worked for a token salary, he [meaning you] repaid the government (which completed its sale of Citi shares at the end of 2010) and brought most of Citigroup’s units back to profitability. Still, he could never shake the criticism that he was running one of the country’s losingest banks.
Pandit made some major mistakes in his tenure, like betting too heavily on the brokerage business with the Morgan Stanley Smith Barney (MS) joint venture. Still, the $4.7 billion charge-off Citi took on that was smaller than JPMorgan Chase’s (JPM) loss from one terrible derivatives bet.
Ultimately what made Pandit’s position particularly difficult is that the public made little distinction between the officials who led the banks into the crisis and those who were assigned to stumble their way out of it. In her recent book on the bailout, former federal regulator Sheila Bair called Pandit “Bob Rubin’s handpicked choice for CEO.” The new boss, in other words, was the same as the old boss.”
No kidding. And we think the next guy is going to be different how?
While I have not had the pleasure of being on the wrong end of a crecit card lawsuit, I have had the pleasure of telling a collection agency to get bent when I’ve received notices that I owed some sort of balance to some company I’ve never heard of, so this story was not surprising:
“Mel Newcomer’s client called, puzzled and angry.
The client was being sued by Citibank for nonpayment. There was just one problem: Citibank had the wrong guy.
Turns out, said Newcomer, a Lancaster attorney, someone with the same last name and first initial as his client had an account with the bank. But at no time, wrote Newcomer in his response to the lawsuit, had his client had a Citibank credit card; at no time had he ever received a bill from Citibank.
The case is still ongoing. But Newcomer, and other local attorneys who deal with debt collection cases involving credit cards, say the scenario is all too familiar.
The number of credit card debt collection lawsuits filed in Lancaster County has surged in recent years; the 1,184 cases filed in 2011 might be a record. According to courthouse records, 708 cases were filed here in the first eight months of 2012, an average of 88.5 cases per month.
The numbers mirror national trends; across the country, credit card lawsuits have soared as the economy has stumbled.
But attorneys and others who deal with these cases say there’s a problem: Many of the cases, like Newcomer’s, are rife with errors or an utter lack of documentation.
Attorneys who defend credit card cases say borrowers should definitely contest the cases in court. But most don’t.
‘Anecdotally, 85 to 90 percent of people who are sued do not defend,’ said James R. Leonard Jr., a Lancaster attorney who handles many credit card cases.
‘I think that’s what [the debt collectors] are looking for.’”
Gee. You think? But, there’s some good news and lesson from James Leonard, a Lancaster attorney:
“‘Especially after years of litigating, you’d think credit card companies would have their act together more,’ he said. ‘If they produce an account agreement [between the debtor and company] usually they just throw a generic boilerplate form at you, and you can’t tell if there’s any connection,’ if his clients have actually agreed to those specific conditions.
In particular, he said, debt collection companies that buy unpaid debt from credit card issuers tend to be thin on documentation. “They typically don’t have the records,” he said, and without the records, the case falls apart.
So next time you get some threatening mail, make sure it if it’s really your debt. If it’s truly not, wait for them to come after you before spending any money, but once they do, defend yourself!
I’d say hire this guy, but his production values leave me concerned:
According to Gawker, your student loan debt is fine, just fine:
“To briefly recap: America is currently in a student loan bubble, holding an unimaginably huge amount of student debt, as delinquency of loan payments swells, and even the well-off question whether they can affordcollege. It would seem, then, rather obvious that student loan debt is too big. Surprise: the people who control the higher education spigot—college admissions directors—disagree!
A new Inside Higher Ed survey of college admissions counselors of all sorts asked: What do you consider a “reasonable debt level” for a student to have, for four years in school? Fort two percent said $20k-$30k, and 17% said $30K-$40K, meaning that a vast majority of college admissions directors are perfectly comfortable with you coming out of their school with between $20k and $40K worth of debt.”
Keep in mind, you’d kind of freak out if you had $40k in credit card debt right? Don’t forget, it’s still a lot of money, despite the fact that there PLENTY of people with far more debt:
“Lauren Asher, president of the Institute for College Access and Success, and its Project on Student Debt, said that many interesting issues are raised by the admissions directors’ responses to the questions about debt and gapping. For instance, she said that there is no “rule of thumb” on how much debt is too much. But she said that the comfort level of a plurality of admissions directors with the current range may be problematic. Of the $20,000-$30,000 debt level for students, she said, “that will be O.K. for some students, but not for other students.” So much depends on a student’s educational plans, career plans, financial resources beyond loans, and various support networks.
Asher said she worried that various news reports of late about students with six-figure debt totals (a real, but very small share of the borrower population) may be “numbing people” to the reality that $25,000 in debt (far more common) can impose “real burdens,” and that those burdens can truly hurt some borrowers.”
So, a LOT of people are dealng with bankruptcy since the crash and many of them can thank Citibank directly for that. Actualy, everyone can thank Citibank to some extent for any financial woes in the last few years, but if you’re in a jam, make sure you get real help and don’t get scammed by guys like Bradley Stephen Snyder, some half baked bankruptcy advocate who liars and cheats seem to have a thing for:
… Bradley Stephen Snyder of Nashville and Michelle Lenee Snyder of Fishers filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Indianapolis on July 16.
Court documents show the Snyders operated several businesses, including Bellwether Inc. and AM Publishing Inc., at 9102 Fallview Drive in Fishers. Debt attributed to Bellwether is listed at more than $3.6 million, which includes a $1.6 million loan backed by the U.S. Small Business Administration, the court filing said.
Court records show Snyder also operates or has operated other businesses on Fallview Drive, and at Keystone Crossing and Woodfield Crossing in Indianapolis. The businesses include such names as Chapter 20 Publishing Inc., Consumer Disclosure Mortgage Inc. and Life After Bankruptcy Inc. …” [emphasis added]
Note the “Bradley” in Bradley Ross, Snyder’s HUGE credit repair scam, resulting in disciplinary action against the lawyer he had hired and the subsequent shutdown of Bradley Ross. According to my sources, Bellwether was the company involved with Bradley Ross and other activities during that time. Much more info and links to documentation of Snyder’s scams are at Stephen Snyder Seminars, Bankruptcy Advisor and Junior Partner scam.”
If you’re trying to dig out of debt, it’s not an easy fix and it’s not cheap unless you do most of the heavy lifting yourself, so do your due diligence and then do it again!
Here’s some fun commentary from a few months back courtesy of a blog that’s a little heavy on the conspiracy theories (I know it sounds weird for me to say that):
Ah Citibank, we know you’re used to screwing people with sneaky fees and interest rate hikes, but now you have messed with the military, and lost another lawsuit. Fine, “settled”:
“A Minnesota National Guard officer has won a $2.3 million settlement for herself and thousands of other troops in a class-action lawsuit against Citibank and The Student Loan Corporation.
Maj. Lyndsey M.D. Olson challenged the way Citibank administered the student loans of service members who were entitled to an interest-rate reduction to 6 percent under the Servicemembers’ Civil Relief Act. She gets about $7,500 of that $2.3 million as the representative plaintiff in the lawsuit; the rest goes to other service members identified as being affected by the alleged actions.
…
Olson began her active duty in 2005. She later informed Citibank (New York State) of her active-duty status, asking to have her interest rate on her student loan reduced to 6 percent. The Servicemembers’ Civil Relief Act requires lenders to reduce interest rates to 6 percent on loans that were entered into before a service member goes on active duty, as long as the service member provides notification and is materially affected by being called to active duty.
Citibank informed Olson that in order to have her interest rate reduced, her loan had to be placed into forbearance. When lenders put student loans into forbearance, the borrower stops making payments or makes reduced payments for a period of time, but interest continues to accrue. Under the SCRA, additional interest does not accrue. Olson contended that the bank charged her more than 6 percent interest and compounded that extra interest over the remaining terms of the loan.”
More precisely, the SCRA:
“Clarifies and restates existing law that limits to 6 percent interest on credit obligations incurred prior to military service or activation, including credit card debt, for active duty servicemembers. The SCRA unambiguously states that no interest above 6 percent can accrue for credit obligations (that were established prior to active duty or activation) while on active duty, nor can that excess interest become due once the servicemember leaves active duty A? instead that portion above 6 percent is permanently forgiven. Furthermore, the monthly payment must be reduced by the amount of interest saved during the covered period. ”
Now, I am quite sure that incompetence and beaurauctratic idiocy was the likely cause of this “oversight”, but would anyone be remotely if it came to light that some VP or middle management type simply opted to ignore the law and hope this went unchallenged or unnoticed? No, I didn’t think so.
The Business Day “Your Money” section recently had two of its reporters and a student debt expert from the National Consumer Center hold a Q&A on the exploding amount of student loan debt facing Americans. While we applaud the effort, the answers were mostly kind of depressing in this way:
“Q. What about some advice for those who are drowning in tens of thousands of dollars in PRIVATE student loans which you can’t put on the income-based repayment or public service loan forgiveness program? Oh wait…there is none! They are basically pay-or-default loans, and as of 2005, Congress stripped away bankruptcy rights on these loans. These loans will literally crawl into the grave with you! Something needs to be done NOW to allow one to combine these loans with federal loans to qualify for income based repayment or restore bankruptcy rights so people can be given a second chance to live their lives!
A. You are right that borrowers with private student loans have fewer options than those with federally guaranteed student loans. There are some efforts in Congress to change the law so that it won’t be so difficult to expunge private student loans in bankruptcy, but there is no guarantee that they will succeed. In the meantime, your best bet is to call your private loan servicer and try to work out an affordable payment plan.
A Sallie Mae spokeswoman adds the following: ‘While private student loans do not guarantee repayment entitlements available on some federal loans, we work with our customers one-on-one if they experience financial difficulty. As appropriate, we customize assistance using a variety of tools – in some circumstances that means modified loan terms, lower interest rates, good-faith catch up programs or temporary suspension of the requirement to make payments. Since 2009, we have modified $1.1 billion in private education loans with interest rate reductions or extended repayment terms.’”
Remember, if someone drops 40k on a car and other goodies that for whatever reason they end up not being able to afford, no sweat, Chapter 11! But if you tried to better yourself and pay your way through school (whether it was a good idea or not,)”Too bad. So sad.” That is an actual quote from the 2005 Congress.
Oh, and as some bankruptcy experts have pointed out, lenders will get the vapors and say it will lead to them giving fewer loans to students (whom they really want to help!) and they are so worried about the poor, left out in the cold students that they can’t stand by and allow student loan debtors have the same rights as that dude that bought the five bedroom McMansion in the Dallas suburbs the second he made more than $50,000 one year. But:
“Commercial lenders are certain to argue that changing the law will reduce loan availability and increase the costs of loans that are tendered. The historical statistics belie both assertions. The value of private student loans issued annually rose from 1.5 to 13 billion between 1997 and 2005, when they were still dischargeable in bankruptcy…”
So, a couple weeks ago, I discovered that Discover took over servicing Citibank’s student loans. No more dealing with citibank’s terrible customer service, hurray! But, I must say, that I think about 1% of Citi’s customers was aware that this was going to happen. Yeah, I’m sure they “announced” itand let us know, most likely with some fine print attached to the junk mail they send us that gets immediately thrown out. So anyway, the scoop:
‘The acquisition of this portfolio further enhances our ability to achieve sustained, profitable growth in private student lending, which is a key component of our direct banking business,’ said a statement from Carlos Minetti, president of consumer banking and operations at Discover. ‘Expanding our student loan portfolio provides Discover with opportunities to cross sell our direct banking products and … continue investing in competitive pricing, industry leading service and innovative products.’”
Um, okay, sure. by buying up things from a “bad-bank”?
“For Citi, the loan portfolio is part of its Citi Holdings unit, its so-called bad-bank, a pile of assets it is looking to shrink. That portfolio had originally been $600 billion in assets.”
Okay, fine, so what’s that mean for you the loan holder? Well, in theory nothing is going to change in how, when and where you pay your loans. However, I was yet again having trouble with my online account, so I sent an email through their secure message center. I got this response:
“Dear Student Loan Customer,
Thank you for your recent message.
We are reviewing your request and will respond within 1 business day. If you need an immediate response, please call us at 1-800-550-0904, 8:00 a.m. to midnight ET, 7 days a week.
Sincerely,
Customer Service
IMPORTANT INFORMATION
You are receiving this e-mail because you provided your e-mail address to us.
We respect your privacy. To view our privacy policy online, visit https://service.studentloan.com/discover/pdf/privacy.pdf.
If you have any questions, visit studentloan.com or call 1-800-550-0904, 8:00 a.m. to midnight ET, 7 days a week.
DISCOVER and other trademarks, logos and service marks used in this e-mail are the trademarks of Discover Financial Services or their respective third-party owners.
That would make me feel better if the message hadn’t come a WEEK after my email. And since then? Nothing for going on ten days. Maybe Discover has some sort of calendar where a business day actually means a regular week and then some. That must be it.
Round these parts, we try (and often fail) to be bi-partisan, after all, both Dems and Republicans are up to their ears in Citibank money. So we thought this anti-Obama “news” piece from the Daily Caller merited attention. According to this article, Citibank is the innocent victim of low income minorities and a bullying Obama, who “‘led” the class action suit that apparently started the financial crisis:
“The Daily Caller obtained the previously unpublished records for all of Barack Obama’s clients in the 1995 lawsuit “Buycks-Roberson v. Citibank Fed. Sav. Bank.” Obama was named as the lead attorney for two of the three named plaintiffs in the case.
These documents are “proof of claim” records for more than 100 of the class-action plaintiffs based in or near Chicago. The paperwork shows their assertion that Citibank had denied them mortgages, an outcome they believed was related to their race.”
Well, one problem with this is that it ignores tha fact that the suit didn’t say anything about reducing lending requirements, as its whole premise was that Citibank was not lending to black applicants who had the same credit qualifications as white applicants. But, details, feh! Tucker Carlson just wants you to know THE TRUTH! Oh, and there’s this:
“According to the Caller, Obama’s participation in the lawsuit makes him “a pioneering contributor to the national subprime real estate bubble” and part of a movement that “contributed greatly to a housing bubble that burst in 2007, crashed the nation’s economy in 2008.” But both their discussion of his role in the case and their analysis of its result are deeply flawed.
Despite its flaws, the Caller piece has already been promoted by Fox News. Caller editor in chief Tucker Carlson appeared on Fox & Friends yesterday to discuss the piece and claimed that Obama “was the lead plaintiff on some of these cases,” adding that the lawsuit is “significant” because it is “at the heart of the 2007-2008 economic meltdown.”
Throughout its 5,000 word lead story and multiple side pieces, the Caller repeatedly inflates Obama’s role in the lawsuit. In the lead piece, Neil Munro reports that Obama “helmed” the lawsuit as “the lead plaintiff’s attorney.” While he writes that Obama’s “role was limited,” he also claims that it was “his lawsuit” and that Obama “sought public credit for the lawsuit: His employer submitted a docket to the court that listed him as the lead attorney for two of the three named plaintiffs in the case.” ThreeotherCaller stories refer to Obama as the “lead attorney” or “lead counsel” for the plaintiffs.
The sole basis the Caller articles cite for this claim is the case docket. That document lists Fay Clayton as “LEAD ATTORNEY” and lists her first among the attorneys representing plaintiff Selma S Buycks-Roberson. It then provides a list of attorneys for Buycks-Roberson listed alphabetically by first name; “Barack H. Obama” is listed first. That list of attorneys includes Judson Hirsch Miner, who was a name partner at Obama’s firm; at the time, Obama was an associate.”
