Consumers' Union Survey Shows Gift Cards Go Unused

Gift cards are good idea . . . for the folks who are selling them. This survey conducted by Consumers Union shows that an astounding $8 billion in gift cards went unredeemed last year and that  27% of cards purchased last year are still unused. The survey also revealed that more than 60% of all shoppers intend to buy gift cards during the coming holiday season.

Identity Theft Protection Services

by Jeff Sovern

Yesterday's Times reports on services--other than those operated by the big three credit bureaus--for preventing or catching identity theft, in an article titled "In ID Theft, Some Victims See Opportunity."  The piece describes services that, for a fee, notify you of attempts to open credit accounts in your name or place credit freezes on your account.  A couple of excerpts (chosen to reflect my perspective):

Among its peers, LifeLock has attracted the most attention — much of it negative. In radio and television ads, Todd Davis, chief executive of LifeLock, gives out his Social Security number to demonstrate his faith in the service. As a result, he has been hit with repeated identity theft attacks, including one successful effort this summer in which a check-cashing firm gave out a $500 loan to a Texas fraudster without ever checking Mr. Davis’s credit report.

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Many consumer advocates say that no one should have to pay anything to defend against identity theft. “Having to renew a fraud alert every 90 days is a pain, and I can see why there’s demand for these services,” said Gail Hillebrand, a senior lawyer at Consumers Union. “But the ultimate solution is not for consumers to pay someone extra. It’s for the credit agencies to make this an easier process and to extend fraud alerts for a year.”

Mortgage Bill Passes House

The House of Representatives has passed H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, by a vote of 291-127.  Not a single House Democrat opposed it.  CNN is reporting that the bill faces an "uncertain future" as it heads to the Senate--not because of opposition by consumer groups, mind you, but because industry lobbyists, the White House, and many Republicans don't want to see any regulation in this area at all.  (In recent days, we've blogged about the bill here, here, here, and here.)

Consumer Groups Oppose Predatory Lending Legislation

by Deepak Gupta

  A coalition of twenty national and local consumer and anti-poverty groups -- including Consumer Action, National Association for Consumer Advocates, National Consumer Law Center, Public Citizen, and U.S. PIRG -- came out in strong opposition to  H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, scheduled for a vote today in the U.S. House of Representatives.   We've previously blogged about this legislation here and here.

In a letter sent to Congress, the groups said that the bill, designed to address abuses in the lending market, would leave consumers worse off than if Congress did nothing at all.  The organizations decry the bill’s insulation of Wall Street and the removal of key state protections that borrowers use to protect their homes. 

“At a moment when the economy is being rocked by the subprime mortgage crisis and when predatory loans are sending millions of Americans into foreclosure, it is shocking that the House of Representatives is protecting Wall Street, instead of the consumers who are at risk of losing their homes,” said Joan Claybrook, president of Public Citizen.

Foreclosures Hit a Snag for Lenders

by Michael Quirk

  In today's New York Times, Gretchen Morgenson has an interesting article about an even more interesting federal district court opinion dismissing 14 home foreclosure actions based on lack of standing by the foreclosing bank trust.  The federal court's dismissal of these foreclosure cases is significant because the court found that the trust lacked standing to pursue the foreclosures because it could not demonstrate its ownership of the mortgages at issue, a problem that experts interviewed in the Times article say is exceedingly common in foreclosure cases throughout the country.

The federal court in In re Foreclosure Cases, No. 1:07CV2282, et al. (N.D. Ohio 10/31/07), Judge Christopher A. Boyko had demanded that foreclosing plaintiff Deutsche Bank National Trust Company produce copies of the Assignment of the Note and Mortgage in each of the 14 cases Deutsche filed showing that it was the owner of the mortgage loans at the time the cases were filed.  Instead, Deutsche produced Assignments stating a present intent to convey all rights.  The court found that this belied Deutsche's assertion that it owned these mortgages, and concluded that Deutsche therefore lacked standing to foreclose.  In addressing and rejecting Deutsche's arguments for recognizing its standing despite this lack of proof, Judge Boyko used a particularly colorful and effective analogy:

The Court will illustrate in simple terms its decision:  'Fluidity of the market' - 'X' dollars, 'contractual arrangements between institutions and counsel' -'X' dollars, 'purchasing mortgages in bulk and securitizing' - 'X' dollars, 'rush to file, slow to record after judgment' - 'X' dollars, 'the jurisdictional integrity of United States District Court' - 'Priceless.'

The Times article conveys the potentially enormous significance of this decision by interviewing market analysts and consumer advocates specializing in foreclosure prevention, all of whom say that this type of scenario where the foreclosing party cannot document ownership of the securitized mortgage is extremely common in foreclosure cases across the country.  This article is accessible here.

Another Times Editorial on the Mortgage Meltdown Legislation

by Jeff Sovern

Today's Times has an editorial on the mortgage legislation that is scheduled for a vote today on the House floor. The editorial observes that "Industry has already scored some regrettable victories. It persuaded the bill’s backers to include a provision that would prevent borrowers from suing Wall Street firms in state court — where consumer protections are often stronger — for common abusive loan practices."  The Times supports Barney Frank's amendment to "ensure that states are allowed to pursue cases against fraud, misrepresentation, deception, false advertising and civil rights violations."  It also describes as a "must-pass amendment" the proposal "that lenders must verify a borrower’s ability to repay."  Finally, the piece calls for giving "borrowers the right to modify an illegal loan, before they’re forced into foreclosure."

Putting a "Freeze" on Your Credit Report

by Brian Wolfman

The Washington Post's Michelle Singletary has this interesting article in today's paper on the three national credit bureaus' new policy of allowing consumers to "freeze" access to their credit reports so that identity thieves cannot use the reports to obtain credit under the victims' names.  The article explains that obtaining a freeze with the credit bureaus will cost $10 per company or $30 overall, except in states that have credit freeze laws on the books.  If you live in one of those states, the cost is much less.  For a ton of information on state freeze laws and efforts to get national legislation, go to this website created by Consumers Union.  Definitely worth reading.

Editorial Cartoon on the Consumer Product Safety Commission

A look at the lighter side of the problems with the Consumer Product Safety Commission (if there is such a lighter side):

Sierra Club Cartoon Video -- Happy HoLEADays!

Check out this video produced by the Sierra Club on lead in toys.  As Spacey the Lead Elf says: "Happy HoLEADays!"  Thanks to U.S. PIRG's Consumer Blog for the tip.

Introducing the Appellate Assistance Project for Consumer Attorneys

by Daniel Mosteller

For lawyers who didn't make it to the NCLC conference last week or who didn't see the fliers at the conference, I wanted to let you know about a new initiative to assist consumer lawyers with appeals related to all areas of consumer law: The Appellate Assistance Project for Consumer Attorneys.

Five consumer organization -- AARP Foundation, the Center for Responsible Lending, the National Association of Consumer Advocates, the National Consumer Law Center, and Public Citizen -- have teamed up to marshal their wide-ranging consumer law expertise to offer free nationwide assistance with appeals related to all areas of consumer law.  We are eager to work with consumer attorneys to assist with any aspect of the appellate process in any court -- from determining whether to take an appeal, to writing an effective brief, to preparing for oral arguments.  We aim to tailor our assistance to the needs and desires of the lawyers who work with us, whether they are veterans of the appellate process who just need some help arranging a moot or they are facing their first appeal of a consumer law case and want more substantial assistance.  In other words, no request is too small or too big for to be considered.

Lawyers interested in taking advantage of our assistance can submit a request on our website at http://www.responsiblelending.org/caap/.  And those with further questions can contact me at 202-349-1863 or daniel.mosteller@responsiblelending.org.