A new report unveiled by the National Consumer Law Center (NCLC) last week, highlights the importance of debt defense programs in providing critical civil legal services to economically vulnerable consumers.  While consumer debts used to be collected primarily outside of the court system, debt collectors now rely heavily on lawsuits as a means of collecting debt.  In fact, because of the large number of debt collection cases filed in our courts, DC Superior Court has set aside entire dockets to deal solely with consumer debt collection cases.

Although every debt collector appears in court with experienced counsel, defendants are generally unaware of the difference a lawyer can make and virtually never come to court represented by counsel.  In what the Federal Trade Commission described as a “broken system,” debt collectors take advantage of the uneven playing field by suing on time-barred debts, filing suits based on incorrect or insufficient evidence, failing to notify consumers of suits, and garnishing exempt funds from bank accounts. Read more →

Legal Aid and Wiley Rein LLP are pleased to announce that they favorably resolved a lawsuit against a D.C.-based law firm alleging persistent consumer law abuses in the firm’s landlord-tenant court filings. The settlement not only provides for monetary damages to the named plaintiffs and seven additional affected tenants, but also includes important provisions requiring the defendant law firm to implement strict due diligence procedures and reporting for its landlord-tenant filings over the next year.
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Legal Aid is pleased to announce that it recently received a grant from the District of Columbia Bar Foundation that will help D.C. residents avoid unnecessary foreclosure. The funds—which will support a joint project of Legal Aid and Legal Counsel for the Elderly—came to the D.C. Bar Foundation as part of a 2014 settlement agreement between the U.S. Department of Justice and Bank of America related to mortgages the bank offered to consumers prior to the financial meltdown.
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Yesterday, Legal Aid and seven other local advocacy groups sent a letter to Councilmember Vincent Orange and other members of the D.C. Council asking them to support and schedule a committee hearing and mark-up of the Debt Buying Limitation Amendment Act of 2015. Councilmember Orange is the Chair of the Committee on Business, Consumer and Regulatory Affairs, the committee to which the bill was referred. The reform would require debt buyers to obtain certain documentation before pursuing collections, particularly in court, a critical consumer protection that has been enacted in several states to curtail abusive debt collection behavior. Read more →

Legal Aid is one step closer to obtaining relief for thousands of tenants in the District, thanks to a June 2015 ruling by Judge James Boasberg of the U.S. District Court of the District of Columbia.

In October 2014, Legal Aid – together with co-counsel Theodore Howard and Bonnie Thompson Wise at Wiley Rein – filed a class action lawsuit in federal district court, Lipscomb v. The Raddatz Law Firm, on behalf of four named individuals against a District-based law firm. The lawsuit alleges that The Raddatz Law Firm P.L.L.C. and its attorneys engage in the unlawful practice of filing complaints on behalf of landlords in D.C. Superior Court that contain false information about the status of the tenants’ federally-subsidized rental properties, in violation of the federal Fair Debt Collection Practices Act. Read more →

Legal Aid announced today that it has been selected by the Consumer Financial Protection Bureau (CFPB) to participate in the federal agency’s Financial Coaching Initiative. As part of this initiative, Legal Aid will host a full-time financial coach to work with our clients to help them with their specific financial goals. Legal Aid was selected as part of a competitive process to identify nonprofit organizations serving economically vulnerable consumers who would benefit from complementary financial coaching services. The initiative, which was formally launched on Wednesday of this week, is designed to provide financial coaching at critical points in consumers’ lives as they move along the path to financial stability.

Last week, Legal Aid and the law firm of Tycko & Zavareei, LLP issued a press release announcing that we have filed a class action lawsuit in D.C. Superior Court against the retail chain USA Discounters. The lawsuit alleges that USA Discounters preys on vulnerable consumers, charging high-interest loans on high-cost furniture and electronics that violate usury laws and the laws prohibiting unfair and deceptive sales practices. Read more →

Earlier this week, guests on The Diane Rehm Show explored a recent study from the Urban Institute revealing that 35% of Americans have debts and unpaid bills that have been sent to debt collection. Margot Saunders of the National Consumer Law Center speculated that this staggering figure may be due in part to the creation of financial products offered to consumers with the expectation of default, noting that the credit industry actually generates profits from consumers’ default. Read more →

Maybe you’ve heard the late night commercials: “If you’ve got a structured settlement, we’ve got cash!” Individuals who suffer severe personal injuries often settle their claims against the responsible party through “structured settlements,” which provide a guaranteed stream of income over long periods for the benefit of the injured party and his or her dependents.

Federal and state laws protect structured settlements by requiring that state courts approve any transfer of these guaranteed sources of income. Unfortunately, unrepresented persons often agree to – and courts sometimes approve – the sale of future guaranteed payments in return for an immediate lump sum amount that represent a tiny fraction of the true present value of the future payments.
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As we noted earlier this week, the Washington Post’s three–part series on the real property tax lien system in the District of Columbia captured the attention of both the Mayor and the Council.

On Wednesday, Legal Aid joined its partners in the AT HOME (Alliance to Help Owners Maintain Equity) coalition to issue the following statement on real property tax sale reform: Read more →