Credit Card Debt and the Statute of Limitations

In Georgia, the statute of limitations on credit card debt is generally six years. After six years of non-payment on the credit card debt, it becomes “time-barred,” meaning a collector or creditor cannot sue you to collect the debt.  Keep in mind that debt being time-barred doesn’t mean it can’t be collected, only that you, as the debtor, can’t be sued on it.
If you are certain the statute of limitations has expired, you can use that fact as justification that you do not have to pay the credit card debt.  But, be careful not to restart the statute of limitations.  You can take many actions with an account, perhaps even inadvertently, that will trigger a restart of the statute of limitations.  For example, making a payment, making a promise of payment, entering a payment agreement, or making a charge using the credit card are all actions that can restart the statute of limitations on an account.  And, when the clock restarts, it restarts at zero, no matter how much time had elapsed before the triggering activity.
Also note that old credit card debt is not a credit card balance that you may have racked up years ago but are still making minimum monthly payments on.  In this case, you will not be considered to have defaulted on the debt.
In addition, be aware that some debt collectors knowingly file lawsuits to collect on expired credit card debts.  Many people who are sued on a very old credit card debt simply don’t answer the lawsuit because they believe the statute of limitations has run out.  THIS IS A BIG MISTAKE.  If you are sued and do not answer the lawsuit, the debt collector will be able to get a judgment by default against you, and possibly take money from your paycheck, bank account, or tax refund to pay off the debt.  Instead, if you are sued for a time-barred credit card debt, you should go to court and assert as your defense that the debt is time-barred.  As proof, provide any information you have that shows the date of your last payment.  The lawsuit will be dismissed if the judge decides the credit card debt is time-barred.

Client Melvin Pittman and Attorney Jimmy Hurt interviewed by CBS 46 about the City of East Point Class Action Lawsuit

Client Melvin Pittman and Attorney Jimmy Hurt interviewed by CBS 46 about the City of East Point Class action lawsuit.

Posted by Hurt Stolz, P.C. on Wednesday, December 28, 2016

Can utility company charge new tenant for a previous occupant’s bills?

Reposted from the “Ask Consumer Ed” article from the Georgia Attorney General’s consumer protection unit.

Dear Consumer Ed:

Can a utility company charge me for a previous tenant’s utility bills? I am a new tenant in a rental home. The owner passed away last year, and apparently after the medical bills were paid, there was no money left in the estate. I am now being told that I cannot get electricity or water service until these bills are paid. Who is legally responsible – me or the estate that is financially broke at this point?

Consumer Ed says:

While we cannot give legal advice, as a general rule, a tenant in a residential property who has no connection to a previous occupant is not responsible for paying the utility bills attributed to the previous occupant’s use.

Furthermore, if you are renting a house, the utility provider may be prohibited from denying you service because of the previous tenant’s unpaid bills.

For example, Georgia law prohibits a public or private water company from refusing to supply water to a new residential tenant because the prior owner or occupant owes it money.

With regard to electricity, if your power company is regulated by the Georgia Public Service Commission, it is prohibited from denying you service on the basis of a previous occupant’s unpaid bill. If your provider is a municipally-owned electric system, you would have to either refer to your city’s code of ordinance or contact your municipal utilities department. Similarly, if your provider is an electric membership corporation (EMC), you would have to contact your local EMC provider to inquire about the rules and regulations that apply to you.

If a utility company insists that you are responsible for the previous occupant’s bills or refuses to give you service until those bills are paid, you may want to ask it to show you in writing where the Public Service Commission or other authority permits it to take this action. The utility companies may simply need to update their billing records to reflect that a new tenant will be occupying the home and start up the utilities under your name.

If you unable to resolve this situation, you may want to consult an attorney about your options.

My Social Security number was compromised in a security hack.

Re-posted from the Georgia Department of Law’s Consumer Protection Unit.

Dear Consumer Ed:

I just heard about a security hack that left my Social Security number out there.  How can I protect myself?

Consumer Ed says:

Identity thieves use Social Security numbers for a variety of purposes:  to file tax returns, to apply for government benefits, to obtain employment, to open credit cards, bank accounts and/or take out loans, or get medical care. If you think your Social Security number was compromised during a hack, follow these steps:

Contact the Social Security Administration. An identity thief may use your Social Security number to get work. If the employer then reports that individual’s income to the IRS using your Social Security number, you might have issues later because it will appear as though you didn’t report all of your income to the government. You can contact the Social Security Administration to review your earnings record by calling 1-800-772-1213 or visiting www.socialsecurity.gov/myaccount.

Contact the Internal Revenue Service (IRS). An identity thief who has used your Social Security number to obtain a job or file a tax return might try to change the address on file with the IRS in order to have a tax refund sent directly to him or her. To contact the IRS Identity Protection Unit, call 1-800-908-4490 or visit www.irs.gov/uac/Identity-Protection.

Place a security freeze with each of the three credit bureaus. A security freeze (also known as a “credit freeze”) locks your credit file so that no one can see your credit report or credit score unless you lift the freeze. Since banks and lenders access your credit file in order to determine whether or not to extend credit to you, a security freeze will prevent an identity thief from using your information to get a credit card or loan. You will need to contact each of the credit bureaus to place the credit freeze:

Equifax.com
1-888-766-0008

Experian.com
1-888-397-3742

TransUnion.com
1-800-680-7289

Get copies of your credit reports.  You can get free credit reports each year by going to annualcreditreport.com. Review your reports carefully. If you come across any accounts or collection items that you do not recognize, contact the credit bureaus to dispute the matter and get it resolved. Note that under federal law, you are entitled to one free credit report each year from each of the three major credit bureaus. Georgia residents are entitled to an additional two free credit reports per year from each of the bureaus.
For more information, visit the Georgia Attorney General’s Consumer Protection Unit’s website at www.identitytheft.georgia.gov.

I’m on the hook for a loan I never signed

[Reposted from the “Ask Consumer Ed” column of the Georgia Attorney General]:

I  have been placed as a co-signer on a student loan for my grandson. I never signed for this loan. When I contacted the loan provider they told me that I  “e-signed” for this loan. I don’t know what information was provided to verify my identity, but now I am on the hook for $95,000. What can I do to rectify this since I never signed the loan?

Consumer Ed says:

In Georgia, the law on e-signatures is governed by the Uniform Electronic Transactions Act, which means that electronic signatures are guaranteed the same force and legal-effect as traditional paper signatures.  That being said, basic contract law still applies, so for you to be bound to the contract, both parties must have the intent to form a contract, have notice of the transaction terms, and give proper consent to the terms.

When determining the enforceability of a particular electronic signature, the context, actions and circumstances of the parties are taken into account.  Authentication of a signer’s signature is critical here. The loan provider must show proof that the agreement was actually signed by you.  If the signature is being disputed in court, evidence such as the signer’s IP address or the use of an email account can be used to verify the identity of the signer.  In some instances, courts have found e-signatures unenforceable where, for example, someone else routinely uses the computer (IP address) that the signer uses.

It is important to know what it means if the loan is enforced against you.  By co-signing a loan, if your grandson stops making payments, you will have to make the payments for him.  The law in Georgia says that a lender can immediately start collecting from a co-signer if the borrower misses a payment.  Also, if your grandson misses any payments, this can also hurt your credit score.

If you did not sign for the loan then you should contact an attorney to discuss your options.

I keep on getting past due letters for a product I never ordered. I’ve tried to explain the error to the company, but I never get responses; I only get past due notices with additional fees. What should I do?

Above all, don’t be pressured into paying for goods or services you never ordered. Many of these so-called “invoices” appear at first glance to be legitimate bills, and may include threatening or confusing legal jargon to create a false sense of urgency to pressure recipients into making quick payments. Scammers are hoping that you’ll simply pay the bogus bills without checking them out.

Another variation on the phony invoice is a solicitation that is designed to look like a bill. It may contain a required legal disclaimer that says in large boldface type: “THIS IS NOT A BILL. THIS IS A SOLICITATION.” Unfortunately, this disclaimer is often absent or obscure. If you’re deceived into paying for the solicitation, you may never receive the goods and services advertised, and will probably have little to no luck in contacting the company, let alone getting them to refund your money. If you don’t see the above disclaimer, don’t assume it’s a legitimate invoice.

The following are steps you should take to avoid falling into this trap:

Verify. Search the name of the company sending you an invoice to see if others are reporting similar issues or other problems. Check a company out with the Better Business Bureau (www.bbb.org), and also try doing an online
search using the company name and words like “complaint” or “scam.”

Carefully read all invoices and solicitations that are sent to you. Check account numbers and the name of the company sending you an invoice. If you do receive a bill that appears to be legitimate, or from a legitimate company, look it over carefully for the name and location of the company sending the bill. If there is any difference (no matter how small) between the name of the business entity which sent the “invoice” and the name of a legitimate business, this is likely an indication that the invoice is phony.

Contact the company. If you ever question an invoice that you have received, call the number on the invoice. Legitimate businesses will have direct contact information, and will welcome questions. Ask for a purchase order or other supporting documents. An inability to contact the sender at the number provided is also an indication that the bill is a fake.

File a complaint. If you’re getting bogus bills, file a complaint with the FTC at www.ftc.gov/complaint, as well as with the Better Business Bureau. If the scheme involved and/or was sent to you via the U.S. mail, submit a Mail Fraud Complaint Form to the U.S. Postal Inspection Service. You also should alert the Georgia Department of Law’s Consumer Protection Unit online at www.consumer.ga.gov, or by calling 404-651-8600.

U.S. Supreme Court to Decide Whether Class Action Defendants Can Bribe Their Way Out of Legal Trouble

[Reposted from www.publicjustice.net]

By Leslie Brueckner, Senior Attorney

The U.S. Supreme Court is poised to decide an issue of huge importance to everyone who cares about access to justice. The question, in Campbell-Ewell v. Gomez, is whether corporate defendants in class actions are entitled to bribe class representatives to abandon the rest of the potential class members.

Yes, you read that right. According to the corporation who was sued, it should be allowed to cancel out a class action against it simply by offering to settle the named plaintiff’s individual claims. Under the defendant’s view of the law, corporations accused of ripping off millions of people could avoid accountability by repeatedly picking off the few named plaintiffs who are willing to step forward. Campbell-Ewell has even gone so far as to argue that class representatives are bound by such offers, accepted or not, even if it effectively denies all other class members the ability to obtain any relief at all.

The craziest part about the theory they’ve put forth is that it turns the whole notion of adequacy of representation 180 degrees. As we explained in an amici brief we just filed with the Court (along with the AARP), one of the most basic rules of class actions is that class representatives are supposed to represent the others impacted by the wrongdoing. Not only is this required by Rule 23 (the federal class action rule), it’s also required by the U.S. Constitution (due process, anyone?). This means not just that the class representatives are supposed to be competent, they are also supposed to be loyal to the rest of the class members. And that means the class representatives are not supposed to file potential class actions just to make money for themselves, they are supposed to be standing up for everyone in the class.

But if Campbell-Ewell’s lawyers are to be believed, the basic ethical and constitutional premises of class actions were just flipped. They say that corporate defendants in class actions have the right to bribe class representatives to abandon everyone else. And in their view, even if a class representative wants to do the right thing and reject an individual payday so they can stand for the entire class, Rule 68 strips away that possibility, and the court must dismiss the whole case for lack of subject matter jurisdiction.

If the Supreme Court agrees with Campbell-Ewell, it could spell disaster for the ability of injury victims to obtain any compensation whatsoever via class action suits. Class actions make it economically possible for injured consumers, civil rights plaintiffs, and low-wage workers to pursue claims for relatively small damage amounts for wrongs that would otherwise go unremedied. A Supreme Court ruling that would allow defendants to shut down class actions simply by “picking off” named plaintiffs could wipe countless cases – and countless consumers and others who would benefit from those cases – off the litigation map.

Hopefully, the Court will see this tactic for what it is: a form of bribery that turns the very idea of class representation on its head.

– See more at: http://www.publicjustice.net/content/us-supreme-court-decide-whether-class-action-defendants-can-bribe-their-way-out-legal-troubl#sthash.9w6nHSVt.dpuf

Q: I’ve been looking for a new apartment. The leases that I have read are over 5 pages long and are full of a lot of legal terms that I don’t understand. What are the most important things I should look out for?

Reposted from the “Ask Consumer Ed” article of the Georgia Governor’s Office of Consumer Protection:

A: Your frustration is understandable. Leases can be overwhelming, even to those accustomed to reading them. Georgia’s Department of Community Affairs has a Landlord-Tenant Handbook available on its website (www.dca.ga.gov) that can give you some guidance, but in particular, here are some important things you should look for before you sign:

  1. Rent and length of the lease – While the landlord may have told you the basic information about the lease, it is important to get the key terms such as monthly rent and length of the lease in writing. This protects you from later changes in price or terms.
  2. Utilities – Leases can differ dramatically in this area. Determine if you are required to place the utilities in your name, pay the landlord for utilities, or if they are included in the rent. This can have drastic impacts on the cost of the apartment, so you need to know upfront what you are obligated to pay.
  3. Security deposit – Most apartments require a security deposit when signing the lease. Find out how much this is and what will be deducted when you move out. Most landlords conduct an inspection before you move in and after you move out to check for damages and deduct the repair costs from the deposit.
  4. Termination and renewal procedures – The lease should state what happens at the end of the lease term. This includes the deadlines and procedures for notifying the landlord that you are either moving out or extending your lease. Be aware of any automatic rent increases that occur if you decide to renew the lease.
  5. Subletting and Subleasing – It is important to know whether you have the ability to leave the

apartment before the lease is up. Leases are often commitments for a year or more and landlords have different rules regarding your ability to lease to another person should your circumstances change.

6. Pets – Some landlords do not allow pets, while others may restrict the number, size or type of pets permitted. Many will charge a pet deposit, which may or may not be refundable. Make sure you are clear about these terms and have budgeted for any additional deposit due.

7. Renter’s Insurance – Remember that your landlord’s insurance does not cover your belongings, only the building itself. If your furniture or belongings are damaged due to fire, theft, or a natural disaster, you’ll be out of luck if you don’t have renter’s insurance. The good news is that renter’s insurance is very affordable, and you can generally purchase it from the same company that insures your vehicle.

Even though a lease can be long and complicated, you should always read it thoroughly before signing it. Be wary of a landlord who seems in a rush for you to sign before you’ve read through the entire document. If you cannot understand the terms of the lease, have someone who is familiar with lease agreements, or an attorney, review it with you to make sure that you fully understand what you are agreeing to before you sign the lease. Do not leave any blanks to be filled in later. Either get them filled in or cross through them, initial each cross-out and have the landlord do so also. Finally, insist upon getting your own copy of the lease, and save it so that you can review your rights and responsibilities should a dispute ever arise.

Why Debt Settlement May Hurt Consumers More than It Helps

ELLEN HARNICK AND LESLIE PARRISH
“Be debt-free in 36 months!”

“Reduce your debt by up to 50%!”

We’ve all heard commercials from debt settlement companies that use pitches like these, promising troubled borrowers that they can get out of debt by paying just a fraction of what they owe.  The industry that the New York City Department of Consumer Affairs once called the “top fraud of the year” is now fighting hard to set up shop in additional states across the country. While several states—such as New Jersey, New Mexico, Arkansas and Wyoming —do not currently authorize debt settlement, industry lobbyists have been making the rounds in state capitals trying to rustle up support to allow the practice.

But it may be in consumers’ best interest to keep debt settlement companies at bay. A recent report by the Center for Responsible Lending confirms that debt settlement is often not worth the risk—and leaves many consumers even worse off.
Debt settlement seems like a viable alternative for families struggling to break free from excessive debt. Enlisting the services of a professional to negotiate down debts appears equivalent to hiring a lawyer to deal with complex legal proceedings.

But there’s a catch. In order to sign up for debt settlement, clients must first default on all of their debts. The money they once spent on minimum credit card or other debt payments is then instead used to fund a special account that can eventually be used for settlements.[1] While consumers wait for settlements that may never come, their debts continue to grow due to late fees and other default charges.

In some cases, creditors simply refuse to negotiate with debt settlement firms. Clients face the significant risk that creditors may instead sue them to collect on these defaulted debts. For example, a Maryland regulator found that one in four clients had been suedby at least one of their creditors during the first year of their debt settlement program.

These drawbacks led the Federal Trade Commission in 2010 to bar debt settlement companies from charging fees until they had settled at least one debt on behalf of their clients. But the CRL report shows that while this regulation may have led to some improvements in business practices, serious risks remain for debt settlement clients.

A debt settlement company would have to settle at least two-thirds of a client’s debt in order for her to emerge better off from the process than when she started, according to the CRL’s analysis of data published by the industry trade association, the American Fair Credit Council. If the potential tax liability on settled debts and the monthly cost of maintaining a special account for settlements are considered, a debt settlement company would have to settle over 80% of a client’s debts for the savings to exceed the costs of the settlement process.

Historically, only a small portion of clients have achieved such successful outcomes. In 2010, the industry reported that over 42% of clients were unable to have even a single debt settled

More recently, the Colorado Attorney General reported that over half of clients in that state who enrolled in debt settlement programs in 2011 had dropped out of their programs by the end of 2012. During that same time period, fewer than 8% had all of their debt settled.

While there are exceptions, it’s clear that debt settlement is inherently risky for financially vulnerable families, potentially leaving many people much worse off than they were in the first place.

Any state should think twice before offering a welcome mat to the industry—unless and until debt settlement companies can show that clients typically settle enough debt to actually benefit from these programs.

The debt settlement chapter of the Center for Responsible Lending’s State of Lending series is available on the CRL website. Ellen Harnick is senior policy counsel and Leslie Parrish is deputy director of research at CRL.

Is Debt Settlement Legitimate?

Re-posting from the “Ask Consumer Ed” publication of the Georgia Governor’s Office of Consumer Protection
Published October 11, 2013

Dear Consumer Ed:

I owe close to $30,000 in credit card debt. I contacted a company that said it could help me get out of debt.  The counselor I spoke to told me to stop making credit card payments for six months and that he would then contact my credit card company and offer to settle my account for $10,000.  Well, it’s now six months later, and the credit card company has refused to accept the debt settlement offer.  Because I didn’t pay anything for six months, I now have an even worse credit rating, not to mention my creditors have added late fees to my balance and have turned my account over to a collection agency.  What can I do?

A:  This company is engaged in an illegal practice known as “debt settlement.” While services known as “debt adjustment” may legally be provided to Georgia residents, these are strictly regulated by Georgia’s 2003 Debt Adjustment Act.  The reason such practices are stringently regulated is that people seeking these services are among the most vulnerable consumers:  those already in dire financial straits.

Before July 2003, debt adjustment, along with debt settlement, debt negotiation, and debt “counseling”, were all illegal in this State.  When our legislature began to allow some of those services to be provided to Georgia consumers, it enacted tightly written laws that established clear and rigid standards through which such businesses could ply their trade.

If a debt adjuster is charging for its services, it cannot provide them to Georgia consumers using any business model or fee structure other than the one contemplated under the Act.  Under this model, the debtor sends money directly to the debt adjustment company, which places the funds in a trust account and then disburses the money to the debtor’s creditors after taking a percentage of not more than 7.5 percent off the top as its fee. While up-front fees, which are fairly common, may be permitted (debt adjustment companies may charge you an up-front fee, monthly fee, or both), the combination of these fees may not exceed 7.5 percent of the amount paid monthly by the consumer to the debt adjustment company for distribution to his or her creditors.  In addition, the debt adjustment company must disburse all funds received from the debtor, less any fees, to creditors within 30 days of receiving them.

The company you contacted is using a model whereby the company tells consumers not to make payments to their creditors, then attempts to negotiate a lump-sum “settlement” with those creditors.  This practice is not permitted under the Debt Adjustment Act.

Companies that commit these types of violations can be subject to legal action on State and Federal levels. In fact, the Consumer Financial Protection Bureau recently took action against Meracord, LLC, a debt settlement payment processor that is alleged to have charged millions of dollars in illegal fees to over 11,000 consumers, nearly half of whose accounts were closed without ever being settled. The company must now pay $1.376 million in penalty fees and immediately cease all illegal activities.

If you believe the business you’re working with may have violated the Debt Adjustment Act, you can file a complaint with the Governor’s Office of Consumer Protection (www.consumer.ga.gov or 404-651-8600), and/or file a private a legal action of your own.  If the company is found to be in violation, it could be required to refund all of the fees you paid and, in a private action, you may request an additional $5,000 as restitution.

Because your debt has been turned over to a third-party debt collector, you are entitled to certain protections under the Federal Debt Collection Practices Act (FDCPA).  Among other things, the FDCPA prohibits a debt collector from contacting you at unreasonable times and places, using abusive tactics to collect the debt, or falsely representing themselves.  For more information about your rights under the FDCPA, visit: http://consumer.georgia.gov/consumer-topics/debt-collectors.