Judson E. Crump, PC

Jefferson Capital Systems, LLC Collection Lawsuit Defeated – Alabama Debt and Credit Attorney Judson E. Crump

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Another credit card lawsuit against a struggling Alabama woman, another victory for the consumer.

Jefferson Capital Systems, LLC sued my client for an allegedly unpaid credit card bill.  They initially sued her in the District Court of Baldwin County, but we won that lawsuit, so they appealed the case to the Circuit Court.  In Alabama, if you lose a lawsuit in the district court level, you can basically ask for a “do over” in Circuit Court, and the entire case starts again from scratch.  Well, they weren’t happy when we beat them the first time, so they decided to appeal it and try again.

The case went to trial on October 17, 2018, and though my opposing counsel did a great job, the judge ruled that none of Jefferson Capitals’ documents were admissible in evidence, and granted us a judgment in our favor.  This was a tremendous relief for my client, Ms. Campbell, who has a job and works hard, but was simply unable to afford to pay them what they were asking and could not risk having a garnishment served on her employer.  This was not our first major victory against Jefferson Capital.  If you or someone you know has been served with lawsuit papers from Jefferson Capital Systems, LLC, it is very important to act quickly to protect yourself from the negative consequences of a potential judgment against you.  Call an experienced debt defense lawyer today.  Our fees are reasonable and our record of success us proven.  251-272-9148.

Another credit card lawsuit against struggling Alabama consumers ends in victory for the people.

What is a YoYo Sale? – Alabama Consumer Fraud Lawyer Judson E. Crump

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You go to a car lot and apply for financing to buy a car.  “Congratulations!” they say.  “You’re Approved.”  So you sign the contract and drive off in the car.  Only later do you discover that you were not, in truth, approved.  Your “approval” has been yanked, and now they’re asking you to come back with the car.  That’s a Yo Yo Sale.

Yo-Yo Sales are one of the most pernicious forms of fraud.  The buyer is tricked into putting down good money for a car they will likely never own.  This causes them to lose their ability to shop around to other, less fraudulent dealers.  They may get jerked around for weeks waiting on title applications, tag paperwork, and their deal papers.  Then, worst of all, when the deal falls through, the dealer thinks they can repo the car and keep your down payment.  Yo-Yo sales are the sort of scam that typically only befalls poor working folks.

Don’t let them jerk your chain. Call Alabama Consumer Rights Attorney Judson E. Crump

Depending on how the paperwork is written, Yo Yo sales can be a form of fraud, a breach of contract, false advertising, and violations of federal consumer protection laws like the Equal Credit Opportunity Act and the Truth in Lending Act.

The most common way I address YoYo sales is by claiming fraud.  In Alabama, fraud is defined a false statement of an important fact that the buyer relied upon, causing the buyer harm.  In a Yo-Yo sale, the most common fraudulent misrepresentation is the statement that the buyer is “Approved.”  If the approval is conditional, then it is not really an approval.  Dealers try to paper over this misrepresentation by having the buyer sign a document called a “Spot Delivery Agreement,” a “Conditional Delivery Agreement,” or a “Bailment Agreement.”  These can be enforceable, but often the dealer does not perform his own obligation under the Conditional Delivery Agreement to seek financing in good faith.  Furthermore, some of these agreements impose massive costs on the buyer, making them unconscionable.

My second favorite way to address a YoYo sale is through the Equal Credit Opportunity Act, or ECOA.  ECOA requires that whenever you apply for consumer credit, the creditor has to give you a firm approval, denial, or counteroffer within 30 days, and if they don’t approve you, then they have to send you a written statement of the reasons you were not approved.  The sorts of dealerships that conduct yo-yo sales almost never do this.  They just don’t care about following the law.

Signs of a YoYo Sale.

  1. They don’t give you a copy of the retail installment sales agreement.  This is the document that states what your interest rate and monthly payments are.  It is the document that describes the sale of the vehicle.  When they’re trying to YoYo you, they don’t give you a copy of the contract.  They’ll just give you a copy of a spot delivery agreement.  They don’t want you to have proof that you are the new owner of the vehicle.  They want to hold all the cards.  If you ask for your paperwork copies, they say “We’ll send them in the mail.”  This is the hallmark of a YoYo.  NEVER EVER EVER drive off with a car unless you have a copy of the title application and retail installment contract.
  2. You don’t get a copy of your title application the day you take the vehicle home.  Similarly, they won’t process your title application until they’ve found the financing that they want.  Again, they want to hold all the cards.  Alabama law requires that they process your title application within 10 days.  If they don’t do this, something fishy is going on.
  3. They ask you to sign a Spot Delivery Agreement or Conditional Delivery Agreement.  NEVER do this.  If they won’t make a full and final deal with you, then you need to take your business somewhere else.  Their excuse is that “this is just something we need you to sign while we’re finishing up the financing paperwork.”  It’s a scam.  Don’t believe them.  There are other places you can go that will deal with you fairly.  Shop around until you have a final deal.
  4. Excuses, Excuses, Excuses.  They constantly make excuses for their failure to finish the deal.  They’re dragging you along hoping to steal your down payment.  The longer you have the vehicle, the more they think they can keep your down payment as a charge for the “use” of the vehicle.
  5. They ask you to return the car to the dealership.  Maybe they say they need to sign more papers.  Maybe they want to “repair” something.  Once they’ve decided to pull the YoYo, they will do whatever it takes to get the car back from you.  They want to move the car to another buyer ASAP.

How to Protect Yourself from a YoYo Sale

  1. Get copies of ALL documents you sign.  Insist on getting a copy of every document you sign.  The Truth in Lending Act requires that they give you a copy of your installment agreement before or at the time you sign it.  If they don’t do this, they’re breaking the law.  Tell them that by law they are required to give you a copy.  They know this is true.  In fact, before even asking for copies, you should go ahead and photograph each page of each document you sign.  They can’t prevent you from doing this, or take your cell phone away.
  2. If they won’t give you copies, demand the down payment be returned.  Just go ahead and tell them that you know they’re doing something illegal and you want no part of it.
  3. Return the Car and get your money back ASAP.  If you already signed a Conditional Delivery Agreement or Spot Delivery Agreement, then return the car to the dealership on the day listed in the agreement.  Most of these documents have a deadline for finalizing the deal.  If there is one, be sure that you follow it.  Don’t take any dealer assurances that they’re still working on it or that you can keep it.  They will go back on their word later.  All that matters is what the paperwork says.

If you’ve been YoYo’d by an Alabama dealer, call the law office of Judson E. Crump, PC at 251-272-9148 to learn your rights.

 

Alabama Supreme Court Continues to Harm Working People for the Benefit of Wealthy Corporations – Alabama Consumer Rights Advocate Judson E. Crump

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The Alabama Supreme Court Hates Working People and Loves Big Corporations.  Here’s Yet Another Example.

On June 26, 2015, the Alabama Supreme Court issued a decision in the case of American Bankers Insurance Company of Florida v. Gladys Tellis.  Now, for those of us who have been living for a while under the extreme anti-consumer regime of the current Alabama Supreme Court, the outcome of such a case can be predicted just by its name.  American Bankers Insurance Company (a huge and rich insurance company) against a lady named Gladys Tellis (an ordinary woman seeking justice after she’d been defrauded).  Whenever a big company is sued by a worker or consumer or anyone who isn’t also a big powerful corporation, the Alabama Supreme Court, whose 9 Republican Justices were elected with millions of campaign dollars paid for by those very banks and insurance companies, is almost certain to find a way to rule against the working man.  So this case was no exception: they handed down a decision that dealt yet another blow to regular people seeking justice.

In this case, the issue before the Court was whether the insurance company could enforce a mandatory arbitration agreement against the Plaintiffs in that case.  Normally, arbitration agreements are enforced due to a federal law called the Federal Arbitration Act, which since a major US Supreme Court misreading of that statute in 1995, has basically been applied to every contract in the United States.  Note here that though I’m complaining in this article about the extreme pro-corporation bias of the Republican Alabama Supreme Court, in the Allied Bruce Terminix case of 1995, the U.S. Supreme Court’s anti-consumer decision was a 7-2 decision, where the only justices who rightfully dissented were the most conservative members of the Court: Scalia and Thomas -both Republican appointees. So don’t think for a minute that I’m just against Republican judes.  I’m not.  I’m against judges who are biased against workers, the poor, and those who have been done wrong by the rich and the powerful

So enforcing mandatory arbitration agreements, no matter how Rumplestiltskinian they may be, is commonplace in the United States.  Why does this matter?  Because arbitration is a grossly unfair proceeding that deprives people of many, many rights that they are supposed to be guaranteed by the Constitution: the right to join together with other people in lawsuits (not just in class actions, but even cases where a handful of friends have been screwed in the same way by the same company), the right to a trial by jury, the right to obtain evidence in their favor that is held by the other side, and, most importantly, the right to appeal a decision that is flat-out wrong.

But in this case, the Plaintiffs had a solid defense to the arbitration agreement in question: they never signed it.

Now anybody with common sense can understand the issue: if you don’t sign it, it isn’t binding.  That’s the normal rule.  Certainly the opposite rule applies: if you sign a contract, it is binding, right?  And of course, the latter rule has always been enforced by our courts.  And what’s good for the goose is good for the gander, right?

Not in Alabama.

Somehow, the Alabama Supreme Court found a way around the common sense rule that only contracts you actually agree to can be held against you.  They said that by paying premiums, the insurance company’s customers implicitly consented to the arbitration agreement.  This is crazy.  The only explanation, of course, is that these judges were just looking for any excuse to help out their corporate sponsors, and they did so at the expense of all of Alabama’s citizens.

This is what happens when we allow our highest court to be sold to the highest bidder.  It is literally justice for sale.  That is a very evil phenomenon, and the worst part of it is this: our voters don’t care.  Because this is a conservative state, and the millions of dollars of insurance company money floods our televisions, radios, billboards, and emails with false messages that if we don’t elect these extreme Republican justices, then our state will descend into crime and chaos.

Until people start caring about protecting their rights, this is going to continue.  We are going to keep losing, and our citizens are going to continue to be screwed by big out-of-state companies that don’t care about Alabama.

Finally, I’d like to mention one thing that should be remembered.  There was, at that time, at least one ray of hope on the Supreme Court: Chief Justice Roy Moore.  Many people criticize him for his popular image in the media of being a crazy conservative, but the truth is that while he was on the bench, he was the only justice that actually cared about doing justice for ordinary people who had been defrauded or harmed by the rich and the powerful.  In the Tellis case, he wrote a powerful and eloquen dissent explaining just how important the right to trial by jury is, and he saw right through the majority opinion to show just what is happeneing in cases like this: the victims of fraud are excluded from the courthouse.  They have lost their constitutional rights and are forced into an arbitration system that makes a mockery of justice.

Unfortunately, even that ray of hope has been extinguished, as Justice Moore was removed from the bench for his stance in defense of traditional marriage.

The full opinion in the Tellis case can be found here:

American Bankers Insurance v. Tellis

Vacating Default Judgments, Part II – Alabama Debtor’s Rights Attorney Judson E. Crump

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Sometimes, Debt Collectors and Collection Lawyers File False or Bogus Service Returns to Get a Judgment Without Notifying You.  Here’s what to do about that.

Last week, we discussed how to get a default judgment vacated if the Service Return showed that you were not served properly under the Alabama Rules of Civil Procedure.  Now we turn to a more difficult situation: where a collection lawsuit was never served on you, but the Service Return says it was served on you.

Before a plaintiff can ask for a Default Judgment, they must prove two things to the Court: a) that the amount sought in the judgment is valid, and b) that you were notified of the lawsuit in accordance with the Rules.

They prove the amount of the judgment by filing a default affidavit – a sworn statement of someone knowing the facts of the lawsuit attesting to the amount owed.

They prove that you were notified by filing a Service Return, which is signed by whomever served the papers on you and states who, when, and how the lawsuit summons was delivered to you.

Most Service Returns are correct.  The vast majority of them.  But there are numerous cases where the Service Return is just plain false. Sometimes people make mistakes.  They may serve the wrong person, for instance, honestly believing they got the right guy.

But there are also more nefarious reasons why a sheriff’s deputy or process server may put false information on a service return: either they’re lazy and don’t care to identify who they’re serving, or they can’t find the defendant and to save time and satisfy their customers (the collection lawyers) they just sign a service return knowing that they never served the papers.

Unfortunately, where a service return states that you were served it is presumed valid.  And contradicting a false service return is not as simple as just going to the court and telling the judge you never got served.  You must prove that you were never served with corroborating evidence.  Here are a few examples of the sort of evidence you’d need to prove a service return wrong:

  • You were out of town on the date you were supposedly served, and you have plane tickets, hotel reservations, or credit card charges to prove it.
  • The date you were served was a major event in your life that you could be expected to remember well – like a birthday, a wedding, or a funeral of a loved one.
  • The person they claim to have served on your behalf at the time was not living in this state, or was dead or incapacitated.
  • You were in a hospital or incapacitated when they claim you were served.

As you can see, these sorts of things are not often the case.  If you can’t prove the service return wrong, then you are probably stuck with it.  That isn’t fair, I know, but that’s the law.  Now, the judge has wide discretion on this, and if you show up with witnesses and you seem very honest about never getting notified, the judge may believe you or feel sorry for you and give you a break.  But don’t count on it, because if the decision gets appealed, your chances aren’t good.

If you can’t prove that the service return is incorrect based on the documents alone, then you do have another option: file the motion to vacate and have your lawyer depose the person who supposedly served the papers.  This is going to cost a lot of money, but it gives you a powerful way to find the evidence you need: from the plaintiffs themselves.  You get to cross examine the process server and hopefully, find holes in his story or other evidence that will enable you to prove that they were lying when they filed the service return.

The cost of locating and deposing a process server will be at least $500, and you’ll have to pay your lawyer at least that much just to file the motion and conduct a deposition.  But if there is a lot of money on the line, or if you have a great shot at beating them at trial, or if you really need the judgment off your credit report to get a home mortgage loan, then it could be worth it.

Next: Vacating a Judgment for Fraud on the Court

What is Fraud? – Alabama Consumer Fraud Attorney Judson E. Crump

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Fraud.

noun | \frȯd\

An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right.  A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury…

Black’s Law Dictionary, 6th Ed. (1992).

Fraud can be hard to define.  Even the good editors of Black’s Law Dictionary have a hard time with it.  But you know it when you see it.  When you have been defrauded.

So how do you get a fraud case to court?

In Alabama, there are 4 elements to a fraud case – elements you have to prove in order to win.

  1. Misrepresentation. In other words, a lie.  They told you something that was false.  Keep in mind that the statement must be demonstrably false at the time it was said.  A false promise of future conduct is not fraud.  It may be breach of contract, but it isn’t fraud.

    So if a merchant says “I will sell you this autographed 1995 Ozzie Smith baseball card for $50,” and the baseball card is not actually autographed by Ozzie Smith, then it is fraud.  However, if he says “If you pay me $50, I will get Ozzie Smith to autograph this baseball card for you,” and he takes the money and never gets that autograph, then he has not defrauded you.  He just breached his agreement.

  2. Of a material fact.  The false statement has to be about something important.

    Example: the card dealer says “I’ll sell you this signed Ozzie Smith baseball card for $50 and put it in this blue envelope for safekeeping.”  And he sells it to you for the agreed price, but the envelope is a red, equally safe envelope, then it is not fraud.  The color of the envelope was not part of the basis of the bargain.  You pay for the baseball card, not the color.

  3. Reliance.  You acted in reliance upon the false statement.  Basically, the deception had to have caused you to act.  In other words: if you had been told the truth, would you have acted any differently?  If not, then there is no fraud.

    Example: The card dealer says “This baseball card has been autographed by Ozzie Smith.”  But your wife is a handwriting expert intimately familiar with the handwriting of Ozzie Smith.  She tells you “No, that’s not a real autograph.”  You buy the card anyway.  There is no fraud, because you did not rely on the dealer’s false statement.  You knew he was lying.

    Reliance is the trickiest part of a fraud case, and it is the one area where fraudulent businesses most often get off the hook.  Why?  Because in Alabama, it isn’t enough to show that you relied on a false statement.  You have to show that your reliance was reasonable.  In other words, in relying on the false statement, were you applying common sense?  But Alabama law goes farther than that.  Our courts have decided that if there is a written contract that does state the truth, then you have a duty to read the contract.  If the the dealer promises on his mother’s grave that the card is autographed, but the contract says in fine print “None of the baseball cards we sell are autographed,” then your reliance on the dealer’s statements will be deemed unreasonable, and the dealer is off the hook.  Even though he is a liar, cheat, scoundrel, and blasphemer, you won’t get any money out of him.  This is why businesses love fine print.  Because they have paid a lot of money to elect judges who uphold the illusion that everyone who has purchased anything in the past 50 years has no children and no job, and and spends all day reading and deciphering fine print.

  4. Damages.  The fraud has cost you something.  It may be money.  It may be time.  It may be a a 20% off coupon at a local oil change shop.  But whatever it is, you have to prove not only that someone lied to you, but that your reliance upon their lies has cost you something.

    Example: You’re at a baseball card shop, and you see a 1995 Ozzie Smith card with a signature on it.  The label says “Price: $5.  Not a real autograph.”  The card dealer says “That’s not really his autograph.  It’s a forgery.”  You buy the card, and when you take it home, your wife (the handwriting expert) looks at it and confirms that it is, actually a genuine Ozzie Smith autograph.  The dealer told you a lie.  About a very important aspect of any baseball card.  You paid $5 in reliance upon that lie.  So there’s a misrepresentation of material fact, with reasonable reliance on your part.  But there is still no fraud, because you have not been damaged.  You paid $5 for a card that is worth at least $50.

Now in real life, most people know when they’ve been screwed.  When people call my office after learning that they have been cheated, there usually is no question that they were told a lie, and that they’ve been damaged by it.  Otherwise they wouldn’t be calling me.  The real challenge for a lawyer is proving that reliance was reasonable and that damages were attributable to the false statements.

But fortunately, we are up to that challenge, and we have more weapons in our arsenal than just fraud.  Deceitful statements in commercials or print ads could be false advertising.  Incorrect statements in lending documents could violate the Truth in Lending Act.  And false, deceptive, or misleading statements by debt collectors are prohibited by the Fair Debt Collection Practices Act.

If you believe you have been defrauded, give us a call at 251.272.9148.

Can the Repo Man Do That? The Law on Repossessions. – Alabama Consumer Protection Attorney Judson E. Crump

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About a million cars are repossessed each year in the United States.  Many of these are illegal, though most debtors (and a lot of repo agencies) don’t know it.  So just what makes a repossession illegal in Alabama?

Breach of the Peace.

A secured creditor can only repossess their collateral if they can do so without any “breach of the peace.”  The Uniform Commercial Code doesn’t define “breach of the Peace,” but the Alabama Supreme Court has.  And they’ve adopted a pretty common sense rule: if the repo man violates a criminal statute, then they’re breaching the peace.

Despite this clear and wise rule, repossessions that breach the peace happen all the time.  These really bother me because I believe that they show a fundamental disrespect for the human dignity of debtors.  How?  Because it should be obvious that you can’t commit crimes in order to repossess a vehicle.

“But it’s my job!” says the Repo Man.

“We have a right to get paid!” says Title Max or the car dealer.

OK let’s consider that.  My job is to win lawsuits.  What if I went into the law offices of my opponents and burned up their files.  “I’m just doing my job.”  Right?  Of course not.  A crime is a crime.  No matter how poor or black or redneck or worthless you think your debtors are.

So they cannot break any criminal law.  What does this mean for you?  Here’s some examples:

  • They cannot enter the property of someone who doesn’t owe money if that person tells them to go away or tries to block their entry (that’s criminal trespass).  They can enter your property.
  • They cannot break a lock, cut a chain, or enter your house.  That would be burglary.
  • They cannot intentionally damage your (or anyone’s) property.  If you have a marble statue of St. Theresa of Avila in your front yard, and they drive right over it, they are breaching the peace.  This is called criminal mischief.
  • They cannot touch you or be violent in any way (that’s Assault).
  • They cannot threaten violence (that’s Menacing).
  • They can’t harm your pets (animal cruelty).
  • They cannot curse you, insult your virtue, or use profanity (harassing communications).
  • They cannot use false pretenses to get the keys to your car.  Or to get access to someone else’s property.

In other words, missing a payment on a car note does not mean that repo men can commit crimes against you with no penalty.  Despite what many creditors, banks, and “pro-business” politicians may think, a person does not become less than human just by falling into financial trouble.  As I said, crimes are crimes.

Conversion.

They have to give your stuff back.  That’s all there is to it.  If they don’t pack it up and send it to you or let you come and get it, then they’re stealing your stuff.  If they want to charge you $40 to come and get your own property that they have taken, that is conversion.  They can’t do that.  If they take valuable things or cash, then you can sue them for that.

Many retail installment contracts and security agreements give them the right to charge a reasonable “storage fee” for holding onto your stuff until you come get it, but even where such fees are authorized by a contract, there is no “storage fee” due unless some actual “storage” took place.  If you go to their lot the day of the repo and your belongings are sitting right there in the car that was repossessed, then they haven’t stored anything for you.   So no “storage” fees.

They get this one wrong All—The—Time.  But it’s still wrong.

Trespass & Property Damage.

There are two types of trespass: trespass on real property (land and homes), and trespass against personal property (cars, boats, books, TVs, everything but land and homes).

Secured creditors do have a privilege to trespass on your own property and to travel on common property (like roads and public parking lots).  However, they are not generally allowed to trespass into residential property of people who don’t owe them anything.  For instance, if my car is in my back yard, the repo man cannot drive through the neighbor’s yard and drag it out over his grass.

Trespass against personal property generally means physical damage.  If they unnecessarily damage or destroy your personal property, then they can be held liable for it.

But beware of one thing: it is also a crime to conceal collateral with the intention of hindering your creditors.

So What If They Break the Law?

A lot of people call me with tales of repossession misbehavior, and they think that if you can prove that the repo man broke the rules, they get their car back without paying for it.

That’s just not true.

Unless the repossession occurred a) when you were not in default, or b) after you’ve filed bankruptcy, you can’t get the car back without paying.

The penalty for an unlawful repossession is cash damages.  Generally, they have to pay for whatever damage their misconduct caused, and in some cases they have to pay extra for violating certain laws.

A secured creditor gets to set off these damages against what you rightfully owe.  So unless you’ve almost paid off your loan or their conduct was just really bad, then a wrongful repossession suit probably will not put any cash in your pocket, though it can shield you from a lot of future debt.

Example 1: You owe $10,000 on your car.  It gets repossessed, and the repo man recklessly drove across your yard and crashed into your boat, causing $5,000 of damage.

They sell the car at auction for $3,000, leaving you with a deficiency balance of $7,000.  If you sue them for trespass, they can counterclaim for the contract deficiency, which is $2,000 more than your trespass damage.  So the court enters a judgment for them in the amount of $2,000.  You reduced your debt, but that doesn’t help you very much.

Example 2. Granny owes $5,000 on a $30,000 mobile home.  She bought it at high interest with $2,000 down 15 years ago.  A repo man comes out with a 5th wheel and tries to haul it off, and in so doing, he pushes Granny onto the ground and knocks open a sewage pipe, causing rotten S— to fly all over poor Granny.  This is a breach of the peace situation that allows for statutory damages of $12,000, plus some emotional distress damages for being such a jerk to a sweet old lady.  Granny will get a cash judgment.

 

There’s a New HomeGoods in Mobile! Before you go shopping there, Learn the Truth About their Pricing – Alabama Consumer Protection Attorney Judson E. Crump

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HomeGoods advertises its ability to offer “department store” brands at way less than department store savings.  Maybe sometimes they do.  But when you go shopping there looking for a discount, don’t just take their word for it.

On July 23, 2015, a federal class action lawsuit was filed against HomeGoods, a large discount retailer that has stores nationwide.  What did they do wrong?

Well, like all stores, their products have tags or stickers announcing their price.  In addition to the price, though, HomeGoods adds a special “Compare At” price, which is invariably much higher than the HomeGoods price.  The purpose of the “Compare At” price is, of course, to make you think that a $10 coffee mug really is worth $50.  What HomeGoods doesn’t tell you, though, is that the “Compare At” number is not based on any real market research, and you probably won’t find any stores actually charging the super-high “Compare At” price.

In other words, they’re false advertising the savings that you get by shopping there.  That is why they’ve been sued.  The lawsuit seeks to require them to either make their labels accurate, or drop them altogether.

This doesn’t mean that HomeGoods doesn’t have good deals.  I’m sure they do.  In fact, my wife will probably check it out and come home with bags of “deals.”

So just be aware: if you see a coffee mug priced at $10 with a “$40 value,” don’t fall for it.

The text of the HomeGoods Lawsuit can be found HERE:

https://www.truthinadvertising.org/wp-content/uploads/2015/07/Metoyer-v-TJX-et-al-complaint.pdf

What Is False Advertising? – Alabama Consumer Protection Lawyer Judson E. Crump

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“False Advertising” happens all the time.  What Can You Do About It?

You Can't Believe Everything You See on TV. But False Advertising is Illegal.
You Can’t Believe Everything You See on TV. But False Advertising is Illegal.

Scenario 1: You open the mailbox.  Tucked in with all the junk mail you see a great offer: a discount on something you’ve been wanting for months, available only for a limited time.  You go to the store to buy the advertised special.  But you get there, and the price advertised isn’t what is being charged.

Scenario 2: An online retailer’s website lists a color printer at $199.  You buy it.  4 days later, the package arrives in the mail, and you open it only to find that the printer is a black and white printer.

Scenario 3: Autotrader.com has a truck listed for $16,990.  You go to the dealership and when you sign the paperwork, you realize that the real price has been jacked up to $18,500.

Scenario 4: You take the family out to dinner at “The Red Crawfish,” where you order a fillet of red snapper.  But it doesn’t taste like snapper.  In fact, the underside of the fillet has some small black scales.  Turns out, you’ve been served mullet instead.

All these scenarios have something obvious in common: they involve false advertising.  False advertising can come in many forms, and new ones are invented every day, it seems.  The reasons are obvious: businesses will do almost anything to get you to buy their products.  And while some exaggeration is harmless and expected, are merchants allowed to lie about the products they sell?  Absolutely not.  And if they do, then they can be taken to court and held responsible.

Like most states, Alabama has a specific statute prohibiting false advertising: the Alabama Deceptive Trade Practices Act, or “ADTPA,” as we lawyers call it.

The ADTPA, which can be found at Ala. Code Title 8, Section 19, contains a list of specific prohibitions.  Here are a few:

  • “Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services.”
  • “Causing confusion or misunderstanding as to the affiliation, connection, or association with, or certification by another.”
  • “Using deceptive representations or designations of geographic origin in connection with goods or services.”
  • “Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.”
  • “Advertising goods or services with intent not to sell them as advertised.”
  • “Disparaging the goods, services, or business of another by false or misleading representation of fact.”
  • “Making a false or misleading statement of fact concerning the reasons for, existence of, or amounts of, price reductions.”
  • “Engaging in any other unconscionable, false, misleading, or deceptive act or practice in the conduct of trade or commerce.”

Translated to normal English, here are some examples of what the Alabama Deceptive Trade Practices Act means:

  • They can’t say a product is “Made in the USA” if in fact most of it was made elsewhere.
  • If you sell Grade A Angus Beef, then you can’t serve Grade B Beef, or Grade A Pork/Beef Mix, or Grade A Beef made from any cow other than an Angus.  It must be Grade A, and Angus, and Beef.
  • You cannot advertise that your product has a 2 year warranty if you only provide a 1 year warranty.
  • They cannot put “red snapper” on the menu if what they sell people is something other than a Lutjanus campechanus (a.k.a. Red Snapper).
  • They can sell “Grouper” even if the grouper comes from Madagascar.
  • If a label says “Certified Organic,” then the food must be organic and certified.
  • If a restaurant brags that it was “Voted Best Hamburgers in Alabama,” then it must have some good reason for saying that.
  • If a price is advertised as “25% Off,” then the non-discounted price should be 33% higher than the “discount” price.  (Because (3/4 of A) x 4/3  = A).

The Alabama Deceptive Trade Practices Act also forbids false advertising of services in many instances.  For example:

  • If a debt settlement company claims it can cut your debt by 50%, and you pay them to do so, but they don’t perform, then they’re false advertising.
  • If a credit repair service claims to be able to boost your score by 100 points, then they better be able to do it.
  • A car finance company or dealer who says that “If you have a job and $500, you can get a new car!” must have new cars that they are actually willing to sell to anyone who has a job and $500.

How to Prepare A False Advertising Case

There are a few things you need to cover before you rush to a lawyer’s office, though.

First, you must get proof of the actual advertised terms.

If advertisements are written, then they are usually allowed to have footnotes and fine print that “explain” the terms they are advertising.  You must obtain a copy or printout of any written, TV, or internet advertisement.  Read the whole thing.  Make sure you paid attention to it before you went to buy the advertised product.  If a “disclaimer” or “Explanation” was hidden, it may not have any legal effect.

Oral or radio advertisements may have a similar explanation at some point during the advertisement.  If you have been cheated or scammed by a radio advertisement, you need to listen for the advertisement that fooled you and record it.

Second, you must show that you bought the falsely advertised product or service.

This is pretty easy.  If you have a receipt, bill of sale, credit card statement, or any other record of your purchase, then you can show that you were in fact the victim of the false advertising.

If you’ve been cheated by false advertising, it is important to take action quickly.  The Alabama Deceptive Trade Practices Act only has a 1 year statute of limitations, which means that you have 1 year to take them to court once you’ve discovered (or should have discovered) the false advertising.  Furthermore, you have to write a letter demanding compensation at least 15 days before you sue them.

The content of this letter should be drafted with the assistance of a consumer protection attorney, because if not drafted properly, it will not have legal effect.

We take false advertising seriously.  It hurts real people and the entire economy.  If you’ve been the victim of false advertising in Alabama, call us today at 251.272.9148.

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