fraud

Strange Inquiries On Your Credit Report? Here’s what to do.

November 16, 2020 by Attorney Judson E Crump 3 Comments

So you’re doing your recommended once-a-year review of your credit report, and everything looks fine. Then you get to the end, to a section labeled “Inquiries.” And listed there are dozens of companies you’ve never heard of. What? WHO ARE ALL OF THESE PEOPLE LOOKING INTO MY CREDIT???

If you’ve ever felt that way, you’re not alone. I have reviewed a lot of credit reports with a lot of clients. And suffice it to say that a lot of people are shocked and bewildered at the number of inquiries into their credit. And this is not a baseless concern: studies show that the number of “hard” inquiries into your credit have a negative impact on your overall credit rating. What is a “hard” credit inquiry? Generally, any inquiry that is not a “promotional” inquiry only is considered a “hard” inquiry. Promotional inquiries are those inquiries that pop up when, for example, a credit card company pays Experian for a list of all the people in Baldwin County, Alabama who have a credit score of over 600 and mortgage debt of less than $200,000. They use that information to pump your mailbox full of wonderful credit card offers.

A hard inquiry, on the other hand, is a traditional credit inquiry, where a potential creditor looks into your credit for the purpose of evaluating you for a loan, lease, or something like that. Hard inquiries are strictly regulated by the Fair Credit Reporting Act. In theory, at least.

So what can you do about it? Well, first, you need to determine if they are legit or not. Just because you don’t recognize a financial institution listed in your inquiries doesn’t automatically mean something nefarious is going on. So don’t freak out. For instance, if you went car shopping recently, you may have signed a credit application with a car dealership authorizing them to communicate with multiple banks to find you the best deal (or, more cynically, to find them the best deal).

How do you do this? Well, as with so many legal problems, it never hurts to send a nice letter. You can write the financial institution and straight up ask them: Did you receive a credit application from me or someone else on my behalf on April 1, 2020? If so, who sent the credit application? What did you do with it? Was I approved or denied? Also, if you were denied, be sure to ask for a copy of your adverse action notice. If you were denied credit based on a credit report, they are required to tell you so and then you have 60 days to get a free copy of the credit report they used to evaluate your application. If they denied you and didn’t send an adverse action notice, they broke the law. The Equal Credit Opportunity Act prohibits any creditor from holding a credit application for more than 30 days. It also requires them to send you a written notice of denial within 30 days of receiving your application. The denial – called a “adverse action notice” – must also tell you why you were denied.

Why bother with this? Well, there are two reasons. First, if you can determine that any of the inquiries were not authorized by you, then they should be deleted from your report. This could help your credit score a little. Second, the adverse action notices can be helpful in figuring out if you were cheated in the underlying transaction. Let’s say that you went and bought a car, and the dealership told you that the best financing they could find was a $18,000 loan at 22.99% APR and a monthly payment of $443. But when you contact these creditors, you learn that one of them actually APPROVED your application for that very same auto loan – at 16%!!!

If you’re ready to take action and figure out what all those inquiries are about, take a look at my Alabama Consumer Resources Page. There’s a document there that can help you get started.

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

January 31, 2018 by Attorney Judson E Crump 4 Comments

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.

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.
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.
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.
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.
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

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.
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.
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.

Buy-Here-Pay-Here Repossessions – Alabama Consumer Rights Lawyer Judson E. Crump

October 19, 2017 by Attorney Judson E Crump 3 Comments

Has your vehicle been repossessed by a Buy-Here-Pay-Here dealership?

Repossessions are hard on folks. You’ve lost your car. You’ve lost the money that you’ve put into it. Your credit has taken a hit. Maybe your neighbors or co-workers witnessed the whole thing and it’s embarrassing. Simply getting a car repossessed is hard enough. But sometimes dealers and repo companies make it worse by not respecting your rights during and after the repossession.

Contrary to what the car sales and finance industries would have you believe, you have certain rights when your car has been repossessed. You have the right to be notified of what they’re going to do with your car, and you have the right to redeem it if you can afford it. If they sell your car, they can’t profit from the sale of your vehicle.

That’s right. If a car dealer or finance company sells your car, they can’t keep any money they make over the balance due on the vehicle.

Here’s an example:

You buy a car whose cash price is $10,000 with $600 of taxes and fees. So the total price is $10,600.

You pay a $2,000 down payment and agree to $300/month for 48 months. So the amount financed is $8,600.

After paying for 6 months, you miss a payment and the car gets repossessed. At the time of the repo, the balance due on the car is $8,200, and the creditor paid the repo man $300 to repo the car. Your balance is now $8,500.

The creditor sells the car. If the creditor sells the car for $8,000, then you owe $500. [$8,500 – $8,000 = $500].

However, if the creditor sells the car for $9,000, then the dealer owes you $500. [$8,500 – (-$9,000) = -$500].

This seems like common sense, right? But believe it or not, used car dealerships break this rule all the time.

Small used car dealers and buy-here-pay-here dealerships usually don’t sell their repossessed vehicles at an auction. Rather, they put them back on their lot and sell them to another customer. So if you paid $2000 down on a $10,000 car that was repossessed 6 months later, it is extremely unlikely that the car has lost $2,000 in value during that time. But when they go to sell the car to another customer, they want to make as much money as possible by selling it for as much as they can. If they sell it for more than the amount you owe at the time it was repossessed, then they have to pay you the money they made off the second sale.

Now, it’s very hard to determine the price they got for a vehicle. That’s why you call a lawyer who knows how to handle these sorts of cases.

If you’ve had a car that has been repossessed and sold from the same lot that repossessed your car, call a knowledgeable Alabama consumer rights lawyer to see what you can do about it.

Alabama Legislature Working Hard to Protect Scammers, Pyramid Schemes, and False Advertisers – Alabama Consumer Rights Lawyer Judson E. Crump

July 6, 2017 by Attorney Judson E Crump 1 Comment

Pyramid Schemes. False Advertising. Deceptive Sales Scams. This behavior has been officially protected by the Alabama Legislature.

In March of 2016, Mr. Phillip “Phil” Williams, an Alabama state Senator from Huntsville, offered a huge favor to fraudulent businesses: he proposed SB270. This was a law that amended the Alabama Deceptive Trade Practices Act. The ADTPA is Alabama’s version of what most states call a UDAP (Unfair and Deceptive Acts and Practices) statute. Every state has one. These statutes regulate things like false advertising, door-to-door or telephone sales, sweepstakes scams, pyramid schemes, bait-and-switch advertising, and outright deceit. Basically, really bad stuff that some businesses do in order to make mor emoney. The sort of stuff that everybody in their gut knows is just morally wrong.

The Alabama Deceptive Trade Practices Act is pretty weak compared to other states, because it requires a 15 day advance warning letter, it exempts insurance companies and financial institutions, and it bans class actions in state court.

But apparently it wasn’t weak enough for the big money lobby. See, federal courts follow their own rules of civil procedure, and therefore allow class actions in federal court, even where the state law may not allow that. When the Eleventh Circuit recently confirmed that principle in the case of Lisk v. Lumber One Wood Preserving. That case was a typical deceptive trade practices case. What happened was this: a man bought some “treated” wood to build a fence that was supposed to be, well, “treated.” Which means that it is supposed to be protected from rot and termites. Well, Lumber One didn’t treat the wood. And it rotted. So Mr. Lisk was left with a worthless, rotting fence. He sued for himself and for everyone else that Lumber One had ripped off. The Eleventh Circuit confirmed that yes, you can do that in federal court.

You wouldn’t think this would be a big deal, right? I mean, who wants to protect a corporation that sells people rotting wood? Senator Phil Williams and the rest of the Alabama Legislature, that’s who.

As they do for every lawsuit, big businesses all across the country threw a hissy fit. They saw signs of the apocalypse. “If we don’t protect businesses from scams that leave people with rotting fences, jobs will leave! The economy will crash!” The corporate lawyers that represent them echoed the party line:

Obviously, this is a load of crap. Lumber One didn’t face a class action because some judges in Atlanta went crazy. They faced a class action because they cheated hundreds of honest paying customers out of millions of dollars. That’s how it always is.

But even when they’ve genuinely done wrong, big businesses hate having to pay the consequences of their actions. They hate class actions because if they can shut down class actions, they can get away with millions of small frauds and ripoffs as long as they only swindle a hundred bucks or so from each customer. So when they wanted a get-out-of-jail free card, they went to Senator Phil Williams, and asked him to pass a bill they wrote.

And guess what? It passed. Nearly unanimously. The bill changes the label on the no-class-action provision in an attempt to circumvent the federal rules. In other words, they want the state court rules to apply in federal court too.

This bill was utterly unnecessary. The ADTPA was rarely used anyway, because of its preexisting limitations. Fortunately, the Alabama legislature doesn’t have power over the federal courts. So hopefully, this anti-consumer sellout of our legislature will be ingored by the federal courts.

Chuck Stevens Chevrolet Found Liable for Defrauding Alabama Woman – Consumer Rights Attorney Judson E. Crump

June 13, 2017 by Attorney Judson E Crump 1 Comment

Chuck Stevens Chevrolet of Atmore, Inc. sold Tamie Shufford a car that had about 1,000 more miles on it than they certified in their sale contract.

Their salesman told her the car was new and had only 67 miles on it. The paperwork and the odometer disclosure forms said the same thing. But as it turned out, the car had been previously sold to another woman. For some reason, that deal was later canceled, so Chuck Stevens then turned around and sold the car to Ms. Shufford, stating that it was still new and that it still had 67 miles on it.

She complained to the Alabama Attorney General’s Office and wrote Chuck Stevens asking for a partial refund, but they didn’t offer her any relief. They said that “This vehicle was contracted for sale to another person; however the financing never took place so the sale was reversed. Ms. Shufford was sold a new car…”

So we sued them under the Motor Vehicle Information and Cost Savings Act, a federal law that requires dealers to execute title transfer and mileage disclosure paperwork clearly and accurately. The matter went to arbitration, and the previous buyer of the vehicle came forward to testify that she not only had in fact taken the vehicle home and driven it for a few days, but that she had taken it on a trip to Tampa, Florida! Which would have meant that the odometer disclosures written in Ms. Shufford’s contract were off by about a thousand miles.

At the arbitration, Chuck Stevens had its employees and former employees testify that these sorts of deals were “common” in the industry. Their excuse for “forgetting” that the vehicle’s odometer reading was off by a thousand miles was that their computer system didn’t fix it for them.

The arbitrator wasn’t buying it. He found that:

The Respondent had knowledge that the vehicle had been operated to some extent by Ms. (redacted) and had the vehicle in its possession for a least a couple of weeks prior to the sale to the Claimant. It could have easily checked the “cumulative mileage registered on the odometer” as required by the MVICSA…the Respondent was at least grossly negligent or acted with disregard of the truth.”

Which was, of course, exactly what happened.

The Motor Vehicle Information and Cost Savings Act has a minimum penalty of $10,000 if a dealer violates it with intent to defraud, as Chuck Stevens was found to have done here. So the arbitrator awarded a judgment for that amount, plus $3,333 for attorneys’ fees. And Chuck Stevens also had to pay $2,200 for arbitration administration fees and $1,500 for arbitrator compensation.

Now, car dealers usually love arbitration because it keeps these sorts of lawsuits from getting before a jury. But this time, the dealer found itself on the losing end of its own arbitration clause. And here’s the beautiful part: once Chuck Stevens was faced with the consequences of its decision to use mandatory arbitration clauses, did they honor the arbitrator’s decision? No. They didn’t. Guess where they went?

To the public court system! The very court system that arbitration is designed to avoid!

Yes, they filed this gem of a motion: Chuck Stevens Wants A Re-Do After it Loses Arbitration

The motion asked the Escambia County Circuit Judge to overturn the arbitrator’s decision. Their motion basically said that since the arbitrator made the (in their opinion) wrong decision, they should give them another shot.

Believe me, as a lawyer who’s been on the losing end of arbitration before, I feel their pain. But, tough shit. It’s nearly impossible to overturn an arbitration award in Alabama (and, honestly, in most places in the USA), and this case was no exception. The statute authorizes an award of $10,000 plus a reasonable lawyer’s fee if the defendant violates the MVICSA statute with intent to defraud. The arbitrator found they’d violated it with intent to defraud and gave us exactly what the statute said.

Unsurprisingly, the Circuit Court flatly rejected Chuck Stevens’ argument, and entered this order: Judge Rejects Chuck Stevens’ Request to Overturn Arbitration Decision.

So now it’s official: Chuck Stevens Chevrolet of Atmore, Inc. has been found liable for violating its customer’s rights, and they’re going to have to pay.

Sure, arbitration is something that is used often to unfairly keep defrauded customers out of court, but in the right type of case, you can still get a fair result.

If you’ve been defrauded by a business who has stuck you with mandatory arbitration, don’t despair. Call an experienced fraud arbitration lawyer to discuss your legal rights.

NOTE: These recoveries and testimonials are not an indication of future results. Every case is different, and regardless of what friends, family, or other individuals may say about what a case is worth, each case must be evaluated on its own facts and circumstances as they apply to the law. The valuation of a case depends on the facts, the injuries, the jurisdiction, the venue, the witnesses, the parties, and the testimony, among other factors. Furthermore, no representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

Fine Print Explained: Car Sale Contracts, Part 2 – Alabama Consumer Rights Attorney Judson E. Crump

May 30, 2017 by Attorney Judson E Crump 2 Comments

Deciphering Car Sale Contracts, Continued.

If you haven’t read the first part of this article, you should read it here.

Today we look at all that fine print on the back side of your car sale contract, and figure out what it all means.

XI. Finance Charge and Payments. Ripoff Rating: 1/10. You promise to make your payments, they charge late fees, they credit your payments to interest first and then principal. What you’d expect. No big deal.

XII. Misc. Promises by You. Ripoff Rating: 2/10. You still have to pay if you crash, lose, or damage the car. You promise not to deliberately abuse the car. You promise not to drive it outside the US or Canada or sell or lease it to someone else. They get a lien on the vehicle and you have to keep it insured against damage – beyond your normal liability insurance. 2 Ripoff points for not letting you drive to Tijuana.

XIII. Default Remedies. Ripoff Rating: 6/10. If you miss a payment or let your insurance lapse, then they can do lots of bad things to you. They can take the car, they can sue you and demand attorneys’ fees as well, they will charge you storage fees for the stuff that was in the car when they repo’d it. They will charge you late fees, they will cancel your service contracts and keep the refund. What is not in here? A grace period. So if your payment is one day late, they can take the car, dump it at auction for a way-too-low price, and sue you for the balance plus court costs and lawyer fees.

XIV. Warranty Disclaimer. Ripoff Rating: 8/10. They do not stand behind their product. In the old days, it was assumed that if a product broke down or didn’t do what it was supposed to do, you could take it back for a refund or replacement. In fact, that’s just what happens if you buy a coffeemaker from Wal-Mart that is malfunctional. But car dealers don’t offer Wal-Mart’s level of customer service.

If the wheels fall off when you drive off the lot, you can’t do anything about it. Even if they swore to you that it was a 1-ton diesel capable of hauling a 36′ Contender to Miami and back. You’re stuck with the lemon. And the lemon law does not apply to used cars. This does not affect manufacturer’s warranties.

XV. Window Sticker Rule. Ripoff Rating: 0/10. The Federal Trade Commission requires all used cars to have a window sticker showing basic info about the vehicle and any warranties that go along with it. The law also requires that sticker’s terms to be part of the contract. Trust me, if it wasn’t required by Big Government Regulation, dealers wouldn’t do it, because that regulation is designed to help you, the buyer, not get screwed.

XVI. Robocall Consent. Ripoff Rating: 3/10. They can call you with robotic telephones to annoy you when they want some money.

XVII. Choice of Law Provision. Ripoff Rating: 0/10. Alabama law applies to contracts written in Alabama. Common sense.

XVIII. Holder Rule Notice. Ripoff Rating: 0/10. When the contract is sold to a finance company, you can sue that finance company for any fraud or breach of contract that the dealer committed. This is to defeat the old common law “holder in due course” doctrine, which was a legal loophole by which a scammer could deceive someone into signing a contract for money payments, then assign that contract and flee to Mexico. The finance company could then pretend to not know about the fraud and sue you for the payments on a fraudulently obtained contract. Today, you can’t do that because dealers have to include the Holder Rule Notice in these contracts. Like most other clauses that provide the buyer with some rights, this one is only in the contract because it is required by a Big Government federal regulation.

XIV. Arbitration Clause. Ripoff Rating: 10/10. This says that if they deceive you, sell a dangerous product, overcharge you, and steal your money, you can’t take them to court. Instead, you have to go through a private, pseudo-legal proceeding called Arbitration. Your case will be decided by a random corporate lawyer. There is a 90% chance the arbitrator will be an older white male who has spent the past 20 years defending corporations like the one that ripped you off. The rules of evidence don’t apply. You can’t compel them to produce documents or evidence that they don’t want to produce. You can’t make them sit down and tell you their side of the story. No jury. No judge. No appeal if the arbitrator sleeps through the proceeding and then issues a ruling against you that is utterly baseless in the law and ignores all of the evidence. You can’t join up with other people who’ve been similarly ripped off and file a joint lawsuit, or any sort of class action. In other words, no matter how bad or deceitful the dealer’s conduct, and no matter how much you were harmed, your legal remedies are cut in half, if that.

Forced Arbitration: The King of Bad Deals.

It’s unavoidable nowadays, because the U.S. Supreme Court (even “liberal” justices like Breyer) are mostly former corporate lawyers who’ve never represented an ordinary working person in their entire lives, and they live in a bubble that protects them from having any clue about what life is like for the 99% of us who live in the modern American economy. But that’s life. At least for now. Maybe Trump will lose in 2020 and we’ll have a good president who will get to appoint 3 justices who care about working folks.

As bad as some of these terms are for consumers like you and me, I hope this at least illuminates the nature of these contracts. The more you know, the more you can protect yourself.

Fine Print Explained: Car Sale Contracts – Alabama Consumer Rights Attorney Judson E. Crump

May 22, 2017 by Attorney Judson E Crump 2 Comments

Ever wonder what all that fine print in your car purchase contract means? Here’s a basic explanation. Warning: when you are done reading this, you will learn that you have been screwed before.

If you’re like most people, when you want to buy something or enter into some sort of deal, you get presented with some massive, multiple page form contract filled with fine print and unintelligible words and phrases. Fine print contracts of adhesion are everywhere. We’re used to them. If you don’t live on a farm in the woods with no sort of insurance or communication services and get around on horseback, then you’re stuck with hundreds of them every year. And since they’re not only mandatory but also basically indecipherable, you probably don’t bother reading them.

But in case you’re curious just what exactly you’re agreeing to, here it is:

I. The Basic Sale Language. Ripoff Rating: 0/10. – This identifies the parties and the goods being sold. Real simple, and very necessary.

The beginning of a typical sale contract.

II. The TILA Box. Ripoff Rating: 0/10. The Truth in Lending Act requires the seller to not only state the price of the goods, but also the cost of any credit charges associated with the transaction. They also must itemize every charge that was financed. This is also very necessary, because without it you wouldn’t know what you were paying and why.

The Truth in Lending Act Box. This is where finance charges, fees, and dealer add-ons are listed. Read it carefully.

ALWAYS examine this box thoroughly, because most of the charges here are entirely optional. This is where they have to list any doc fees, credit life or disability insurance premiums, GAP insurance premiums, service contracts, extended warranties, etc. There are two important things to know about these charges:

You cannot be required to purchase these things. If you see them on your contract and you don’t want to waste thousands of dollars that you don’t have to spend, you can and should ask the dealer to rewrite the contract to remove everything but doc fees and Tag/Title fees, which are $16.50 in Alabama.
You are being overcharged for these things. Dealers add hundreds of dollars to the prices of these extras and pocket the money. For instance, if a GM extended warranty costs $1,000, the dealer won’t tell you that, but will just write it up with a cost of $1,500. The dealer gets to keep the difference, while you’re paying that money back with interest. This used to be considered fraud, but our super-conservative AL supreme court decided in the 1990s to let dealers off the hook. It remains a huge profit source for them.

That concludes the part of your contract that is actually useful and necessary. Everything else is utterly worthless to you as a buyer, and is designed solely to give the dealer more money and privileges while depriving you of as many rights as the law allows. This isn’t hyperbole. It’s life in the modern American economy in a conservative state.

III. GAP Contract Box. Ripoff Rating: 3/10. This is where you can agree to pay extra money to the dealer for a virtually worthless service. I don’t care what the salesman tells you. It’s a ripoff.

Sign if you want to donate money to your car dealer and get almost nothing in return.

IV. No Cooling Off Period. Ripoff Rating: 3/10. Pretty Self-Explanatory. Once the deal is signed, you can’t bring it back, even if the salesman promises otherwise.

No Cooling Off Period. You can’t bring the car back and cancel the deal, even 5 seconds after you sign the paperwork.

V. Interest Rate Skimming Notice. Ripoff Rating – 7/10. This short little disclaimer warns you that the interest rate on your contract is probably higher than the interest rate that the finance company was going to charge you. How does this work? Easy. You fill out a credit application at the dealership. They send it to multiple finance companes to “find you the best deal.” They get a few responses almost instantly, based on your credit, income, and other information. Bank A says they’ll finance the deal at a minimum of 8% APR, with a monthly payment not to exceed $300. Bank B says they’ll finance the deal at a minimum 8.5% APR, with a monthly payment not to exceed $350. The dealer says, “You’ve got some problems on your credit, but we worked hard and pulled a few strings and got you approved at $325/month with Bank B. That’s a good deal, buddy.” Not knowing any better, you agree, and they fill out a contract with an interest rate of 12.75%. They didn’t tell you that Bank A would have financed the deal at 8% with a monthly payment of $287. And this little 2-liner lets them off the hook if you later discover that they were lying to you.

The Interest Rate Overcharge Notice. If the dealer can convince you to pay more interest rate than the finance company requires, then they get to keep the bonus money.

VI. Merger Clause. Ripoff Rating: 7/10. This says that the paperwork is the entire deal. Sounds innocuous, right? But what it means in the courts is that nothing anyone told you matters at all once you sign this contract. So the salesman could promise 38 mpg mileage, that the car has 266 HP, that it’s never been wrecked, that you can bring it back tomorrow if you don’t like it, that the financing you got was the best they could find, or basically anything else, and even if he is lying through his teeth, you can’t do anything about it.

This says that the salesman can deliberately deceive you and you can’t do anything about it. Also, if you are 3 days late on a payment and the finance company says they won’t repo it if you wire them the money today, they can still repo it.

It also is designed to get finance companies off the hook if they promise to let you make a payment 2 days late, accept the payment, and then repo the car anyway.

VIII. Read-This-Contract Notice. Ripoff rating: 4/10. This is legally mandated warning that you should read this contract before you sign it. By signing it, you are basically saying that you read the whole thing and understood it, even though that’s obviously false for 90% of the American public. You’ll be held to this if you ever make it to court. It also incorporates any arbitration agreement that may be attached to this deal. Which accounts for its ripoff rating.

IX. Optional Insurance Box. Ripoff Rating: 4/10. If you were conned into buying some credit life or disability insurance, this is where you sign to agree to it. Please don’t sign it. If you’re just feeling generous, give your money to a charity instead. Or go out to eat and leave a good tip.

Another optional donation to your car dealer.

X. Assignment Block. Ripoff Rating: 0/10. This is where they write the name of whatever finance company they sell the contract to. No big deal. It doesn’t change the terms of the deal in any way.

They can sell your contract to a finance company. No big deal.

That concludes our analysis of the first page of a typical retail installment purchase agreement for a motor vehicle in Alabama. Next, we’ll talk about the back of the contract.

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

March 4, 2017 by Attorney Judson E Crump 1 Comment

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

Scalia’s Last Betrayal: AT&T Mobility v. Concepcion – Brokenhearted Catholic Lawyer Judson E. Crump

February 27, 2017 by Attorney Judson E Crump 3 Comments

January 18, 1995:

JUSTICE THOMAS, with whom JUSTICE SCALIA joins, dissenting.

I disagree with the majority at the threshold of this case, and so I do not reach the question that it decides. In my view, the Federal Arbitration Act (FAA) does not apply in state courts. I respectfully dissent.

Allied Bruce Terminix v. Dobson.

April 28, 2011:

JUSTICE SCALIA delivered the opinion of the Court.

…

We have described this provision as reflecting both a “liberal federal policy favoring arbitration,” Moses H. Cone, supra, at 24, and the “fundamental principle that arbitration is a matter of contract.”

AT&T Mobility v. Concepcion.

One of these statements was made by an honest intellect dedicated to restraining federal power within its original constititutional limits. The other was made by a dishonest intellect searching for an excuse to rule for the side he liked the best.

Yet both statements were made, or at least agreed to, by the late Justice Antonin Scalia. What happened during those 16 intervening years? Did he change his mind? Did his brain wither and grow feeble? Was he just tired of fighting the overreach of federal power and decided that, “if you can’t beat ’em, join ’em?” Did he just have different clerks that ghostwrote his opinions for him?

Any of these things may be possible, but they’re all disturbing. And the result can’t be denied. The man who at one time stood constant as a stone for his originalist devotion to the founding fathers’ vision, became somehow more malleable, more willing to compromise his former values, and eventually able to completely reverse course and make a decision that would ultimately do great harm to millions of Americans.

Go ahead and read the actual opinions and you’ll see exactly what I’m talking about.

The Terminix decision is famous because it took the old Federal Arbitration Act (which had largely lain dormant from disuse for many years) and expanded it to say not only that arbitration agreements were enforceable like any other contract (which is what the FAA actually says), but also that it is illegal for any state to enact any law limiting arbitration. In politics, you often hear people talk about “states’ rights.” And at one time, Justice Antonin Scalia cared about “states’ rights.” Case in point: Allied-Bruce Terminix.

Though the SCOTUS wasn’t able to predict it at the time, their Terminix decision created a tidal wave of fine-print arbitration clauses being inserted into every business dealing that the average person enters into in their lives: Want to have internet? You’re stuck with arbitration. A car? Arbitration. Want to work for a large company? Arbitration. Want a bank account? Arbitration. Credit card? Arbitration.

Time would eventually teach us that this explosion of arbitration was really, really bad for ordinary people, because it allowed big businesses to get away with negligence, theft, or even outright fraud and never be taken to court over it. So the “liberal” justices later decided to change their tune on arbitration. Once they realized that it was being used to screw over ordinary people, they started ruling against it. Sure, that’s not intellectually consistent, but liberals justices tend to care a lot less about upsetting precedent. It’s what they’re all about, in fact. Judicial activism is the whole problem that most conservatives have with the Supreme Court’s democrat appointees.

But as with so many other things in American civics nowadays, what matters more than principle is what side you’re on. And so we came, eventually, down to AT&T Mobility v. Concepcion. In this case, the cell phone carrier falsely advertised free phones, but they were charging people sales taxes on a “free phone.” Since 5% of $0.00 is $0.00, I don’t understand how that’s possible, but hey, that was what they were doing. Naturally, they got sued in a class action.

But AT&T had slipped a no-class-action ban into its arbitration contract. Meaning that if you wanted to sue AT&T for its $5.00 overcharge, you’d have to hire a lawyer and make your own lawsuit.

Obviously, this is never going to happen, which means that enforcing such agreements is basically legalizing frauds that are too small to hire a lawyer for. 4 of the justices realized this and said “No, you can’t do that sort of Rumplestiltskin crap. This is America. If you rip 10,000 people off for $5.00 each, you can be taken to court for $50,000.”

But the 5 Republicans said otherwise. They couch it in much more elegant English and make a few excuses (“class arbitration greatly increases risks to defendants” etc.) but ultimately uphold the fantasy that arbitration is fair, even when it basically leaves consumers with no recourse whatsoever to small wrongdoings.

Of course, much has been written of the unfairness of arbitration elsewhere, so there’s no need to re-write those books here.

My concern here is with Scalia, and particularly how he slowly quit fighting federal power. How, when faced with cases where the litigants (big businesses) who supported his “team” (the Republican Party) found themselves asking for the expansion of federal power, he lost his principles. He just gave up. Unlike his friend, Justice Thomas.

When Scalia died, I heard a lot of mourning, especially from fellow Catholics, about how this justice was a principled, stoic man, a force for good, and a consistent defender of the rights of those fighting federal power. Maybe with cases involving religion or abortion, he was, even during the last decade of his life. But not when the power of Uncle Sam was stretched out to protect his favorites. The record is clear.

Hired Ferry & Nicholas? Consider Getting a Refund – Alabama Debtor’s Rights Lawyer Judson E. Crump

February 10, 2017 by Attorney Judson E Crump Leave a Comment

Ferry & Nicholas Sends Advertisement Letters to Debtors in Alabama. I believe they may be sending false advertisements.

If you have been sued by a debt collector or credit card company in Alabama, you’ve probably received a letter from a company called Ferry & Nicholas. They claim to be “professional negotiators” who help people resolve debt collection lawsuits. I formerly had a client who had hired them for a matter and he informed me that what Ferry & Nicholas did was agree to a consent judgment for the full amount of the lawsuit. This is obviously a horrible deal that a good attorney could easily have beaten.

I’ve previously written about how Credit Repair Companies and Debt Settlement Companies are Scams, but if you’ve hired this outfit, it is not too late to take action!

Another of my clients recently received a letter from them and I believe that it contains information that is misleading to the public. I am currently investigating potential false advertisement claims against this company. If you or someone you know has hired this company, please call me at 251.272.9148 for a free consultation to discuss your options for potentially recovering compansation.