August 31, 2009

Warranty Claims and a Bankrupt Company

Bankruptcy Law Network has posted an article that discusses if a company going bankrupt is obligated to honor a warranty. It depends on the type of bankruptcy that was filed for.


If it was Chapter 11, there's more of a chance that the company will honor your warranty that was purchased prior to filing for bankruptcy. One main reason is to maintain a positive business image.

If the company filed Chapter 7 then they aren't obligated to honor a warranty, but might do so anyway to keep the same "goodwill" image.

Otherwise, you’re out of luck. This wasn’t a rip-off, this was just the bad luck of doing business with a company that didn’t make it. You’ve lost your warranty. The owners lost a significant asset, and the workers lost their jobs.

If you have questions regarding bankruptcy, feel free to contact us.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Bankruptcy

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August 28, 2009

Debt Settlement Industry Remains Busy, but Grows Anxious

The New York Times has posted an article that discusses the growing unrest in the debt settlement industry. David Streitfeld, author of the article, says that the industry is preoccupied worrying about its future.

A formidable array of forces is concerned about the way the settlement companies solicit consumers and negotiate lower payments on their debts. The industry is in the cross hairs of the Federal Trade Commission, state regulators, members of Congress and state legislatures. Credit card companies are not fond of it, and many consumer advocates practically loathe it. The common complaint among all these groups is that too many debt settlement companies are more interested in helping themselves earn fees than aiding their beleaguered clients. Their ads promise the clients will get out of debt but, critics say, the reality is that they often become even more enmeshed.

However, some of the settlement agencies say that the "bottom feeders" are giving the reputable agencies an undeserved bad reputation. The "bottom feeders" are the ones who didn't attend the United States Organizations for Bankruptcy Alternatives Convention.

The settlement companies, which number about 2,000, have varying business models but generally develop programs for strapped individuals to pay off a percentage of their credit card debt and avoid bankruptcy.

Regulators and attorneys general “don’t understand what we do and how we do it, and the benefits we provide for consumers,” said Peter McLaughlin of Preferred Financial Services in Andover, Mass.

Understanding might be on the upswing, although whether it will lead to appreciation is a separate issue. Preferred Financial was one of numerous settlement companies that received a subpoena from the New York attorney general, Andrew M. Cuomo, last month as part of a wide-ranging investigation.

There are alternatives to debt settlement programs. The FDCPA has laws that may be able to help you if you are being approached by collectors. Feel free to contact us for more information.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Collectors/Debt Buyers

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August 23, 2009

Man Tries to Steal 130 Million Credit Card Numbers

The Associated Press has posted an article about a man from Miami, Albert Gonzalez, who has reportedly tried to steal 130 million credit card numbers. "The one-time government informant" is being charged with the largest case of credit and debit card data theft in the nation's history...on top of another 40 million numbers that he previously stole.

Gonzalez used to work for the US Secret Service as an informant responsible for tracking hackers, which is ironic because

...the agency later found out that he had also been working with criminals and feeding them information on ongoing investigations, even warning off at least one individual, according to authorities.

Two Russian co-conspirators also joined Gonzalez in attempting to hack into corporate computer networks to leave malware that would give them access to steal data. They targeting major companies such as 7-Eleven Inc, the grocery store chain Hannaford Brothers, Co. Inc, as well as a New Jersey based card-payment processor named Heartland Payment Systems.

He is already in jail on other hacking charges and could face up to 20 years for this particular sentence. Other charges against him include hacking into the servers of Barnes and Noble, TJ Maxx, Office Max, Sports Authority and the restaurant chain Dave and Buster's.

If convicted, Gonzalez could face a life sentence for those charges as well as 20 years for the recent charges.

If you have had problems with identity theft or stolen credit card numbers, feel free to contact us.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Credit Card , Fraud , Identity Theft

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August 21, 2009

Medical Identity Theft

Our friend Denise Richardson has posted an article about the growing concern of medical identity theft. In 2007 more than 250,000 people reported being victims of medical identity theft, which is even harder to correct than kinds of financial identity theft.

Richardson links to a New York Times Article that discusses how medical identity theft happens.

...someone can use stolen insurance information, like the basic member ID and group policy number found on insurance cards, to impersonate you — and receive everything from a routine physical to major surgery under your coverage. This is surprisingly easy to do, because many doctors and hospitals do not ask for identification beyond insurance information.

Even more common, however, are cases where medical information is stolen by insiders at a medical office. Thieves download vital personal insurance data and related information from the operation’s computerized medical records, then sell it on the black market or use it themselves to make fraudulent billing claims.

Sometimes employees in a medical office stealing information will sell it or use it themselves and file fraudulent claims.

In a widely reported case in 2006, a clerk at a Cleveland Clinic branch office in Weston, Fla., downloaded the records of more than 1,100 Medicare patients and gave the information to her cousin, who in turn, made $2.8 million in bogus claims.

Fraudulent claims can result in an exponential amount of unpaid balances, but can also be physically dangerous. The victim's medical information may have been amended to list different allergies, surgeries and medications that are not the victim's. This can be especially dangerous because it impacts future medical treatments.

Privacy laws work against the victim once the theft is discovered, in that the thief's medical records are also considered to be confidential, even though they are intermingled with the victim's. This makes the problem exceptionally hard to fix, since the victim is not technically supposed to see the other person's records.

If you have had problems with identity theft, feel free to contact us.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Identity Theft

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August 19, 2009

Video About Bankruptcy Myths

Getoutofdebt.org has posted an article and a video that sheds light on the "five myths of bankruptcy" and why they're not necessarily true.

The myths are:

You should be dead broke until you file for bankruptcy.
Bankruptcy ruins your credit score.
You lose your home if you go bankrupt.
You should max out your credit cards before going bankrupt.
You should raid your 401(k) to pay your bills before going bankrupt.

Our firm doesn't handle bankruptcy but feel free to contact us to discuss alternatives, particularly if you are dealing with harassment from debt collectors.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Video

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August 17, 2009

Carfax Reports Can Be Unreliable

The Indiana Consumer Law Blog has posted an article reminding consumers that Carfax Vehicle History Reports cannot be trusted for total reliability.

The blog post agrees that certainly it is worthwhile to purchase a report from Carfax, or a similar company, when considering purchasing a used vehicle. If something shows up on the report then it is usually factual.

However, the article warns that if nothing at all shows up on the report then it doesn't really mean anything. Some dealers have found they can purchase a vehicle for much less at auction because of a known defect, and then turn around and sell it for more because of a clean Carfax report.

In short, the article advises that a Carfax report is a good place to start your research into a used vehicle, but shouldn't be the only place you look.

If you have had problems with auto fraud, feel free to contact us.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Auto Fraud

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August 15, 2009

FTC's Proposed Rules to Protect Consumers

The Federal Trade Commission has posted an article on their website that discusses how the organization is looking for public feedback about their "rules" that are supposed to protect consumers from deceptive and abusive debt relief services done through telemarketing.

In the Noticed of Proposed Rulemaking (NPRM) announced today, the Commission proposes amendments to the Telemarketing Sales Rule (TSR) that would:

Prohibit companies from charging fees until they have provided the debt relief services;
Require disclosures about the debt relief services being offered, including how long it will take to obtain promised debt relief and how much it will cost;
Prohibit specific misrepresentations about material aspects of debt relief services, including success rates and whether a debt relief company is nonprofit;
Extend the TSR to cover calls consumers make to debt relief services in response to their advertisements; and
Define the term “debt relief service” to cover any service to renegotiate, settle, or in any way alter the payment terms or other terms of the debt between a consumer and one or more unsecured creditors or debt collectors, including a reduction in the balance, interest rate, or fees owed.

The NRPM discusses three major areas of debt relief: credit counseling, debt negotiation and debt settlement, as well as the abuses associated with each area. Law enforcement and the FTC's efforts to curb this abuse are also discussed.

TSR requires disclosure and

prohibits misrepresentations during telemarketing calls.It also bars abusive practices, including
charging up-front fees for certain services such as credit repair, recovery services, and offers of a loan or other extension of credit when granting it is “guaranteed” or is represented as having a
high likelihood of success. The TSR was amended in 2003 to create the National Do Not Call Registry and again in 2008 to curtail telemarketing calls that deliver prerecorded messages.

If you have had any problems with creditor/telemarketer harassment, feel free to contact us.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Collectors/Debt Buyers

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August 4, 2009

Relaunch Of Sued By A Debt Buyer Website

Several months ago we launched a website - Sued By A Debt Buyer - but we were not happy with the look of it so we have redesigned the look and feel of it and added some videos. Feel free to take a look at it and let us know if this is helpful to you or if we can help you in any way.

There is a companion site - Sued By A Debt Collector - that we trust will also be helpful to you.

If you are dealing with debt collectors calling you then you should check out our site on Illegal Voicemails.

We will continue to add websites that will contain useful information related to specific subjects as we look forward to continuing to try to "level the playing field" between consumers and those who make it their business to abuse and cheat consumers.

Contact us if you have any questions or if we can help you in any way.

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Posted by John G. Watts & M. Stan Herring | | Email This Post

Posted In: Collectors/Debt Buyers , Video

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Watts Law Group P.C.
& M. Stan Herring P.C.
Alabama Consumer Protection Lawyers
Phone: (205) 879-2447
or (205) 714-4443

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