Wall Street Journal
Some Democratic lawmakers want to help consumers fight back against creditors. The Consumer Reporting Fairness Act, introduced by Sen. Sherrod Brown, D-Ohio, would make it easier to fix inaccurate credit reports. It would also punish creditors that ignore consumers' requests to fix inaccurate credit reports, by allowing borrowers to sue for damages. The bill was introduced after some borrowers sued creditors, claiming they didn't remove negative information on their credit reports even after the debts were erased in personal bankruptcy. Some borrowers have already sued banks, claiming the companies didn't furnish updated information to credit bureaus, resulting in inaccurate credit reports. Banks sued thus far include Bank of America, Synchrony Financial and Citigroup. The Consumer Financial Protection Bureau earlier this month ordered JPMorgan Chase to pay $216 million for selling "zombie debts" to third-party debt buyers, including accounts that had inaccurate information or weren't collectible.
If you can't trust your lawyer, who can you trust? Visa, MasterCard and millions of merchants may see the $6 billion settlement of a class-action lawsuit go up in smoke. The reason is what a legal ethics expert described as "gross misbehavior" by the lawyers involved. The settlement resolved a lawsuit alleging the credit-card networks engaged in price-fixing when they banned merchants from charging customers more when they used a credit card instead of other payment forms. In the recent controversy, Keila Ravelo, a lawyer who had represented MasterCard, and her husband were charged with setting up fake companies to steal more than $5 million from law firms where she had worked. During the investigation of her theft, Ravelo's former law firm found emails between Ravelo and another lawyer, Gary Friedman, who was her friend and who represented merchants in the class-action lawsuit. The two exchanged confidential information about their clients in the case, which unnamed sources say resulted in the merchants getting inadequate representation in the case. As a result, Home Depot, Walmart, 7-Eleven and other merchants plan to file a motion in court on Tuesday to blow up the $6 billion settlement. Additionally, the merchants plan to seek to do the same thing to a $79 million settlement with American Express. Attorneys for the merchants also plan to ask a judge to vacate the $32 million award that Friedman received. The merchants' case to dismiss the settlements isn't a slam-dunk; MasterCard and American Express have said in court filings that Ravelo and Friedman did not play large enough roles in the cases to justify vacating the settlements. (If Friedman was awarded $32 million for a not large role, sign me up for that job.)