Practice Areas - Consumer Protection
Langer Grogan & Diver is committed to protecting consumers from dishonest corporations and deceptive practices. We have been at the forefront of the fight against predatory “payday” loans that target our most vulnerable citizens. We have challenged misleading credit reports and background checks that ruin consumers’ financial standing and prevent them from getting jobs they deserve. And we have defended homeowners from abusive practices in the real estate and mortgage markets.
If you have been harmed by an unfair or deceptive practice, please contact us here.
MASS CONSUMER FRAUD
Falony v. Wachovia Bank — In 2010, the firm recovered over $150 million dollars from Wachovia Bank on behalf of primarily elderly victims of telemarketing fraud. Checks were mailed to approximately eight hundred thousand victims in the full amounts taken from their accounts.
Reyes v. Netdeposit, LLC, 802 F.3d 469 (3d Cir. 2015) — The United States Court of Appeals for the Third Circuit has breathed new life into a major fraud action case against Zions First National Bank, a subsidiary of Zions Bancorp (NASDAQ: ZION), for its alleged involvement in a scheme to defraud hundreds of thousands of depositors throughout the United States. The case was brought on behalf of the depositors by the firm. Damages in the case have been estimated to be in excess of $50 million and are trebled under the federal RICO Act.
PREDATORY “PAYDAY LENDING”
“Payday” loans—the short-term, small-amount lending which charges triple-digit interest rates and is designed to trap consumers in a cycle of long-term debt—are illegal in Pennsylvania. Nonetheless, unscrupulous businesses have managed to find ways to circumvent Pennsylvania law, particularly through the use of the Internet.
Langer Grogan & Diver is currently representing the Pennsylvania Attorney General in litigation against a Texas-based finance company that has partnered with Native American tribes to do this form of lending over the Internet. Commonwealth of Pennsylvania v. Think Finance, Inc., No. 14-cv-7139 (E.D. Pa.).
Previously, the firm successfully handled a class action against a company, Frascella Enterprises, that used a bank to help it conduct storefront payday lending in Philadelphia. After the company filed for bankruptcy and removed the case to bankruptcy court, and following extensive litigation concerning a class-action waiver in the loan contracts, 349 B.R. 421 (Bankr. E.D. Pa. 2006), the case settled and produced a distribution to thousands of consumers.
EMPLOYMENT BACKGROUND SCREENING
Large employers’ use of “big data” background screening has significantly injured many low-wage workers. The principal legal tool for remedying these injuries is the federal consumer statute, the Fair Credit Reporting Act (“FCRA”). Langer Grogan & Diver has used the FCRA successfully in class actions directed against both the background reporting industry and employers.
Langer Grogan & Diver served as lead counsel in a class action that exposed and ultimately terminated a secret “theft database” used by the retail industry against employees with clean criminal records who were unknowingly labeled as unemployable “thieves” by previous employers. See Goode v. LexisNexis Risk & Information Analytics Group, Inc., 848 F. Supp. 2d 532 (E.D. Pa. 2012); Stephanie Clifford and Jessica Silver-Greenberg, “Retailers Track Employee Theft in Vast Databases,” N.Y. Times, April 3, 2013, page 1. The class settlement, finally approved in February 2015, resulted in the suspension of the database and the mailing of individual statutory damage checks near the maximum amount the FCRA permits.
The firm is co-counsel in several pending FCRA class actions against employers, including Moore v. Rite Aid Hdqtrs Corp., 33 F. Supp. 3d 569 (E.D. Pa. 2014), and Freckleton v. Target Corp., 2015 U.S. Dist. LEXIS 4130 (D. Md. Jan. 12, 2015).
Langer Grogan & Diver works to protect Pennsylvania homeowners from abusive practices in the real estate and mortgage market. This work has focused on mortgage origination practices, the mortgage servicing industry and the Pennsylvania foreclosure process. Attorney Irv Ackelsberg is the author of the legal treatise, Residential Mortgage Foreclosure: Pennsylvania Law and Practice (George T. Bisel Co. 2014, 2d edition), and is widely recognized as the leading expert on foreclosure defenses statewide.
Wilson v. Bank of Am., N.A., 48 F. Supp. 3d 787 (E.D. Pa. 2014), was among the first cases that enforced enhanced mortgagor rights established by new Mortgage Servicing Rule promulgated by the Consumer Financial Protection Bureau. Our work enabled an extensive analysis of the availability of Pennsylvania state law remedies against mortgage servicers that mistreat borrowers after a preliminary approval for “HAMP” loan modification.
Green Tree Consumer Discount Co. v. Newton, 909 A.2d 811 (Pa. Super. 2006) narrowed a 20-year old precedent that had limited the ability of foreclosure defendants to raise certain defenses. The expressly recognized as defenses the mental incapacity of the mortgagor and the failure of the contractor to provide promised home improvements.
Newton v. United Companies Financial Corp., 24 F.3d 444 (E.D. Pa. 1998) was the first reported opinion under Home Ownership Equity Protection Act and resulted in the rescission of four subprime mortgages.
In re Smith, 866 F.2d 576 (3rd Cir. 1989) established the applicability of Pennsylvania’s Consumer Protection Law’s treble-damage remedy to mortgage servicing abuses.
REPRESENTING CONSUMER CREDITORS IN CHAPTER 11 BANKRUPTCIES
Consumer class actions against a company engaged in questionable business practices can often trigger a bankruptcy filing by the defendant business. The firm has developed a unique expertise in representing consumer classes in those bankruptcies. This work magnifies the class’s leverage over estate resources and has preserved post-bankruptcy legal remedies. Irv Ackelsberg has served on several Official Creditor Committees and is a leader in the field:
Gentry v. Siegel, 668 F.3d 83 (4th Cir. 2012), was decided after the firm authored an amicus curiae brief on behalf of National Association of Consumer Advocates and National Association of Consumer Bankruptcy Attorneys. The opinion established the right of consumer creditors to file class claims in chapter 11.
SCH Corp. v. CFI Class Action Claimants, 597 Fed. Appx. 143 (3d Cir. 2015), reversed a bankruptcy court approval of a settlement between the estate and debtor’s parent company.
SCH Corp. v. CFI Class Action Claimants, 569 Fed. Appx. 119 (3d Cir. 2014) reversed the district court’s use of the equitable mootness doctrine to dismiss a consumer class’s appeal of bankruptcy court’s denial of the class’s motion for sanctions against the debtor’s parent company.