VW Customer Care Diesel Fraud: Hello South Dakota

Volkswagen announced its customer care program for consumers cheated by the clean diesel fraud. The program gives consumers who register a $500 Visa gift card, a $500 dealer coupon, and three years of free roadside assistance.

The last two benefits are nothing more than slick marketing, designed to drive sales. The first–that Visa card–comes with some wicked fine print.

You have to root around in the shiny website to find the cardholder agreement, and then you have to page through that to get to this gem:

“10. WAIVER OF RIGHT TO TRIAL BY JURY
YOU AND WE ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL RIGHT BUT MAY BE WAIVED IN CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, YOU AND WE KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT. THIS JURY TRIAL WAIVER SHALL NOT AFFECT OR BE INTERPRETED AS MODIFYING IN ANY FASHION THE DISPUTE CLAUSE SET FORTH IN THE FOLLOWING SECTION, IF APPLICABLE, WHICH CONTAINS ITS OWN SEPARATE JURY TRIAL WAIVER.

IN THE EVENT OF ANY DISPUTE OR CLAIM RELATING IN ANY WAY TO THIS AGREEMENT, CUSTOMER AGREES THAT SUCH DISPUTE SHALL BE RESOLVED BY BINDING ARBITRATION WITH THE AMERICAN ARBITRATION ASSOCIATION, UTILIZING THE RULES OF PROCEDURE OF SUCH ARBITRATION SERVICE, FURTHER, ANY SUCH ARBITRATION SHALL TAKE PLACE IN SIOUX FALLS, SOUTH DAKOTA AND THE LAWS OF THE STATE OF SOUTH DAKOTA SHALL APPLY. THE DECISION OF AN ARBITRATOR WILL BE FINAL….”

Show of hands: So who wants to go to Sioux Falls to have their case decided by a professional, corporate arbitrator?

It is unclear whether VW is trying to capture the Diesel Fraud claims in this arbitration clause, but the language is broad enough to raise serious questions.

And of course, VW is trying to buy consumers’ loyalty for $1,000. Seems kind of cheap, given the scope of this multi-billion dollar fraud.

At bottom, this is risky business.

-David

BP class action update: Claim time!

The claim process has started in our consumer fraud class action against BP for illegal debit card fees at Oregon ARCO stations. We’re getting a lot of calls, emails, and questions on our Facebook page.

And on top of it all, ice and snow have moved into Portland. So it looks like I may not be able to get to my office to answer calls today.

A few details and updates.

1) One common question is “How do I make a claim?

There are two ways. If we recover your name and address, you’ll get a notice that says you’re in. If you get a letter, you don’t have to do anything more to make your claim.

The notices are starting to go out this week and will continue as we get more names and addresses. We have about 500,000 letters going out this week. I’m hoping that we’ll get another million names and addresses.

To keep your data secure, I do not have direct access to it, so I can’t look up whether we’ve recovered your data.

For those people whose records we do not recover, you will need to file a claim form. Very important: We can’t file for you because you need to fill out the form.

Here is the link to the claim form

2) More information

The official court-approved website is here

FAQ’s on the official website are here.

If you want more of a flavor of the history of this fight, you can read blog posts collected here.

3) What will consumers who make claims get?

The jury verdict means a maximum of $200 for each consumer who paid the illegal debit card fee between January 1, 2011 and August 30, 2013. The court may deduct up to $40 from each claim to contribute to fees and expenses. We’re asking the court to order BP to pay all the fees–we don’t know how the court will rule. Bottom line: Depending on the court’s ruling, each person who makes a valid claim will get $160-200.

4) When do I get my money?

Great question. Don’t go spending it yet. BP tells us they will appeal. That may well take years. If BP wins on appeal, we may not collect a dime. (And by “we,” I mean you and me!) But if we keep winning, you also get interest at 9 percent on your claim.

5) What’s next?

We hope to finish the claim process by December 31. There is an attorney fee hearing in February. (Sorry, I don’t have the date at fingertips but will make sure it gets posted on the official site.)

We’re pleased with our progress, but there is far to go. My promise to you: Our legal team will keep fighting until we see this thing through.  We’ll also do our best to answer questions and get back to you, but we’re buried in this, so please be patient.

Best contact for me is david@davidsugerman.com or by phone 503.228.6474. Thanks for you patience and your support.

David Sugerman

Sallie Mae collections against Western Culinary Institute/Le Cordon Bleu Portland students?

In our ongoing case against Career Education Corp. and Western Culinary Institute/ Le Cordon Bleu Portland, we’re continuing our work on the appeal. Background here.

There is an interesting development that may or may not be related. We’re hearing occasional reports that Sallie Mae may be upping its collection activities.

Sallie Mae recently sued a family from the Southern California culinary school in court. We also know that Sallie Mae has been contacting WCI/Le Cordon Bleu Portland students about outstanding balances.

The team is on the lookout for cases in which Sallie Mae has filed a collection lawsuits in court against Western Culinary/Le Cordon Bleu-Portland graduates.  If Sallie Mae starts to sue Oregon culinary students in Oregon court, we want to hear about it. It could have major impact on our case and help many, many graduates of Western Culinary/Le Cordon Bleu Portland.

So this is a bit of a reach out to WCI/Le Cordon Bleu-Portland graduates: If you are sued in a collections case by Sallie Mae, please call or contact us immediately. While it would certainly be a frightening prospect if Sallie Mae sues, it may provide us with significant opportunities.

If you are sued, it is very important that you act act quickly upon receipt of the papers. Usually we have 30 days from the date you are served within which to file an appearance. So that would make quick action important.

Because of the importance of this issue, feel free to circulate this to other graduates of Western Culinary Institute/Le Cordon Bleu Portland who are facing collections from Sallie Mae.

Meanwhile, we continue our work on the case against CEC. They may have slowed down the process, but we remain confident that they will face their day of reckoning.

David Sugerman

 

Economic Fairness Oregon weighs in on ending the consumer fraud exemption for insurance companies

Nice piece here at Blue Oregon from Economic Fairness of Oregon relating to the need to end the consumer fraud exemption for insurance companies. Disclosure: When it comes to EFO, I’ve long been an unabashed  fanboy–they do tremendous pro-consumer work.

HB 3160-A is pending in the Oregon Senate. To my way of thinking this isn’t a blue or red issue. Last I checked, insurance companies don’t discriminate based on political affiliation. They hose the D’s and the R’s, those who live in the city and those who live in the country, the rich and the poor. The things that divide us simply do not matter when it comes to insurance companies taking advantage.

Let’s hope our State senate is listening to EFO and constituents who are pushing on this issue. It’s time to end the special break for insurance companies. Like every other business, they should be covered by Oregon consumer fraud laws.

Let’s end Oregon insurance companies exemption from Oregon consumer protection laws

Great KOIN-6 News report here KOIN-6 Iteam Hold Oregon insurers accountable highlighting the loophole that gives Oregon insurance companies a pass on Oregon’s Unlawful Trade Practice Act, our signature consumer protection law.

A pending bill, HB 3160-A would close the loophole. The bill amends the Oregon Unlawful Trade Practices Act to cover insurance companies.  Like all other Oregon businesses, insurance companies should be held to basic levels of fairness when dealing with consumers. It is time that our legislators act to rein in those insurance companies that engage in fraud and abuse.

That’s why we support HB 3160-A. You should too.

A modest proposal: Close your Umpqua Bank account

Great coverage here in today’s Oregonian by Brent Hunsberger regarding Umpqua Bank’s decision to cram mandatory arbitration down the throats of Umpqua customers. If you’re an Umpqua Bank customer, you might want to seriously consider moving your funds to a credit union.

By way of background, the U.S. Supreme Court decision last year in AT&T Mobility v. Concepcion touched off a race to the bottom. The Court gave corporations great power to require customers to take any disputes to arbitration, while banning class actions.

The Court fell for the old Lucy, Charlie Brown and the football argument that arbitration is cheaper, easier and better for consumers. Arbitration is none of those things to consumers–especially in small consumer cases. In those cases in which the amount at stake might be $20-200, arbitration filing fees, hearing fees and arbitrator payment fees effectively bar individual consumers from pursuing their claims.

When the likes of Umpqua Bank and ATT Mobility engage in small-dollar rip offs of many consumers, they earn large amounts of money. To put it concretely, if a bank illegally charges five dollars each year to a million customers, it earns $5 million per year in illegal profits. In the past, consumer lawyers have stopped that nickel and diming by pursuing class actions. If a class of a million consumers collects $5 per consumer plus attorney fees and costs, does anyone think the bank will continue the illegal practice?

Banks–and those who represent them–dislike class actions. They settled on a simple strategy. Ban class actions and require consumers to go to arbitration. Ending consumer class actions is a bit like filling the slop pit for a bunch of hungry swine. They’ll be all over that deal.

Once the Supreme Court decided ATT Mobility v. Concepcion, banks, cell phone providers, credit card companies–hell, almost any big business that sells things or services under a written contract–all rushed in for the feeding frenzy. So I guess it is no surprise that Umpqua wants to get in on the action.

So where are consumers in this? If you care about this issue and you are an Umpqua customer, the best response is to vote with your feet. Move it to a consumer-friendly credit union. Because if enough Umpqua customers move, I’m guessing they will get a little nervous. And if a lot of Umpqua customers move, I’m thinking they might get a lot of nervous.

So do it if you can. If they can’t treat us better than slops in a trough, seems to me they don’t deserve our business.

Fighting the robber barons: Illegal debt card charges for overdrafts

News today that West Coast Bank reached an agreement with the FDIC relating to its “courtesy coverage” overdraft protection. According to Brent Hunsberger’s report in The Oregonian, the issue was ineffective opt outs. But there is a bigger problem with Oregon banks ordering transactions in a way that triggers a cascade of overdraft charges.

I’m particularly interested in this area and looking at various cases. If you have had multiple overdraft charges assessed by Umpqua Bank, I’m interested in talking to you about the problems.

While it’s good that the FDIC stepped in, I am concerned that they did not fully take care of consumers who were affected by West Coast Bank’s overdraft charges. Still, enforcement is essential. Failing that, those of us who dare to fight the robber barons provide the next best thing.

Feel free to contact me if you have a story about Umpqua or any other Oregon bank that is overcharging on overdraft fees.

David Sugerman

ARCO debit card fees–Again?

Oregon readers know about our gasoline rules. In Oregon, there is no self-service. So when you pull up to the pump and ask the attendant to gas it up, you commit to the purchase the minute the gas starts flowing into your tank.

ARCO does not take credit cards. Consumers can pay cash or with debit cards.

Over a decade ago, I did my first consumer class action against ARCO in Oregon. They were charging an undisclosed debit card fee for consumers who paid with debit cards.

After a hard-fought battle, we settled that class action case many years ago. Part of the settlement required ARCO to post debit card fee disclosure signs at the pump. We demanded the fee notices so that consumers would know before committing to the purchase that they were paying an extra charge.

That extra charge is now 45 cents per purchase. So when you buy five gallons worth of gas, it is nine cents per gallon more than the posted price if you pay with a debit card.

That’s right. It appears that ARCO, which is now a subsidiary of Gulf oil spill British Petroleum, is back to nickel and diming consumers. My annoyance knows no bounds…I really dislike nickel and diming consumers.

If you have had a problem with ARCO debit card charges in Oregon, I would appreciate a call or an email so that we can properly analyze and address this problem.

The long fight ahead: Consumer advocates gear up on mandatory arbitration

In their recent decision in AT&T Mobility v. Concepcion, the U.S. Supreme Court gave a hearty five thumbs up to anything-goes arbitration clauses. The Court’s opinion means that consumers will trade their 7th Amendment rights to trial by jury for expensive, secret, pro-big business private arbitration. At least some members of Congress are engaged. Sens. Franken and Blumenthal and Rep. Hank Johnson have taken on the task by re-introducing the Arbitration Fairness Act.

Here is what’s at stake. After seven years of work, we favorably settled a multi-million dollar consumer class action against Comcast. My guess is that the case would have failed had it been brought after AT&T Mobility.

Those of us who protect consumers will follow this legislation carefully and work to assist. Meantime, if you’ve been shut out of court by a one-sided arbitration clause, I would love to hear about it. Use the comments or ping me via email.

David

 

Reviving the plutocracy–U.S. Supreme Court ends consumer class actions

 

A win for the plutocracy*

Yesterday’s decision in AT&T Mobility LLC v. Concepcion represents a breathtakingly bad opinion that does profound harm to consumers. It’s a bit geeky, but the takeaway is that this is a huge win for the rich and powerful.

The problem-One of the favorite great business abuses of consumers is the nickel and dime charge. It’s no doubt happened to you. Your bank, credit card company, phone provider, utility, car dealer or cable company has incorrectly charged you a few bucks. Maybe it was a one-time $10 fee on your checking account, or maybe the cable TV company illegally collected a six dollar late fee. But of course, in this era of massive corporate sizing, you are one of a million customers. So at the same time you got billed ten bucks, so did a million other customers. And zotz…just like that…the bank has collected $10 million illegally from its customers.

Here is the tally for those keeping score at home: Bank illegally enriched $10 million. Consumers hosed. That’s why consumers have class actions. With capable counsel and a willing representative, consumers had the tools to fight the nickel and diming problem.

The ruling: The Court effectively ended future consumer class actions with yesterday’s decision. The Court broadly interpreted federal preemption under the Federal Arbitration Act. The Federal Arbitration Act requires courts to enforce valid arbitration agreements. State courts have been ruling that arbitration agreements that limit consumer remedies and ban class actions are not valid under state law. The U.S. Supreme Court decided that those state law rulings were entitled to no deference and were of no effect. Here is the bottom line: No state law may prevent a corporation from: 1) requiring arbitration of all disputes between the consumer and the business; and 2) from prohibiting class actions for those disputes.

What it means for consumers. The problem is that now there will be no class actions for nickel and diming cases, so when a bank, cable company, cell phone provider or car dealer illegally charges a million customers $10, their arbitration clause will be upheld, and consumers will not be able to band together into a class to recover the money.

This will take place soon with emails and letters from cable companies, credit card providers, banks, cell phone companies and the like. It will start with revisions to your credit card agreements, cell phone terms and conditions, and cable terms of service. Buried in that long document will be a change in terms that will add or change the arbitration clause. They will all contain class action bans. Thanks to the Supreme Court, they will likely be enforceable.

Consumers have now been stripped of their abilities to enforce state consumer laws by an over-zealous Supreme Court. Consumer protection will stand and fall on state regulation and state enforcement. Have you seen the state budget lately? I’m sure there’s plenty of extra cash available for consumer protection enforcement. Even with those states that can afford enforcement, the Supreme Court has forced states to increase regulation if states want to have consumer protection. Because God knows–or at least the Roberts Court knows–that private enforcement by consumer class action lawyers is bad for business.

We will either see more regulation, or–more likely–we will see no control. Most businesses operate rationally. If you tell someone that ripping off consumers for $10 million may subject them to a class action case that will cost them that much or more, they will act to avoid facing that liability. But if bending the rules gets you $10 million without consequences, we all know how it ends.

Load up the troughs and get out of the way. Those hogs are hungry!

It’s a win for the plutocrats.

____

*Plutocracy: “[Gk ploutokratia, fr. ploutos wealth] 1: government by the wealthy 2: a controlling class of rich men.” Webster’s New Collegiate Dictionary, p. 878 (1979)