Consumer Rights

Rules Prohibiting Schools’ Use of Mandatory Arbitration Agreements

By: Amy

On October 28, the Department of Education issued final regulations intended to protect student loan borrowers against school closures and fraud.  To that end, the rules include significant provisions restricting school arbitration agreements; clarifying student rights to raise school fraud as a defense to loan repayment; providing automatic closed school loan discharges to certain eligible borrowers; and providing new rights for students to obtain false certification loan discharges.  See https://www.gpo.gov/fdsys/pkg/FR-2016-11-01/pdf/2016-25448.pdf.  Although some provisions are likely to face legal challenge, the rules generally will be effective July 1, 2017.

For those in the dispute resolution community, the  provisions that may be of most interest are those limiting school arbitration and class-waiver requirements.  This came in the wake of some institutions, such as Corinthian Colleges, using class action waivers and arbitration clauses to thwart actions by students for fraudulent and abusive conduct that largely pushed students into financial peril.  The new rules prohibit schools participating in the federal student loan program from entering into pre-dispute arbitration agreements with students or agreements that purport to waive students’ rights to bring class actions.  These limitations apply to agreements with students who have obtained Federal Direct Loans or benefited from Direct Parent PLUS Loans, and apply to claims regarding the making of the Federal Direct Loan or the provision of educational services for which the loan was obtained.  This bars schools from using contract clauses or stand-alone pre-dispute agreements with students that waive students’ right to go to court or to pursue a class action over any claims that could also give rise to a “borrower defense” claim (described more fully in the new rules).  The provisions also bar a school from relying on an existing pre-dispute arbitration agreement or other agreement to force an individual or class action out of court.  This includes agreements entered into prior to the rule’s effective date.  The school must either amend the agreement or notify the students that they will not enforce the agreement.

The rules also aim to increase transparency regarding such “borrower defense” related arbitration and litigation.  If schools do engage in arbitration proceedings in a manner that is consistent with the regulations and applicable law, the rules require that these schools notify the Secretary of Education and provide disclosures.  The rules similarly require that schools disclose such judicial filings and dispositions.

The complete provisions are lengthy, and can be reviewed in the PDF linked above from 75926 Federal Register/Vol. 81, No. 211/Tuesday, November 1, 2016/Rules and Regulations.

Meanwhile, we wait for the Consumer Financial Protection Bureau (CFPB) to issue final regulations regarding its proposal to prohibit companies from including pre-dispute arbitration clauses in agreements regarding financial products or services that prevent class action lawsuits. The proposal would open up the legal system to consumers so they could file a class action or join a class action when someone else files it. Although the proposal would allow companies to include arbitration clauses in their contracts, it would require that the clauses would have to say explicitly that they cannot be used to stop consumers from being part of a class action in court.

A Basic Guide to Understanding Missouri Payday Loans for the Missouri Consumer

 

In 2003, Elliot Clark took out five short-term loans of $500 from payday lenders in Kansas City so he could keep up with the bills his security job simply could not cover. Clark juggled the five loans for five years, paying off a $500 loan and interest using loans he took from another payday lender. Clark ultimately received disability payments from Veterans Affairs and Social Security, and he was able to repay the debt. The interest Clark paid on the original $2500: more than $50,000.

Clark is not alone. Twelve million American adults use payday loans annually. In Missouri, borrowers received 1.87 million payday loans between October 2013 and September 2014. The average loan in Missouri during this time period was $309.64, with an interest/fee of $53.67 for a 14-day loan. The resulting average interest rate was approximately 452%.

So, how do we as Missouri consumers navigate the world of payday loans and short-term lending? This post answers: (1) how does Missouri define payday loans and (2) what traps should I avoid as a consumer of such loans?

What is a payday loan?

A payday loan is an unsecured small dollar, short-term loan. The name of the loan derives from the loan period; the typical duration of a payday loan matches the borrower’s payment schedule. In Missouri, a borrower can obtain a loan for up to $500. An initial interest rate can be set for up to 75%. The loan must be repaid 14 to 31 daysafter the borrower receives the loan.

A borrower may “renew,” or rollover the loan for an additional 14 to 31 days. To renew a loan, a borrower must:

  • Make a written request to the lender
  • Pay 5% of the principal amount of the loan
  • Make a payment on interest and fees due at the time of renewal

The lender can also charge up to 75% in interest rate for each renewal. A borrower in Missouri can renew the loan up to 6 times.

What traps should I, the consumer, avoid?

  • Do not underestimate the extremely high interest rate: A lender can charge an interest rate of 75% on the initial loan. During each renewal period, that interest rate stays the same. As mentioned above, the average annual percentage rate for a payday loan in Missouri is 452%, and with high annual percentage rates reaching 800%.
  • Do not take the full amount offered: Payday lenders will frequently attempt to persuade consumers to take the full $500 loan, when a borrower only needs a fraction of that amount. Take only the amount you need to cover the immediate expenses. The extra $100 you borrow can become over $1000 that you must pay back.
  • Do not be embarrassed to ask for help in understanding the contract terms: Loan language can be confusing, especially as special terms used in loan contracts are not used in everyday language. If you do not understand what annual percentage rate, renewal, or principal are, ask the employee. Make the employee explain exactly how the loan will work – go through how much you will owe at the end of the term, how much money will be owed if renew the loan, and how much interest will be paid on each loan. It is better to understand what you contract into before you sign then to be surprised in two weeks with a larger debt than you expected.
  • Do not renew a payday loan: Lenders make money by collecting on interest on renewal loans. Because Missouri allows interest rates up to 75% per renewal, your interest owed will quickly become larger than the amount you originally took out. As mentioned earlier, only take out the amount you need and can afford to pay back!
  • Do not take out loans from multiple locations: While it is tempting to take out a second loan from a second lender to pay the interest off a second loan, this leads to further debt. While law does not allow this type of lending, it still occurs in Missouri payday loan practice. Like Clark, borrowers become stuck juggling multiple loans and increasing interest.

Alarmingly, the Missouri laws regulating payday loans are confusing and unclear. More terrifying is the lack of guidance Missouri consumers face in navigating the maze of payday statutes. The Missouri Attorney General’s office currently does not produce a guide to short-term loans (like it does in other areas of law, such as Landlord/Tenant). The Missouri Department of Finance provides an explanation as murky and bewildering as the statute it attempts to interpret.

Ultimately, Missouri consumers must be extremely careful when taking out payday loans. The best policy individual consumers regarding payday loans may be to simply avoid at all costs.

**I would like to recognize Michael Carney, staff attorney at Mid-Missouri Legal Services, for his help in researching and understanding the Missouri statutes applicable to payday loans.

When is a Landlord Allowed to Enter Your Home?

By: jjrbennett 

When is a Landlord Allowed to Enter Your Home?

What Does the Law Say?

Unfortunately in Colorado there is not many protections for a tenant’s privacy in relation to their landlord. Boulder County and City, along with the State of Colorado, have no statutory language for tenant privacy. However there is an implied covenant of quiet enjoyment that is written into every lease.

The Duty of Quiet Enjoyment

Colorado case law provides that a landlord cannot violate the duty of quiet enjoyment. This duty is defined generally to be “a covenant that promises that the grantee or tenant of an estate in real property will be able to possess the premises in peace, without disturbance by hostile claimants.” This covenant protects tenants rights in principle, yet enforcement is difficult. There are also many legitimate reasons for landlords to come in and inspect the premises.

When Can a Landlord Enter the Premises? 

A tenant’s right to privacy is almost entirely subject to the lease. Whatever protections you wish to have relating to your privacy must be negotiated with your landlord at signing.

According to the standard Boulder Housing Lease, a landlord may enter their tenant’s premises, without notice, to:

  • Inspect the residence
  • Repair damage
  • Or show the premises to prospective buyers

The specific language in the Boulder Model Lease is laid out below

“Resident shall permit owner/agent to enter the premises at reasonable times and upon reasonable notice for the purpose of making necessary or convenient repairs or reasonable inspections, or to show the premises to prospective residents, purchasers, or lenders. Entry may be made without prior notice only if owner/agent reasonably believes that an emergency exists, such as a fire or broken water pipe, or that the premises have been abandoned.”

Link: http://ocss.colorado.edu/sites/default/files/imce/BoulderModelLease.pdf

What about the Boulder Housing Code?

The Boulder Housing Code does require that entry be permitted for reasonable repairs which relate to the Code. Therefore, whatever language you negotiate with your landlord for privacy cannot violate this code.

Link: https://bouldercolorado.gov/plan-develop/codes-and-regulations

What Else Can I Do If a Landlord Continues to Invade My Privacy? 

First and foremost, you should attempt to resolve the problem by negotiating with your landlord. This is the easiest and most hassle-free way to resolve all landlord-tenant disputes. Perhaps starting with a tactful letter may be the best way to go.

If negotiations break down, then it is time to consult an attorney or request mediation. Mediation services in the City of Boulder can be found here:

https://bouldercolorado.gov/community-relations/mediation-program

Finally, DO NOT deny entry of your home to your landlord. If your landlord has similar language in your lease as in the Boulder Model Lease above, then your landlord can immediately start eviction proceedings against you.

Conclusion

I hope this is helpful! Best of luck with your future landlord relationships!

-Joshua JR Bennett

Let Me Ask My Lawyer…

By: Greg Garcia
Of the many types of fraud in the United States, advance fee schemes are among the most devious and frustrating for authorities. This is because these scams, where someone asks for money upfront with the promise of a big payoff later, are only limited by the imagination of the person committing the fraud. Some variations of advance fee schemes that are more common than others include:
  • Debt Elimination Fraud. These scams target people with existing debts and are difficult to distinguish from legitimate debt consolidation services. Generally, these scams involve collecting an upfront fee or payment in exchange for the promise of negotiating away your existing debts. Most people caught in these scams lose the fee they pay to the scammer and also suffer the consequences from their existing debts not being paid.
  • Nigerian Fraud. This scam is so common that it is almost folklore in the United States. In this scheme, someone poses as a government official or other authority figure and asks for help in transferring funds out of Nigeria (or some other country) in exchange for a percentage of the funds. Despite the popularity of these schemes, creative fraudsters are still able to still defraud new victims each year in the U.S.
  • Investor Fraud. These scams often involve emails inviting victims to purchase bonds or other securities and are sent from email addresses containing .gov, .org, or .us. You should always be skeptical of any such email that comes from address that does not END in .gov, .mil, or fed.us.

This is only a small sampling of the types of advance fee fraud out there in the world today. Fortunately, regardless of the form the scam takes, there are a few things you can do to protect yourself in all of these situations. First, always ask to see documentation around anything someone is trying to sell or offer to you. A legitimate business or organization will almost never be concerned with this request. Second, and this is one of my favorite tricks to avoid scams, always tell someone you need to have something reviewed by your attorney. Even if you don’t have an attorney, or don’t actually want to have one you have review what you are looking at, simply mentioning this can be a powerful tool to help weed out fraud. If someone refuses to let you take the time to speak to your attorney, or even worse, asks that you sign something PREVENTING you from doing so, walk away… and maybe talk to your lawyer.

Facing Foreclosure? Avoid These Common Mistakes and Instead Take Some Positive Steps

By: Beth Michaels

Homeowners facing foreclosure are often financially stressed and emotionally overwhelmed, and this can lead to mistakes that make them worse off. If you or someone you know is facing foreclosure, avoid these common mistakes:

  1. Doing Nothing

THE WORST THING YOU CAN DO IF FACING FORECLOSURE IS NOTHING!

Lenders cannot foreclose until 120 days after your first missed payment. That means you have about four months to avoid foreclosure or minimize your losses. The sooner you act, the more options you’ll have.

  1. Falling Victim to Foreclosure Avoidance Scams

Foreclosure avoidance scams are a huge problem. Watch out for these red flags:

  • High or Upfront Fees

You do not need to pay someone to understand your options. Housing counselors approved by the U.S. Department of Housing and Urban Development (“HUD-approved housing counselors”) will help you for free. If someone wants to charge you for their services, be very skeptical!

  • Guarantying Results

No one can guaranty a result when it comes to foreclosure. Most options require your lender to agree. If someone says they can guaranty you will get a loan modification or some other foreclosure avoidance option, this person is probably not legitimate.

  • Signing Over Your Deed to a Third Party

This is a scam to get your house!

Remember, signing over your deed will not wipe out your loan. But it will cause you to lose any legal right to your house.

  • Making Mortgage Payments to Anyone Other Than Your Lender

Anyone who suggests this will probably take your money and run. Always pay your lender directly.

  • Anyone Who Tells You to Stop Talking to Your Lender

You will have to talk to your lender directly to work out any of the foreclosure avoidance options you decide to pursue. Not communicating with the bank will only make things worse, so this is very bad advice.

  • Anyone Who Tells You to Stop Paying Your Mortgage

This will only make the problem worse. You do not want to be further behind on your payments.

  • Unsolicited Contacts from Other States

Foreclosure law is different from state-to-state, so if someone from Florida is offering to help with your Colorado foreclosure, be very skeptical. A Florida lawyer or housing counselor probably doesn’t know anything about Colorado foreclosure law.

  • Remember, If It Sounds Too Good to be True, It Probably Is!

If something doesn’t sound right, don’t hesitate to contact a HUD-approved housing counselor or a lawyer.

 

So what should you do if you’re facing foreclosure?

  1. ACT RIGHT AWAY!!!

The sooner you act, the more options you will have.

  1. Contact a HUD-Approved Housing Counselor.

HUD-approved housing counselors can help you understand what your options are and what might work best for your particular situation.

In Boulder County – contact Boulder County Housing and Human Services to talk to a housing counselor.

Website: http://www.bouldercounty.org/dept/housinghumanservices/pages/default.aspx

Phone: 303-441-1000

Outside of Boulder County – contact HUD to find housing counselors near you.

Website: http://www.hud.gov/offices/hsg/sfh/hcc/fc/

Phone: 1-800-333-4636

For veterans with VA Home Loans, contact Veteran Services for foreclosure-avoidance assistance.

Website: http://www.benefits.va.gov/HOMELOANS

VA Loan Guaranty Office: 1-800-827-3702

VA Regional Loan Center for Colorado: 1-888-349-7541

  1. Contact Your Lender Right Away.

Contact your lender as soon as possible after missing a payment, or even before missing a payment if possible. This will show them that you are serious about finding a mutually-acceptable solution.

If you are having problems with your lender (e.g., they aren’t communicating with you, you feel like you’re getting the run-around, etc.), talk to a HUD-approved housing counselor, contact a lawyer, and/or file a complaint with the Consumer Financial Protection Bureau.

CFPB Website: www.consumerfinance.gov/complaint

CFPB Consumer Help Line: (855) 411-2372

Exploring Student Loan Repayment Options

By: Mercedes Pineda

The Consumer Financial Protection Bureau (CFPB) reports that more than 40 million borrowers owe on federal and private student loans, with the average student debt around $23,000. I, like many of you, am one of those 40 million borrowers. Student loan debt can be a stressful financial burden for most people. However, armed with some knowledge and a helpful toolkit, we can make these loans more manageable.

Why is paying back student loans so difficult? The CFPB’s recent report highlights many of the problems student borrowers experience when trying to repay their student loans. These problems include (but are not limited to): a lack of flexible repayment offerings for distressed borrowers, lack of information regarding repayment options, paperwork processing delays, and inconsistent instructions from servicers. Below I outline the best way to approach repayment and the various options available to borrowers. 

How Do I Find Information About My Loans?

The best place to start is the National Student Loan Data System (https://www.nslds.ed.gov/nslds/nslds_SA/). This is a government database that keeps track of all your federal loans. Speak to your school’s financial aid administrator about any information they may be able to provide you about your loans. Additionally, check your credit report. Student loans are often listed on your credit report. You are entitled to a free copy of your credit report from each of the three major credit-reporting agencies. (www.annualcreditreport.com). However, please be aware that student loans may look confusing on your credit report. Loan servicers often sell loans, and it may be difficult to determine which servicer owns your loan now and how much you owe. I highly recommend going over your credit report with a trained financial counselor. Take advantage of your local or county community services that provide this resource!

What Are My Repayment Options?

  • Standard Repayment Plans
    • Payments are generally a fixed amount over the course of a certain amount of years
  • Income Based Repayment Plans
    • If you have federal loans, flexible repayment options may work best for you. These plans take into account your yearly income and the payments are a certain percentage of your discretionary funds (that is the money you have available after paying rent and bills). Payments are recalculated every year. Generally, outstanding balances are forgiven after a minimum of 20 years.
    • Learn more about these plans here: www.studentaid.ed.gov/sa/repay-loans/understand/plans
  • Consolidation
    • Allows you to simplify repayment by combining loans into one payment. Not all federal loans are eligible for this option, and it may not be the best option for your situation. You cannot consolidate federal and private loans into one payment. You cannot “undo” consolidation.
    • Beware of “Debt Relief” scams! Many scammers try to charge you fees to help consolidate your loans. They can often leave you with a loan that was worse than your original loan! Federal debt consolidation is an option you can apply to for free via studentloans.gov
    • Get more information about consolidation here: http://www.bouldercounty.org/doc/hhs/student-loan-consolidation.pdf and here : studentaid.ed.gov/sa/repay-loans/consolidation
  • Refinancing
    • To refinance you take out a new loan, and you use that loan to pay off the existing loans. With this option you can change the terms of your loan. By doing this you can lock in a different interest rate and save money over the life of your loan.
    • The government does not offer refinancing. You can refinance your federal loans into private student loans. BUT, you may give up benefits such as income based repayment options or eligibility for student loan forgiveness programs by converting your loan.
    • However, like consolidation, there are some scams out there for loan refinancing. The following to sites are reliable and have resources such as a refinancing calculator to help you explore this option:
  • Student Loan Forgiveness
    • The most common of these is the Public Service Student Loan Forgiveness Program. This program allows federal student loan borrowers a chance to qualify for loan forgiveness after committing 10 years to public service work. To find out if you may be eligible for this option use the chart at the following site: bouldercounty.org/doc/hhs/public-service-loan-forgiveness.pdf
    • There are VERY limited other situations in which your loan may be forgiven. To learn more about them visit this site: studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation
    • Please be aware that this is another option that sees many scams. Your federal loans can only be forgiven by the federal government. Please visit the government site listed above or reach out to your servicer directly to figure out if you qualify for a forgiveness program.

Summary:

I hope the above information will help borrowers explore and consider the right repayment options. I highly recommend seeking out local resources, such as a financial counselor at your community services center, who can help you understand the repayment process and help pick the best option for your situation.

How to Dispute an Online Order That Was Never Delivered

By: Aaron Fransua

According to the latest reports from the U.S. Dept. of Commerce, roughly $3.4 Billion of retail sales occurred online just last year alone. Consumers are becoming increasingly more comfortable with making their purchases online. Fortunately, the vast majority of these sales occur without any problems, but what happens when those shoes you purchased online do not show up? What are your rights when the seller delays delivery? Even worse, what happens when you get the credit card bill in the mail a few weeks later with the charge for the shoes still on it?

Two federal laws- the Mail, Internet or Telephone Order Merchandise Rule and the Fair Credit Billing Act offer protections and procedures, so you don’t have to pay for merchandise that you ordered, but never received.

Your Rights When Shopping Online, Phone, or by Mail

The Mail, Internet, or Telephone Order Merchandise Rule is a federal regulation that is administered by the Federal Trade Commission and applies to most goods you order by mail, phone, fax, or online. Essentially, this rule requires sellers to have a reasonable basis for claiming they can ship an order within a certain time. The rule also tells sellers what to do whenever there is a delay in an expected shipment.

By law, a seller should ship your order within the timeframe stated in its ads or over the phone. In cases where a delivery date is not promised, then the default rule is that you can expect the seller to ship the goods within 30 days of your order. The timer begins as soon as the seller receives a completed order with your Name, Address, and Payment.

If the seller is unable to ship your product within the promised time, the rule requires that they must notify you, provide you with a revised shipping date, and give you an option for either a full refund or to accept the new delivery date. If you do not respond, and the delay is 30 days or less, then it is assumed that you accept the delay and are willing to wait for the merchandise, If, however, you do not respond, and the delay is more than 30 days, the seller must cancel the order by the 30th day and issue you a full refund promptly.

Hopefully, the seller has delivered your order within the revised delivery schedule. But, if there is yet another delay, then the Rule requires the seller to contact you again and give you a revised delivery date, or the option cancel the order for a full refund. If you do not respond to the second notice, the seller should assume that you are not willing to wait, cancel your order, and issue a full refund.

How to Dispute Your Charges for Non-Delivery:

Below is a quick summary of steps to take to get either your money back or the charge removed from your credit card bill:

Step One: Contact the seller

Reach out to the seller and try to resolve the problem with them directly first. Larger websites such as Amazon have great consumer dispute resolution processes to either get a new product reshipped quickly, or a refund issued. In general, most businesses want to keep the consumer happy so you’ll keep coming back with them. Hopefully, this should be the only step you need to take, but if you get pushback from the business, you still have options!

Step Two: File a Dispute with your Credit Card Company (Unless you paid via Paypal, then jump down to the PayPal Dispute section below)

The Fair Credit Billing Act allows you to file a dispute with your credit card company for undelivered merchandise, so long as you inform the credit card company within 60 days of the first bill that has the disputed charge on it. To take advantage of this right:

  • Write to the credit card issuer at the address given for “billing inquiries,” not the address where you send your payments. Make sure to include your name, address, account number, and a description of the billing error- in this case nondelivery of your goods.
  • Include copies of sales slips or any other documents that support your position.
  • It’s recommended to send this letter via certified mail, so you have proof of what the credit card issuer received.

After you have filed your complaint, the credit card company must acknowledge your complaint, in writing, within 30 days after receiving it. The credit card company then must resolve the dispute within two billing cycles after getting your letter. During this time that the company investigates your dispute, you may withhold your payment on the disputed amount. Keep in mind this is only for the disputed amount, so make sure you continue to pay for all other charges on that card. Also, during this time, the credit card company may not take any legal or other action to collect on the disputed amount and related charges (including finance charges).

Paypal Dispute:

If you paid for your online order with your credit card and used Paypal as the payment processor, it’s recommended that you file your complaint with Paypal due to their expanded line of protection. The Paypal Purchase Protection policy gives you 180 days to file a complaint, and will provide you with a full refund of your purchase price and shipping costs if:

1) You were charged for something you didn’t purchase, or

2) Your order never arrived, or

3) Your order arrives, but it is significantly different than how it was described. 

There are a variety of scenarios that meet this condition, for instance:

  • You received a completely different item.
    Example: You purchased a book, but received a DVD.
  • The item is missing parts or features, and this was not disclosed.
    Example: The listing said batteries included, but they weren’t.
  • You purchased a specific quantity of an item but received the wrong amount.
    Example: You purchased five pairs of fuzzy dice and only received four.
  • The item was damaged en route to its destination.
    Example: You bought a beautiful antique lamp, and it arrived in pieces.
  • You received a counterfeit version of the item.
    Example: You purchased a Rolex, but received a Faux-Lex.

Summary:

Hopefully utilizing the above steps should quickly put the law on your side and help get you a refund for your order, or the charge removed from your credit card statement! When shopping online, always try to stick with using larger retail stores since many of them have policies in place to quickly resolve these sorts of issues. It also helps to use a payment processor such as Paypal whenever you get the chance so that you can take advantage of the Purchase Protection policy.

 

Your Facebook Account Doesn’t Have to Die with You

By: Michael Havlik

In a 2014 estimate, there were almost 1.4 billion Facebook users in the world, with 890 million of these users spending an average of 21 minutes per day on Facebook. Even senior citizens, traditionally a demographic slow to adopting online technology, are seeing the value of creating a virtual life on social media. In fact, a recent reportfound that the fastest growing social media demographic is persons 50 years and older. Among all of these users, an estimated 4.75 billion pieces of content are shared daily.

Have you ever wondered what happens to your Facebook account–and all that uploaded content–after you die? Fortunately, recent changes to Facebook’s policy has made death a little less scary.

It has been said that “old age isn’t so bad when you consider the alternative.” Similarly, to fully appreciate Facebook’s new policy, it is worth discussing the alternatives. Consider the widely publicized saga of the Ellsworths family following the death of their son, Lance Corporal Justin Ellsworth. Justin, a Marine, died in combat in 2004 while serving in Iraq. After his death, the Ellsworth family wanted to make a memorial of his life by using the e-mails Justin had sent and received while deployed overseas. Yahoo!, the e-mail service provider, denied all requests by the Ellsworth family, citing that it was against their terms-of-service. It was only after a lengthy and costly court battle that Yahoo! gave the family access to Justin’s emails.

Even Facebook’s policy used to be onerous for heirs. In 2012, a family sued Facebook to compel Facebook to give them access to their son’s account. Their son had unexpectedly committed suicide, leaving no note or rationale for the coping family, and the family sought access to help solve the mystery. Even though the family won the lawsuit, Facebook refused to provide the access for some time afterwards.

All of that changed in February of this year (at least for Facebook users). Facebook’s new “Legacy Feature” allows account holders to designate a friend to have certain access after the user passes away. For instance, the legacy contact will be able to pin a post on the decedent’s timeline after death (such as a funeral announcement), respond to new friend requests, or update cover and profile photos. Additionally, users can elect whether they want their legacy contact to be able to download pictures, posts, and videos from their account. And lest you worry about those embarrassing messages with your ex—the legacy contact won’t be able to log in as you or read any private messages.

Alternatively, through this feature, you can tell Facebook to permanently delete your account after death.

Here’s how to designate your legacy contact:

  • From your Facebook profile, click on “Security”
  • Choose “Legacy Contact” at the bottom
  • Enter the name of a Facebook friend as your legacy contact. (Note: an email will be sent to the friend alerting them of their new status)

Guarantees and Warranties—Is There a Difference and Does it Matter?

By: Andre Kaiser 

100% Satisfaction Guarantee. You’ve read the phrase before, probably on a food product or maybe the packaging of a consumer electronics item. How does this “satisfaction guarantee” relate to the term “limited warranty” that consumers find familiar? While the terms “guarantee” and “warranty” may have become synonymous in the minds of some consumers, the two are actually quite different. Understanding the difference helps consumers know their rights and what remedies they are entitled to.

Much of the confusion starts with the fact that, at a fundamental level, both guarantees and warranties provide remedies to consumers who have an issue with a good they have purchased. Another similarity is that the offering party in both a guarantee and a warranty is legally bound to the terms of the agreement.

A basic distinction between guarantees and warranties is satisfaction as opposed to malfunction. Dissatisfaction with a product is not generally a circumstance that a warranty will cover. A guarantee on the other hand would generally provide a remedy for dissatisfaction. A manufacturer’s warranty is an assurance or stipulation given by a manufacturer against defects in the components and workmanship with a promise to cure any defects. In contrast, a guarantee is a promise that something is of specified quality, content, benefit, etc., or that it will perform satisfactorily for a given length of time. A warranty can be thought of as an insurance policy the purchaser has against the manufacturer for product defects for a certain period of time, while a guarantee is a promise of satisfaction offered to the purchaser. Warranties are more like a contract in which the manufacturer is promising quality and consistency in the product while guarantees can be more subjective to what an individual consumer hopes to get out of a product.

Perhaps an example can further clarify the difference. Consider Connie Consumer who buys a printer, which is manufactured by Perfunctory Printers. Perfunctory provides Connie with a warranty that the printer will print 100 pages per minute and guarantees that Connie will be happy with the printer’s ease of set-up and use. If Connie notices that her new printer only prints 99 pagers per minute, she could request that Perfunctory fix the printer so that it meets the warranted standard under the warranty. Instead, if the printer has an interface that Connie finds confusing and frustrating to use, under the guarantee she can return the printer for a full refund. Note that the warranty does not require Perfunctory to take the printer back, just to fix it. The guarantee, however, allows Connie to return the printer for a full refund on essentially a “no questions asked” basis.

Another distinction between guarantees and warranties is who provides each of them. As the name implies, a manufacturer’s warranty is always going to be provided by the manufacturer of the good. As discussed earlier an extended warranty could be provided by the manufacturer but more likely will take the form of a service contract provided by a third party seller. A guarantee could be offered by the manufacturer, the seller, or both. For a guarantee that is printed on the packaging of the product, the consumer should generally reach out to the manufacturer if they are dissatisfied with the product or good. However, some third-party sellers provide their own satisfaction guarantee in the form of allowing returns on products for a certain period of time.

The remedies that a warranty and a guarantee each provide can also be used to distinguish the two. In general, a warranty offers to repair malfunctioning or broken parts. However, not all warranties are created equal and in some cases a warranty may not provide for the repair of a defective part. Computers are a prime example of this where “Orange Computers” (Orange) might be the “manufacturer” of the computer and assemble everything, but the processor is actually made by another company, and the hard drive by a third company. In such a situation the warranty Orange provides may only cover the parts Orange itself manufactures and not the processor or hard drive. A warranty usually will not provide for full replacement unless multiple attempts have been made to fix the product to no avail. Thus it is always important to check the terms of the warranty to determine what actually is covered. A guarantee usually only offers the consumer replacement or refund on a product that the consumer is dissatisfied with or for a product that isn’t working properly. Thus, a warranty can be thought of as covering the individual parts or components of the product while the guarantee covers the product as a whole.  However, this will depend on the terms of the warranty or guarantee.

Warranties and guarantees are not necessarily free. The “costs” may be rolled into the price of the product, and warranties can often be extended by paying extra. Sometimes an “extended warranty” is offered by the manufacturer, but more often it is offered by the third-party seller of the good (retailer). Nonetheless, a guarantee may be essentially free when it is part of a free promotion for customer satisfaction. Thus, when a good comes with a guarantee the consumer can generally return the product and get a full refund on their purchase within the guarantee period. But once that guarantee period expires, if the consumer becomes dissatisfied they are likely out of luck. However, this is not always a hard and fast rule. Manufacturers and sellers both want to keep consumers happy and thus might refund a product outside of the stated guarantee period.

Understanding these differences can help consumers know where to look for a remedy if they are unsatisfied with a good they have purchased, or if the good malfunctions.

Your Foreclosure Rights

By: James Wilson

Foreclosure is a scary process. Navigating the waters and understanding the process is daunting. There are significant benefits to individuals and the community in the preservation and growth of home ownership. Included in the laws designed to protect consumers, Colorado has adopted the Foreclosure Protection Act (the “Act”) to help ease the burden on consumers faced with foreclosure.

If you are facing the possibility of being displaced from your home, your first step should be to contact the Colorado Foreclosure Hotline at 1-877-601-HOPE (4673). Making this call will connect you to a housing counselor who can help offer free assistance. On their website (www.coloradoforeclosurehotline.org), the Hotline points out that, “There were 19,622 foreclosures in Colorado in 2011…but four out of five that met with a Colorado Foreclosure Hotline housing counselor successfully avoided foreclosure.” Many factors go into whether or not you can avoid foreclosure, but knowing the right questions to ask could be the difference between staying in your home or rushing to find alternative housing opportunities. Things you should discuss with a housing counselor include setting up alternative payment arrangements, and the timelines that lenders must follow before initiating, and during, the foreclosure process.

Often times the most appropriate action will be to engage an attorney familiar with foreclosure and consumer protection laws. An attorney will be able to help you consider warnings that the Act and the Colorado Attorney General have identified with regard to consumer foreclosures.

 

Foreclosure Process

In order to initiate the foreclosure process, your lender is required to send you a thirty (30) day notice to allow you the opportunity to speak with a housing counselor and your lender’s loss mitigation department. Only after the expiration of this notice period can your lender proceed with the formal foreclosure process. If you do receive one of these notices, do not ignore it. As indicated, four out of five people who call the Hotline have the opportunity to stay in their home.

If the foreclosure process proceeds past the notice stage, you will receive a series of additional notices setting forth, among other things, information related to the date of sale. Initially, the sale is set to take place in 3-4 months, but delays and postponements could push the actual sale date farther down the road. Depending on where you live—and even if you have vacated the property—you may have continuing obligations with regard to the property, such as HOA assessments, until the property is actually sold. This is one of the most critical reasons to consult a knowledgeable attorney in order to understand what responsibilities you may carry until the property transfers.

Do not forget that you have the right to cure the default on your loan up to fifteen (15) days before the date of foreclosure sale. In order to cure the default you are required to file certain notices with your lender and public officials. An attorney can help you make sure your notices are properly drafted and sent to all the necessary parties.

 

Foreclosure Consulting Contracts

The Act specifically addresses the engagement of a foreclosure consultant. Generally speaking, a foreclosure consultant is an individual you hire in a non-attorney relationship to assist you through the foreclosure process, and who is not affiliated with your lender. The Colorado Attorney General warns that various individuals may contact you to help you avoid foreclosure after you are in default on your mortgage. By law, these individuals are required to follow certain rules in the Act, which you should ensure are followed before agreeing to pay a foreclosure consultant a fee. A consultant is not allowed to charge or collect any fee from you until the consultant has fully performed his or her services.

A consultant is also required to provide you with a written contract for you to keep at least twenty-four hours before you sign it. The contract must contain the following notices:

  • The consultant cannot ask you to sign any document that transfer your ownership to the consultant or his or her associates.
  • The consultant cannot guarantee that they will be able to refinance or arrange for you to keep your home.
  • You have the right to cancel the contract at any time by written notice. The consultant is required to provide you with a “Notice of Cancellation” form. If you are unsure about how to properly complete this form, call the Hotline!
  • If you cancel, you must repay certain expenses plus interest spent by the consultant on your behalf.

The Attorney General also warns against individuals and scams that offer short-term loans that allow you to cure the current default, but leave you unable to pay off the short-term loan. You should also be extremely cautious of any individual who wants you to transfer title to your property with an option to repurchase at a later date. Before you make any decision related to a current or foreseeable foreclosure, call the Hotline and speak to an attorney.