Washington State Consumers
As heavy hearted as I am, I’m also not quite ready to write about last night’s repeal of the CFPB arbitration/class action ban. All morning, I’ve gotten emails/calls about whether this means the end of any Equifax litigation, to which I reply, “No.” Below, however, is a terrific piece that reports on how @SenateGOP gored consumers’ rights from Yahoo.
‘This was the Wells Fargo Immunity Act’: Consumers lose the right to sue companies
Ethan Wolff-Mann Yahoo Finance October 25, 2017
Vice President Mike Pence broke a 50-50 tie on the Senate floor Tuesday evening to repeal a rule that prevents consumers from suing financial institutions — banks and credit card companies, for example.
The Consumer Financial Protection Bureau, which was built out of the financial crisis, created the rule after five years of studying forced arbitration clauses, the fine print inserted by companies to insulate them from lawsuits.
“Congress is standing up for everyday consumers and community banks and credit unions, instead of the trial lawyers, who would have benefited the most from the CFPB’s uninformed and ineffective policy,” said the White House in a press release.
For the 145 million consumers who watched Equifax play fast and loose with their financial data, it may be difficult to see how allowing companies to kill class-action lawsuits is a good thing.
“Tonight’s vote is a giant setback for every consumer in this country,” said Richard Cordray, the CFPB director, in a statement. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”
A popular bill for financial institutions, unpopular for consumers
“The bill was entirely and exclusively supported by the [finance] industry,” said F. Paul Bland, an attorney at Public Justice, a consumer group. “Every group that represents consumers was strongly against the bill.”
Bland listed special interest groups that opposed the bill: armed service member groups, senior citizen groups, civil rights groups. “Lots of polling said both Republicans and Democrats oppose the bill by heavy margins,” said Bland. “This was the Wells Fargo immunity act. It’s essentially a bailout for those companies.”
For Wells Fargo, Equifax, and other companies that behave badly on a major scale, preventing consumers from banding together to seek justice is a major boon that could save these companies from an unknowable amount of damages.
According to Bland, without class-actions, most consumers will not take action. “The argument that individual arbitration is better for consumers is laughable,” he said. “Look at Equifax: 145 million people. Each of them are supposed to separately file an individual arbitration for themselves? How many of them will even be able to find the American Arbitration Association’s website?”
Good lawyers and bad lawyers
The Trump administration said in the statement that the CFPB’s rule would have benefited “trial lawyers” with “frivolous lawsuits.” Putting aside judging whether suing Equifax or Wells Fargo for negligence might be considered “frivolity,” the Trump administration’s statement amounts to a blatant disregard for facts.
In the CFPB’s massive study on arbitrations, the agency examined more than 400 class-action lawsuits. The attorney fees ended up being just 18% of the money recovered on average — a far cry from lawyers-take-all.
Within the Trump administration’s comments about these “trial lawyers,” as the White House calls them, lies a hypocrisy, according to Bland.
“Mike Pence has a view of trial lawyers that basically adds up to: If you’re on the side of the rich and powerful you’re a good lawyer,” Bland said. “If a lawyer is representing an individual person, they’re a ‘trial lawyer’ and a leech on American society.”
Another scandal will happen, and this will bite the Republicans
In the past two years, two large companies have been exposed for bad behavior on a massive scale: Equifax and Wells Fargo.
“Down the road this is going to be a slow-rolling catastrophe for Republicans who voted for this bill,” said Bland. “I don’t think it’s likely the last significant time we’re going to see consumers totally cheated,” referring to Equifax and Wells Fargo
By removing consumers’ rights to class-action lawsuits, companies have less motivation to police their own behavior and play by the rules.
“The next time we discover something like Wells Fargo having a couple million people that they’ve opened phony unauthorized accounts for,” said Bland. “Fifty Senate Republicans and Mike Pence will own 100% of that scandal.”
Over the past few weeks, so many tragic headlines have gripped all of us. This includes the rising death toll and long-term devastation in Puerto Rico. Then, we continue to reel from the horrifying mass-shooting in Las Vegas. All the while, the stock market continues to rise to new highs and the GOP wants to pass a law to strip consumers’ rights to sue. That said, all of us need to stay informed about the many maneuvers that undermine consumer rights. I hope that some of you were listening closely to the words of the former Equifax CEO, Richard Smith. With his feigned concern for consumers, he continues to mislead and confuse. There are so many ways he has done so before the House Financial Services Committee. But I want to focus on one point, where he continues to show that lawmakers and the public should not trust anything he says.
Smith keeps insisting that a “lock” is preferable for customers because, he claims, a lock is very “user-friendly” and less cumbersome. But note: Locks are not the same as freezes. While activating and deactivating a security freeze takes more time. But note that state law governs security freezes, which translates to that consumers are not financially liability when executing a freeze on their credit files. So, if a consumer experiences fraud after activating a security freeze, then the consumer is in the clear. However, if you opt for a credit lock, which Smith promotes repeatedly in his testimony, it is unclear who is liable if/when fraud occurs.
A credit lock seems like an attractive choice, as you can do this by using an app with no PIN. And, it is typically instantaneous. But interestingly, only two credit monitoring bureaus—TransUnion and Experian—offers instant credit locks. Ironically, Equifax says its lock product included in TrustedID Premier requires 24 to 48 hours to process a customer’s request: the same as for a freeze. Also realize that you can’t lock and freeze at the same time. You need to choose one over the other.
Contrary to ex-CEO Smith’s testimony, don’t find comfort in the deceptively simple route of “locking” your credit. Why? Because we represent a number of clients who
have experienced identity theft on a jaw dropping level, after already having locked their files.
DISCLAIMER: By reading this blog post, there is no attorney-client relationship formed. Anything in this article should not be construed as an attorney’s advice. Please seek the advice and counsel of an attorney directly, if you are a victim of identity theft. We welcome your inquiries and will discuss your possible case with you at no cost. Email us at Equifax@Stritmatter.com and visit our Equifax page.
A Seattle law firm is announcing a class action lawsuit against Equifax after a data breach exposed information of 143 million customers.
Posted by KING 5 on Tuesday, September 12, 2017
The Equifax data breach has sent shock waves like we’ve never seen before. Some consumers are only now starting to realize the lasting damage and harm that this breach will have on their lives. Thank you for all of your calls and emails. Please continue to send concerned family, friends, co-workers to us at Equifax@Stritmatter.com. Yes – we have heard from folks from New York, Florida, Virginia, Arizona, California, etc.– a former employee of Equifax, data privacy experts, and reporters who are trying to separate fact from fiction.
I promise to write more soon, as I continue to try to respond personally to as many emails/calls as I can. But please let me address one pesky fiction that occasionally rears its head on corporate-leaning media outlets and individual’s social media posts: A class action against Equifax will address a deep-rooted systemic problem that puts all of us at risk. I cannot speak for all lawyers. But please think twice before rushing to judgement against those of us who are committed to advancing consumer rights. I will point to our work in the massive Anthem data breach litigation: Significantly, as a result of the Anthem settlement, a team of us have helped all affected from the breach by holding Anthem accountable. The agreement includes a court enforced term that will hold Anthem to a more rigorous standard in its safeguarding of Personally Identifiable Information (PII). Anthem will have to spend at least $90 million annually on beefing up its cybersecurity practices for the coming years. At minimum, my clients will get awarded between $5K -$15K each. Then, there are dozens of attorneys like myself who have invested countless hours and dollars (yes – pursuing class actions costs money) and we will not want to retire anytime soon because we love fighting for consumers. BTW: note that federal law has a strict limit on attorneys’ fees.
Thanks to all of you who have contacted us with your stories, questions and concerns. As with our many other clients, we want to help give you a voice and make sure that you recover from this historic data breach.
For the last several months, I have gone mostly dark on this website. Not purposely. But I’ll admit that the absence of posts here was in large part a reaction to two events–one involving my personal life and the other involving our body politic.
All of us should not give up in the face of the breathtaking insolence of leaders beholden to corporations. I refer not only to Congress’ onslaught against consumer privacy and consumer class actions, but also to the daily (sometimes hourly) blitz on individual rights. Admittedly, it’s difficult to keep track as the battles grow more frequent.
In the end, I urge all of you to tune out the immediate noise. Please know that there are attorneys such as myself who are dedicated to the long-term fight for each consumer’s privacy rights. Always remember that our privacy rights are inextricably entwined with my fight to protect the consumer. Yes, each of us love the convenience that Google, Amazon, Apple, and other major corporations offer us. And, some of these corporations are doing a decent job to protect individual privacy rights. But each of us must remain diligent.
Please stay tuned for the following new blog posts:
- Think that a data breach won’t hurt you? Thank again. – I will share with you some eye opening stories of a client, whose personal data was compromised as the result of a massive healthcare data breach. To this day, she continues to deal with identity fraud.
- Experian rubs salt in the wounds of 143+ million breach victims – Don’t accept offers for “free credit monitoring,” from Equifax. In addition to giving up your valuable Personal Information, you will also give you your right to sue Equifax. If you think that arbitration sounds fair enough, you are in for a rude awakening.
I read an interesting post earlier today on one of WSJ’s blogs. It admitted that the pendulum has swung in favor of consumers in data breach cases. While defendant companies continue to get cases bounced on the flawed premise that no its data breach victims have not suffered any “actual harm,” more courts are sympathetic to the consumers.
Two big cases come to mind. One is the Wyndham data breach case (FTC brought the action). This past August, the Third U.S. Federal Circuit Court ruled against Wyndham, finding that the FTC can take action against organizations that adhered to poor IT security practices.
Several weeks before Wyndham was decided, the U.S. Court of Appeals for the Seventh Circuit reinstated a data breach case against Neiman Marcus. Why? It found that the risk of harm was enough to establish standing. The 350,000 affected customers “should not have to wait until hackers commit identity theft or credit-card fraud in order to give the class standing,” the court ruled.
The Seventh Circuit, however, reinstated both types of claims – those who had incurred expenses tied to the Neiman Marcus hack, and those who feared identity theft in the future. Chief Judge Diane Wood pointed out that a breach victim’s fear of hackers in the future is not too “speculative” for a day in court.
Wood asks: “Why else [other than to cause harm] would hackers break into a store’s database and steal consumers’ private information?”
WA AG Ferguson urges T-Mobile customers “…to take immediate steps to determine whether you have been a victim of ID theft, and to protect your information going forward,” he said in a statement offering advice to affected consumers.
According to T-Mobile and the credit-reporting company Experian, the breach compromised data that was used by T-Mobile to run credit checks of individuals who applied for T-Mobile services from Sept. 1, 2013, through Sept. 16, 2015. Unauthorized access was gained to Experian’s servers, exposing data including name, address, birthdate, Social Security number, other ID numbers (such as driver’s license, military ID, or passport numbers), and additional information used in T-Mobile’s credit assessment. An estimated 15 million consumers nationwide may have had their data compromised. Experian plans to notify affected consumers.
The Attorney General’s Office offers affected consumers the following advice to guard against identity theft.
- Monitor your credit reports. You are entitled to one free credit report every 12 monthsfrom each of the three nationwide credit bureaus (Equifax, Experian and Trans Union). You can request one free report from a different bureau every four months to monitor throughout the year.
- Consider placing a “fraud alert” with each of the three credit bureaus. An alert does not block potential new credit, but places a comment on your history. Creditors should contact you prior to opening a new account.
- Consider placing a “security freeze” with each of the three credit bureaus to prohibit the release of any information from your reports. A security freeze can help prevent identity theft since most businesses will not open credit accounts without checking a consumer’s credit history first. This increases the likelihood that if an ID thief tries to open a new account under your name, they will be denied.
- Beware of unsolicited calls or emails offering credit monitoring or identity theft services. Consumers should never provide their Social Security number, credit card numbers or other personal information in response to unsolicited emails or calls.
If you find unexplained activity on your credit reports, or if you believe you are the victim of identity theft, check these resources for information on steps you can take to protect yourself.
- Review the Attorney General’s ID theft website.
- Review the Federal Trade Commission’s ID theft website.
This entry is republished from an Oct. 9, 2015 blog entry at http://nw-injurylawyers.com/.