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Consumer Law the Basics May 14, 2009

Scott Maurer Katharine & eor!e "#e$an%er Community Law Center Santa C#ara &ni'ersity Schoo# o( Law )hone* +40,- 2,,./000 1irect Line* +40,- 2,,.02/2 +attorneys on#y 3#easee.mai# * smaurer4scu5e%u

6a7#e o( Contents

Consumers Le!a# 8eme%ies "ct 5555555555555555555555555555555555555555555555555555555555555555555555555555555555555 Ca#5 9ehic#e Co%e a%'ertisin! 3ro'isions 5555555555555555555555555555555555555555555555555555555555555555555555 Ca#5 Ci'i# Co%e :1;025555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 "utomo7i#e Sa#es <inance "ct555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 6ruth in Len%in! "ct555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 8e3ossessions an% 1e(iciencies5555555555555555555555555555555555555555555555555555555555555555555555555555555555555 Leasin! 555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 Sources o( =arranty Law555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 1e7t Co##ection 1e(ense5555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 <air 1e7t Co##ection )ro'isions55555555555555555555555555555555555555555555555555555555555555555555555555555555555555 >%entity 6he(t 55555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 <air Cre%it 8e3ortin!5555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 Co.Si!ner )rotections 555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 )ossi7#e 1e(enses to Cre%it Car% 1e7ts an% Char!es 555555555555555555555555555555555555555555555555555555 6imeshare issues 55555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 6owin! c#aims 555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 Coo#in! ?(( )erio%s555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555555 )ro Se @o Contact Letters C#ient Au%!ment )roo(BBBBBBBBBBBBB5 0; "tty re3 #etter on 7eha#( o( Cu%!ment 3roo( c#ient BBBBBBBBBBBBBBB55 @o Contact Letter (rom attorney %e7t %is3ute% BBBBBBBBBBBBBBBB )ro Se no contact #etter %e7t %is3ute% BBBBBBBBBBBBBBBBBBBB55 1eman% #etter (or a cease communication 'io#ation BBBBBBBBBBBBBBBB "ttorney #etter on 7eha#( o( i%entity the(t 'ictim BBBBBBBBBBBBBBB5

2 0 4.; ;.9 10.11 12.10 14 14.12 12.1/ 1/.21 21 22.22 2; 2; 2; 2;.2/ 2,.02 00. 0/.0, 09 40 41

42.40

>ntro%uction =hat is a consumer caseD Most o( the statutes re(erence% here ha'e in common that there must 7e a Econsumer transactionF5 > wi## use that term as shorthan% (or the (o##owin!* G 6y3ica##y reHuires that an in%i'i%ua# enter into a transaction +3urchase, #oan, #ease, etc53rimari#y (or personal, family or household use5 G I$c#u%es transactions (or commercia# use G enera##y inc#u%es items that a consumer uses in conCunction with her Co7 J car use% main#y to !o to an% (rom worK is a consumer 3urchase J uni(orm 3urchase% 7y em3#oyee is a consumer 3urchase I$am3#es* G Aoan worKs (or a #an%sca3in! ser'ice an% 7uys a car to !et to an% (rom worK5 >t is a consumer 3urchase G Aoan is the so#e 3ro3rietor o( AoanFs Lan%sca3in! Ser'ice an% 3urchases a trucK 3rimari#y (or use in the 7usiness5 >t is @?6 a consumer 3urchase5 Most o( the statutes re(erence% here a#so reHuire that the se##er L #en%er 7e Ein the 7usinessF o( se##in! or #en%in! +checK each statute to see i( there are 3articu#ar numeric reHuirements-, so that transactions 7etween 3ri'ate 3arties are not co'ere%5 So when > re(er to a statute as co'erin! Econsumer transactionsF, un#ess otherwise s3eci(ie%, it means that* 1- the in%i'i%ua# 7ou!ht +7orrowe%, #ease%, etc- (or 3ersona# as o33ose% to 7usiness use 2- the other 3arty to the transaction was Ein the 7usinessF & 0- the other 3arty must 7e a 3ri'ate +non.!o'ernmenta#- 3arty

Consumers Le!a# 8eme%ies "ct, +CL8"- Ca#5 Ci'i# Co%e :1/20 et seq. G a33#ies to most Econsumer transactionsF (or !oo%s or ser'icesM unc#ear whether the se##er must 7e Ein the 7usinessF G e$c#u%es rea# 3ro3erty sa#e an% construction contracts G enumerates 20 3rohi7ite% 3ractices at Ca#5 Ci'i# Co%e :1//0+a-+1.20-5 6he most !enera##y a33#ica7#e L common#y use% o( which are 3rohi7itions on* N re3resentin! that !oo%s or ser'ices ha'e 5 55characteristics 55OorP5 7ene(its 55 55Huantities which they %o not ha'e 5 5 55 +a-+2N a%'ertisin! !oo%s or ser'ices with intent not to se## them as a%'ertise% +a-+9N re3resentin! that a transaction con(ers or in'o#'es ri!hts, reme%ies, or o7#i!ations which it %oes not ha'e or in'o#'e, or which are 3rohi7ite% 7y #aw5 +a-+14CL8" 8eme%ies Ci'i# Co%e :1/,0+a- 3ro'i%es (or* G actua# %ama!esN G inCuncti'e re#ie( G restitution +an% 3resuma7#y rescissionG 3uniti'e %ama!esN G a 3ena#ty o( u3 to Q2,000 i( the 'ictim was a senior citiRen or %isa7#e% 3erson u3on a (in%in! o( one o( more a!!ra'atin! (actors s3eci(ie% in Ca#5 CC :0042+7G e((ecti'e#y one.way attorney (ees 3ro'ision (or consumer N in or%er to 7e e#i!i7#e (or a %ama!es awar%, the consumer +or her attorney- must sen% the se##er a #etter %escri7in! the a##e!e% 'io#ations an% %eman%in! recti(ication5 6he se##er has thirty %ays (rom recei3t o( the #etter to maKe recti(ication, a(ter which the consumer can institute an action (or %ama!es Ci'i# Co%e :1/,1 s3eci(ica##y authoriRes c#ass actions

LI "L >SS&IS "8>S>@ <8?M M?6?8 9IS>CLI 68"@S"C6>?@S

+7ut not necessari#y #imite% to 'ehic#e transactionsADVERTISING AND SOLICITATION S3eci(ic to motor 'ehic#e sa#es* Ca#5 9ehic#e Co%e ::11/10.11/1051 contain e$tensi'e re!u#ation o( auto %ea#er a%'ertisin!5 6he most he#3(u# 3ro'isions are* :11/1051+e-, which 3ro'i%es that a%'ertise% 'ehic#es sha## 7e so#% at or 7e#ow the a%'ertise% tota# 3rice 555 re!ar%#ess o( whether the 3urchaser has Know#e%!e o( the a%'ertise% tota# 3rice :11/10+a-, which 3ro'i%es 7roa% 3rohi7itions a!ainst any ty3e o( untrue o( mis#ea%in! a%'ertisin! G :11/10+K-, which 3rohi7its mis#ea%in! Eno %own 3aymentF a%'ertisin! G :11/1051+i-, which 3rohi7its a%'ertisin! 'ehic#es with the intent not to su33#y reasona7#y e$3ecta7#e %eman%, un#ess the a%'ertisement %isc#ose the num7er o( 'ehic#e in stocK at the a%'ertise% 3rice G :11/1051+H-, which 3rohi7its se##in! 'ehic#es o'er the MS8), un#ess the %ea#er a((i$es a su33#ementa# 3rice sticKer in com3#iance with the reHuirements o( that su7section

Since Au#y 1, 200;, Ca#5 9ehic#e Co%e :11/1051, has 3rohi7ite% %ea#ers (rom usin! the term certi(ie% with res3ect to a use% car un%er a num7er o( circumstances inc#u%in! 7ut not #imite% to that the %ea#er Knows or shou#% Know that* G the 'ehic#e is so#% E"S >SF or the %ea#er %isc#aims any warranties o( merchanta7i#ity G the o%ometer is not accurate G the 'ehic#e is a #emon #aw 7uy.7acK G the tit#e has 7een 7ran%e% as Esa#'a!e%F, E(#oo%F, etc5 G the 'ehic#e has (rame %ama!e @ot s3eci(ic to motor 'ehic#e sa#es* Ca#5 Ci'i# Co%e :1//0+a-+9- 3rohi7its a%'ertisin! !oo%s or ser'ices with intent not to se## them as a%'ertise%5

Ca#5 Ci'i# Co%e :1;02 "33#ies to the (o##owin! ty3es o( Econsumer transactionsF* G retai# insta##ment sa#es o( !oo%s or ser'ices to consumers 7y retai# se##ers G transactions co'ere% 7y the "utomo7i#e Sa#es <inance "ct +see 7e#owG transactions co'ere% 7y the 9ehic#e Leasin! "ct +see 7e#owG unsecure% consumer #oans G consumer #oans secure% 7y somethin! other than rea# 3ro3erty G #eases o( %we##in! units (or #on!er than one month G mort!a!e #oans ne!otiate% 7y in%e3en%ent 7roKers G attorney (ee a!reements G re'erse mort!a!es G (orec#osure consu#tin! contracts G 6he reHuirements o( :1;02 are tri!!ere% i( the ne!otiations were con%ucte% in one o( (i'e #an!ua!es N S3anish N 9ietnamese N Korean N Chinese N 6a!a#o! @?6I* <or contracts consummate% 3rior to Au#y 1, 2004, the only co'ere% #an!ua!e is S3anish G >n or%er to tri!!er :1;02Ts reHuirements, the ne!otiations must ha'e taKen 3#ace 3rimari#y in one o( (i'e #an!ua!es N no case #aw on the meanin! o( E3rimari#yF G >( the %ea#ershi3 3ro'i%es a trans#ator, the ne!otiations wi## ha'e 7een %eeme% to ha'e taKen 3#ace in the consumerFs #an!ua!e G >( the consumer 3ro'i%es hisLher own trans#ator, the ne!otiations wi## ha'e 7een %eeme% to ha'e taKen 3#ace in In!#ish N minor trans#ator e$ce3tion +CC :1;02+h-N incom3etent trans#ator e$ce3tion +CC :1;02+h-6he 3rimary o7#i!ation tri!!ere% 7y 1;02 is the reHuirement that the consumer 7e !i'en a trans#ation in hisLher #an!ua!e prior to e$ecutin! the In!#ish #an!ua!e contract5 G timin! is crucia#, 7ut trans#ation 3ro'i%e% a(ter si!nin! 3resents 3roo( 3ro7#ems G issue re!ar%in! E"cKnow#e%!ement o( 8ecei3tF 4

G )oor#y written S3anish te$t on "cKnow#e%!ement rea%s* =ith antece%ence o( the si!nature o( the co3y in In!#ish that was com3#ete#y (i##e% out 7e(ore our contract or a!reement, the c#ient acKnow#e%!es the recei3t o( this contract o( a!reement trans#ate% to the S3anish #an!ua!e, as reHuire% 7y #aw5 6here(ore, this so.ca##e% acKnow#e%!ement shou#% not 7e treate% as %eterminati'e o( the issue5 =hat %ocuments must 7e 3ro'i%e% to the consumerD G the statute states the %ocument creatin! the ri!hts an% o7#i!ations o( the 3arties an% inc#u%es any su7seHuent %ocument maKin! su7stantia# chan!es in the ri!hts an% o7#i!ations o( the 3arties5 See Ci'i# Co%e :1;02+!G sa#es s#i3s, month#y 7i##in! statements, etc5 are e$3ress#y excluded G a rare case inter3retin! CC :1;02 he#% that a @otice o( >ntent to 1is3ose o( Motor 9ehic#e +see 7e#ow- is a ty3e o( %ocument (or which a trans#ation must 7e 3ro'i%e%5 8eyes '5 Su3erior Court, 1,, Ca#5"3350% 129 +19,1-5 G (or use% cars, a BuyerFs ui%e is 3art o( the contract, an% there(ore a trans#ation shou#% a#so 7e 3ro'i%e% +too see a BuyerFs ui%e !o here* htt3*LLa!o5mo5!o'LConsumerCornerLencyc#o3e%iaLim!Lsam3#e.use%.car.7uyin!.!ui%e5!i( 1oes a trans#ation o( a (orm contract with the 3rices, interest rates, an% other sa#e.s3eci(ic terms #e(t 7#anK satis(y the reHuirements o( the "ctD G i( the contract was consummate% on or a(ter Au#y 1, 2004, the answer is 3retty c#ear#y EnoF . statute amen%e% to reHuire a trans#ation o( e'ery term an% con%ition in that contract or a!reement5 :1;02+i- re!ar%in! EretentionF o( numera#s was a#so a%%e%5 G (or contracts consummate% 3rior to Au#y 1, 2004, itFs more o( a c#ose ca##, 7ut sti## a 'ia7#e case 6here is an a%%itiona# reHuirement (or the (o##owin! su7set o( 1;02 transactions* G retai# insta##ment sa#es o( !oo%s or ser'ices to consumers 7y retai# se##ers G transactions co'ere% 7y the "utomo7i#e Sa#es <inance "ct +see 7e#owG transactions co'ere% 7y the 9ehic#e Leasin! "ct +see 7e#owG unsecure% consumer #oans G consumer #oans secure% 7y somethin! other than rea# 3ro3erty <or these ty3es o( transactions, the se##erL#en%er must a#so 3ost a notice in any o( the a7o'e. s3eci(ie% #an!ua!es in which the se##erL#en%er %oes 7usiness5 6he notice must 7e cons3icuous#y %is3#aye%5 6he notice must state that consumers ha'e a ri!ht to a trans#ation o( the In!#ish #an!ua!e contract5 See CC :1;02+(-5 8eme%ies (or Ci'i# Co%e :1;02 cases* 2

G 8escission +CC :1;02+K-G >( the contract 3ro'i%es (or attorneys (ees (or the en(orcement o( the contract +as is the case in motor 'ehic#e contracts-, attorneys (ees wi## 7e a'ai#a7#e un%er CC :1/1/ G 6hese cases are !enera##y a33ea#in! to 3ri'ate consumer attorneys NNNNNNNNNNNNNNNNNNNN Automobile Sales Finance Act +E"S<"F, Ci'i# Co%e :29,1 et seq5M a5K5a E8ees.Le'erin!FCo'era!e* G must 7e a Econsumer transactionF G on#y a33#ies to (inance% sa#es o( motor 'ehic#es N motor homes are co'ere%, mo7i#e homes an% trai#ers are not G the se##er must arran!e or assist in the (inancin! o( the 'ehic#e5 N i( a consumer in%e3en%ent#y o7tains her own (inancin! +such as, 7y !oin! to her cre%it union-, such a #oan is @?6 co'ere% 6he most common sa#e.re#ate% 'io#ations o( the "S<" stem (rom the con(#ictin! interests o( the %ea#ers an% #en%er.assi!nees5 LI@1I8FS >@6I8IS6S G that the consumer ha'e 3ai% a si!ni(icant +Q2000 or so- %own 3ayment G that the 3rimary %ri'er has an acce3ta7#e cre%it score G that the consumer ha'e an income su((icient to maKe the month#y 3ayments Ci'i# Co%e :29,159* the ?ne 1ocument 8u#e I'ery con%itiona# sa#e contract su7Cect to this cha3ter sha## 5 5 5 contain in a sin!#e %ocument a## o( the a!reements o( the 7uyer an% se##er with res3ect to the tota# cost an% the terms o( 3ayment (or the motor 'ehic#e, inc#u%in! any 3romissory notes or any other e'i%ences o( in%e7te%ness5 6his ru#e is most common#y 'io#ate% when the 3arties maKe a!reements +which may or may not 7e re(#ecte% in se3arate %ocuments- which contra%ict the terms o( the 3urchase contract5 6he two (orms o( Ee$tra.contractua#F a!reements most common#y (oun% are* G a!reements to a##ow the consumer to %e(er a## or 3art o( her %own 3ayment G a!reements to tra%e.in 'ehic#es with ne!ati'e eHuity ; 1I"LI8FS >@6I8IS6 SILL 6SI C?@68"C6 "6 "LL C?S6S

1e(erre% 1own )ayment "!reements 6here is nothin! >@SI8I@6LU i##e!a# a7out %e(erre% %own 3ayment a!reements5 >n (act, they are contem3#ate% 7y the "S<" an% the stan%ar% car contract5 +See CC :29,2+a-+;-+1-M #ine ;515 on contract-5 But some (inance com3anies a33arent#y shy away (rom 3urchasin! contracts which %isc#ose the e$istence o( a %e(erre% %own 3ayment a!reement +this is 3articu#ar#y true (or consumers with #ow cre%it scores-5 6hey are a33arent#y concerne% with the consumer ha'in! mu#ti3#e 3ayments o7#i!ations in the (irst months o( the contract5 =hen the 3arties a!ree to a %e(erre% %own 3ayment arran!ement, 7ut that arran!ement is not re(#ecte% in the contract +with the %own 3ayment 7ein! #iste% as EcashF-, the %ea#er 'io#ates the Eone %ocument ru#eF, CC :29,159 an% CC :29,2+a-+;-+1-5 1e(erre% %own 3ayment a!reements can 7e* G in the (orm o( ESo#% ChecK+s- "!reementsF G se3arate written a!reements or 3romissory notes G mere#y ora# a!reements G in some cases, the consumer 3ro'i%es the %ea#er with 3ost.%ate% checKs 8e#e'ant case #aw Bratta '5 Caruso, 1;; Ca#5"3352% ;;1, ;;0 +192,-M Si!hway 6rai#er o( Ca#i(ornia, >nc5 '5 <ranKe#, 220 Ca#5"3352% /00 +19;/- & Krou3a '5 Sunrise <or%, // Ca#5 "335 4th ,02 +1999- +9L" case-5 8eme%ies (or 'io#ations o( CC ::29,159 & 29,2+a-+;-+1G essentia##y rescission* see CC :29,0 G attorneys (ees an% costs* see CC :29,054 6hese cases may 7e attracti'e to 3ri'ate attorneys, %e3en%in! on other issues in the case @e!ati'e IHuity not 1isc#ose% on <ace o( Contract ?n a stan%ar% Ca#i(ornia contract, a tra%e.in is a#ways consi%ere% 3art o( the E%own 3aymentF5 =hen a consumer owes more on his tra%e.in that it is worth, he starts with a Ene!ati'e %own 3aymentF5 &n#ess the consumer has enou!h cash to o'ercome the ne!ati'e eHuity 3#us another Q2,000 or so, it wi## 7e %i((icu#t (or the %ea#ershi3 to !et the contract (inance%5 Many %ea#ers res3on% 7y arti(icia##y in(#atin! the 'a#ue o( the tra%e.in +ca##e% an Eo'er.a##owanceF- so that the net tra%e.in is Reroe%5 6he %ea#er wi## then increase the sa#es 3rice o( the 3urchase 'ehic#e 7y the amount o( the o'er.a##owance5

@e!ati'e IHuity not 1isc#ose% on <ace o( Contract 6he "utomo7i#e Sa#es <inance "ct contem3#ate% that ne!ati'e eHuity wi## 7e %isc#ose% as such on the contract, rather than hi%%en in the 3rice o( the 3urchase 'ehic#e5 +See CC ::29,2+a-+1-+<. an% 29,2+a-+;-+", C & -5 =hi#e at (irst !#ance it wou#% a33ear that the consumer is 3ayin! the /

same 3rice either way, a consumer is actua##y 3ena#iRe% when ne!ati'e eHuity is ro##e% into the 3urchase 3rice5 6his is so 7ecause ta$es an% #icense (ees are not assesse% on ne!ati'e eHuity, 7ut they are 7oth assesse% on the (u## 3rice o( the 3urchase 'ehic#e5 6he 3ena#ty amounts to rou!h#y 9.10V o( the amount o( the o'er a##owance which is ro##e% into the 3urchase 3rice5 6his 3ractice 'io#ates the a7o'e.re(erence% co%e sections, an% 3ossi7#y the one %ocument ru#e* CC :29,1595 6hom3son '5 10,000 89 Sa#es, >nc5, 100 Ca#5 "335 4th 920 +20028eme%ies (or 'io#ations o( CC ::29,2+a-+1-+<. - an% 29,2+a-+;-+", C & G essentia##y rescission* see CC :29,0 G attorneys (ees an% costs* see CC :29,054 6hese cases are attracti'e to 3ri'ate attorneys5 Car BuyerFs Bi## o( 8i!hts Since Au#y 1, 200;, the "utomo7i#e Sa#es <inance "ct cou3#e% with 'arious 9ehic#e Co%e sections has reHuire% %ea#ers to o((er consumers a contract cance##ation o3tion when se##in! a use% 'ehic#e at #ess than Q40,0005 Ca#5 Ci'i# :29,2+r-M Ca#5 9ehic#e :11/105215 6he %ea#er is 3ermitte% to char!e the consumer (or the o3tion5 6he 3rice o( the o3tion is ca33e% %e3en%in! on the 3rice o( the 'ehic#e, an% can ran!e (rom Q/2 to Q4005 >( the consumer actua##y e$ercises the o3tion, the %ea#er can then char!e the consumer an a%%itiona# restocKin! (ee o( 7etween Q1/2 an% Q200, 7ut then must re(un% to the consumer the 3rice o( the o3tion contract +an% o( course the %ea#er must return the consumerFs %own 3ayment an% any tra%e.in 'ehic#e-5 "nother new +/L1L0;- 3ro'ision reHuires a %ea#er to 3ro'i%e to the consumer, 3rior to consummation, a %ocument showin! the tota# char!e they are 3ayin! (or s3eci(ie% accessories +ser'ice contracts, rust 3rotection, etc- as we## as what their month#y 3ayment wou#% 7e with an% without the accessories5 Ca#5 Ci'i# Co%e :29,2525 6his 3ro'ision is meant to en% the (ormer#y wi%es3rea% 3ractice o( E3ayment 3acKin!F +see 35 11-5 )rior to Au#y 1, 200;, car %ea#ers o(ten recei'e% a Kin% o( E7onusF (rom (inance com3anies (or !ettin! the consumer to si!n a contract at an interest rate hi!her than the 7est rate the consumer Hua#i(ie% (or +o(ten ca##e% a E7uy rateF-5 >n%ustry re(ers to this E7onusF as a yie#% s3rea% 3remium5 &n%er new +/L1L0;- #aw, these 3remiums are ca33e% at 252 3ercent (or contracts ca##in! (or ;0 3ayments or #ess, an% are ca33e% at 250 3ercent (or contracts ca##in! (or more than ;0 3ayments5 Ca#5 Ci'i# :29,25105 >t is unc#ear how a consumer a%'ocate can 3ro'e that this 3ro'ision was 'io#ate%5 S3ot 1e#i'eryL yo.yo sa#es 6he stan%ar% (orm contract use% in Ca#i(ornia a##ows the %ea#er to maKe the contract = s en(orcea7i#ity contin!ent u3on the %ea#er= s a7i#ity to (in% a thir% 3arty #en%er which wi## taKe assi!nment o( the contact5 Such > contin!ent sa#es= are e$3ress#y 3ermitte% 7y the "utomo7i#e Sa#es <inance "ct +see Ca#i(ornia Ci'i# Co%e ' 29,252+%-+2--5 =hen a %ea#er is una7#e to o7tain (inancin! u3on the terms state% in the contract with the consumer, the transaction is re(erre% to as a > s3ot %e#i'ery= +the > in%ustry= term- or a > yo.yo sa#e= +as consumer a%'ocates ten% to %escri7e such transactions-5 =hen a %ea#ershi3 honest#y ,

7e#ie'es that it can (in% a thir% 3arty (inance com3any 7ut cannot %o so, the %ea#ershi3 acts within its ri!hts i( it 3rom3t#y %eman%s the return o( the 'ehic#e, 3ro'i%e% that it com3#ies with Ca#i(ornia Ci'i# Co%e ' 29,252+%-+2- +that is, 3ro'i%e% that the %ea#ershi3 ten%ers the consumer= s tra%e.in an%Lor %own3ayment 7acK to the consumer without %eman%-5 ?n the other han%, the contin!ent nature o( the contract 3ro'i%es (o%%er (or a num7er o( un(air an% %ece3ti'e %ea#er 3ractices5 >( the %ea#er re(uses to ten%er 7acK a## consi%eration the consumer has 3ro'i%e% when (inancin! cannot 7e o7taine%, the %ea#er 'io#ates Ci'i# Co%e ' 29,252+%-+2-5 @o reme%y is set (orth (or such a 'io#ation un%er the "S<"5 But the CL8" 3rohi7its Ere3resentin! that a transaction55 5 5in'o#'es 5 5 5 5o7#i!ations which it %oes not ha'e or in'o#'e, or which are 3rohi7ite% 7y #aw5 Ca#5 Ci'i# Co%e :1//0+a-+14-5 So such a scenario is 3ro7a7#y 7est treate% as a CL8" 'io#ation5 >n es3ecia##y e!re!ious cases, the %ea#er te##s the consumer that their tra%e.in has a#rea%y 7een so#%5 Such re3resentations ty3ica##y !o han%.in.han% with the %ea#er= s attem3t to !et the consumer to 7uy a %i((erent 'ehic#e, or to si!n a new contract to 3urchase the same 'ehic#e5 6he secon% contract 3resente% to the consumer near#y a#ways contains terms #ess (a'ora7#e to the consumer* the ")8 may 7e raise%, the %own 3ayment may 7e raise%, the month#y 3ayment may 7e raise%, the term o( the #oan may 7e e$ten%e% +resu#tin! in hi!her (inance char!es-, the consumer may 7e reHuire% to in'o#'e a co.si!ner, or any an% a## o( the a7o'e5 6he most e!re!ious (orm o( yo.yo sa#e occurs when the %ea#er %e#i'ers a 'ehic#e 3ursuant to a contract that it Knows wi## not 7e (inance%5 6he %ea#er %oes this with the a33arent intent to ca## the consumer 7acK in to si!n a #ess (a'ora7#e contract at some %ate in the (uture5 Courts ha'e reco!niRe% the 3otentia# (or a7use associate% with yo.yo transaction5 8ucKer '5 Sheehy "#e$an%ria, 22, <5Su3352% /11, /1,./19 +I5159a5 2002-5 Many yo.yo sa#es thus resu#t in mu#ti3#e contracts5 >t is (air#y stan%ar% 3ractice (or the %ea#er to Kee3 the %ate o( the (irst contract on any su7seHuent contracts5 6his E7acK.%atin!F 3roce%ure can #ea% to 6ruth in Len%in! "ct 'io#ations5

A Brie Loo! at TILA"

6he <e%era# 6ruth in Len%in! "ct +6>L"-, 12 &5S5C5 :1;01 et seq G Econsumer transactionF reHuirement G a33#ies to most consumer cre%it transactions G 'irtua##y a## consumer mort!a!e #oans G other c#ose%.en% consumer #oans where the #oan amount is Q22,000 or #ess G o3en.en% cre%it arran!ements +cre%it car%s, etcG i%ea is to 3romote the in(orme% use o( cre%it an% 3romote com3arison sho33in! 7y reHuirin! uni(orm %isc#osures which must 7e 3ro'i%e% 3re.consummation <inance Char!e G inc#u%es not on#y interest, 7ut any other reHuire% char!e which is im3ose% in cre%it transactions 7ut not in cash transactions +un#ess s3eci(ica##y e$em3te% 7y #aw (rom such treatment- +see 12 &5S5C5 :1;02+a--5 G e$am3#e* cre%it a33#ication (ee "nnua# )ercenta!e 8ate G a measure o( how much (inance char!es are 3ai% on a certain #oan amount +Eamount (inance%F- o'er a 3erio% o( time G annua# 3ercenta!e rates must 7e accurate within 1L, o( 1V +5122V- +12 &5S5C5 :1;0;+c-G (inance char!e %isc#osures must 7e accurate within Q100 +12 &5S5C5 :1;02+(-+1Most common 6>L" 'io#ations in car transactions G @e!ati'e eHuity ro##.ins N See 6hom3son '5 10,000 89 Sa#es, >nc5, 100 Ca#5 "335 4th 920 +2002-M )arra '5 Bor!man <or%, 2001 &5S51ist5LIW>S +=515Mich5 2001-M )erson '5 Courtesy Motors, 2001 &5S51ist5LIW>S 422; +=515 Mich, 2001-5 G BacK.%atin! a secon% or thir% sa#es contract in a yo.yo sa#e to the %ate o( the (irst contract, which #ea%s to an o'er.state% ")85 6his 3ractices 'io#ates 6>L" i( the ")8 is o(( 7y more than 5122V5 N See 8ucKer '5 Sheehy "#e$an%ria, 22, <5Su3352% /11 +I5159a5 2002-5 G <ai#in! to 3ro'i%e written %isc#osures to a consumer 3rior to consummation in a (orm they can Kee3 N C"9I"6* >tFs a terri7#y %i((icu#t 'io#ation to 3ro'e5 See S3earman '5 6om =oo% )ontiac. MC, 012 <50% ,4, +/th Cir5 200210

" note a7out s3urious o3en.en% cre%it 6here are two Kin%s o( %isc#osures contem3#ate% 7y 6>L"* G Ec#ose%.en% %isc#osuresF, %esi!ne% (or a sin!#e e$tension o( cre%it, such as a car #oan G Eo3en.en% %isc#osuresF, %esi!ne% (or a #ine o( cre%it which wi## 7e use% many times, such as a cre%it car% a!reement Some #en%ers wou#% 3re(er to !i'e o3en.en% %isc#osures in a transaction that is #iKe#y a one.time e$tension o( cre%it5 &n#ess the #en%er can Ereasona7#y contem3#ate% re3eate% transactionsF, such a Emis.%isc#osureF 'io#ates 6>L" 6>L" 8eme%ies +see :1;40G any actua# %ama!es G a statutory %ama!e amount, which is ca33e% at +an% ty3ica##y amounts to- Q1,000 G one.way attorneys (ees G s3eci(ica##y 3ro'i%es (or c#ass actions NNNNNNNNNNNNNNNN

B"CK 6? M?6?8 9IS>CLIS

)ayment )acKin! )ayment 3acKin! is +or was- a so3histicate% (rau%u#ent scheme which is a#ways un#aw(u#, 7ut is o(ten 'ery %i((icu#t to 3ro'e5 <irst, the %ea#er !ets the consumer to a!ree to Key terms such as the sa#es 3rice o( the 3urchase 'ehic#e, the amount o( cash to 7e 3ai% %own, the 'a#ue o( any tra%e.in 'ehic#e, the term o( the #oan, an% the "5)585 6he %ea#er then 3#u!s those num7ers into his com3uter to ca#cu#ate the month#y 3ayment5 Sowe'er, the %ea#er then Huotes the consumer an in(#ate% or E3acKe%F 3ayment5 ?nce the consumer has a!ree% to a E3acKe%F 3ayment, a %ea#ershi3 can then o((er to se## a%%itiona# items to the consumer at a su33ose% #ow cost o( Cust a (ew %o##ars a month5 6hese a%%itiona# items are usua##y EaccessoriesF such as Ethe(t 3rotection %e'icesF or sea#ant 3ro%ucts, or (or ser'ice contracts5 >n (act, the items are actua##y much more e$3ensi'e than the Huote% 3rice, 7ut a consumer without a ca#cu#ator may not 7e a7#e to rea#iRe this (act5 Xuotin! the consumer an in(#ate% month#y 3ayment (or the car without the Ee$trasF an%Lor mis#ea%in! the consumer a7out the month#y cost o( the Ee$traF 3ro%ucts wi## 'io#ate one or more o( the (o##owin! sections o( the CL8"* G Ca#5 Ci'i# Co%e ::1//0+a-+2, 9, 10, 14 & 1;>t is not #iKe#y that any %ea#er wou#% attem3t this 3ractice with res3ect to a contract consummate% on or a(ter Au#y 1, 200;5

Re#ossessions an$ De iciencies

11

Many consumers wi## come to seeK a%'ice re!ar%in! a car transaction on#y a(ter the 'ehic#e has 7een re3ossesse%, (reHuent#y at the time when they ha'e 7een sue% (or a %e(iciency5 I'ery as3ect o( the motor 'ehic#e transaction shou#% 7e e$amine% at this 3oint, since any %e(ense to the contract wi## 7e a %e(ense to the %e(iciency5 >n a%%ition to the 3otentia# c#aims an% %e(enses #iste% a7o'e, the consumer may ha'e c#aims an% %e(enses arisin! (rom the re3ossession an%Lor resa#e o( the 'ehic#e5 6he 8e3o >tse#( =hi#e most re3ossessions occur in the mi%%#e o( the ni!ht with no 3ersona# contact an% no tres3ass, it is worth asKin! the consumer re!ar%in! the e'ent5 " secure% cre%itor may not 7reach the 3eace in e$ercisin! se#(.he#35 Ca#5 &CC :9;09+7+2-5 " 7reach o( the 3eace is not #imite% to a 3hysica# con(rontation5 >( any 3erson 'er7a##y o7Cects to the re3ossession, it is a 7reach o( the 3eace (or the re3ossessor to !o (orwar%, un#ess the o7Cection is with%rawn5 +See, e5!5 So##i7ush '5 <MCC, 1/9 =is521 /99 +1990--5 " 7reach o( the 3eace !i'es rise to a c#aim (or con'ersion5 " secure% cre%itor cannot tres3ass in or%er to e$ercise se#(.he#35 "ny 3hysica# 7reaKin!, such as into a c#ose% !ara!e or c#i33in! the #ocK on a !ate, constitutes a 7reach o( the 3eace5 +See, e5!5 B#oomHuist '5 <irst @ationa# BanK o( I#K 8i'er, 0/, @5=52% ,1 +Minn5 19,2-M Sen%erson '5 Sec5 )ac5 @atF# BanK, /2 Ca#5"3350% /;4 +19//--5 "!ain, a 7reach o( the 3eace !i'es rise to a c#aim (or con'ersion5 8e3o ManFs 1uty to Sen% @otice re )ossessions in 9ehic#e Consumers o(ten #ea'e 'a#ua7#e 3ro3erty in their motor 'ehic#e, 7ein! unaware that the 'ehic#e is a7out to 7e re3ossesse%5 8e3o men ha'e a %uty un%er Bus5 & )ro(5 Co%e :: /20/59.510 to 3ro'i%e notice to the consumers that they ha'e this 3ro3erty 3rior to %is3osin! o( it5 6hese notices are rare#y sent5 "#thou!h there is no 3ri'ate ri!ht o( action un%er the B&) Co%e sections, consumers cou#% seeK com3ensation throu!h the &n(air Com3etition Law, Bus5 & )ro(5 Co%e :1/200 et seq5 1is3osin! o( the 3ro3erty cou#% a#so constitute a 'io#ation o( the 8osentha# "ct +see 7e#ow-5 BacK to the "S<"* 8eHuire% @otice o( >ntent to 1is3ose +@?>Contrary to many consumersF e$3ectations, there is no reHuirement o( notice o( any Kin% 3rior to re3ossession5 Sowe'er, the (inance com3any must 3ro'i%e notice to the consumer o( its intent +@?>- to %is3ose +rese##- the 'ehic#e G within ;0 %ays o( the re3ossession G at #east 12 %ays 3rior to resa#e +20 %ays i( the notice is comin! (rom out o( state6he @?> must contain a## the %isc#osures reHuire% 7y Ca#5 Ci'i# Co%e ::29,052+a-+1.9-5 "mon! the %isc#osures reHuire% is the consumerFs ri!ht to Ere%eemF 7y 3ayin! the 7a#ance o( the #oan5 Strict com#liance is reHuire% with a## o( the %isc#osures reHuire% 7y CC :29,052+a-* i( the secure% cre%itor (ai#s to strict#y com3#y, it wi## 7e a7so#ute#y 7arre% (rom co##ectin! any %e(iciency5 +See, e5!5 C5>565 Cor35 '5 "inwri!ht, 199 Ca#5"3350% 1420 +19,/--5 " re#ati'e#y recent a33e##ate %ecision, Juarez v. Arcadia Financial, Ltd., 122 Ca#5"3354th ,,9 +200/-, has set o(( a wa'e o( c#ass action #iti!ation5 6he court construe% Ca#5 Ci'i# Co%e 12

:29,052+a-+2- to reHuire the secure% cre%itor to %isc#ose, in the @?>, the %ates an% amounts o( any #ate (ees or 3ayments that wou#% accrue %urin! the 3erio% 7etween the %ate the notice was sent an% the #ast %ay to re%eem L reinstate5 >t is hi!h#y #iKe#y that any @?> %ate% on or 7e(ore Au#y 1, 200; is non.com3#iant5 "s state% a7o'e, a Ca#i(ornia a33e##ate court has he#% that i( the sa#e was ne!otiate% in a #an!ua!e co'ere% 7y Ca#5 Ci'i# Co%e :1;02, the @?> must 7e in that #an!ua!e5 8eyes '5 Su3erior Court, 1,, Ca#5"3350% 129 +19,1-5 Com3#iance with this reHuirement is Huite #ow5 6he 8einstatement 8eHuirement 6he @?> must %isc#ose that the consumer has the ri!ht to EreinstateF5 =hereas most consumers cannot a((or% to re%eem, many can a((or% to reinstate5 8einstatement mere#y reHuires that the consumer 3ay the 3ast %ue month#y 3ayments an% any costs associate% with the re3ossession5 Sowe'er, a secure% cre%itor can %eny the ri!ht to reinstatement i(* G the consumer 3ro'i%e% (a#se in(ormation on the cre%it a33#ication G in or%er to a'oi% re3ossession, the 'ehic#e was concea#e% or remo'e% (rom the state G the consumer has threatene% to %estroy the 'ehic#e, or a##owe% it to 7ecome su7stantia##y im3aire% in 'a#ue G the consumer has threatene% or assau#te% the re3o man G the consumer has use% the car to commit a crime, or a##owe% it to 7e use% (or crimina# 3ur3oses G the 'ehic#e has 7een seiRe% un%er <e%era# %ru! #aws or other statutes that 3rohi7it reinstatement G the consumer has a#rea%y reinstate% twice, or reinstate% once in the 3ast year Secure% cre%itors 'io#ate the "S<" an% the CL8" when they %eny the ri!ht to reinstate (or any other reason +e5!5 Ere(usa# to maKe 3aymentsF, Ea7an%onment o( 'ehic#eF-5 Such an im3ro3er re(usa# resu#ts in a (or(eiture o( the ri!ht to reinstatement, an% may !i'e rise to a c#aim (or con'ersion5 +See, e5!5 Cerra '5 B#acKstone, 1/2 Ca#5"3350% ;04 +19,2--5 6he 8esa#e o( the 9ehic#e Many consumers are Custi(ia7#y u3set that to #earn that the 'ehic#e was reso#% at a E%ea#ers on#yF auction (or (ar #ess that its who#esa#e 'a#ue, which resu#ts in a #ar!e %e(iciency amount5 =hi#e the Commercia# Co%e %oes reHuire sa#es to 7e Ecommercia##y reasona7#eF, it a#so 3ro'i%es that a sa#e is %eeme% to 7e commercia##y reasona7#e i( it is ma%e in the usua# manner on any reco!niRe% marKet5 Since (inance com3anies Eusua##yF se## re3ossesse% 'ehic#es in this manner, this %e(ense has not 7een (erti#e5 NNNNNNNNNNNNNNNNNNNNNNNNNNNNN

A VER% BRIEF OVERVIE& OF 'OTOR VE(ICLE LEASING

Consumer #eases o( motor 'ehic#es are !o'erne% 7y 7oth <e%era# Law +the Consumer Leasin! "ct, 12 &5S5C5 :1;;/ et seq.- an% Ca#i(ornia Law +the 9ehic#e Leasin! "ct Y9L"Z, Ca#5 Ci'i# 10

Co%e :29,25/ et seq5-5 Statutory 'io#ations to #ooK out (or in #easin! transactions* G 7ecause #eases are !enera##y more #ucrati'e (or %ea#ers, some sa#es3eo3#e re3resent to the consumer that she is 7uyin!, then switch the consumer to a #ease5 Such %ece3tion wou#% 'io#ate numerous 3ro'isions o( the CL8", inc#u%in! 7ut not #imite% to Ci'i# Co%e :: 1//0+a-+2, 9 & 14-5 G 6he 9L" a#so has a one %ocument ru#e +CC :29,25,+a-- simi#ar to the "S<"5 See the one %ocument ru#e %iscussion a7o'e, an% Krou3a '5 Sunrise <or%, // Ca#5 "335 4th ,02 +1999-5 G i( the 'ehic#e has 7een re3ossesse%, the consumer is entit#e% to a notice which com3#ies with Ca#5 Ci'i# Co%e :29,/+%6he reme%ies (or 9L" 'io#ations are set (orth in CC :29,,52.595

VER% BRIEF OVERVIE& OF &ARRANT% ISS)ES

@ew Motor 9ehic#es >n the case o( new motor 'ehic#es, e$3ress an% im3#ie% warranties wi## !enera##y 3rotect the consumer a!ainst %e(ects which Esu7stantia##y im3airF the use, 'a#ue o( sa(ety o( the 'ehic#e to the consumer5 >( the manu(acturer (ai#s to re3air the %e(ects a(ter a reasona7#e num7er o( attem3ts, statutory reme%ies inc#u%e rescission an% attorneysF (ees (#ow5 "n in.%e3th co'era!e o( the Ca#i(ornia Lemon Law is 7eyon% the sco3e o( this trainin!5 6he Ca#i(ornia 1e3artment o( Consumer "((airs has a (air#y com3rehensi'e, consumer.(rien%#y summary o( the #aw at htt3*LLwww5%ca5ca5!o'Lac3L3%([(i#esLen!#emn53%( &se% Motor 9ehic#es Some new motor 'ehic#es come with short e$3ress warranties5 "!ain, any %e(ects which Esu7stantia##y im3airF the use, 'a#ue o( sa(ety o( the 'ehic#e to the consumer which arose %urin! the warranty 3erio% must 7e re3aire% within a reasona7#e num7er o( attem3ts5 But most use% cars come with no e$3ress warranties5 6he Commercia# Co%eFs >m3#ie% =arranty o( Merchanta7i#ity +:2014- may 3ro'i%e some 3rotection, un#ess %isc#aime%5 6he <e%era# 6ra%e Commission +<6C&se% Car 8u#e 3ro'i%es the means 7y which use% car se##ers must 3ro'i%e in(ormation a7out warranties, or #acK thereo(5 1; C5<585 : 422 et seq5 6he &se% Car 8u#e reHuires the %ea#er to %isc#ose the warranty in(ormation 3re.sa#e, an% to 3ro'i%e the consumer with a co3y at the time on contract consummation55 <ai#ure to (o##ow these 3roce%ures may maKe the %ea#erFs 3ur3orte% wai'er o( the >m3#ie% =arranty ine((ecti'e5 I'en i( the %ea#er (o##ows the correct 3roce%ure, the %ea#erFs 3ur3orte% wai'er o( the im3#ie% warranty is ine((ecti'e i( the %ea#er a#so se##s the consumer a ser'ice contract5 See the <e%era# Ma!nuson Moss =arranty "ct at 12 &5S5C5 ::200,+a & c-5

NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN
14

DEBT COLLECTION
1e7t Co##ection 1e(ense Many consumers seeK a%'ice re!ar%in! %e7ts that they %o not %is3ute5 BanKru3tcy is an o3tion, 7ut BanKru3tcy is 7eyon% the sco3e o( this trainin!, an% wi## 7e the su7Cect o( a (uture trainin!5 Many consumers nee% not (i#e (or BanKru3tcy 7ecause they ha'e no assets that cou#% 7e #e!a##y taKen 7y a Cu%!ment cre%itor5 6hey are ECu%!ment.3roo(F %ue to e$em3tions 3ro'i%e% (or outsi%e o( BanKru3tcy5 " com3#ete #ist o( the e$em3tions 3ro'i%e% (or 7y Ca#i(ornia an% <e%era# #aw are #iste% 7e#ow +see EI$em3tions (rom the In(orcement o( Au%!mentsF-5 =hi#e a consumer with %e7t issues shou#% 7e asKe% a7out Eanythin! o( 'a#ueF which they own, it is 3ractica# to (ocus on the three (a'orite tar!ets o( Cu%!ment cre%itors* G 7anK accounts G wa!es G rea# 3ro3erty BanK "ccounts +Ca#5 CC) :/0450,0Most 7anK accounts are not e$em3t in any amount, an% a Cu%!ment cre%itor is (ree to #e'y on a## (un%s in the account u3 to the amount o( the Cu%!ment5 Sowe'er, there are e$ce3tions which a33#y to a su7stantia# num7er o( 3ersons +ty3ica##y seniors an% 3ersons with %isa7i#ities recei'in! Socia# Security-* G Money in 7anK accounts may 7e e$em3t only i such accounts recei'e $irect $e#osit o( certain (un%s 3ai% 7y 3u7#ic entities as (o##ows* N i( one 3erson recei'es Socia# Security 3ayments the (irst Q2,422 is e$em3t N i( 7oth s3ouses recei'es Socia# Security 3ayments, the (irst Q0,;20 is e$em3t N i( one 3erson recei'es Ca#i(ornia 3u7#ic 7ene(its, the (irst Q1,222 is e$em3t N i( 7oth s3ouses recei'es Ca#i(ornia 3u7#ic 7ene(its, the (irst Q1,,22 is e$em3t =a!es +12 &SC :1;/0 & Ca#5 CC) :/0;5021+7-"!ain, most wa!e.earners are not Cu%!ment.3roo(, 7ut Ca#i(ornia an% <e%era# #aws 3ro'i%e some #imite% 3rotections with res3ect to !arnishment5 N un%er <e%era# #aw, 'ery #ow wa!e worKers can e$em3t a## o( their 3ay i( they recei'e %is3osa7#e wa!esNN o( #ess than the (o##owin! amounts* "(ter Au#y 24, 200, 7ut 3rior to Au#y 24, 2009 >( 3ai% weeK#y Q19;520 >( 3ai% 7iweeK#y Q090 >( 3ai% semi.month#y Q42;541 >( 3ai% month#y Q,205,2 "(ter Au#y 24, 2009 >( 3ai% weeK#y >( 3ai% 7iweeK#y Q21/520 Q402 12

>( 3ai% semi.month#y >( 3ai% month#y

Q4/159, Q9415/,

NN1is3osa7#e wa!es are those #e(t a(ter #e!a##y man%ate% %e%uctions T*ese are t*e only +a,e-earners +*o are truly .u$,ment-#roo 5 Such a #ow.wa!e ty3ica##y in%icates 3art.time worK5 >( the 3erson mo'es to (u##.time worK, they #iKe#y wi## no #on!er 7e ECu%!ment.3roo(F5 6he same <e%era# #aw 3ro'i%es that 'ery #ow wa!e worKers who earn 7etween Q;;9520 . Q,925;/ 3er month can ha'e their wa!es !arnishe% on a Es#i%in! sca#eF 7etween 0.22V N un%er <e%era# #aw, worKers who earn more than the amounts #iste% a7o'e can e$em3t the (irst /2V o( their net 3ay N un%er Ca#i(ornia #aw, worKers can e$em3t wa!es that are use% (or the necessities o( #i(e, such as rent, (oo%, chi#%care, an% c#othin!, unless the Cu%!ment was 7ase% on a %e7t that was itse#( incurre% (or the necessities o( #i(e5 "ssumin! the %e7t was not incurre% (or the necessities o( #i(e +such as (or a car- this may mean that the Cu%!ment cre%itor cannot attach any wa!es5 Caution shou#% 7e use% in a%'isin! such a 3erson that they are ECu%!ment.3roo(F, as their income an% e$3ense situation is su7Cect to chan!e5 Somes +Ca#5 CC) :/045/00C"&6>?@* 6he (o##owin! e$em3tions ensure that the consumerFs home wi## not 7e so#%, 7ut !i'en that rea# 3ro3erty ten%s to a33reciate, a consumer may want to (i#e 7anKru3tcy to 3rotect themse#'es, e'en i( their eHuity is current#y Ee$em3tF5 Ca#i(orniaFs homestea% e$em3tions 3ro'i%es (or the (o##owin! amounts o( e/uity to 7e 3rotecte% " G Q20,000 (or sin!#e 3ersons G Q/2,000 (or marrie% 3ersons +one mem7er o( the (ami#y must not ha'e tit#e to the houseG Q120,000 (or %isa7#e% 3ersons an% 3ersons ;2 or o#%er G Q120,000 (or 3ersons 22 or o#%er i( their income is #ess than Q20,000 +Q12,000 i( sin!#e6he Ec#assicF Cu%!ment.3roo( 3ro(i#e is* G a 3erson not #iKe#y to re.enter the worK(orce, %ue to a!e or %isa7i#ity G who rents +owns no rea# 3ro3ertyG whose 7anK account, i( any, !ets %irect %e3osit (rom a source #iste% a7o'e, an% whose 7a#ance is within the #imits state% a7o'e Such a 3erson has no nee% to (i#e (or BanKru3tcy, an% can %ea# with harassment 7y cre%itors an% %e7t co##ectors 7y sen%in! one o( the ECu%!ment.3roo( L no contactF #etters 7e#ow5 1e7t Co##ection "7use an% 8eme%ies Statutes* <e%era# <air 1e7t Co##ection )ractices "ct +<1C)"-, 12 &5S5C5 :1;92 et seq Ca#5 Ci'i# Co%e :1/,, et seq +6he 8osentha# "ct-

1;

Co'era!e* G Both statutes reHuires that the co##ector Ere!u#ar#yF co##ect %e7ts +Ca#5 Ci'i# Co%e :1/,,52+c-M 12 &5S5C5 :1;92a+;-5 G Both statutes reHuire consensua# transactions Oe5!5 a##e!e% sho3#i(tin! %e7ts, a##e!e% sate##ite si!na# 3iracy %e7ts, etc @?6 co'ere%P 6he (o##owin! charts show the co'era!e %i((erence 7etween the two statutes* 6y3e o( co##ector <e%5 <1C)" ?ri!ina# cre%itors @o ESer'icersF acHuirin! account 7e(ore %e(au#t "ttorneys 8e3o men +en(orcers o( security interests6hir% 3arty %e7t co##ectorsL %e7t 7uyers 3ost. %e(au#t @o Ues :1;92(+;- on#y Ues Ca#5 8osentha# Ues Ues @o UesN Ues

N"n un3u7#ishe% <e%era# court case taKes a contrary 'iew5

6he %ecision contains no ana#ysis an% is contrary to the 3#ain #an!ua!e o( the statute

1/

6y3e o( %e7t 8eturne% +@S<- checK +not 3ost.%ate%8eturne% +@S<- checK +3ost.%ate%-

<e%5 <1C)" Ues Ues

Ca#5 8osentha# @o Ues UesN Ues @o @o

Secure% 3ro3erty +en(orcement o( security interest- :1;92(+;- on#y 1e7ts resu#tin! (rom consensua# cre%it transactions Ues 1e7ts resu#tin! (rom consensua# non.cre%it transactions @o consensua# transaction +e5!5 sho3#i(tin! E%e7tF3#ain #an!ua!e o( the statute

Ues @o

N"n un3u7#ishe% <e%era# court case taKes a contrary 'iew5 6he %ecision contains no ana#ysis an% is contrary to the "ttacKin! &n(air 1e7t Co##ection )ractices Because the 8osentha# "ct incor3orates a#most a## o( the <e%era# "ct 7y re(erence, an% 7ecause the <e%era# "ct 3ro'i%es !reater 3rotection to consumers, the !enera# ru#e is that any 'io#ation o( the <e%era# "ct is a 'io#ation o( the 8osentha# "ct +with the e$ce3tions s3eci(ie% 7e#ow-5 <1C)" "((irmati'e 1isc#osure 8eHuirements 6he (o##owin! %isc#osures are reHuire% 7y the <e%era# <1C)", 7ut not reHuire% o( ori!ina# cre%itors su7Cect to the 8osentha# "ct5 6hese are a#so the only a((irmati'e %isc#osures reHuire% 7y the <1C)"5 6he E!F or E'a#i%ationF notice =ithin (i'e %ays o( the initia# communication with the consumer +in 3ractice, a#ways the (irst #etter-, the %e7t co##ector must sen% a notice with (i'e %isc#osures* 1- the amount o( the %e7t G must state the e$act amount as o( the %ate o( the noticeM <1C)" is 'io#ate% i( the consumer cannot %etermine the amount without ca##in! the %e7t co##ector +e5!5 Q2,000 3#us interest an% (ees wou#% 'io#ate the "ct-5 +See Mi##er '5 McCa##a, 214 <50% ,/2 +/th Cir5 2000-5 2- the name o( the cre%itor 0- a statement that un#ess the consumer, within thirty %ays after receipt o( the notice, %is3utes the 'a#i%ity o( the %e7t, or any portion thereof, the %e7t wi## 7e assume% to 7e 'a#i% 7y the %e7t co##ector G this %isc#osure must 7e com3#ete5 <or instance, omission o( either ita#iciRe% 3hrase wi## #ea% to #ia7i#ity +See, e5!5 BaKer '5 5C5 Ser'ices, ;// <52% //2 +9th Cir5 19,2-5 G %eman%s (or 3ayment in a 3erio% o( #ess than 00 %ays, or threats to taKe a%'erse 1,

action Osuch as #iti!ation or ne!ati'e cre%it re3ortin!P within a 3erio% o( #ess than 00 %ays, 'io#ate this section 7y Eo'ersha%owin!Lcontra%ictin!F the %isc#osure, un#ess the %e7t co##ector 3ro'i%es a%%itiona# in(ormation a7out the consumerFs !+7- ri!hts so that e'en the E#east so3histicate% consumerF wou#% not 7e con(use% a7out their ri!hts to %is3ute the %e7t an% cease co##ection acti'ity +see, e5!5 Swanson '5 Southern ?re!on Cre%it Ser'5, ,;9 <52% 1222 +9th Cir5 19,,-5 4- a statement that i( the consumer noti(ies the %e7t co##ector in writin! within the thirty. %ay 3erio% that the %e7t, or any 3ortion thereo(, is %is3ute%, the %e7t co##ector wi## o7tain 'eri(ication o( the %e7t or a co3y o( a Cu%!mentNN a!ainst the consumer an% a co3y o( such 'eri(ication or Cu%!mentNN wi## 7e mai#e% to the consumer 7y the %e7t co##ectorM an% 2- a statement that, u3on the consumerTs written reHuest within the thirty.%ay 3erio%, the %e7t co##ector wi## 3ro'i%e the consumer with the name an% a%%ress o( the ori!ina# cre%itor, i( %i((erent (rom the current cre%itor5N 0 00 the %e7t co##ector nee% not maKe re(erence to a Cu%!ment i( there is no Cu%!ment5 6he %e7t co##ector nee% not maKe the !+2- %isc#osure i( the cre%itor #iste% in the !+2- %isc#osure is the ori!ina# cre%itor " consumerFs %is3ute in res3onse to the 'a#i%ation notice "#thou!h the consumerFs ri!hts un%er :!+7- nee% not 7e %isc#ose%, they are im3ortant5 >( a consumer sen%s a %is3ute within the 00 %ay 3erio%, the %e7t co##ector must cease all co##ection acti'ity +inc#u%in! #iti!ation an% cre%it re3ortin! acti'ity- unti# it res3on%s with the reHueste% 'a#i%ation5 6he E'a#i%ationF (urnishe% 7y the %e7t co##ector shou#% 7e res3onsi'e to the nature o( the %is3ute5 " %e7t co##ector nee% not cease co##ection acti'ity in res3onse to a %is3ute sent a(ter the 00 %ay 3erio%5 6he Emini.Miran%aF* :e+11>n the (irst #etter the %e7t co##ector must state 6his is an attem3t to co##ect a %e7t, an% any in(ormation wi## 7e use% (or that 3ur3ose5 >n (uture communications, the co##ector must i%enti(y itse#( as a E%e7t co##ectorF, a#thou!h case #aw su!!ests that the %isc#osure can 7e omitte% it that (act is o7'ious5 1RO(IBITIONS "## E%e7t co##ectorsF within the meanin! o( the <1C)" an% 8osentha# "ct are su7Cect to the <e%era# "ctFs 3rohi7itions set (orth in 12 &5S5C5 ::1;927, c, %, e+1.10 & 12.1;-, (, h, i & C5 Se#ecte% common 'io#ations G te#e3hone harassment in 'io#ation o( :1;92% +7ut o(ten %i((icu#t to 3ro'eG ca##in! with unreasona7#e (reHuency in 'io#ation o( :1;92%+219

G %iscussin! the (act that a consumer owes a %e7t with anyone other than the consumer or the consumerFs s3ouse5 =hi#e %e7t co##ectors are 3ermitte% to contact thir% 3arties to #earn the consumerFs resi%ence or worK3#ace contact in(ormation, they are not 3ermitte% to %iscuss anythin! more with those 3ersons5 See 12 &SC :: 1;92a+/-, 7, c+7-5 G contactin! the consumer at worK a(ter the consumer has in%icate% it is incon'enient to recei'e ca##s at the worK3#ace, in 'io#ation o( :c+a-+1G contactin! the consumer a(ter the consumer has sent a #etter %irectin! the co##ector to cease communications in 'io#ation o( :c+c-5 J on "3ri# 0, 2009 a San Aose Cury awar%e% Q200,000 to a cou3#e who recei'e% 90 ca##s a(ter the cease communications #etter was sent to the %e7t co##ector5 G (a#se threats o( #iti!ation in 'io#ation o( :e+2G %eman%s (or (ees not 3ro'i%e% (or 7y statute or contract :(+11RACTICE TI1S" Letters to $ebt collectors 2 +*et*er sent by attorneys or clients 2 s*oul$ al+ays be sent by Certi ie$ 'ail, Return Recei#t Re/ueste$ 3or by some ot*er orm #ro4in, recei#t56 &*en #ro4i$in, clients +it* 7no contact8 letters, also #ro4i$e t*em +it* collection lo,s to $ocument 4iolations6 One suc* lo, a##ears *ere" *tt#"99+++6$ebtcollector-#roblems6com9Collection-Communications-Lo,6#$ State 1isc#osure 8eHuirement Ca#5 Ci'i# Co%e :1,125/00 et seq. reHuires any thir% 3arty %e7t co##ector su7Cect to the <e%era# "ct to %isc#ose the (o##owin! in(ormation in its (irst #etter* \6he state 8osentha# <air 1e7t Co##ection )ractices "ct an% the (e%era# <air 1e7t Co##ection )ractices "ct reHuire that, e$ce3t un%er unusua# circumstances, co##ectors may not contact you 7e(ore , a5m5 or a(ter 9 35m5 6hey may not harass you 7y usin! threats o( 'io#ence or arrest or 7y usin! o7scene #an!ua!e5 Co##ectors may not use (a#se or mis#ea%in! statements or ca## you at worK i( they Know or ha'e reason to Know that you may not recei'e 3ersona# ca##s at worK5 <or the most 3art, co##ectors may not te## another 3erson, other than your attorney or s3ouse, a7out your %e7t5 Co##ectors may contact another 3erson to con(irm your #ocation or en(orce a Cu%!ment5 <or more in(ormation a7out %e7t co##ection acti'ities, you may contact the <e%era# 6ra%e Commission at 1.,//.<6C.SIL) or www5(tc5!o'5\ >( a %e7t co##ectorFs initia# ora# contact is in a #an!ua!e other than In!#ish, the %e7t co##ector must 3ro'i%e the notice a!ain in the consumerFs #an!ua!e5 9io#ations are treate% as 'io#ations o( the 8osentha# "ct5 8IMI1>IS <e%era# "ct 8eme%ies +see :1;92KG actua# %ama!es +i( any20

G statutory %ama!es o( u3 to Q1,000 +re!ar%#ess o( the num7er o( 'io#ationsG e((ecti'e#y one.way attorneys (ees an% costs G c#ass action 3ro'isions 8osentha# "ct 8eme%ies G any 'io#ation o( the <e%era# reHuirements incor3orate% 7y re(erence !i'e rise to the <e%era# reme%ies G (or any wi##(u# an% Knowin! 'io#ation o( any as3ect o( the 8osentha# "ct, an a%%itiona# amount 7etween Q100.Q1,000

IDENTIT% T(EFT
Ca#i(ornia >%entity 6he(t )rotections Ca#i(ornia has recent#y enacte% a num7er o( statutes to assist 'ictims o( i%entity the(t, inc#u%in! su7stantia# amen%ments to the 8osentha# <air 1e7t Co##ection )ractices "ct at Ca#5 Ci'i# 1/,,51,5 Sowe'er, the most he#3(u# o( the enactments ha'e to 7e the 3ro'isions co%i(ie% at Ca#5 Ci'i# Co%e ::1/9,592.59/5 6his statute* G %e(ines E'ictim o( i%entity the(tF to reHuire that 3erson to ha'e (i#e% a 3o#ice re3ort G 3ro'i%es (or %ec#aratory re#ie( actions that the 'ictim %i% not incur the %e7t G 3ro'i%es (or inCuncti'e re#ie( reHuirin! %e7t co##ectors an% others (rom 3ursuin! the 'ictim G 3ro'i%es (or actua# %ama!es an% attorneys (ees in some circumstances G 3ro'i%es (or a 3ena#ty o( u3 to :;<,<<< i( N at #east 00 %ays 3rior to (i#in! suit, the 'ictim 3ro'i%e% written notice that a situation o( i%entity the(t mi!ht e$ist an% e$3#ainin! whyM N the entity attem3tin! to co##ect (ai#e% to %i#i!ent in'esti!ate the 'ictimFs c#aim N the co##ector continue to 3ursue its c#aim )ractice 3ointer* = al+ays a%'ise c#ients who ha'e 7een 'ictimiRe% 7y i%entity the(t to imme%iate#y (i#e a 3o#ice re3ort an% o7tain a co3y5 G al+ays noti(y cre%itorsL%e7t co##ectors o( (acts re#atin! to i%entity the(t in +ritin, G ha'e c#ients com3#ete the <6C <rau% "((i%a'it an% su7mit it to entities which are %eman%in! 3ayment5 6he <6C <rau% "((i%a'it can 7e (oun% here* htt3*LLwww5(tc5!o'L7c3Le%uLresourcesL(ormsLa((i%a'it53%(

CREDIT RE1ORTING ISS)ES

enera##y !o'erne% 7y the <e%era# <air Cre%it 8e3ortin! "ct, 12 &5S5C5 :1;,1 et seq. +<C8"-, which 3reem3ts most state #aw5 6he <C8" im3oses o7#i!ations on three sets o( 3ersons* G cre%it re3ortin! a!encies . +a5K5a C8"s or E7ureausF-, the entities that com3i#e consumers cre%it histories (or sa#e to thir% 3arties G (urnishers . the entities that 3ro'i%e the C8"s with consumersF 3ayment an% cre%it 21

histories G users . the entities that o7tain consumer cre%it (i#es (rom the C8"s in or%er to maKe a %ecision re!ar%in! the consumersF cre%it worthiness5 ?7#i!ations 3#ace% on users @o cre%it re3ort may 7e E3u##e%F without a 3ermissi7#e 3ur3ose +see 12 &5S5C5 :1;,17+a--5 6he most common 3ermissi7#e 3ur3oses are in connection with a consumer cre%it or em3#oyment a33#ications, or in connection with the co##ection o( a %e7t5 &sers must a#so 3ro'i%e consumers with in(ormation a7out the e$istence o( ne!ati'e in(ormation in their cre%it re3orts a(ter ha'in! taKen an Ea%'erse actionF5 See :1;,1m+a-5 ?7#i!ations 3#ace% on (urnishers @umerous o7#i!ations to ensure the (urnishin! o( accurate in(ormation +see 12 &5S5C5 :1;,1s.2-5 Sowe'er, a consumer on#y has a 3ri'ate ri!ht o( action un%er :1;,1s.2+7-, which arises when a (urnisher unreasona7#y 'eri(ies inaccurate in(ormation a(ter a consumer has su7mitte% a %is3ute to a cre%it re3ortin! a!ency5 ?7#i!ations 3#ace% on Cre%it 8e3ortin! "!encies C8"s are reHuire% to a%a3t 3roce%ures to ensure ma$imum 3ossi7#e accuracy, e'en a7sent a %is3ute5 See :1;,1e+7-5 Sowe'er, most #iti!ation a!ainst C8"s is 7ase% on their unreasona7#e (ai#ure to %e#ete or mo%i(y ne!ati'e cre%it in(ormation in res3onse to a consumer %is3ute5 See :1;,1i5 8eme%ies un%er the <C8" Consumers are entit#e% to actua# %ama!es an% attorneys (ees in a case in'o#'in! ne!#i!ent noncom3#iance5 :1;,1o5 Consumers can a#so co##ect 3uniti'e %ama!es (or wi##(u# noncom3#iance5 :1;,1n+a-+2-5 STE1S FOR ASSISTING CONS)'ERS &(O (AVE DEROGATOR% CREDIT INFOR'ATION ON T(EIR CREDIT RE1ORT &(IC( IS INCO'1LETE OR INACC)RATE Ste3 15 Obtain credit reports (if not already done Cre%it re3orts can 7e o7taine% (rom the three maCor cre%it re3ortin! a!encies +6rans.&nion, IHui(a$, an% I$3erian- (or (ree once a year5 6his can 7e %one instantaneous#y at www5annua#cre%itre3ort5com5 6he re3orts can a#so 7e o7taine% 7y ca##in! 1.,//.022.,22, or writin! )5?5 Bo$ 1022,1, "t#anta, a5, 0004,.22,15 Sen%in! a co3y o( the consumerFs %ri'erFs #icense with a written reHuest wi## he#3 ensure that the reHuest is 3rom3t#y 3rocesse%5 Ste3 25 !ispute the inaccurate or incomplete information Consumers shou#% write a c#ear#y wor%e% #etter, com3#ete with su33ortin! %ocumentation, which e$3#ains why the in(ormation re3orte% is inaccurate or incom3#ete5 Consumers shou#% mai# the #etters to the cre%it re3ortin! a!encies, as we## as the com3any which re3orte% the %ero!atory 22

in(ormation5 6he consumer shou#% Kee3 a co3y o( a## corres3on%ence, an% may want to sen% the %is3ute #etter 7y certi(ie% mai#, return recei3t reHueste% so there is no %ou7t that the #etter is recei'e%5 6he a%%resses o( the three cre%it re3ortin! a!encies are* I$3erian IHui(a$ >n(ormation 6rans.&nion Consumer 8e#ations /01 I$3erian )arKway Ser'ices, LLC 12;1 I5 ?ran!ethor3e "'enue )5?5 Bo$ 9224 )5?5 Bo$ 10221, <u##erton, C" 92,01.220/ "##en, 6W /2010 "t#anta, " 0004, =ithin 00 %ays the cre%it re3ortin! a!encies are reHuire% to con%uct an in'esti!ation o( the %is3ute% cre%it in(ormation an% re3ort 7acK on the resu#ts o( the in'esti!ation5 Ste3 05 "n necessary, further le#al action =hen the consumer recei'es the resu#ts, he or she wi## Know whether the in(ormation has 7een %e#ete%5 >( the in(ormation has not 7een %e#ete%, the consumer may initiate #e!a# action un%er the <air Cre%it 8e3ortin! "ct5 6he success o( this c#aim wi## %e3en% 3art#y on how we## the %is3ute #etter was written, an% what su33ortin! %ocuments were 3ro'i%e% to the cre%it re3ortin! a!encies5 A sam#le mo$el $is#ute letter ollo+s

20

Sam K S3a%e 120 Consumer Street San Aose, C" 92110 Aune 24, 2000 I$3erian /01 I$3erian )arKway )5?5 Bo$ 9224 "##en, 6W /2010 IHui(a$ )5?5 Bo$ /4022; "t#anta, " 000/4 RE" Certi(ie% Mai#, 8eturn 8ecei3t 8eHueste% @o5 /002 2000 0000 0;0/ /;,9 Certi(ie% Mai#, 8eturn 8ecei3t 8eHueste% @o5 /002 2000 0000 0;0/ /;9;

Consumer" Sam >6 S#a$e, Social Security No6 ?@;-AB-CDEF Furnis*er Account No6" Acme Ac/uisition Account GC?@;ABCDEF Furnis*er Account No6" 'ono,ram Ban! o Geor,ia Account GFEDCBA;@?

1ear Sirs or Ma%ams* > am writin! with res3ect to %ero!atory cre%it in(ormation su7mitte% 7y "cme "cHuisition which is 7ein! re3orte% on my IHui(a$ an% I$3erian cre%it re3orts5 > ha'e a#rea%y %is3ute% the matter se'era# times, without success5 " re'iew o( the enc#ose% %ocuments wi## %emonstrate that the in(ormation re3orte% on my cre%it re3ort is erroneous an% shou#% 7e remo'e%5 ?n Se3tem7er 1;, 2000, > 3urchase% a %iamon% rin! (rom Mont!omery =ar%s5 6he cost o( the rin! was Q1/205;45 > 3ai% (or the rin! with my "%'anta cre%it car%, as %emonstrate% on the enc#ose% recei3t5 > su7seHuent#y recei'e% the enc#ose% "%'anta month#y statement, which > 3rom3t#y 3ai%5 6he statement shows the Q1,/205;4 3urchase on Se3tem7er 1;, 20005 <or reasons unKnown to me, > recei'e% a month#y statement (rom Mono!ram BanK statin! that > ha% char!e% Q1,/205;4 on my Mont!omery =ar%s car% on Se3tem7er 1;, 20005 > %i% ha'e a =ar%s car% 7ut rare#y, i( e'er use% it5 > %i% not use it to 3urchase the %iamon% rin! on Se3tem7er 1;, 20005 "s state% a7o'e, > 3ai% (or the rin! with my "%'anta car%5 > ha'e s3ent the #ast two 3#us years %is3utin! this %e7t throu!h numerous #etters an% 3hone ca##s5 "(ter > re(use% to 3ay the erroneous char!e Mono!ram BanK re3orte% %ero!atory cre%it with res3ect5 =hen Mont!omery =ar%s (i#e% 7anKru3tcy an% c#ose% its stores, Mono!ram BanK con'erte% my =ar%s car% into a =a#mart car% without my authoriRation5 "cme "cHuisitions then 7e!an attem3ts to co##ect the erroneous char!e5 "cme "cHuisitions is now re3ortin! %ero!atory cre%it as we##5 1ero!atory entries (rom 7oth Mono!ram BanK o( eor!ia an% "cme "cHuisitions ha'e a33eare% on my cre%it re3orts at 'arious times5 Current#y, on#y the "cme "cHuisition tra%e #ine a33ears on my I$3erian an% IHui(a$ re3ort5 24

6his #etter reHuests that IHui(a$ an% I$3erian imme%iate#y %e#ete the ne!ati'e entry with res3ect to the "cme "cHuisition account an% to taKe ste3s to ensure that neither the "cme "cHuisition nor the Mono!ram BanK o( eor!ia account rea33ear on my cre%it re3ort5 > await your 3rom3t res3onse5 Sincere#y,

Sam S3a%e 120 Consumer Street San Aose, C" 92110 enc#osures* 1- "%'anta Statement %ate% 10L1;L00 2- Mono!ramL=ar%s Statement with %ue %ate 11L10L00 0- recei3t (or 3urchase o( %iamon% %ate% 9L1;L00 4- 1iamon%L emstone Certi(icate %ate% 9L1;L00

22

Co-si,ner 1rotections +Ca#5 Ci'i# Co%e :1/99590 et seq an% 1; C5<585 :44451 et seq.Ca#i(orniaFs co.si!ner statute a33#ies to a## consumer #oans with the e$ce3tion o( some mort!a!e #oans5 >t is %esi!ne% to reHuire a warnin! notice to 3ersons who recei'e no 7ene(it (rom a contract they si!ne% +> wi## ca## such a 3erson a Enon.reci3ientF-5 >t is immateria# how the non. reci3ient is %esi!nate% on the contract +i5e5 as E!uarantorF, Eco.7uyerF or E7uyerF- so #on! as more than one consumer si!ns the contract5 >( the non.reci3ient is set u3 as the so#e Estraw 7uyerF the Ca#i(ornia statute wi## not a33#y %irect#y, 7ut an ar!ument can 7e ma%e that the <e%era# ru#e, cite% a7o'e, a33#ies5 >( a non.reci3ient consumer %oes not recei'e the warnin! notice, no action may 7e 7rou!ht a!ainst the consumer to en(orce the contract5 Ca#5 Ci'i# Co%e :1/995925

1ossible De enses to Cre$it Car$ Claims H C*ar,es

Statute o( Limitations Cre%it car% accounts are #iKe#y su7Cect to a (our year statute o( #imitations 3ursuant to Ca#5 CC) :00/5 Some cre%it car% a!reement contain a choice.o(.#aw 3ro'ision5 >( the 3arties se#ect the #aw o( a state with a shorter #imitations 3erio%, that se#ection wi## 7e en(orce% 7y the court5 Many cre%it car% com3anies are hea%Huartere% in 1e#aware an% reHuire consumers to e#ect 1e#aware #aw5 >n that case, the statute o( #imitations is Cust three years5 See 8esur!ence '5 Cham7ers, +2009-+cite not a'ai#a7#e as o( 4L14L09-5 Bi##in! Irrors 6he <air Cre%it Bi##in! "ct, 12 &SC :1;;;, !i'es consumers si$ty %ays to cha##en!e certain char!es on their cre%it car%s5 6hese are 3rimari#y in the nature o( mistaKes 7y the cre%it car% issuer5 S3ecia# 8u#e (or Cre%it Car% )urchases 6his ru#e, co%i(ie% at 12 &SC :1;;;i, 3ro'i%es a %e(ense to certain cre%it car% char!es, to the e$tent the consumer wou#% ha'e a %e(ense i( the merchant who acce3te% the car% attem3te% to en(orce the char!e %irect#y5 >n or%er to taKe a%'anta!e o( the ru#e, the car%ho#%er must ha'e ma%e a !oo% (aith e((ort to reso#'e the %is3ute with the merchant, the %is3ute% amount must 7e o'er Q20 an% the transaction must ha'e occurre% in the same state or within 100 mi#es o( the consumerFs resi%ence5

'ISCELLAN%
6imeshare sa#es 6imeshare com3anies usua##y #ure consumers to sa#es 3resentations with the 3romise o( a !i(t o( some sort5 Such a 3ro!ram wou#% 7e su7Cect to Ca#5 Bus5 & )ro(5 Co%e :1/20/51 et seq. 6imeshare com3anies rare#y i( e'er com3#y with the %isc#osure reHuirements therein5 =hi#e the reme%ies %o not s3eci(ica##y inc#u%e rescission, the Law Center has 7een a7#e to use 'io#ations to #e'era!e rescission5 6owin! %e7ts 6he Law Center (reHuent#y sees consumers who ha'e 7een contacte% 7y a co##ection a!ency +ty3ica##y 8icKen7acKer or )aci(ic Cre%itors "ssociation- attem3tin! to co##ect thousan%s o( %o##ars (or the towin! an% stora!e o( an o#% 'ehic#e5 ?(tentimes the consumer ha% trans(erre% the 'ehic#e to a thir% 3erson who cause% the tow +7ut our consumer c#ient (ai#e% to time#y su7mit a 2;

@otice o( 8e#ease o( Lia7i#ity +@8L- to the 1M95 6he #ien.ho#%ers seemin!#y ne'er com3#y with Ca#i(ornia #aw an% there(ore are not entit#e% to a %e(iciency5 Co##ection a!encies a#most a#ways 7acK o(( when recei'in! a #etter (rom the Law Center 3ointin! out one or more o( the (o##owin! 3ro7#ems with the co##ection a!encies c#aim* G no statutory 3ro'ision (or %e(iciency is 3ermitte% (or 'ehic#es 'a#ue% un%er Q200 G i( the 3o#ice o((icer (ai#s to 3#ace a 'a#ue u3on or%erin! the tow, the #ien.ho#%er must 3rom3t#y %o so Ca#5 9eh5 Co%e :22;/0+7G 6o the e$tent the consumer %e#i'ere% tit#e to a trans(eree 3rior to the tow, Ca#5 9eh5 Co%e :2;02+a- maKes c#ear that an @8L is unnecessary

2/

1C?@S&MI8 68"@S"C6>?@S =>6S S6"6&6?8U C?@68"C6 C"@CILL"6>?@ 8> S6S January, $%%%10 >5 S)IC><>C S6"6&6?8U C"@CILL"6>?@ 8> S6S " num7er o( #aws !i'e consumers the ri!ht to cance# contracts in s3eci(ic transactions short#y a(ter the consumer si!ns the contract5 " #ist o( these transactions an% the 3erio%s a##owe% (or cance#in! them (o##ows5 @ote that some cance##ation 3erio%s are measure% in 7usiness %ays5 " consumer.7uyer can cance# these contracts (or any reason +or (or no reason-5 >n or%er to cance#, the 7uyer must sen% the se##er written notice o( cance##ation within the 3erio% a##owe% 7y statute5 +&ost cancellation periods be#in 'hen the consumer receives 'ritten notification of his or her ri#ht to cancel5- 6he 7uyer must si!n an% %ate the cance##ation notice, an% it must state that the 7uyer is cance#in! the contract5 6he 7uyer shou#% sen% the notice to the se##er 7y certi(ie% mai# return, recei3t reHueste%, at the a%%ress the se##er has !i'en in the sa#e %ocuments5 6he 7uyer shou#% Kee3 a co3y o( the notice (or his or her own recor%s to 7e a7#e to 3ro'e that the notice was !i'en5 enera##y, the 7uyerTs notice o( cance##ation is e((ecti'e when it is %e3osite% in the mai# with the 3ro3er a%%ress an% 3osta!e5 6he 7uyer shou#% note the e$act %ate, time an% 3#ace o( mai#in! on the retaine% co3y5 " "utomo7i#e Sa#es an% Leases5 6here is no statutory cance##ation 3erio% (or automo7i#e sa#es or #eases5 +But Cali ornia +ill soon be t*e irst state in t*e nation to #ro4i$e a statutory cancellation #erio$ or some motor 4e*icle #urc*asesC 1 Cre%it 8e3air Ser'ices .. (i'e %ay cance##ation 3erio% +CC 1/,951;-5 1ance Stu%io Ser'ices .. si$ month cance##ation 3erio% in$e inite cancellation #erio$ +it* #ro rata re un$ +CC 1,12524+7-+1--5 1atin! Ser'ices .. three 7usiness %ay cance##ation 3erio% +CC 1;9451-5 See also CC I?CFA6@3e5" i a contract $oes not com#ly +it* t*e 4arious re/uirements o t*e Act, t*e buyer may cancel at any time6 NNN 1iscount Buyin! Ser'ices .. three %ay cance##ation 3erio% +CC 1,12511,-5 1oor.to.1oor Sa#es .. three 7usiness %ay cance##ation 3erio% +CC 1;,952-5 I I#ectric Ser'ice Contract .. three 7usiness %ay cance##ation 3erio% +)&C 092-5

1 1 I *a4e u#$ate$ some obsolete co$e section re erences an$ ma$e some a$$itions6 C*an,es mar!e$ in bol$6 2,

Im3#oyment Counse#in! Ser'ices .. three 7usiness %ay cance##ation 3erio% +CC 1,125211+a-+;--5 T*e cite$ section also #ro4i$es t*at t*e buyer may cancel until t*e seller *as com#lie$ - t*ere ore i t*e cancellation notice or contract is la+e$, t*e buyer may cancel at any time 3u# to t*e statute o limitations #erio$5 In%#ess Chain Scheme ] in%e(inite cance##ation 3erio% when scheme is un#aw(u# un%er )C 02/ +CC 1;,952-5 < S <unera# Contracts +3re.nee%- .. in%e(inite cance##ation 3erio% +B&) //0/-5 Sea#th Stu%io Ser'ices .. three 7usiness %ay cance##ation 3erio% +CC 1,125,2+7--5 See also CC I?E?@6EB3b53;5" t*e buyer may cancel until t*e seller *as com#lie$ +it* t*e cancellation notice #ro4isions - t*ere ore i t*e cancellation notice is la+e$, t*e buyer may cancel at any time 3u# to t*e statute o limitations #erio$5 Some IHuity Sa#e 1urin! <orec#osure .. (i'e 7usiness %ay cance##ation 3erio% +CC 1;9254-5 Some 8e3air or 8estoration Contracts <o##owin! a 1isaster .. se'en 7usiness %ay cance##ation 3erio% +un#ess contract is automatica##y 'oi%- +CC 1;,95;+c--5 Some.Secure% 6ransactions .. three %ay cance##ation 3erio% +12 C<8 22;520-5 I notice $oes not strictly com#ly +it* t*e abo4e-re erence$ section, t*e consumer can rescin$ or u# to t*ree years6 Some So#icitation Sa#es .. three 7usiness %ay cance##ation 3erio% +CC 1;,952-5 Some Stu%y or Corres3on%ence 9ocationa# Schoo# Courses .. ei!ht 7usiness %ay cance##ation 3erio% +I%5 Co%e 94,22, 94,;/+a-+2--5 For contracts ,o4erne$ by t*e &aters Act, t*e consumer can cancel until s*e *as recei4e$ t*e $isclosures re/uire$ by E$ Co$e FAECE6 T*ese statute contain eJtensi4e $isclosure re/uirements, an$ many 4ocation sc*ools ail to com#ly6 > >mmi!ration Consu#tant Ser'ices .. three %ay cance##ation 3erio% +B&) 22442+e--5 >nternet Sa#es +when or%er has not 7een (i##e%- .. 00 %ay cance##ation 3erio% +B&) 1/20,+a--5 Ao7 Listin! Ser'ices .. three 7usiness %ay cance##ation 3erio% +CC 1,12521;+a--5 T*e abo4e-re erence$ section #ro4i$es t*at until t*e seller *as com#lie$ +it* t*e #ro#er cancellation notice #ro4isions, t*e buyer may cancel6 Le!a# 1ocument "ssistant .. one %ay cance##ation 3erio% +B&) ;410+e--5 29

M Mai#L6e#e3hone Sa#es +when or%er has not 7een (i##e%- .. 00 %ay cance##ation 3erio% +B&) 1/20,+a-, 1; C<8 )art 402-5 Mem7ershi3 Cam3in! Contracts >( 7uyer 'isits site .. three 7usiness %ay cance##ation 3erio% +CC 1,125000-5 >( 7uyer %oes not 'isit site .. 10 7usiness %ay cance##ation 3erio% +CC 1,125004-5 See also CC I?E?@6;<;3e5" t*e buyer may cancel until t*e seller *as com#lie$ - t*ere ore i t*e cancellation notice or contract is la+e$, t*e buyer may cancel at any time 3u# to t*e statute o limitations #erio$5 Mort!a!e <orec#osure Consu#tant Ser'ices .. three 7usiness %ay cance##ation 3erio% +CC 294250-5 ) )ersona# Imer!ency 8es3onse &nit .. se'en 7usiness %ay cance##ation 3erio% +CC 1;,95;+7--5 T*e abo4e-cite$ section #ro4i$es t*at t*e buyer may cancel until t*e seller *as com#lie$ - t*ere ore i t*e cancellation notice or contract is la+e$, t*e buyer may cancel at any time 3u# to t*e statute o limitations #erio$5 8ea# Istate 6rans(er .. %e#aye% or materia##y amen%e% 6rans(er 1isc#osure Statement .. three %ay +statement %e#i'ere% 3ersona##y- or (i'e %ay +statement %e#i'ere% 7y mai#cance##ation 3erio% +CC 110250-5 Se##er "ssiste% MarKetin! )#ans .. three 7usiness %ay cance##ation 3erio% +CC 1,125209-5 Seminar Sa#es .. three 7usiness %ay cance##ation 3erio% +CC 1;,9520-5 CC I?CEF6@<3a5 #ro4i$es t*at t*e buyer may cancel until t*ree business $ays a ter t*e seller *as #ro4i$e$ a com#liant notice o cancellation - t*ere ore i t*e cancellation notice is la+e$, t*e buyer may cancel at any time 3u# to t*e statute o limitations #erio$5 Ser'ice Contracts <or use% cars, home a33#iances, an% home e#ectronic 3ro%ucts .. 00 %ay cance##ation 3erio% +CC 1/94541+a-+4-+"--5 <or new motor 'ehic#es .. ;0 %ay cance##ation 3erio% +CC 1/94541+a-+4-+"--5 <or any ty3e o( !oo%s +inclu$in, t*ose state$ abo4e5 , 3ro.rata re(un% #ess 3ena#ty .. in%e(inite cance##ation 3erio% +CC 1/94541+a-+4-+B--5

6 6e#e3hone Sa#es +when or%er has not 7een (i##e%- .. 00 %ay cance##ation 3erio% +B&) 1/20,+a-, 1; C<8 )art 402-5 See also Cal6 Bus6 H 1ro 6 Co$e I?DB??6@3e5, +*ic* #ro4i$es or a cancellation notice ,i4in, an a$$itional t*ree $ays a ter t*e or$er is ille$ or many ty#es o Tele#*onic Sales6 00

6imeshares ] three %ay cance##ation 3erio% +B&) 11024-5 Cal6 Bus6 H 1ro 6 Co$e I ??@;B ,i4es a se4en $ay ri,*t to cancel selecte$ times*are contract +*ic* are less t*an t*ree years in len,t*6 & &n#aw(u# 1etainer "ssistants .. one %ay cance##ation 3erio% +B&) ;410+e--5

9 9ocationa# Schoo# Courses .. (i'e 7usiness %ay cance##ation 3erio% +I%5 Co%e 94,;/+a+1-, 94,;,-5 See K(ome Stu$y or Corres#on$ence Vocational Sc*ool CoursesL abo4e = =ater 6reatment 1e'ices .. three 7usiness %ay cance##ation 3erio% +B&) 1/2//50-5 See 7Door to Door Sales8, abo4e =ei!ht.#oss Ser'ices .. three 7usiness %ay cance##ation 3erio% +CC 1;945;-5 See also CC I?CFA6D3e5" t*e buyer may cancel until t*e seller *as com#lie$ t*ere ore i t*e cancellation notice or contract is la+e$, t*e buyer may cancel at any time 3u# to t*e statute o limitations #erio$5 6he consumer may a#so ha'e other cance##ation ri!hts5 "#most any consumer contract entere% into in a consumerTs home +or somewhere other than the se##erTs 3#ace o( 7usiness- can 7e cance#e% 7y sen%in! a written notice o( cance##ation to the se##er 7y mi%ni!ht o( the thir% 7usiness %ay a(ter the consumer si!ne% the contract5 6he contract must 7e (or consumer !oo%s costin! Q22 or more5 +CC :: 1;,9.1;,95125" !enera# %iscussion o( other cance##ation ri!hts (o##ows5 >>5 I@I8"L C?@68"C6 C"@CILL"6>?@ 8> S6S " 7uyer a#so may 7e a7#e to cance# a contract i( his or her consent to it was o7taine% 7y the se##erTs (rau% or misre3resentation, or i( the 7ar!ain (ai#s in some maCor res3ect throu!h no (au#t o( the 7uyer5 6he 7uyer shou#% contact an attorney or other e$3ert i( the 7uyer thinKs that he or she may ha'e one o( these !roun%s (or cance#in! a contract5 J 8escission (or <rau%, MistaKe, &n%ue >n(#uence, Breach, >##e!a#ity

+1- >( the 7uyerTs consent to a contract was in%uce% 7y the se##erTs (rau%, or was !i'en 7y mistaKe, or un%er %uress, menace or un%ue in(#uence, the 7uyer can e#ect to rescin% the contract +CC 1;,9+7--5 +2- " 7uyer has a ri!ht to rescin% a contract when the e$chan!e that the 7uyer antici3ate% recei'in! (rom the se##er \(ai#s, in who#e or in 3art, throu!h the (au#t\ o( the se##er +CC 1;,9+7+2--5 +0- 6he 7uyer has a ri!ht to rescin% a contract when the e$chan!e the se##er 3romise% to the 7uyer \7e.comes entire#y 'oi% (rom any cause\ +CC 1;,9+7-+0--5 +4- 6he 7uyer has a ri!ht to rescin% a contract when the e$chan!e which the 7uyer 7ar!aine% to recei'e (rom the se##er \(ai#s in a materia# res3ect (rom any cause\ 7e(ore it is ren%ere% to the 01

7uyer +CC 1;,9+7-+4--5 +2- 6he 7uyer has a ri!ht to rescin% a contract when the contract \is un#aw(u# (or causes which %o not a33ear in its terms or con%itions, an% the 3arties are not eHua##y at (au#t\ +CC 1;,9+7-+2--5 +;- 6he 7uyer has a ri!ht to rescin% a contract i( \the 3u7#ic interest wi## 7e 3reCu%ice% 7y 3ermittin! the contract to stan%\ +CC 1;,9+7-+;--5 +/- " 3roce%ure (or e$ercisin! the ri!ht to rescin% +which inc#u%es a notice o( rescission to the other 3arty- is esta7#ishe% 7y #aw +CC 1;91.1;90-5 +,- 6he 3ro'isions on rescission, at CC 1;,9. 1;90, a#so a33#y when the ri!ht to rescin% is con(erre% un%er another statute +CC 1;,9+7-+/--5 NNNNNN 6his 3u7#ication is a'ai#a7#e on the >nternet5 See the 1e3artment o( Consumer "((airsT home3a!e at www5%ca5ca5!o'5 6his %ocument may 7e co3ie%, i( a## o( the (o##owin! con%itions are met* the meanin! o( the co3ie% te$t is not chan!e%NM cre%it is !i'en to the 1e3artment o( Consumer "((airsM an% a## co3ies are %istri7ute% (ree o( char!e5 Aanuary, 1999 N My a3o#o!ies to the 1C"* see (ootnote 1

02

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ 1ate*[[[[[[[[[[[[[[[[[[[[[[[[[ VIA CERTIFIED 'AIL, RET)RN RECEI1T REM)ESTED

NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN RE" NNNNNNNNNNNNNNNNNNNNNNNNN Acct GNNNNNNNNNNNNNNNNNNNNNNNN 6o =hom it May Concern* > am writin! to reHuest that you cease a## contact with me 3ursuant to Ca#i(ornia Ci'i# Co%e :1/,,51/ an%Lor 12 &SC :1;92c+c-, which reHuire you to cease a## contact with a consumer when you recei'e a written reHuest to %o so5 > %o not conce%e that > owe any %e7t to you5 I'en i( > %i%, > cou#% not a((or% to 3ay you5 6here(ore, > wi## not maKe "@U (urther 3ayments on the a7o'e.re(erence% account5 > ha'e consu#te% with an attorney an% > ha'e 7een in(orme% that > am Cu%!ment.3roo(5 Uou may sue me i( you wish, 7ut you wi## not 7e a7#e to co##ect any money (rom me 7ecause > ha'e no assets or income that can 7e attache% with a Cu%!ment5 > reco!niRe that you may choose to re(er this account to a co##ection a!ency, or some other entity5 Shou#% you choose to %o so, U?& M&S6 >@CL&1I " C?)U ?< 6S>S LI66I8 >@ MU <>LI, "@1 6SI "CC?&@6 M&S6 BI @?6"6I1 6S"6 > 1? @?6 =>SS 6? BI C?@6"C6I1 >@ "@ "66IM)6 6? C?LLIC6 " 1IB65 >( you (ai# to com3#y with this reHuest, > wi## consi%er it an intentiona# attem3t to circum'ent Ca#i(orniaFs <air 1e7t Co##ection )ractices "ct5 6hanK you (or your antici3ate% coo3eration with res3ect to my reHuest that you cease any (urther contacts with me5 Sincere#y,

00

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ 1ate*[[[[[[[[[[[[[[[[[[[[[[[[[ VIA CERTIFIED 'AIL, RET)RN RECEI1T REM)ESTED NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN RE" NNNNNNNNNNNNNNNNNNNNNNNNN Acct GNNNNNNNNNNNNNNNNNNNNNNNN 6o =hom it May Concern* > am writin! to reHuest that you cease a## contact with me 3ursuant to Ca#i(ornia Ci'i# Co%e :1/,,51/ an%Lor 12 &SC :1;92c+c-, which reHuire you to cease a## contact with a consumer when you recei'e a written reHuest to %o so5 > %o not conce%e that > owe any %e7t to you5 I'en i( > %i%, > cou#% not a((or% to 3ay you5 6here(ore, > wi## not maKe "@U (urther 3ayments on the a7o'e.re(erence% account5 > ha'e consu#te% with an attorney an% > ha'e 7een in(orme% that > am Cu%!ment.3roo(5 Uou may sue me i( you wish, 7ut you wi## not 7e a7#e to co##ect any money (rom me 7ecause > ha'e no assets or income that can 7e attache% with a Cu%!ment5 > reco!niRe that you may choose to re(er this account to a co##ection a!ency, or some other entity5 Shou#% you choose to %o so, U?& M&S6 >@CL&1I " C?)U ?< 6S>S LI66I8 >@ MU <>LI, "@1 6SI "CC?&@6 M&S6 BI @?6"6I1 6S"6 > 1? @?6 =>SS 6? BI C?@6"C6I1 >@ "@ "66IM)6 6? C?LLIC6 " 1IB65 >( you (ai# to com3#y with this reHuest, > wi## consi%er it an intentiona# attem3t to circum'ent Ca#i(orniaFs <air 1e7t Co##ection )ractices "ct5 6hanK you (or your antici3ate% coo3eration with res3ect to my reHuest that you cease any (urther contacts with me5 )LI"SI BI "="8I 6S"6 > "M " SI@>?8 C>6>^I@ "@1 "@U <&86SI8 C?@6"C6S =>LL C"&SI MI &@@ICISS"8U S68ISS5 Sincere#y, 04

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ 1ate*[[[[[[[[[[[[[[[[[[[[[[[[[ VIA CERTIFIED 'AIL, RET)RN RECEI1T REM)ESTED

NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN RE" NNNNNNNNNNNNNNNNNNNNNNNNN Acct GNNNNNNNNNNNNNNNNNNNNNNNN 6o =hom it May Concern, > am writin! to reHuest that you cease a## contact with me 3ursuant to Ca#i(ornia Ci'i# Co%e :1/,,51/ an%Lor 12 &SC :1;92c+c-, which reHuire you to cease a## contact with a consumer when you recei'e a written reHuest to %o so5 > %o not conce%e that > owe any %e7t to you5 I'en i( > %i%, > cou#% not a((or% to 3ay you5 6here(ore, > wi## not maKe "@U (urther 3ayments on the a7o'e.re(erence% account5 > ha'e consu#te% with an attorney an% > ha'e 7een in(orme% that > am Cu%!ment.3roo(5 Uou may sue me i( you wish, 7ut you wi## not 7e a7#e to co##ect any money (rom me 7ecause > ha'e no assets or income that can 7e attache% with a Cu%!ment5 > reco!niRe that you may choose to re(er this account to a co##ection a!ency, or some other entity5 Shou#% you choose to %o so, U?& M&S6 >@CL&1I " C?)U ?< 6S>S LI66I8 >@ MU <>LI, "@1 6SI "CC?&@6 M&S6 BI @?6"6I1 6S"6 > 1? @?6 =>SS 6? BI C?@6"C6I1 >@ "@ "66IM)6 6? C?LLIC6 " 1IB65 >( you (ai# to com3#y with this reHuest, > wi## consi%er it an intentiona# attem3t to circum'ent Ca#i(orniaFs <air 1e7t Co##ection )ractices "ct5 6hanK you (or your antici3ate% coo3eration with res3ect to my reHuest that you cease any (urther contacts with me5 )LI"SI BI "="8I 6S"6 > "M 1>S"BLI1 "@1 "@U <&86SI8 C?@6"C6S =>LL C"&SI MI &@@ICISS"8U S68ISS5 Sincere#y,
1 [[[[[[[[[[[[[[[[[[[[[[[[[[[[[

02

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

1ate*[[[[[[[[[[[[[[[[[[[[[[[[[

VIA CERTIFIED 'AIL, RET)RN RECEI1T REM)ESTED NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNN RE" NNNNNNNNNNNNNNNNNNNNNNNNN Acct GNNNNNNNNNNNNNNNNNNNNNNNN 6o =hom it May Concern, > am writin! to reHuest that you cease a## contact with me 3ursuant to Ca#i(ornia Ci'i# Co%e :1/,,51/ an%Lor 12 &SC :1;92c+c-, which reHuire you to cease a## contact with a consumer when you recei'e a written reHuest to %o so5 > %o not conce%e that > owe any %e7t to you5 I'en i( > %i%, > cou#% not a((or% to 3ay you5 6here(ore, > wi## not maKe "@U (urther 3ayments on the a7o'e.re(erence% account5 > ha'e consu#te% with an attorney an% > ha'e 7een in(orme% that > am Cu%!ment.3roo(5 Uou may sue me i( you wish, 7ut you wi## not 7e a7#e to co##ect any money (rom me 7ecause > ha'e no assets or income that can 7e attache% with a Cu%!ment5 DO NOT LEV% ON '% BAN> ACCO)NT &IT( %O)R O)DG'ENT 2 '% BAN> ACCO)NT CONTAINS ONL% EPE'1T SOCIAL SEC)RIT% F)NDS6 > reco!niRe that you may choose to re(er this account to a co##ection a!ency, or some other entity5 Shou#% you choose to %o so, U?& M&S6 >@CL&1I " C?)U ?< 6S>S LI66I8 >@ MU <>LI, "@1 6SI "CC?&@6 M&S6 BI @?6"6I1 6S"6 > 1? @?6 =>SS 6? BI C?@6"C6I1 >@ "@ "66IM)6 6? C?LLIC6 " 1IB65 >( you (ai# to com3#y with this reHuest, > wi## consi%er it an intentiona# attem3t to circum'ent Ca#i(orniaFs <air 1e7t Co##ection )ractices "ct5 6hanK you (or your antici3ate% coo3eration with res3ect to my reHuest that you cease any (urther contacts with me5 )LI"SI BI "="8I 6S"6 > "M " SI@>?8 C>6>^I@ "@1 "@U <&86SI8 C?@6"C6S =>LL C"&SI MI &@@ICISS"8U S68ISS5 Sincere#y,

0;

March 00, 2014

VIA CERTIFIED 'AIL, RET)RN RECEI1T REM)ESTED

OCre%itor or 1e7t Co##ectorFs Corres3on%ence "%%ressP

8e* 6onya C#ient "ccount _ * O>nc#u%e "ccount @um7er SereP 6o =hom it May Concern, > am re3resentin! Ms C#ient with re!ar%s to the a7o'e.re(erence% account, an% a## o( her %e7ts5 )#ease imme%iate#y note (or your recor%s that a## (urther communications re!ar%in! this account are to 7e %irecte% to my o((ice5 S3eci(ica##y, you are %irecte% to chan!e the a%%ress an% 3hone num7er in(ormation on the account to the a%%ress an% 3hone num7er #iste% a7o'e5 Ms5 C#ient re!rets the (act that she wi## not 7e a7#e to maKe any (urther 3ayments on this %e7t5 Ms5 C#ientFs on#y source o( income is Socia# Security 7ene(its, which are nee%e% to 3ay her necessities o( #i(e5 She has no assets5 Ms5 C#ientFs (inancia# situation wi## not chan!e (or the 7etter5 Ms5 C#ient has 7een %isa7#e% an% recei'in! %isa7i#ity 7ene(its since 19,;5 She is 2; years o#%5 > ha'e inter'iewe% Ms5 C#ient an% %etermine% that she is Cu%!ment.3roo(5 6here(ore it wi## not 7e necessary (or her to (i#e (or BanKru3tcy5 )#ease %o not #ea'e messa!es with my o((ice seeKin! BanKru3tcy in(ormation5 Such ca##s wi## not 7e returne% 7ecause there wi## 7e no such in(ormation to re3ort5 &n%er the circumstances, > wou#% reHuest that your com3any char!e o(( Ms5 C#ientFs %e7t5 Ms5 C#ient re!rets that such a reHuest must 7e ma%e, 7ut she sim3#y has no 3ros3ects o( re3ayin! the %e7t5 My c#ient is a#rea%y aware that non.3ayment wi## resu#t in cance##ation o( any cre%it 3ri'i#e!es an% the re3ortin! o( ne!ati'e cre%it in(ormation, there(ore you nee% not contact me to re3ort such in(ormation5 Ms5 C#ient is a#so aware that you may choose to (i#e suit on this %e7t5 @e'erthe#ess, she has %eci%e% to acce3t the conseHuences on non.3ayment, an% has authoriRe% me 0/

to reCect any an% a## sett#ement o((ers (rom your com3any which wou#% reHuire her to maKe any (urther 3ayments5 6here(ore, %o not contact me with any sett#ement o((ers5 > am a#so aware that you may choose to re(er this account to a co##ection a!ency5 Shou#% you choose to %o so, you must in%icate that a## contacts are to 7e %irecte% to my o((ice5 MS5 C#ientFS 8IS>1I@6>"L "118ISS "@1 6ILI)S?@I @&MBI8 "8I @?6 6? BI 68"@SM>66I1, "S > "M 8I)8ISI@6>@ SI8 =>6S 8IS)IC6 6? 6S>S M"66I85 Shou#% you trans(er this account to a co##ection a!ency without in%icatin! that > am re3resentin! Ms5 C#ient, > wi## ha'e no choice 7ut to recommen% to my c#ient that she (i#e suit a!ainst your com3any (or attem3tin! to e'a%e the 3ro'isions o( Ca#i(orniaFs 8osentha# "ct5 )#ease 7e a%'ise% that my c#ient is e#%er#y an% %isa7#e%, there(ore maKin! him es3ecia##y susce3ti7#e to emotiona# %istress5 T*ere ore it is o t*e utmost im#ortance t*at you not contact *er $irectly6 Ca#i(orniaFs 8osentha# "ct reHuires that you cease communication with a consumer when you are aware that the consumer is re3resente% 7y an attorney5 6he "ct 3ro'i%es (or statutory 3ena#ties5 Ca#5 Ci'i# Co%e ::1/,,51/M 1/,,5005 <urthermore, Ca#i(ornia Ci'i# Co%e :0042 3ro'i%es (or tre7#e 3ena#ties when the 'ictim o( un#aw(u# 3ractices is Known to 7e a %isa7#e% 3erson an%Lor es3ecia##y susce3ti7#e to inCury %ue to her %isa7i#ity5 6here(ore, i( you contact Ms5 C#ient %irect#y a(ter recei'in! this #etter, > wi## a%'ise her to (i#e suit a!ainst your com3any, seeKin! tre7#e 3ena#ties 3ursuant to the a7o'e.re(erence% statutes5 )ursuant to Ca#i(ornia Ci'i# Co%e :1/,,514+c-, 3#ease %irect a## (urther inHuiries re!ar%in! this matter to me at the a%%ress #iste% a7o'e5 > thanK you in a%'ance (or your antici3ate% coo3eration in this matter5 Sincere#y,

Scott Maurer cc* 6onya C#ient

0,

"u!ust 01, 2004 9>" <"W & &5S5 )?S6"L SI89>CI Ca3ito# ?ne Customer 8e#ations )5?5 Bo$ ,2012 8ichmon%, 9" 202,2.2012 <a$*+,,,- 229.0021 8e* Mari#yn C#ient Ca3ito# ?ne "cct5_* 40,, ;41, $$$$ "mount* Q0;2500 6o =hom it May Concern* )#ease note (or your recor%s that attorney Scott Maurer re3resent Ms5 C#ient with res3ect to the a7o'e.re(erence% account5 )ursuant to <e%era# an% Ca#i(ornia #aw, you are not to contact Ms5 C#ient %irect#y5 6he 3ur3ose o( this corres3on%ence is to reHuest the 'a#i%ation o( an a##e!e% %e7t to Ca3ito# ?ne5 )#ease sen% an accountin! showin! that Ms5 C#ient owes Q0;2 +or any amounton the account in Huestion5 > ha'e enc#ose% an "uthoriRation to 8e#ease >n(ormation si!ne% 7y Ms5 C#ient5 )#ease note (or your recor%s that our c#ient %is3utes the a##e!e% %e7t5 6here(ore, you are %irecte% not to re3ort any ne!ati'e cre%it in(ormation re!ar%in! this account to any cre%it re3ortin! a!ency without a#so re3ortin! that the account is %is3ute%, as reHuire% 7y Ca#i(ornia Ci'i# Co%e Section 1/,2522+c-5 6hanK you in a%'ance (or your attention to this matter5 Sincere#y, 8eu7en Casti##o, Le!a# "ssistant &n%er the su3er'ision o( attorney Scott Maurer Inc# +as state%cc* M5 C#ient

09

Sen%erFs* "%%ress

[[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[

1ate* [[[[[[[[[[[[[[[[[[[[[

VIA CERTIFIED 'AIL, RET)RN RECEI1T REM)ESTED 8eci3ientFs* "%%ress [[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[ [[[[[[[[[[[[[[[[[[[[[[[[[ 8e5 [[[[[[[[[[[[[[[[[[[[ "cct5 @o5 [[[[[[[[[[[[[[[ 6o =hom it May Concern* > am writin! to reHuest that you cease a## contact with me 3ursuant to 12 &5S5C : 1;92c+c- o( the <e%era# <air 1e7t Co##ection )ractices "ct5 > reco!niRe that you may choose to re(er this account to another co##ection a!ency or 7acK to the ori!ina# cre%itor5 Shou#% you choose to %o so, U?& M&S6 >@CL&1I " C?)U ?< 6S>S LI66I8 >@ MU <>LI, "@1 6SI "CC?&@6 M&S6 BI @?6"6I1 6S"6 > 1? @?6 =>SS 6? BI C?@6"C6I1 >@ "@ "66IM)6 6? C?LLIC6 6SI 1IB65 >( you (ai# to com3#y with this reHuest, > wi## consi%er it an intentiona# attem3t to circum'ent the reHuirements o( the <e%era# an% State <air 1e7t Co##ection )ractices "ct5 >n a%%ition, since > %is3ute the e$istence o( any %e7t, you are %irecte% not to re3ort any ne!ati'e cre%it in(ormation re!ar%in! this account to any cre%it re3ortin! a!ency without a#so re3ortin! that the account is %is3ute%, as reHuire% 7y Ca#i(ornia Ci'i# Co%e +CC- : 1/,2522+c-5 6hanK you (or your time an% consi%eration5 Sincere#y, [[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ +Si!n @ame[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[ +)rint @ame40

March 00, 2014 VIA FACSI'ILE AND FIRST CLASS 'AIL +;10- /10.;190 @C? <inancia# Systems, >nc5 )5?5 Bo$ 4141/ 1e3t5 99 )hi#a%e#3hia, )" 19101 8e* <irst &S" "ccount "ccount _ 40;;1010$$$$$$ 6o =hom it May Concern, 6his #etter is in res3onse to your #etter a%%resse% to Ms5 Aane 1oe %ate% March ;, 20025 ?ur o((ice 3re'ious#y sent @C? a #etter in(ormin! @C? that we re3resente% Ms5 1oe5 " co3y o( that #etter is enc#ose%5 NCO 4iolate$ t*e Cali ornia an$ Fe$eral Fair Debt Collection 1ractices Acts <e%era# #aw 3rohi7its %e7t co##ectors (rom contactin! consumers Known to 7e re3resente% 7y attorneys5 12 &SC :1;92c+a-+2-5 @C? 'io#ate% that #aw 7y sen%in! Ms5 1oe the #etter %ate% March ;, 20025 Uour #etter to Ms5 1oe a#so 'io#ate% Ca#i(ornia Ci'i# Co%e :1/,,514+c-, which s3eci(ica##y 3rohi7its contacts with a %e7tor when the %e7t co##ector has 7een 3re'ious#y noti(ie% in writin! 7y the %e7torFs attorney that the %e7tor is re3resente% 7y such attorney555 an% such notice inc#u%es the attorneyFs name an% a%%ress an% a reHuest 7y such attorney that a## communications re!ar%in! the consumer %e7t 7e a%%resse% to such attorney5 Deman$ or reme$ies #ursuant to Fe$eral an$ State Fair Debt Collection 1ractices Acts 6he <e%era# an% State "cts cite% a7o'e 3ro'i%e (or u3 to Q0,000 in statutory 3ena#ties (or 'io#ations o( their 3ro'isions5 Ca#i(ornia Ci'i# Co%e ::1/,,51/, 1/,,500+7-, 12 &SC :1;92K5 6he "cts a#so 3ro'i%e (or costs an% attorneys (ees5 6here(ore, to recti(y your 'io#ations o( Ms5 1oeFs ri!hts, 3#ease (orwar% a checK in the amount o( Q0,000 to my o((ice5 >( Ms5 1oe is contacte% a!ain > wi## a%'ise her to (i#e suit seeKin! a## a'ai#a7#e reme%ies, inc#u%in! attorney (ees5 ?nce a!ain, > wou#% #iKe remin% you to cease a## communication with my c#ient 3ursuant to 12 &5S5C5 :1;92c+a-+2- an% Ca#5 Ci'5 Co%e :1/,,514+c-5 > a#so remin% you that my c#ient is a senior citiRen an% es3ecia##y susce3ti7#e to emotiona# %istress stemmin! (rom unnecessary %e7t co##ection contacts5 )#ease %irect a## (uture inHuiries to this o((ice at the a%%ress #iste% a7o'e5 =e #ooK (orwar% to your 3rom3t res3onse5 Sincere#y, Scott Maurer 41

Inc#5

Se3tem7er 2/, 2004 VIA CERTIFIED 'AIL, RET)RN RECEI1T REM)ESTED )atricia L5 Sastin!s )a#mer, 8ei(#er & "ssociates, )5"5 )? Bo$ 24249 Los "n!e#es, Ca#i(ornia 90024.0249 8e* <[[[ " ^ <i#e* NNNNNNN 1ear Ms5 Sastin!s* )#ease 7e a%'ise% that this o((ice is re3resentin! Ms5 ".^ with res3ect to the a7o'e.re(erence% account5 )#ease %irect a## (urther communication on this account to the a%%ress #iste% a7o'e, 3ursuant to Ca#i(5 Ci'5 Co%e :1/,,514+c-5 <acts Ms5 ".^ 7e#ie'es that she is a 'ictim o( i%entity the(t5 "t any rate, my c#ient has ne'er sto#en anythin! (rom K.Mart5 Se'era# months a!o Ms5 ".^ %isco'ere% that someone ha% 7een usin! her socia# security num7er to 3rocure em3#oyment, as e'i%ence% 7y wa!es on her =.2 that are not her own5 Ms5 ".^ a#so %isco'ere% crimina# char!es o( the(t on her recor% that are not her own5 Ms5 ".^ su7seHuent#y (i#e% a 3o#ice re3ort with the Santa C#ara )o#ice 1e3artment on "u!ust 24, 20045 Inc#ose% is a co3y o( this 3o#ice re3ort5 "t this time, Ms5 ".^ %oes not Know the true name or a%%ress o( the thie(5 Law Ca#i(5 Ci'5 Co%e :1/9,592 %e(ines a 'ictim o( i%entity the(t as* a 3erson who ha% his or her 3ersona# i%enti(yin! in(ormation use% without authoriRation 7y another to o7tain, cre%it, !oo%s, ser'ices, money, or 3ro3erty, an% %i% not use or 3ossess the cre%it, !oo%s, ser'ices, money or 3ro3erty o7taine% 7y the i%entity the(t, an% (i#e% a 3o#ice re3ort in this re!ar% 3ursuant to Section 20052 o( the )ena# Co%e5 )#ease consi%er this notice o( Ms5 ".^Fs status as a 'ictim o( i%entity the(t an% 7e a%'ise% 42

that Ca#i(5 Ci'5 Co%e :1/9,590+7-+;- 3ro'i%es (or statutory %ama!es o( u3 to thirty thousan% %o##ars a!ainst a c#aimant that (ai#s to %i#i!ent#y in'esti!ate the 'ictimFs noti(ication o( a 3ossi7#e i%entity the(t an% continues to 3ursue its c#aim5 > trust this in(ormation an% the enc#ose% 3o#ice re3ort wi## satis(y you that my c#ient is not the 3erson you are seeKin!5 >( you ha'e any Huestions, 3#ease %o not hesitate to contact this o((ice at the num7er #iste% a7o'e5 Sincere#y,

[[[ M[[[[[, Law Stu%ent un%er the su3er'ision o( "ttorney Scott Maurer Inc#s* "s state% a7o'e cc* <[[[ " ^ +wLo enc#5-

40