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30

May 2010

Before bankruptcy, does Navy Federal violate Virginia law?

Posted by / in Before Bankruptcy, Virginia Bankruptcy / 3 comments

Before you file bankruptcy, once you have a lawyer, you should tell your creditors when they call, “call my bankruptcy lawyer.”  The law assumes that most companies with a good name will leave you alone at that point.

In my experience that’s true of just about everybody, but not Navy Federal.

Navy Federal’s collection department says they will keep calling you day and night, until the bankruptcy is filed with the court.  And they do.  (Some people told us Navy Federal calls almost hourly until the bankruptcy is filed.)

I think this is a violation of Virginia law.  Code of Virginia § 18.2-429 makes it a class 3 misdemeanor to cause someone’s phone to ring with the “intent to annoy.”  And the law expressly says that it can still be illegal even if there is also an “intent to communicate.”

The punishment in Virignia for a class 3 misdemeanor is a fine of up to $500.

I think its pretty clear that when Navy Federal calls four or five times a day, after being told, “I can’t pay, call my bankruptcy lawyer, I have to file bankruptcy”–that’s calling with the intent to annoy.

This spring, we helped one of our clients sue Navy Federal to get them to stop violating Virginia law.  We didn’t get far.  Just because something is a criminal law violation,  does not mean a private citizen can sue to enforce it.

So, the judge made it clear we would lose, unless we dropped the case.  (Which we did.  We are going after them under Florida law, but that’s for another day.)  But the judge suggested, here on page 13, that we could “bring it back as a criminal offense.”

My before-bankruptcy clients seem to have fewer complaints about Navy Federal than they did this time last year.  Maybe that’s because they have gotten nicer.

Maybe it’s because their lawyers were listening to that judge.  I hope so.

PS October 2016, CFPB slams Navy Fed

Saw in this morning’s Washington Post that the Consumer Finance Protection Bureau went after Navy Fed.  Hit them for $23 million to unfair collection procedures.  I was really glad to see it.  You can read the Post story, here: Navy-Federal-to-pay-23-million.

PPS  January 2018, Navy Fed suddenly polite.

The last week of January brought a nice letter from a now very polite Navy FCU.  

NFCU was writing to tell me that Woodbridge resident “Stevie” asked them to stop calling her, and that they’d do it!  That’s a big change. 

Thank you Navy Federal.  I take back half the bad things I’ve said about you.

 

Here’s the polite letter

Here’s a sample of the polite letter Navy Federal sends now, when you tell them to “call my lawyer.”

 

 

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13

May 2010

Abusive Debt Collectors: The Lies They Tell

Posted by / in After Bankruptcy, Before Bankruptcy / No comments yet

For most people facing the prospect of filing for bankruptcy, it seems that nothing is more stressful than getting behind on your debts. Knowing that you have obligations that you simply cannot meet, bills that you cannot pay—it’s enough to make the average person feel anxious, frustrated, and even helpless. Now imagine a collector calls about one of those debts and threatens you with arrest and imprisonment if you don’t pay. That’s what happened to one of our clients just this past year.

Our client, let’s call her Mary, had gotten behind on a debt with a department store. That debt was later either assigned or sold to a debt collector called Creditors Interchange Receivable Management, LLC.  Creditors Interchange began calling Mary at home. They left several messages on her answering machine telling her that a lawsuit was being “finalized” against her for the department store debt.  In their final message, an employee of Creditors Interchange told Mary “the authorities” were coming to her home and the only thing she would get out of ignoring their messages was a trip to jail.

After weeks of sleepless nights, crying, depression, and fear, Mary’s son convinced her to call our office. She truly believed that Creditors Interchange could have sent her to jail for failing to pay a personal debt. Once we assured her that that was not possible, we started the work of getting her justice under the law.

The law we used to fight on her behalf was the Fair Debt Collection Practices Act (or FDCPA). The FDCPA is the law passed by Congress to protect consumers from abusive debt collectors such as Creditors Interchange Receivable Management, LLC. The FDCPA says generally that a debt collector cannot harass or abuse you, make false, misleading, or deceptive statements to you, or use unfair practices to collect from you.  These protections for consumers apply whether or not you owe the debt about which the debt collector is calling.

In this case, we were able to get Mary an out of court settlement she was more than happy with, and begin the process of making her whole.

No one should have to go through what Mary went through, but if you have, you do have a remedy.

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30

Apr 2010

Navy Federal takes money from children

Posted by / in Before Bankruptcy / 18 comments

Last month, Navy Federal emptied out the savings account where 14 year old Tammy (not her real name) saved the money she made baby sitting.

Tammy’s mom had been out of work for nine months.  She was now two months behind on her second mortgage.  (The second mortgage was from Navy Federal.)  She just got a new job paying half of what she had been making, and she was glad to get that.  But she knew she would not be able to pay the second mortgage and still feed her children.

So Tammy’s mom came to see me about filing bankruptcy.  But she mentioned in passing that Navy Fed has helped themselves to her daughter’s savings account.  How could they do it?

First time I heard of Navy Fed doing this, I was shocked too.  But I figured out how they do it.

Most banks set up children’s accounts under the Uniform Transfers to Minor’s Act, where the parent is the custodian of the account, but the child is the owner.

Navy Fed apparently doesn’t do it that way.  Instead they set up a joint account, with the parent and the child.  This gives them right, as they see it, then to take Tammy’s money to make mom’s payment.

I think that stinks.  The child, by definition, is a child, and hasn’t agreed to co-sign for mom.  So I don’t think the credit union can pretend the little girl did.

I’ll see if I can find a judge who agrees with me on this.

The big lesson of this.  If you lose your job, take your money out of Navy Federal.  And that include’s your children’s money, too.

PS Navy Federal did back down on this when we sued them–and the little girls have their money back. May 2011

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NORTHERN VIRGINIA BANKRUPTCY LAW OFFICES