Sunday, March 1, 2015
SANTANDER CONSUMER USA RESOLVES ALLEGATIONS OF ILLEGAL CAR REPOSSESSIONS AGAINST SERVICE MEMBERS
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, February 25, 2015
Justice Department Reaches Settlement with Santander Consumer USA to Resolve Allegations Concerning Over 1,100 Illegal Car Repossessions Against Service Members
Santander Consumer USA Inc. has agreed to pay at least $9.35 million to resolve a lawsuit by the Department of Justice alleging that the motor vehicle lender violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced today. The complaint and the settlement, which is subject to court approval, were filed today in the U.S. District Court for the Northern District of Texas.
The settlement covers the improper repossessions of 1,112 motor vehicles between January 2008 and February 2013. The proposed consent order represents the largest settlement for illegal automobile repossessions ever obtained by the United States under the SCRA.
“This is a just resolution that will provide service members with financial relief and help repair their bad credit caused by Santander’s improper repossessions and fee collections with respect to more than 1,100 cars,” said Acting Associate Attorney General Stuart Delery. “The Department of Justice will continue devoting time and resources to protect our service members and their families from such unjust actions and hold bad actors accountable."
“Those who answer this nation’s call to duty understandably have much on their minds while they are in military service,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Whether their car will be seized and sold at auction should not be an additional worry. We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it is owned by a service member.”
The SCRA protects service members against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the service member took out the loan, and made a payment, before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the service member, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the service member. By failing to obtain court orders before repossessing motor vehicles owned by protected service members, Santander prevented service members from obtaining a court’s review of whether their repossessions should be delayed or adjusted in light of their military service.
The lawsuit alleges that Santander initiated and completed 760 repossessions, without court orders, of motor vehicles owned by SCRA-protected service members. The agreement requires Santander to pay $10,000 plus compensation for any lost equity (with interest) to each of these service members. The lawsuit also alleges that Santander sought to collect fees arising from an additional 352 repossessions that unrelated motor vehicle lenders had conducted in violation of the SCRA before Santander acquired the loans. The agreement requires Santander to pay $5,000 to each of these service members. Santander also must repair the credit of all affected service members.
“The SCRA is an important protection for the men and women serving our country in the armed forces, and this settlement not only will rectify the past improper repossessions of service members’ vehicles, but will work to prevent such improper repossessions in the future,” said Acting U.S. Attorney John Parker of the Northern District of Texas.
For future repossessions, the settlement requires Santander to check the Defense Department’s automated database to see if a car’s owner is in military service prior to conducting a repossession.
The Department of Justice first learned of Santander’s repossession practices through a referral from the U.S. Army’s Legal Assistance Program. The referral involved a claim that Santander illegally repossessed the car of a service member, U.S. Army Specialist Joshua Davis, in the middle of the night, after having been informed that he was at basic training. The department also opened its investigation after learning that Santander used an arbitration clause included in its loan documents to prevent a second service member from pursuing systematic relief through a class action lawsuit he filed alleging that Santander had repossessed service members’ vehicles in violation of the SCRA.
As part of its investigation, the United States has already identified Santander’s illegal repossessions, and efforts to collect unlawful repossession fees, occurring between January 2008 and February 2013. Service members identified based on that investigation will be contacted by an independent settlement administrator later this year. The settlement also requires Santander to conduct a review and provide compensation for any additional unlawful repossessions that may have occurred since February 2013. All service members who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the Department of Justice.
The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 37 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $1.2 billion in monetary relief for impacted communities and individual borrowers.
Friday, February 27, 2015
Thursday, February 26, 2015
Wednesday, February 25, 2015
SOME CONSUMERS WHO LOST MONEY ON 'FAT BURNING' AND 'CALORIE BLOCKING' DIET PILLS, WILL RECEIVE REFUND CHECKS
FROM: U.S. FEDERAL TRADE COMMISSION
FTC Sends Refund Checks Totaling More Than $464,000 to Consumers Who Lost Money Buying Deceptively Marketed ‘Fat Burning’, ‘Calorie Blocking’ Diet Pills
More Than 11,500 Checks Are Being Mailed Starting Today
The Federal Trade Commission is mailing 11,585 refund checks totaling more than $464,000 starting today to consumers who lost money buying dietary supplements deceptively marketed as “fat burning” and “calorie blocking.” These are legitimate checks, and the FTC encourages consumers who receive them to cash them before they expire on April 21.
The refunds are being made from funds collected through a July 2014 settlement with Canadian marketers who falsely claimed that their Double Shot pills would cause rapid, substantial, and permanent weight loss without diet or exercise. According to the FTC’s complaint, Manon Fernet and the company she controls, which did business as the “Freedom Center Against Obesity,” marketed Double Shot to U.S. consumers from 2012 through October 2013. The company falsely claimed that users could eat as much of any food as they wanted and lose 15 to 20 pounds a week, just by taking the pills.
Rust Consulting, Inc., the redress administrator for this matter, will mail refund checks to eligible consumers beginning today. The checks must be cashed by April 21, 2015 or they will become void. Recipients should note that the FTC never requires consumers to pay money or provide information before redress checks can be cashed.
Monday, February 23, 2015
MAN AND COMPANIES TO PAY OVER $6.7 MILLION FOR DEFRAUDING INVESTORS THROUGH COMMODITY POOLS
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
February 13, 2015
Federal Court Orders Scott M. Ross and his Companies to Pay More than $6.7 Million in Restitution and a Civil Monetary Penalty for Defrauding Investors in His Commodity Pools, Mishandling Customer Funds, and Failing to Properly Register as a Commodity Pool Operator
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Order requiring Defendants Scott M. Ross, formerly of Gilberts, Illinois, and his companies, Maize Capital Management, LLC and Maize Asset Management, LLC, jointly to pay $5,402,818.89 in restitution to the participants in his fraudulent and illegal “Maize Fund” investment scheme, as well as a $1.3 million civil penalty. The court previously entered a Consent Order that imposes permanent trading and registration bans against all Defendants. Ross currently is incarcerated in Federal prison for his role in two other fraudulent investment scams.
The Memorandum Opinion and Order, entered by Judge James B. Zagel of the U.S. District Court for the Northern District of Illinois, stems from a CFTC Complaint filed in September 2009, charging Ross and his companies with violating the core anti-fraud provisions of the Commodity Exchange Act (Act) in connection with activities relating to the solicitation and management of a pooled foreign exchange account called the Maize Fund. According to the Complaint, Ross and his companies engaged in extensive fraud and other unlawful conduct by making false statements to prospective investors in marketing materials, issuing false account statements that reflected profits when trading was not profitable, mishandling customer funds, and failing to properly register with the CFTC as a Commodity Pool Operator (see CFTC Press Release 5712-09).
In the Order, the court finds that Ross and his companies unquestionably were the cause of customers’ losses. “[T]he fraudulent acts in this case were, by their nature, a part of every transaction relating to the Fund. Every dollar in the Fund was both obtained and retained through fraud,” the Order finds. The Order further finds that the Defendants violated “core provisions of the Act and these violations severely harmed the Fund’s customers,” thus warranting the imposition of a substantial penalty.
The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this action are Joseph Konizeski, Elizabeth Pendleton, Michael Tallarico, William Janulis, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
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