Press Release: How Consumer Financial Class Actions Help and Protect Americans

Thursday, July 20, 2017

For Release                                                                           
July 20, 2017
Contact: Joanne Doroshow
212.431.2853 
joanned@centerjd.org
 
CONSUMER GROUP RELEASES NEW REPORT SHOWING HOW CLASS ACTIONS
HELP CHEATED AND DEFRAUDED AMERICANS

 
 
The Center for Justice & Democracy at New York Law School (CJ&D) released a new report today, titled “How Consumer Financial Class Actions Help and Protect Americans.”  The report describes nine important consumer class actions that financial institutions have settled in recent months, including one involving the massive Wells Fargo “fake bank account” scandal.
 
Said CJ&D Executive Director Joanne Doroshow, “Like our large 2014 class action study, this new report shows how class actions help victims of corporate law-breaking and lead to changes in corporate behavior that otherwise would never be possible.”  Noted Doroshow, “When a financial institution receives a large windfall through small injuries to large numbers of people, a class action lawsuit is the only realistic way that harmed customers can challenge this wrongdoing and get relief.”
 
The study comes just as the Consumer Financial Protection Bureau (CFPB) has finalized a critical rule to allow defrauded or cheated individuals to file class actions against banks, lenders, credit card companies and other financial institutions that violate the law.  Over the last six years, many financial institutions have banned class actions against them via arbitration clauses that consumers are forced to sign. The CFPB action would restore customers’ legal rights.  Yet congressional efforts to challenge the rule have already begun.
 
“This report illustrates how anytime, anywhere, an unscrupulous bank or lender could steal money from you, your family, or your small business,” said Doroshow. “If Congress repeals this common-sense rule, there will be virtually nothing you can do if, say, a bank opens a fraudulent bank account in your name, charges you fees and ruins your credit; or, a company illegally freezes money in your bank account, or cuts access to your prepaid cards, so you can’t pay your bills or withdraw money; or, a bank makes illegal credit inquiries without your permission and hurts your credit score so you can't get a loan; or, a bank charges you fraudulent mortgage or loan fees and then illegally try to collect the debt.”
 
Continued Doroshow, “Class action lawsuits are among the most important tools that cheated individuals and small businesses have to recover stolen money, hold large financial institutions accountable and deter future misconduct. The Founders of our nation intended everyday Americans to have unobstructed access to the courts as a vital protection against tyranny and injustice, which is why they preserved the right to civil jury trial in the 7th Amendment.  This rule is critical to restoring constitutional rights that financial institutions have recently tried to take away.”
 
A full copy of the report can be found here: http://centerjd.org/system/files/ConsumerFinancialClassActionsF4.pdf
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