Attorney General Kilmartin announced a major settlement with Volkswagen for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing diesel vehicles equipped with illegal and undisclosed defeat device software. The agreement is part of a series of state and federal settlements that will provide cash payments to affected consumers, require Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles, and prohibits Volkswagen from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers and regulators.
Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015.
This includes 3,292 vehicles in Rhode Island. Once the consumer program is approved by the court, affected Volkswagen owners will receive restitution payment of at least $5,100 up to $10,000, and a choice between:
- A buy back of the vehicle (based on pre-scandal NADA value); or
- A modification to reduce NO emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a fix. Owners who choose the modification option would also receive an Extended Emission Warranty; and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.
The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and sellers after September 18, 2015 when the emissions-cheating scandal was disclosed (50 percent of the restitution available to owners).
The full details of the agreement will be available online at www.VWCourtSettlement.com. Affected consumers can file a claim via the website.
If you believe you used MoneyGram to send money to third parties involved in schemes to defraud consumers, you may be eligible for restitution. The settlement with MoneyGram includes a nationwide consumer restitution program. The settlement provides for an independent third party settlement administrator who will review MoneyGram records and send notices regarding restitution to all consumers who are eligible to receive restitution under this settlement.
Generally, consumers who are eligible for restitution previously filed complaints with MoneyGram between July 1, 2008 and August 31, 2009 regarding fraud induced transfers sent from the U.S. to foreign countries other than Canada. More information about this settlement is available at the Settlement Administrator’s website: www.MoneyGramSettlement.com.
HSBC recently entered into a joint state-federal settlement to address mortgage origination, servicing, and foreclosure abuses. The settlement provides direct payments to Rhode Island borrowers for past foreclosure abuses, as well as other relief for borrowers in need of assistance, sets forth rigorous mortgage servicing standards, and grants oversight authority to an independent monitor.
The HSBC agreement requires the company to provide certain Rhode Island borrowers with loan modifications or other relief. The modifications, which HSBC chooses through an extensive list of options, include principal reductions and refinancing for underwater mortgages. HSBC decides how many loans and which loans to modify, but must meet certain minimum targets. Because HSBC receives only partial settlement credit for many types of loan modifications, the settlement will provide relief to borrowers that will exceed the overall minimum amount.
Payments to Borrowers
Approximately 222 Rhode Island borrowers whose loans were serviced by HSBC and who lost their homes to foreclosure from January 1, 2008 through December 31, 2012 and encountered servicing abuse will be eligible for a payment from the national $59.3 million fund for payments to borrowers. The borrower’s payment amount will depend on how many borrowers file claims. Eligible borrowers will be contacted by the Settlement Administrator about how to qualify for payments.
Mortgage Servicing Standards
The settlement requires HSBC to substantially change how it services mortgage loans, handles foreclosures, and ensures the accuracy of information provided in federal bankruptcy court.
The National Mortgage Settlement’s independent monitor, Joseph A. Smith Jr., will oversee HSBC agreement compliance for one year. Smith will oversee implementation of the servicing standards required by the agreement and issue public reports that identify whether HSBC complied or fell short of the standards imposed by the settlement. If HSBC is alleged to have violated terms of the agreement, the states and federal agencies can seek relief through the court.
The agreement resolves potential violations of civil law based on HSBC’s deficient mortgage loan origination and servicing activities. The agreement does not prevent any action by individual borrowers who wish to bring their own lawsuits.
Chase Bank and Chase Bankcard Services Settlement
Under the terms of a settlement with Chase Bank USA N.A. and Chase Bankcard Services Inc., the company will reform its unlawful credit card debt collection practices. The settlement requires Chase to significantly reform its credit card debt collection practices in areas of declarations, collections litigation, debt sales and debt buying. Among other reforms, the agreement requires new safeguards to help ensure debt information is accurate and inaccurate data is corrected, provides additional information to consumers who owe debts, and bars Chase’s debt buyers from reselling consumer debts to other purchasers.
In addition, Chase has agreed to cease all collection efforts on more than 528,000 consumers, including an estimated 806 in Rhode Island. Chase sued the affected consumers for credit card debts and obtained judgments between January 1, 2009 and June 30, 2014. Chase will notify affected borrowers of the change and will request all three major credit reporting agencies to not report the judgments. The agreement also ensures that Chase will provide $50 million in consumer restitution through a separate 2013 consent order reached with the Office of the Comptroller of the Currency. Chase estimates that so far it has provided $13,000 in restitution to 20 Rhode Island consumers.
Consumers with Debt Collection Questions or Complaints
Debt collectors are bound by state and federal laws, including the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from consumers. Consumers may also have the option of pursuing claims in state or federal court. Consumers may file complaints with the Federal Trade Commission, the Consumer Financial Protection Bureau or the RI Office of Attorney General.