Consumer and Financial Abuse Unit
By: Source: AARP Foundation Date Posted: 2007-06-19
The Consumer and Financial Abuse Unit (“Consumer Unit”) provides extended representation to victims of fraud and financial abuse. These cases usually include complaints about real property title fraud, predatory lending or foreclosure rescue schemes.
“Foreclosure rescue” schemes occur when unscrupulous investors track down homeowners facing foreclosure and promise to help them save their homes. In reality, the investors induce the homeowner to sign over title to his/her home and then to rent it back from the investor, with an option to repurchase within a given time. The deals are usually structured so that the homeowner cannot possibly buy back the property, and most of the homeowners do not even realize they transferred title to the investor. The investor leaves the mortgage in the name of the homeowner and then evicts the homeowner at the first opportunity.
The staff attorneys in the Consumer Unit conduct trainings on consumer cases to attorneys and advocates in seminars and at national conferences. In an effort to educate the public about consumer rights and potential fraud, the Consumer Unit staff attorneys present information to community-based organizations and the media. The Consumer Unit also works with pro bono counsel to provide additional representation to LCE clients.
The Consumer Unit is funded in part by a record-breaking contribution of $2.3 million made to Legal Counsel for the Elderly (LCE). The funds constitute a portion of the proceeds of a class action lawsuit attorney Philip Friedman filed 10 years ago against a Washington, D.C. cable company for charging illegal late fees. After the class members who came forward were reimbursed, Attorney Friedman urged the Court to divide the remaining funds recovered from the case among four clinic groups, including LCE.
“In recent years, LCE has been able to work on behalf of older consumers in the District of Columbia, but resources are always tight,” said Jan May, LCE Director.” It’s very gratifying to receive recognition for the work we’ve been able to do in the past, but more importantly the interest on this fund provides us with the means and the opportunity to continue protecting the rights and interests of consumers in the future.”
According to Director May, the contribution represents the single largest gift ever received by LCE, which came only after consumers covered by the class action were notified and given the customary length of time to claim their portion of the settlement. The funds that went unclaimed are being distributed to LCE and the other groups to bolster their ongoing efforts on behalf of District consumers.
“You always hear that all the money goes to the lawyers and the consumers get nothing,” said Mr. Friedman. “This is a real example of how class actions really do work. It not only stopped a predatory practice, but it took the money and used it for the longer term benefit of preventing further abusive practices.”
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