Filing a Credit Card Lawsuit Against a Bank – Are You Out of luck With Your HMO?
The PHH lawsuit is yet another in a long series of lawsuits that the PHH has launched in an effort to improve its public image, after all the problems it has faced in recent years. While these efforts have so far been mostly ineffectual and quite simply made a tiny scratch in the armor of the Bureau of credibility, the PHH lawsuit might have drawn some real blood. PHH stepped into full frontal assault on the legality of the Bureau’s lawsuit. At first, they claimed that the lawsuit was “ooterballed” – that is, without proper authority. Then, PHH claimed that it had “uvigated” the complaint and that it could not be found guilty as a matter of federal law. The court found otherwise and found that the PHH had indeed gone too far in overstepping its jurisdiction, and that the complaint was therefore justified.
Many opponents of the PHH lawsuit charge that it is a green light for lenders to force-placed insurance payments onto borrowers. This is because, if the lender can show that force-placed insurance caused a breach in fiduciary duty, they may be able to sue the lender. As this case shows, however, lenders are not usually able to show a concrete breach of fiduciary duty; rather, they must resort to theories of negligence or plain mistakes of commission. One thing we can be sure of is that if a lender can show that force-placed insurance caused an injury to a third party, and this injury arose as a result of the lender’s negligent act or lack of diligence, the third party victim will likely recover damages from the offending entity. If the PHH cannot show such damage, however, the borrowers’ complaint falls apart.
This brings us to the second fundamental problem with this lawsuit: The complaint relies on an extremely weak argument. The complaint asserts that the PHH was arbitrarily charging borrowers higher rates based on inaccurate information, and then, when they found out the PHH had made this information public, they “up’s” their borrowers about it. This argument, while it is indeed true that the PHH inadvertently disclosed its rates during a news media event, does not give the borrowers a legally sufficient reason to sue the lender. The mere fact that the news media made this mistake does not mean that the lender committed any wrongdoing; and if the error was made by an employee (a supervisor or other ranking official), then (as we have seen with another recently-filed HMO lawsuit) the bank’s responsibility is to ensure that all employees follow whatever procedures they’ve set down and to take steps to correct any errors that they find.
The crux of the complaint is that many borrowers are being unnecessarily harmed by what appears to be a deliberate act on the part of the lender. But the fact that the bank made this mistake does not mean that the PHH should be held liable for it. There are many cases of lenders making clerical mistakes or even typos that end up being accidentally reported to the borrowers. In one case, the offending PHH made more than three hundred clerical errors in a single month! Are these mistakes supposed to make you sue the bank?
No. To file a successful HMO and/or credit card lawsuit, a borrower must show that (a) the lender deliberately violated the HIPAA, and (b) the violations were done in a deliberate and willful manner. How do you know if your lender has violated the HIPAA? A HIPAA lawsuit loan document is specifically designed to make it easy to identify the things that can and cannot be covered by your particular plan. The document clearly outlines what “covered entities” are, how they can be held responsible for violating the provisions of the HIPAA, and what must be done to reinstate or terminate that protection. Furthermore, the forms clearly set forth the amount of damages that can be collected from a liable party for violating the provisions of HIPAA.
When filing a credit card lawsuit against a bank, borrowers must remember that even if their HMO has a valid complaint against them, it doesn’t mean that the bank has intentionally violated the law. Even when an HMO has filed a valid lawsuit against a borrower, borrowers can still bring a valid HMO and/or lawsuit against the bank. Why? Simply because the HMO’s lawsuit loan forms expressly set forth the limitations on the type of claims that can be brought against the bank.
