Consumer Banking and Payments Law: 2.9.3 Error Resolution After Account Closure
Sometimes consumers who have been impacted by fraud or unauthorized use attempt to close their bank accounts or find out that the bank closed their account.
Sometimes consumers who have been impacted by fraud or unauthorized use attempt to close their bank accounts or find out that the bank closed their account.
The Massachusetts Tort Claims Act (“MTCA”) establishes the procedures for asserting tort claims against public employees and municipalities. Mass. Gen. Laws ch. 258, § 2. Specifically, the MTCA establishes that public employers “shall be liable for injury or loss of property or personal injury or death caused by the negligent or wrongful acts or omissions of any public employee while acting within the scope of his office or employment.” Id.
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There is one 2020 case involving a class action in Nebraska, Lassalle v. State, 307 Neb. 221, 948 N.W.2d. 725 (2020). This class action involved a group of Department of Health and Human Services (“DHHS”) employees that brought a wage dispute against the State. Id.
When money in a deposit account (or property in a safe deposit box) appears abandoned for a certain period,357 state laws require the financial institution to transfer the money or property to the state. This is escheatment—the transfer of unclaimed funds or property to a state government.
[77 Fed. Reg. 69,738 (Nov. 21, 2012); 77 Fed. Reg. 70,114 (Nov. 23, 2012); 78 Fed. Reg. 70,196 (Nov. 25, 2013); 78 Fed. Reg. 80,302 (Dec. 31, 2013); 79 Fed. Reg. 56,485 (Sept. 22, 2014); 80 Fed. Reg. 43,911, 43,920 (July 24, 2015); 80 Fed. Reg. 73,949 (Nov. 27, 2015); 81 Fed. Reg. 72,395 (Oct. 19, 2016); 81 Fed. Reg. 84,371 (Nov. 22, 2016); 81 Fed. Reg. 86,266 (Nov. 30, 2016); 82 Fed. Reg. 18,975 (April 25, 2017); 82 Fed. Reg. 37,773 (Aug. 11, 2017); 82 Fed. Reg. 51,979 (Nov. 9, 2017); 83 Fed. Reg. 6364, 6440 (Feb. 13, 2018); 83 Fed. Reg. 59,278 (Nov.
In 2021, the Supreme Court issued a second major decision—TransUnion L.L.C. v. Ramirez1623—about the application of Article III to claims under federal consumer protection laws. The case arose when TransUnion, one of the “Big Three” nationwide consumer reporting agencies, issued a report identifying a car buyer, Sergio Ramirez, as a potential terrorist.
The Ramirez opinion begins by discussing general principles for Article III standing.
Ramirez involved a second issue regarding FCRA notice requirements.
Ramirez acknowledges that “traditional tangible harms,” such as physical injury and loss of money, are concrete.1639 In every EFTA case it is important to undertake a thorough evaluation of any tangible losses that the violation caused.
One way to establish that an intangible harm is concrete, recognized by Spokeo and Ramirez, is to show that it is analogous to a harm that was traditionally actionable at common law or in some other way.1644
Spokeo holds that “the judgment of Congress” plays an “important role[]” in determining whether an intangible injury is concrete.1649 However, the majority opinion in Ramirez states that “Congress’s creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide whether a plaintiff has suf
As discussed in § 5.17.6.2, supra, the Spokeo Court stressed that the protections it was addressing were merely procedural, thereby implying that standing might be more easily established for violations of
As noted in § 5.17.6.2a.2, supra, Ramirez appears to cut back on the principle that Spokeo seemed to adopt—that “the risk of
A number of businesses have adopted an ostensible “opt out” strategy to take advantage of the common statement that both procedural and substantive unconscionability must be proven to establish that a contract term is unconscionable and unenforceable. Under this strategy, businesses offer consumers a limited opportunity to opt out of an arbitration clause, and then argue that this opt-out option means that the contract is not a take-it-or-leave-it contract of adhesion,155 and is therefore not procedurally unconscionable.
Section § 8.7.2, supra, examines the impact of arbitration fees and other costs on the enforceability of an arbitration agreement. This subsection looks at arbitration agreements that require that the losing party in an arbitration pay the other party’s attorney fees. The prevailing rule in the United States in litigation is that each party pay their own attorney fees.
Arbitration clauses are often not mutual: the consumer must arbitrate claims, but the lender or merchant can resort to judicial or non-judicial remedies, or has the option of doing so. Such clauses can be challenged under two very different theories.
Arbitration provides an alternative forum to resolve the parties’ legal rights. It should not limit those legal rights. Stripping away rights to enforce federal statutes clearly prevents vindication of those rights, as does stripping away rights under state law, and both should be found unconscionable.272 Perhaps the most extreme example of such an arbitration clause is one that waives the consumer’s rights under both state and federal law, leaving only tribal law.
A number of federal consumer statutes explicitly provide for punitive damages, such as the Fair Credit Reporting Act and the Equal Credit Opportunity Act.
An essential element of many federal consumer statutes is a provision requiring courts to award attorney fees to a prevailing consumer (but not to a prevailing creditor), making it far more practical to raise claims under these statutes for small consumer damages.296 Arbitration agreements requiring each party to bear their own attorney fees and costs, regardless of which party prevails, fundamentally conflict with the congressional intent underlying these statutes.
When an arbitration clause or the rules of an arbitration service provider rule out injunctive relief as a consumer remedy, then an action seeking injunctive relief under federal law cannot be forced into arbitration as a matter of federal law.304 As a matter of state law, an arbitration clause that restricts a consumer’s ability to seek injunctive or other equitable relief can be found to be unconscionable, particularly when the right to that relief is explicitly granted by state statute.305 Wh
Some arbitration agreements or the rules of certain arbitration service providers require that the consumer’s claim be brought to arbitration within a set period of time, or the claim is forfeited. This period of time may be substantially shorter than the applicable limitations period for bringing the action in court. A number of federal courts have held that such a limitation is unconscionable as a matter of state law or inconsistent with the federal statutes setting out a different statute of limitations.307
The arbitration clause or arbitration rules may specify where the arbitration is to take place. Inconvenience of the venue is a ground for finding an arbitration clause unconscionable or for finding that it prevents the vindication of federal statutory rights.325
If the method of selecting the arbitrator or the arbitration rules are too one-sided, this can be a basis to find the provision unenforceable. The leading case is Graham v.
Arbitration agreements may mandate confidentiality as to the arbitration proceeding and award,421 and other agreements reference arbitral rules that require confidentiality,422 including the AAA and JAMS rules.423 AAA’s Employment Arbitration Rules and Mediation Procedures state: “The arbitrator shall maintain the confidentiality of the arbitration and shall have the authority to make appropriate rulings to safeguard that confidentiality, unless th