Late Fees Home Repair Fraud Rent to Own

Consumers League has filed "friend of the Court" briefs in several suits which had a great significance for consumer law and consumer rights. Rent to Own The CLNJ submitted amicus briefs in the N.J. Supreme Court appeal, Perez v Rent-a-Center. The Supreme Court agreed with CLNJ that RTO contracts are installment sales, and are subject to N.J.'s 30% crminal usury law. Late Fees The N.J. Supreme Court in MetLife Corp. v. Washington Avenue Assoc, reversed an appeal in which the N.J. Appellate Division issued a very favorable opinion on late charges. The Appellate Division made the lender prove a reasonable relationship between any money lost by lateness and the percentage late fee the lender charged to a commercial borrower. CLNJ joined AARP and the National Association of Consumer Attorneys, in a brief supporting the idea that lenders must prove their late charges. The idea of an "unreasonable penalty" has been a part of the law for over 400 years. Apparently the banks don't think this law should apply to them. Contrary to the bank's fears, since the Metlife decision, mortgage lending in New Jersey has never been more robust. CLNJ is represented by Lisa Rodriguez (Cherry Hill), AARP by Deborah Zuckerman (D.C.), and NACA by Pat Sturdevant (D.C.). The N.J. Supreme Court held that a percentage late fee was OK in this commercial loan (the borrower was a sophisticated real estate investor and attorney). The Court did say that that they were not considering what might be appropriate in a consumer case. Home Repair Fraud In Scott v. Mayflower Home Improvement, CLNJ was amicus in the N.J. Supreme Court to argue that a case should be certified as a class action. Approximately 300 homeowners in Passaic County, represented by Madeline Houston (Paterson) sued to complain that they had all been defrauded by a home repair contractor in the same way. Incredibly, the trial judge refused to certify a class action, which would have let the consumers join together in one suit, instead of the impossibility of paying for 300 attorneys for 300 suits. CLNJ quoted Benjamin Franklin, who on signing the Declaration of Independence, said: "We must all hang together or assuredly we shall all hang separately." The Supreme Court told the Appellate Division to hear the emergency appeal. CLNJ was represented by Michaelene Loughlin (Hackensack). AARP and the National Consumer Law Center joined our brief. In round two, the Appellate Division dismissed again, stating that the homeowners could not raise their defenses until they got sued in foreclosure! This seems silly: justice does not depend on "who goes first." So long as there is a live dispute about a debt, the homeowner should be able to petition a Court for a declaration that the debt is no longer owing. What does the Appellate Division wish the consumer to do? risk the loss of one's home? CLNJ thinks the Supreme Court should again hear this case, and CLNJ per Michaelene Loughlin, has submitted another amicus brief. Rent to Own Consumers League was also amicus in Green v. Continental Rentals, 292 N.J. Super 241 (1994). There the N.J. Superior Court held that rent to own is a retail installment sale pretending to be a lease. The Judge dismissed the idea that RTO is not credit, when he said "There are no services, this is interest." The Court held that RTO violated New Jersey's criminal usury law (30% maximum), the N.J. Consumer Fraud Act, the N.J. Retail Installment Sales Act, and the U.S. Truth in Lending Act. Ms. green was represented by Madeline Houston (Paterson). CLNJ was represented by Lawrence Lustberg, Gibbons DelDeo Dolan Griffinger & Vecchione (Newark). The N.J. Attorney General's Office also intervened on the side of the consumer. CLNJ has a rent to own campaign. If you have an individual problem, please check out CLNJ's guide, How to Complain.