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In a long article on Bloomberg News, but well worth the read:
How unscrupulous lenders have used an obscure legal document to wreck havoc against small businesses nationwide.
The lenders’ weapon of choice is an arcane legal document called a confession of judgment. Before borrowers get a loan, they have to sign a statement giving up their right to defend themselves if the lender takes them to court. It’s like an arbitration agreement, except the borrower always loses. Armed with a confession, a lender can, without proof, accuse borrowers of not paying and legally seize their assets before they know what’s happened. Not surprisingly, some lenders have abused this power. In dozens of interviews and court pleadings, borrowers describe lenders who’ve forged documents, lied about how much they were owed, or fabricated defaults out of thin air.
By seizing their bank deposits, Yellowstone had managed to collect its money ahead of schedule(60k on a 38k loan) and tack on $9,990 in extra legal fees, payable to a law firm in which it owns a stake. In about three months, the company and its affiliates almost doubled their money. At that rate of return, one dollar could be turned into 10 in less than a year.
Everyone else involved in the collection process got a slice, too. SunTrust got a $100 processing fee. Barbarovich’s office(NYC Marshal) got approximately $2,700, with about $120 of that passed along to the city. The Orange County Clerk’s office got $41 for its rubber stamps. The New York state court system got $184.
Cash-advance companies have secured more than 25,000 judgments in New York since 2012 worth an estimated $1.5 billion.
It sure explains why my small business gets a ton of loan/cash advance offers.
It should be noted that these letters have been prohibited in some states for over 50 years, and banned nationwide for consumers since 1984. (but even when banned by a state, they pursue it in a state where they are legal.)
(Score: 3, Informative) by PiMuNu on Wednesday November 21 2018, @02:41PM (5 children)
Yes, let's privatise the police, that will help.
(Score: 3, Insightful) by DannyB on Wednesday November 21 2018, @02:53PM
Only if we privatize the prisons and education system as well. That way everything works together in synergy.
Education system ensures that there are enough uneducated dolts who will fill the private prisons, but also enough hothead bullies to staff the police departments, as well as the right amount of barely employable morons to pay for the entire system to just barely work while the rich continue to live lives oblivious to the problems of the machine that supports them.
Also privatize the fire department and pay for it with private fire insurance. (Sorry ma'am, according to your private fire insurance policy, we cannot start fighting the fire until at least 1/6 of your home has been destroyed.)
To transfer files: right-click on file, pick Copy. Unplug mouse, plug mouse into other computer. Right-click, paste.
(Score: 3, Funny) by suburbanitemediocrity on Wednesday November 21 2018, @04:44PM (3 children)
Why don't the people just read the contracts before they sign the papers. Or if they can't read, hire a lawyer to explain it to them?
(Score: 3, Touché) by PiMuNu on Wednesday November 21 2018, @04:57PM (2 children)
> just read the contracts
> FTFSummary "describe lenders who’ve forged documents, lied about how much they were owed, or fabricated defaults out of thin air"
> hire a lawyer to explain it to them?
Mod +1 Funny.
(Score: 1) by anubi on Thursday November 22 2018, @04:32AM (1 child)
If people read the contract, very few would do business.
The contract is by *far* the most common reason I will walk away from a business offer. Lots of dingbats and fine print scream to me that the business that presented this to me is preparing to financially rape me, and I am best advised to terminate the business relationship immediately.
All that fine print hits me like the sound of a rattlesnake.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2) by Thexalon on Thursday November 22 2018, @03:04PM
Any organization who encourages me not to read a contract they want me to sign is pretty well guaranteeing I won't sign it.
The current state of boilerplate legalese, though, is pretty telling: Most contracts you'll see someone place in front of you state in no uncertain terms that you are not allowed to sue them under any circumstances, ever. And yes, that's legal in the US, per Supreme Court cases decide in the last couple of decades. Which means, of course, that the organization who wrote the contract can break the rules any time they want, and you can do nothing about it.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.