Amerisave Class Action Lawsuit. AmeriSave Mortgage Company has settled a $3.1m class action lawsuit which, if approved, is expected to resolve claims that it improperly charged excessive fees to customers who tried to secure a loan or improperly applied for a loan. According to the complaint, AmeriSave routinely charged borrowers for a wide range of services which they did not actually provide and then pushed these services on delinquent borrowers even after borrowers had requested that they be more careful with their borrowing.
Some of the services that AmeriSave billed services that were actually provided by other companies, but AmeriSave charged more for them. In addition, while many class action lawsuits have been successful in obtaining financial compensation for their clients, this one may not be.
Amerisave Class Action Lawsuit
So what do we make of this? First of all, we note that many a court case has determined that a credit check is unnecessary before a company can submit a settlement offer to a class action lawsuit plaintiff.
See United States v. American Laundry Company, Case No. 4:12-CV-03 CVB. So, is this another example of a company counting on people’s fear of being denied credit and therefore settling for a much less than optimal settlement amount? We believe not.
Nevertheless, there are certain things to watch out for when evaluating the merits of a class action lawsuit.
There are many arguments about whether or not a lender’s efforts to collect late fees from borrowers are predatory and thus merit the attention of a class action lawsuit. Certainly, we don’t like to see companies take advantage of the fears of a customer, but class action lawsuits allow the courts to force companies into positions where they are vulnerable to suits.
If a borrower requests a waiver of certain fees, a company cannot rely on the borrower’s fear of being subjected to a class action lawsuit as a basis for denying the request for waiver. (As noted above, courts do not recognize a company’s silence as a waiver.)
In the present case, there were two meritors involved in a Amerisave action lawsuit.
Neither lender had a strong incentive to pursue a lawsuit because they had a very large number of late fees and penalties accumulated and did not have a sufficient amount of available funds to settle the accounts. Accordingly, there were valid cases of misstating billing, fraud, and debtor misrepresentation at the time of billing.
Nevertheless, a class action lawsuit held that the lenders had a duty to warn their customers and that the deficiencies showed a propensity to engage in fraudulent or unethical practices. Accordingly, they were ordered to settle the case.
This decision was disturbing for a number of reasons.
First, it was clearly contrary to decisions reached by the courts in past years. Second, the settlement order arbitrarily assigned blame to a specific customer rather than considering all of the evidence in the case. Third, the case was resolved improperly because it did not provide the necessary information to properly determine which party was at fault.
Fourth, a proper case should have required proof beyond a reasonable doubt that the deficiencies were caused by the defendants’ conduct, rather than by the customer’s failure to act in a certain way.
Accordingly, I would vacate the complaint and dismiss the complaint with prejudice, as it was clear from the complaint and the district court’s order that the complaint was fraudulent.
Furthermore, I would affirm the dismissal of the complaint with prejudice as the complaint was a violation of the statute of frauds. Accordingly, I would award a judgment in favor of the plaintiffs and have the plaintiff repay the amerisave class action lawsuit funding.