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Big Business Vows Battle Against Consumer-Protection Laws

American Tort Reform AssociationOn Wednesday, April 23, 2014, the American Tort Reform Association (“ATRA”) announced a “multiyear, multistate campaign” to reform state consumer-protection laws.  However, by “reform,” the ATRA really means to scale back, water down, and weaken such laws.  

The effect on consumers could be devastating, as such “reforms” could directly impact consumers’ ability to file lawsuits over misleading food labels, defective cars, and unlawful debt collection practices.  Reform proponents, who openly represent big business and corporate interests, argue that the abuse of consumer-protection laws has actually harmed consumers by increasing product and service costs while inundating courts with frivolous claims.  On the other hand, Peter Holland, a Maryland-based consumer lawyer who is an expert on the debt buying industry, warned that the corporate lobbyists are “basically creating a race to the bottom” and stated that such “reforms” would leave consumers vulnerable to hazardous products and sleazy marketing.  

As a consumer protection firm that fights against big business and corporations every day, LeavenLaw is against any so-called “reform” that weakens consumer-protection rights.  Some of the state laws that ATRA plans to attack are the very laws that LeavenLaw use to enforce our clients’ rights.  For example, the ATRA plans to battle laws that require defendants to pay the consumer’s attorneys’ fees in the event that the consumer prevails in litigation against creditors and debt collectors.  Such fee-shifting statutes allow consumer attorneys to file lawsuits against big corporations and banks in circumstances where the consumer obviously does not have thousands of dollars to fight big business and their corporate attorneys.  If these laws are changed, including the FCCPA and FDCPA, then consumer-protection attorneys will no longer be empowered as private attorneys general to fight for the rights of ordinary consumers and citizens.  

To that end, Ian Leavengood and Aaron Swift of LeavenLaw recently served on a committee that was instrumental in thwarting efforts that would have gutted the protections of the FCCPA for Florida consumers.  Specifically, they helped shape the arguments as to why the FCCPA should not be amended to only apply to debt collectors.  Now, as a result, the amendment will not include this change, and the FCCPA will continue to proscribe abusive and harassing conduct on the part of first-party creditors.  

For more information about the ATRA’s efforts to weaken consumer-protection laws, or to learn more about LeavenLaw’s efforts to fight these so-called reforms, please visit or call (727) 327-3328.

Trouble Over Biggert-Waters?


Biggert-Waters Act Flood Insurance Victim

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What would you do if your house payment suddenly went up $500? What if it was through no fault of your own? That’s exactly what happened to one of our clients, Kurt Petersen. Because of an oversight by his mortgage company, his flood insurance premium was not paid on time. This would normally be an easy problem to remedy, but with the new Biggert-Waters Flood Insurance Reform Act now in effect, his premium will jump from $1,800 a year to over $8,000. 

Sure, his premium would have increased anyway because his waterfront home in northeast St. Petersburg is in a flood zone, but only by 20 percent per year, up to the new higher non-subsidized rate. 

Equally concerning about this oversight is that his home and its contents were not covered by flood insurance for most of the year.  "My home was without flood insurance for 10 months, and it was supposed to be paid through the escrow," Petersen said. 

Biggert-Waters Act Flood Insurance

Like many homeowners, Kurt Petersen’s property taxes and insurance premiums are paid through an escrow account managed by his mortgage company. These costs along with his mortgage principal and interest are bundled into his monthly mortgage payment. 

The oversight seems to be a byproduct of refinancing his mortgage in 2012. An act that was intended to save money may end up costing Mr. Peterson much more. Peterson, a banker, calculates the difference between stair step increases and the immediate increase could add up to $50,000. 

This is why Mr. Petersen has enlisted the services of LeavenLaw. Attorney Ian Leavengood states, "Review of Mr. Petersen's re-finance closing documents clearly demonstrates not only that flood insurance escrow was contemplated by Mr. Petersen's lender, Wells Fargo, but that Wells Fargo even charged Mr. Petersen on the closing statement for a company to monitor and verify that Mr. Petersen continually had flood insurance.  Both Mr. Petersen's lender and Life of Loan Flood Policy Company completely failed Mr. Petersen, and as a result, he has been irreparably damaged." 

Biggert-Waters Act Flood Insurance claim

Leavengood adds, "There's no negligence on the part of Mr. Petersen. He has made his payments in a timely manner and performed exactly how he was supposed to perform, and now he's at least potentially facing monetary damage." 

Leavengood is hopeful that either the National Flood Insurance Program will agree Petersen did not intentionally allow his policy to lapse, or the escrow agent will absorb the costly error. 

In either case, "Consumers just need to be very diligent," Leavengood advised. "They need to try to understand what this law means. You can't afford to let your flood policy lapse." 

This case also illustrates how the flood insurance reforms impact local economies. The money to pay the higher premium will have to come from somewhere. "It means I'm not buying a new car," Petersen said. "I have a 1996 and a 2000, and one of them's gotta go soon."

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