H&R Block, Reebok, and Portfolio Credit Card Debt Claims Being Dismissed Due to Lack of Class Action Lawsuit
Recently, I was contacted by a person who wanted to file a class action lawsuit against H&R Block, Reebok and Portfolio Recovery Associates. He alleged that he was a victim of fraud at their company. He had lost money on several accounts at H&R Block and Portfolio, which are in the credit card debt settlement category. He was not an account holder in any of those accounts. He did, however, purchase the cards through Reebok, and later found out that Portfolio Recovery Associates was responsible for his inability to collect.
The class action lawsuit referred to in this article is not new.
Prior to the current economic downturn, many people filed such lawsuits, often obtaining settlements worth thousands of dollars and the chance to have their credit card debt repaid. Unfortunately, most of those who filed such lawsuits received very little, if anything, in compensation. H&R Block and Reebok have both were previously sued for concealing loan information, and in turn, they settled the claims, paying the customers’ attorneys.
My client, while seeking to recoup his losses from H&R Block and Portfolio, chose to file a lawsuit against these companies. There is nothing wrong with that. People wish to pursue justice when they are wronged. However, he overlooked one very important aspect of filing his lawsuit. His lawsuit was not filed under the proper legal authority.
The way class action lawsuits should be filed is under the appropriate class.
The complaint must be filed in a class action lawsuit against the parties to the original lawsuit. It is not necessary to have a separate suit in the court of general jurisdiction. Class action lawsuits are designed to permit any person to join the lawsuit, regardless of whether or not he has been personally harmed or is legally justified in joining the suit. If a class action lawsuit was brought against the Reebok Credit Card Company, it would not be able to recover damages on behalf of its investors without having another suit in the court of general jurisdiction to enable it to do so.
If it did have such a suit in the first place, Reebok could not use any of its prior settlement agreements to force its investors to repay its loans to which it has become a lender.
It could not use any of its loans as collateral on another loan. That is why the class action lawsuit was improperly filed. Had the plaintiffs actually been able to sue, the Reebok Credit Card Company could have have been forced into bankruptcy.
Had that happened, H&R Block and Portfolio could easily go out of business. Thus, an attempt to force the credit card companies into bankruptcy should not even be raised in this litigation. What should be considered instead, is an equitable claim for damages on behalf of all those who have been injured through the actions of the defendants. In other words, a class action lawsuit on behalf of all the people who have been injured through the activities of the defendant. This is something that few people ever bother to do when they are presented with an unfair situation like the one presented to the credit card company of Reebok.
Had the plaintiffs brought their own lawsuit against Reebok, the argument presented by their attorneys in their defense might have been a bit more convincing.
Their attorneys could have argued that there was a likelihood of the credit card company misrepresenting the facts to the plaintiffs in order to force them into a settlement. This argument would have been quite persuasive. Unfortunately, many attorneys do not put any thought into how their arguments will hold up in court, and so they simply proceed to attack the credibility of the class action lawsuit of H&R Block and Portfolio.
The bottom line is that the credit card companies are protected by a certain layer of exception known as the exception to the rule.cc
This exception is based on the fact that Congress has provided an incentive for credit card companies to provide protection for their customers. If the company can show that the plaintiffs would lose a substantial amount of money if the debtors did not settle their claims, then it will be able to prevent class action lawsuits from being filed. There is a very good reason for this exception, which is that there is a strong public policy in place that makes it far more likely that credit card companies will settle than it would be otherwise. The credit card companies know that if they do not settle the claims, then they may be putting themselves at a competitive disadvantage from the beginning.
