| Volume 124 Number 5 |
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The People’s Lawyer’s Tip of the Day
Heading to the outlet mall looking for good deals? You might want to shop around to make sure that “great” deal is really great. Lawsuits against major outlet stores allege that the “former prices” listed on some “sale” items were a scam to make the “sales” price look better. Just because you’re shopping at an outlet store, don’t assume that you are always getting the best price. Click here for more.
Banks Closing the Accounts of Money Transfer Businesses
Major banks are refusing to do business with money transmitters that allow consumers to transfer money internationally. Over one-quarter of American households rely on nonbank financial institutions, including money transmitters, for everyday banking needs. Convenience stores that handle transfers need an account to deposit the cash. However, banks are categorizing these transmitter companies and their agents as high risk for money laundering, because it is nearly impossible for banks to know the identity of the final customer in a money transfer. Banks either close or freeze these transmitter accounts over concerns about money laundering and extra regulatory scrutiny.
Mexico is the biggest destination for money transfers from the United States. Last year about $24.3 billion was sent there from the U.S. Regulators say they are growing concerned that people will resort to sending cash across the border, which is harder to track and riskier. A lack of banks willing to provide account services to any business that is transferring money to Mexico is causing friction and leading to increased costs. The affected businesses include mom-and-pop convenience stores, potentially limiting options for the millions of people living in the United States who want to send money home by forcing them to mail cash, which is risky. But what was once viewed as a big consumer business opportunity for American banks is now seen as a liability. Click here for more.
Your Money
According to a survey published on CreditCards.com, roughly four in ten people come to regret co-signing a loan for a family or friend. About a third of co-signers had their credit scores drop because of late or missed payments. And 26% of co-signers said that co-signing hurt their relationship with the person they tried to help, because they ended up paying some or all of the loan. A co-signer is responsible for loan payments and it can take awhile before the co-signer knows that payments weren't paid. Before taking the responsibility, prepare for the worst case scenario. Ask yourself if you could afford to make the loan payments. In addition to principal and interest, there could also be late fees and collection costs that increase payments. If payments aren't made, the lender can sue you or garnish your wages. Consider whether you plan to take out loans or credit cards. If you apply for a mortgage the lender will count the loan you co-signed as one of your own financial obligations. Your credit score is also at risk and anything other than a perfect payment history will drag it down. Click here for more.
For the Lawyers
Seventh Circuit accepts NLRB’s position regarding class action waivers in arbitration. The long-running battle between National Labor Relations Board and employers regarding the lawfulness of class and collective action waivers in employment arbitration agreements continues. The U.S. Court of Appeals for the Seventh Circuit issued the first federal appellate court decision to agree with the NLRB’s position that mandatory employment arbitration agreements that require employees to waive the right to engage in class or collective actions in court violate the National Labor Relations Act. Jacob Lewis v. Epic Systems Corp (7th Cir.). Click here for more.