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New consumer cases surged in fiscal 2009

Mon, Mar 22nd 2010 12:00 am
WASHINGTON (AP) - The number of new cases in federal courts related to consumer issues surged in the year ended Sept. 30 as Americans battered by the recession fought foreclosures and downgraded debt ratings, data released Tuesday show.

The statistics were compiled by the Administrative Office of the U.S. Courts, which keeps track of the workload of federal courts. They showed that cases filed by individuals or state regulators under two federal laws, the Fair Credit Reporting Act and the Fair Debt Collection Practices Act, jumped 53 percent in fiscal 2009 - to 6,463 from 4,239 the previous year.

Many lawsuits have been filed against credit-reporting agencies, which collect information to calculate consumers' credit scores, regarding the accuracy of their information. The law requires the agencies to maintain accurate records and respect consumers' privacy rights, and spells out a consumer's right to access his or her credit reports and dispute inaccurate information. The major credit agencies are Equifax Inc., Experian Group and TransUnion LLC.

The Fair Debt Collection Practices Act outlines how collection firms can operate.

The figures for fiscal 2009 also show a tripling of new foreclosure cases, to 1,517, brought in federal court under the Truth in Lending Act. Foreclosure generally is a state process, but homeowners may sometimes challenge the terms of the mortgage under federal law.

New personal and business bankruptcy filings increased 35 percent in the last fiscal year, to more than 1.4 million. That was the largest number of filings in any fiscal year since 2005, when a new law was enacted making it more difficult for people to wipe their debt slate clean in bankruptcy proceedings.