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Bank of America Lawsuits – How the Banks Use Consumer Arbitration to Avoid Taxes indemnification

On December 17, 2011, German-American bank HSH Nordbank AG announced a securities lawsuit against Bank of America Corporation(NYSE: ). This represents quite a handful of unresolved legal issues, Bank of America has encountered. These include such matters as Bank of America’s attempts to avoid foreclosure, the scope of Bank of America’s defective debt collection practices and other oversights. If you have been harmed by Bank of America’s poor performance, you may be eligible for monetary damages from Bank of America through a Bank of America lawsuit.

One of the major issues with Bank of America lawsuits is that many victims are never notified that they can pursue legal proceedings against their lenders.

When a victim contacts Bank of America to discuss possible actions related to their delinquent debts, they are usually instructed to stop making contact with Bank of America or to contact a lawyer specializing in Bank of America lawsuits. Often, victims are told that they do not have to worry about such correspondence from Bank of America or the possibility of litigation. However, even when victims do receive written communications from Bank of America or their attorneys regarding pending litigation, they are often improperly provided with contact information or are instructed to stop contacting Bank of America directly or to contact their attorney. In some cases, Bank of America employees also inappropriately threaten such victims with the use of Attorneys Everywhere.

It is important to understand that many of the causes of Bank of America lawsuits result from arbitration clauses contained in both the federal and state statutes.

In 2005, the U.S. Congress enacted the Truth in Settlement Act (TOSCA). Among its many provisions, the TOSCA includes a new statute called the Consumer Debt Arbitration Relief Act. Pursuant to this new statute, consumers are now able to take advantage of a “debt settlement” provision in their credit agreement or contract with any bank or other institution that charging them interest on delinquent payments. The new law provides that if the bank wrongfully denies or delays credit access, then the consumer may submit a lawsuit under the laws governing credit agreements. Bank of America, along with all other banks and mortgage companies, are required to abide by the laws that are enacted by the Consumer Credit Act.

Many times, consumers who are subject to Bank of America lawsuits find themselves unable to repay the debts that they accrued as a result of Bank of America policies and practices.

One example of this would be the credit card accounts in which the bank improperly charged high interest rates. Such excessive interest rates may be illegal because they are deemed to be an abuse of the billing process in the manner in which they were established. In addition to this, many of the fees associated with a Bank of America settlement may also constitute illegal charges under the Fair Debt Collection Practices Act (FDCPA) or the Electronic Funds Transfer Act (EFT Act.) The regulations governing these fees are controlled by the Federal Trade Commission.

Because Bank of America is a publicly held company that is majority owned by one of its shareholders, the corporation must fight to prove that it has not engaged in any wrongdoing that could result in a lawsuit being filed against it.

Every time a lawsuit is filed against a bank, it must defend itself vigorously in court. It often appears that the bank’s efforts to fend off the suit are only successful when the defense attorneys refuse to drop the case. As such many people who have been sued for unfair housing act violations or credit card debt collections have been unable to repay the debtors and faced foreclosure or loss of their home.

The Bank of America lawsuits focus on two areas: forced arbitration and mandatory arbitration agreements.

Forced arbitration is the practice of settling disputes through mandatory arbitration that requires the agreement of both parties to settle the dispute rather than going to trial. As a result of these lawsuits, the government has placed a ban on mandatory arbitration clauses and has made it illegal for banks to use them to force consumers into arbitration. However, the courts have given banks immunity from damages claims in non-foreclosure situations where the bank has provided assurances that the homeowner will be able to repay the loan in a timely manner.

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