The United States District Court for the District of New Jersey Approved This Legal Notice

A Class Action Settlement with Consumer Portfolio Services, Inc. Will Provide Certain Benefits

 Pierre-Charles vs. Consumer Portfolio Services, Inc. 

Case No.: 3:10-cv-10025-BRM-DEA

At the Fairness Hearing on July 21, 2020, the Court entered an order granting final approval to the Settlement described below.  A copy of the Court’s Order may be found here.  The Settlement will be implemented as described in the answer to question #5 below.

This is a Settlement Notice to inform Settlement Class Members about a proposed settlement in a class action lawsuit against Consumer Portfolio Services, Inc. (“CPSI”), an auto finance company.  The lawsuit claims that CPSI violated New Jersey law regarding the manner in which fees were charged in connection with the repossession of motor vehicles, and the storage and release of personal property located in those vehicles.  Although CPSI denies any and all claims asserted in that lawsuit, it has agreed to settle the lawsuit. This Settlement Notice describes the proposed settlement (the “Settlement”), and informs Settlement Class Members of their rights.  The benefits described are in exchange for releasing certain rights.

Who is in the Settlement Class?

A Notice was mailed to all members of the Settlement Class– if you received such a notice you currently are in the Settlement Class.  The Settlement Class is defined as any consumer whose vehicle was repossessed within the State of New Jersey without consent of the consumer by CPSI where:

a) the consumer owed money on that account after credit was given for the sale of the repossessed vehicle; and

b) the repossession occurred after September 19, 2013 and before (i) November 6, 2017 (if the repossession was completed under a contract between CPSI and American Recovery Service, a Patrick K. Willis Company); or (ii) after September 19, 2013 and before February 1, 2018 (if the repossession was completed under a contract between CPSI and ALS Resolvion LLC); or (iii) after September 19, 2013 and before February 8, 2018 (if the repossession was completed under a contract between CPSI and any other vendor).

The Settlement Class excludes any person:

  • whose relevant motor vehicle loan resulted in a court judgment for CPSI as of September 1, 2019;
  • who obtained a bankruptcy discharge on the relevant motor vehicle loan after the date the vehicle was repossessed and before April 15, 2020;
  • who was in an active bankruptcy proceeding as of April 15, 2020;
  • who filed for bankruptcy after April 15, 2020 and the bankruptcy proceeding is active as of the date the Court gives final approval to the settlement;
  • who received a bankruptcy discharge after April 15, 2020 and before the date the Court gives final approval to the settlement;
  • who entered into a general release of claims with CPSI; or
  • whose loan transaction involved a Co-Obligor (Co-Signer) and that either the Primary Obligor or Co-Obligor successfully excludes himself or herself from the Settlement Class.

If you did not receive a copy of a Notice regarding this settlement and you believe you meet this definition, you may contact the Settlement Administrator at NJCPSISettlement@atticusadmin.com to request a copy of the individualized Notice.

A Summary of the Settlement Benefits

1)   For Settlement Class Members where their relevant vehicle loan account has a balance, CPSI will stop all efforts to collect the amount of money it claims the Settlement Class Member owes on that loan account and mark that loan balance as zero.  It will not sell that debt.

2)   CPSI will request the consumer reporting agencies to which it reported Settlement Class Member accounts to permanently delete those accounts from those Settlement Class Members’ credit report.

3) CPSI will obtain an order eliminating a judgment against a small number of Settlement Class Members and send that order to those persons so they may send it to any credit reporting agency.

4) A small number of Settlement Class Members who had satisfied their relevant vehicle loan accounts or the account had been marked for no further collection by CPSI will be paid $285.  If there is a co-signer on that account, then a check will be made jointly payable to both persons.

However, if there is a Co-signer reflected on a Class Member’s account, and either the Primary Obligor or the Co-Obligor (Co-Signer) signer successfully removes themselves or is excluded from the Settlement Class, then that Class Member will not receive any of the benefits described in this notice.

If 10% or more of the Settlement Class Members associated with the 1020 accounts subject to the Settlement submit a timely request to remove themselves from the Settlement, CPSI may terminate this Settlement.  If that happens, the Fairness Hearing will be canceled, and the Plaintiff will attempt to pursue a class action in litigation which may or may not involve those earlier identified Class Members.  If this occurs, the Class Member will be sent a second notice.

A Member of the Settlement Class Has Three Options:

A) Do nothing and Stay in the Settlement Class: If the Settlement Class Member does nothing, the Class Member will stay in the Settlement Class and receive the benefits described in this notice in exchange for giving up certain legal claims if the Co-Obligor on the account of the Settlement Class Member also does nothing.

B) Remove themselves from the Settlement Class by June 16, 2020: This means the Settlement Class Member will not receive any settlement benefits, but will not give up any claims. The answer to Question 7 explains how a Settlement Class Member may remove themselves from the Settlement Class.

C) Stay in the Settlement Class and file an objection with the Court by June 16, 2020: If the Class Member stays in the Class, and wishes to object, the Class Member may do so by filing an objection with the Court no later than June 16, 2020. The answer to Question 8 explains how a Class Member may file an objection.

Additional Information

  1. What is this lawsuit about?
  2. What is a class action and who is involved?
  3. Who represents Settlement Class Members?
  4. What is the proposed Settlement and what will Class Members receive?
  5. What claims are Class Members giving up by staying in the Settlement Class and receiving benefits?
  6. How does a Class Member participate in the Settlement and receive benefits?
  7. What if a Class Member wants to remove themselves from the Settlement Class?
  8. How may a Class Member object to the terms of the Settlement?
  9. What is the difference between objecting and removing oneself from the Settlement Class?
  10. What will happen at the Fairness Hearing?
  11. How will a Class Member know if the Settlement is approved by the Court?
  12. How may a Class Member get more information?
  13. What if a Class Member’s address changes?
1.  What is this lawsuit about?

In December 2015, Consumer Portfolio Services, Inc. (“CPSI”) repossessed the vehicle of Ms. Deborah Pierre-Charles, who is the “Class Representative” or “Plaintiff.”  When she retrieved her personal property from inside the vehicle from the company that repossessed the vehicle, she claims that she was charged a $95 “handling fee” by that company and a $370 repossession fee by CPSI.

The Plaintiff filed a lawsuit against CPSI in the Superior Court of New Jersey.  She claimed that by charging her the personal property fee in addition to allegedly charging her a $370 repossession fee, CPSI violated the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1 et seq.  Plaintiff claimed that she did not owe the personal property fee because she was already charged a repossession fee, which she alleged covered the handling of personal property.  Plaintiff sought triple damages of the $95 personal property fee under the CFA.  She also sought to recover triple damages for those similarly situated, and to compel CPSI to change its business practices, and to pay her legal fees.

CPSI removed the case to the United States District Court of New Jersey, where that case is known as Pierre-Charles vs. Consumer Portfolio Services, Inc., Case No.: 3:10-cv-10025-BRM-DEA.

CPSI denies any wrongdoing related to the Plaintiff’s claim, and denies that any of her claims have merit.  Nonetheless, CPSI has agreed to settle the lawsuit to avoid further legal action.

CPSI has represented that the repossession fee was typically added to each account where there was a repossession, but it claims it cannot practically determine which persons paid a personal property fee to the companies that repossessed their vehicles.  CPSI has conducted a survey and determined that the average fee charged to recover personal property from a repossessed vehicle was approximately $76.00 (although some people were not charged a fee at all).

2.  What is a class action and who is involved?

In a class action lawsuit, one or more people called “Class Representatives” sue on behalf of other people who have similar claims.  In this case, Ms. Deborah Pierre-Charles is the “Class Representative” or “Plaintiff.” The Plaintiff, with people who have similar claims and who do not remove themselves from the settlement, are a “Settlement Class” or “Settlement Class Members.”  Because everyone in the Settlement Class has the same or similar claims against the same Defendant, one court action can resolve the issues for everyone in the Settlement Class.

3.  Who represents Settlement Class Members?

The Court appointed these attorneys as “Class Counsel” to represent the Settlement Class: 

Andrew R. Wolf, Esq. & Bharati Sharma, Esq.

The Wolf Law Firm, LLC

1520 U.S. Highway 130, Ste. 101

North Brunswick, NJ 08902

(732) 545-7900

info@wolflawfirm.net   www.wolflawfirm.net

Christopher J. McGinn, Esq.

The Law Office of Christopher J. McGinn

243 N. Union St., Suite 220

Lambertville, NJ 08530

(609) 682-1900

cjmcginn@njconsumerprotection.com   www.njconsumerprotection.com

Together, these attorneys are called “Class Counsel.”  They are experienced in handling similar consumer class actions. If a Settlement Class Member has questions about the Settlement or the information in this notice, the Settlement Class Member may contact any of the attorneys listed above. If the Settlement Class Member removes themselves from the Settlement, they will no longer represent that Class Member.  The Settlement Class Member may hire their own attorney to represent the Settlement Class Member.  If the Settlement Class Member wants to be represented by their own lawyer, the Settlement Class Member will be responsible for paying his or her fees.

The Terms of the Settlement

4.  What is the proposed Settlement and what will Class Members receive?

1)   For Settlement Class Members where their relevant vehicle loan account has a balance, CPSI will stop all efforts to collect the amount of money it claims the Settlement Class Member owes on that loan account and mark that loan balance as zero.  It will not sell that debt.

2)   CPSI will request the consumer reporting agencies to which it reported Settlement Class Member accounts to permanently delete those accounts from those Settlement Class Members’ credit report.

3) CPSI will obtain an order eliminating a judgment against a small number of Settlement Class Members and send that order to those persons so they may send it to any credit reporting agency.

4) A small number of Settlement Class Members who had satisfied their relevant vehicle loan accounts or the account had been marked for no further collection by CPSI will be paid $285.  If there is a co-signer on that account, then a check will be made jointly payable to bother persons.

CPSI agrees not to issue to any Settlement Class member a tax Form 1099-C due to CPSI’s agreement under the Settlement to cease collection of Settlement Class members’ disputed debt balances, unless directed to do so by the Internal Revenue Service, a State taxing authority or a court of competent jurisdiction.  CPSI, its Counsel, Plaintiff, and Class Counsel take no position as to whether the settlement will have any tax significance for Settlement Class Members.  If a Settlement Class Member has any tax questions, the Settlement Class Member may wish to consult an accountant or other professional at the Settlement Class Member’s own expense.

In all, approximately 944 accounts totaling $7,980,000 will be marked as zero balances; approximately 5 judgments will be vacated, and approximately $20,000 will be paid to 71 Settlement Class Members.

However, if there is a Co-signer reflected on a Class Member’s account, and either the Primary Obligor or the Co-Obligor (Co-Signer) successfully removes themselves or is excluded from the Settlement Class, then that Class Member will not receive any of the benefits described in this notice.

If 10% or more of the Settlement Class Members associated with the 1020 accounts subject to the Settlement submit a timely request to remove themselves from the Settlement, CPSI may terminate this Settlement.  If that happens, the Fairness Hearing will be canceled, and the Plaintiff will attempt to pursue a class action in litigation which may or may not involve those earlier identified Class Members.  If this occurs, the Class Member will be sent a second notice.

CPSI Has Changed Certain Practices

CPSI has made certain representations regarding the practices at issue in this lawsuit: (a) it has directed its vendors to not permit the assessment of fees related to storage and release of personal property from vehicles which are involuntarily repossessed; (b) it has included such language in the contracts with its vendors that provide repossession services; (c) its vendors have represented that they will not assess such fees; and (d) it does not charge consumer obligors a fee in addition to a basic repossession fee for the consumer obligor’s recovery of personal property from a vehicle involuntarily repossessed.

CPSI Will Pay the Fees and Costs of Administering the Settlement

CPSI will pay the fees and costs of administering the settlement through the third-party Settlement Administrator.  That Settlement Administrator will be responsible for updating the mailing list, creating the website, setting up the telephone service, mailing and remailing notices such as these, updating addresses, and mailing any checks or court orders.

CPSI Will Pay the Fees and Expenses of Class Counsel

Under the terms of the Settlement and subject to Court approval, CPSI will pay Class Counsel $185,000 for their attorneys’ fees and expenses working on this case from its beginning through their overseeing the implementation of the Settlement. This payment is in addition to the settlement benefits each Settlement Class Member will receive.

CPSI Will Pay Service Awards to the Settlement Class Representative

Under the terms of the Settlement and subject to court approval, CPSI will pay Deborah Pierre-Charles the amount of $10,000 for serving as the Class Representative on behalf of the Settlement Class.

A copy of the complete Settlement Agreement may be found HERE.

5.  What claims are Settlement Class Members giving up by staying in the Settlement Class and receiving benefits?

Persons who remain in the Settlement Class will not be able to sue, or continue to sue, CPSI as part of any other lawsuit concerning, relating, or arising out of any Settlement Class Member’s retail installment sales contract or repossessed vehicle.  If a Settlement Class Member remain in the Settlement Class, the Settlement Class Member will be legally bound by all of the orders the Court issues and judgments the Court enters in the proposed Settlement.

Under the Settlement Agreement, if a Settlement Class Member remain a member of the Settlement Class, the Settlement Class Member will be bound by the following release of claims:

Upon the Effective Date, Settlement Class Members shall be deemed to have covenanted and agreed that, upon CPSI’s compliance with the terms of the settlement, each Settlement Class Member shall release and forever discharge CPSI and its related and predecessor companies and their past or present directors, officers, employees, partners, principals, agents, successors, assigns, reorganized successors, subsidiaries, divisions, parents, related or affiliated entities, underwriters, insurers, co-insurers, re-insurers, licensees, divisions, attorneys, and controlling shareholders from any and all “Released Claims.”  The term “Released Claims” means all claims, demands, actions, causes of action, rights, offsets, setoffs, suits, damages, lawsuits, liens, costs, surcharges, losses, attorneys’ fees, expenses, or liabilities of any kind, in law or in equity, for any relief, including monetary, statutory damage or statutory penalty, injunctive or declaratory relief, rescission, general, compensatory, special, liquidated, indirect, incidental, consequential, or punitive damages, and all claims for any damages, damage to credit, penalties, attorneys’ fees, costs, or expenses, whether known or unknown, alleged or not alleged, suspected or unsuspected, contingent or  vested, accrued or not accrued, liquidated or unliquidated, matured or not, that concern, relate to, or arise out of any Settlement Class Member’s retail installment sales contract and vehicle repossessed pursuant to the relevant account, including, but not limited to any claims at common law tort or statutory claims of any type, whether arising from federal, state, or local law or regulation which each Settlement Class Members has or may have had, or now has, from the beginning of time up through and including the Effective Date, against CPSI.

The release of CPSI by each Settlement Class Member includes the release of CPSI’s, authorized dealers, joint ventures, suppliers, sub-suppliers, CPSI’s past and present third-party vendors, and any contractors engaged by CPSI or on CPSI’s behalf to initiate, manage or perform the involuntary repossession of vehicles owned by the Settlement Class Members, but limited to claims related to the relevant CPSI vehicle loan accounts, and the repossession and disposition of the relevant collateral vehicles by or on behalf of CPSI.

The “Effective Date” is defined as the later of: (a) the day the Final Approval Order is entered on the Court’s Docket if no objection is filed; (b) the 31st day after the Final Approval Order is entered on the Court’s Docket if an objection is filed and no appeal is filed on the Court’s  Docket (the date following the date on which an appeal may be filed); or (c) if an appeal of the Final Approval Order is timely filed, on the day following the date on which the Final Approval Order is not subject to further judicial review or appeal, provided that the Final Approval Order is not reversed or modified in any way by the Court or an appellate court which is not mutually acceptable to the Parties.

The release provisions contained in this section do not apply to any consumers that have been excluded from the Settlement Class.

 Class Members’ Rights and Options 

6.  How does a Class Member participate in the Settlement and receive the benefits?

A Settlement Class Member will be automatically included in the proposed Settlement unless the Settlement Class Member is excluded as described in the response to Question 3 above or elect to remove/exclude themselves as described in the response to Question 8.  If the Settlement Class Member does not remove themselves, and the Settlement Class Member is not otherwise excluded as described in the response to Question 3 and the Settlement is approved, the Settlement Class Member will receive the benefits described in the answer to Question 5.

7.  What if I want to remove myself from the Settlement Class?

If a Settlement Class Member does not want to give up his or her claims in exchange for receiving the benefits described in this notice, then the Settlement Class Member must take steps to remove themselves from the Settlement Class.  If the Settlement Class Member removes themselves from the Settlement Class, the Settlement Class Member will no longer be covered by CPSI’s Settlement Agreement and will not receive the benefits described in this notice.

If there is a Co-Obligor (Co-Signer) associated with a Settlement Class Member’s account, and if either the Primary Obligor or Co-Obligor remove themselves from the Settlement Class, then both the Primary Obligor and the Co-Obligor will no longer be covered by CPSI’s Settlement Agreement and neither of the Settlement Class Members will receive any of the benefits described in this Notice nor will either the Primary Obligor or Co-Obligor have the right to object as described below.

Settlement Class Members may remove themselves by timely submitting a removal request as follows: The Settlement Class Member’s removal request must include: (A) The Settlement Class Member’s printed name and mailing address; and (B) the statement “I request to be removed from the CPSI Settlement” and mailed to the Settlement Administrator.

Consumer Portfolio Services Settlement

C/O Atticus Administration

PO Box 64053

St. Paul, MN 55164

Phone:  1-800-214-9556

The Settlement Class Member’s removal request must be received by the Settlement Administrator at the above address or postmarked no later than June 16, 2020.  Late requests for removal from the Settlement Class may be considered untimely, which would mean the Settlement Class Member would continue to be a member of the Settlement Class.

As stated above, however, if 10% or more of the Settlement Class Members associated with the 1020 accounts subject to the Settlement submit a timely request to remove themselves from the Settlement, CPSI may terminate this Settlement.  If that happens, the Fairness Hearing will be canceled, and the Plaintiff will attempt to pursue a class action in litigation which may or may not involve those earlier identified Settlement Class Members.  If this occurs, Settlement Class Members will be sent a second notice.

8.  How may a Class Member object to the terms of the Settlement?

Objecting is telling the Court that the Settlement Class Member does not approve of the Settlement.  Only those who have not removed themselves from the Settlement Class, or those whose Co-Obligors (Co-Signers) have not removed themselves from the Settlement Class, may object to the Settlement. At the Fairness Hearing, any person who has remained in the Settlement Class and who wishes to object must appear in person or through counsel of his or her own choosing, and at his or her own expense, to be heard to the extent allowed by the Court.

Any Settlement Class Member who does not object, or whose Co-Obligor (Co-Signer) does not object, in the manner required by this Notice may be considered to have given up his or her objection and may not be able to object to the fairness, reasonableness, or adequacy of the proposed Settlement or any payment of Class Counsels’ attorneys’ fees and expenses and payment of the Class Representative’s incentive awards.

A Settlement Class Member’s objection must include:

  1. the name and docket number of this case;
  2. the Class Member’s name and, if the Class Member is represented by a lawyer, the name of the Class Member’s lawyer;
  3. a statement of each objection along with a description of the facts underlying each objection and any legal authorities underlying each objection;
  4. a statement of whether the Class Member or Class Member’s attorney intends to appear at the Fairness Hearing;
  5. a list of witnesses whom the Class Member may call by live testimony and the facts or opinions to which they will testify;
  6. a description of any testimony or affidavit that will be presented during the Fairness Hearing; and
  7. a list of exhibits which the objector may offer during the Fairness Hearing, along with copies of all of the exhibits.

If a Settlement Class Member stays in the Class, and wish to object, the Settlement Class Member may do so, by filing an objection with the Court, and sending copies to Class Counsel and counsel for CPSI, so that the Settlement Class Member’s written objection is received by the following, no later than June 16, 2020, at the following addresses:

The Court

United States District Court

Case#: 3:10-cv-10025

District of New Jersey

402 E. State Street

Trenton, NJ 08608

Consumer Portfolio Services, Inc. (Defendant)

Dana Carrera, Esq.

Jeffrey R. Seewald, Esq.

McGlinchey Stafford, PLLC

112 West 34th Street, Suite 1515

New York, NY 10120

(646) 362-4000

Class Counsel

Andrew R. Wolf, Esq.

The Wolf Law Firm, LLC

1520 U.S. Highway 130, Ste. 101

North Brunswick, NJ 08902

(732) 545-7900

Any written objection and supporting documentation must be received by the Court, Class Counsel, and Defendant’s Counsel by June 16, 2020. Objections not conforming to these requirements may not be considered by the Court.

 As stated above, however, if 10% or more of the Settlement Class Members associated with the 1020 accounts subject to the Settlement submit a timely request to remove themselves from the Settlement, CPSI may terminate this Settlement.  If that happens, the Fairness Hearing will be canceled, and the Plaintiff will attempt to pursue a class action in litigation which may or may not involve those earlier identified Settlement Class Members.  If this occurs, Settlement Class Members will be sent a second notice.

9.  What is the difference between objecting and removing oneself from the Settlement Class?

Only Settlement Class Members may object.  Those who remove themselves are no longer Settlement Class Members, and those whose Co-Obligors remove themselves are no longer Settlement Class Members. A Settlement Class Member may not object and then remove oneself.  A Settlement Class Member may not remove oneself and then object.

10.  What will happen at the Fairness Hearing?

At the Fairness Hearing, presently scheduled for July 21, 2020 at 2:00 p.m., or at a later time as scheduled by the Court, the Judge will decide whether the settlement is fair, reasonable, and adequate and whether it should be given final approval.  The Judge will also consider any objections and determine the amount that Class Counsel will receive in attorneys’ fees and expenses and whether payment of the award to the Class Representatives should be approved.

Settlement Class Members are not required to attend the Fairness Hearing, unless a Class Member wishes to object to the settlement.  Settlement Class Members are welcome to attend at the Class Member’s own expense.  The Court may adjourn the Fairness Hearing without further written notice to the Settlement Class.

11.  How will a Class Member know if the Settlement is approved by the Court?

If the Settlement is approved by the Court, this website will post the Order within a few days.  A Settlement Class Member may also contact Class Counsel for information regarding the status of the Settlement approval. Their contact information is available in response to Question #4 above.

 Additional Information

12.  How may a Class Member get more information?

Additional information about this case may be found on this website.  A Settlement Class Member may request additional information from the lawyers appointed by the Court to represent the Class Members.  Their contact information is in the response to Question #4.

13.  What if a Settlement Class Member’s address changes?

If a Settlement Class Member’s address has changed, or changes in the future, the Settlement Class Member should send his or her new address and telephone number to the company appointed by the Court to serve as Settlement Administrator:

Consumer Portfolio Services Settlement

c/o Atticus Administration

PO Box 64053

St. Paul, MN 55164

Phone:  1-800-214-9556

Submit address changes via email here: NJCPSISettlement@atticusadmin.com

Due to COVID-19 related complications, the final approval hearing may not be open to the public or may be moved to a different date.  Updates will be posted here as they become available.  Thank you and stay safe.