Associated Press Article on LDF Campaign Against Installment Contracts and Loan Agreements

    y by Associated Press 

NEW YORK POST 

July 8, 1969 

owen mig 

tallment contra ots 

and loan agreements are the targets of a broad three-pronged 

legal campaign yeing mounted by the NAA Leg 

fan ca. Aenea und « ~ Sea: e gat Pet aehlbaes 

lawyers for the fund are claiming in a flurry of lawsvits th is 

syumer these clauses unfairly deprive consumers of their right to 

defense themselves against creditors. 

clauses s 
1. Those in which consumers who fall to meet installment 

jayments give up Aheir right to defend themselves against svi 

by finance companies. This errangement is permitted in all st 

20 Mpose in woich consumers give vp their right even to be 

notified they are peing sued by the companies or by the merch 

Shemselves. this is permitted in Colorado, Delaware, Hawaii 

idaho, Illinois, Maryland, Ohio Pennsylvania and virginia.’ 

2, Those in which consumers whé default on loan'or purchase 

yayments assign futvre wages to their creditors. This is perm 

jn most statese 
: 

phshee Schrag, a fund lawyer, told in a telephone interview 

ver-all consumers campaigns 

ihe civil rights organization is aiming at three kinds of contract 

ts 
ates 

except California, Maryland Massachrsetts, Yermont and Washington. 

ants 

4 ted 

of the 

**Poor consumers, both black and white, are routinely cheated 

and abused ty merchants and creditors + We are vsing every 

available legal device to protect these tvyers and borrowers 

| tecause such merchants contribyte significantly to keeping poor 

people poore *sCivil rights are meaningless uniess they are 

| accompanied by economic rights .»? 
] 

| Ybe fund is relying heavily on the Supreme Gourtes 7-1 decis 

| Jast month jnvalidating Wis cons in 3 garnishment law-one of 
ion 

seven cases argued succesafvlly before the covrt by fund attorneys 

last terme. 

can be frozen to satisfy a creditor »3 demands + fhe court ruled a worker is entitled to a hearing vefore his salary 

| {his decision vnderont garnishment laws in 16 other states and 

voided @ quarter-million ontstanding garnishment 

not be taken from & person in @ court proceeding unless he 

nance to defend himself. 

| Tund attorneys are arguing the fine-print clavses don st give 

and adequate warning to consumers tbat they are waiving their 

constitutional right toa day in court. 

Neanwhile, in @ separate series of suits, the fund is trying 

| establish the right of consumers to sue merchants and credit 

companies collectively+ 

3 

moreover, it seems to have established the principle that property 
as 

clear 

to 

| The individual consumer »3 claim often is small-less than $100-and 

| lawyers generally are reluctant to take the cases + 

ie fund lawyers are svecessfvl, such claims could be agregated 

| and consumers could sve ag a class. Attorneys would collec 

| their fees from the creditors 4f and when the consumers wone 

| Laat week the New York State Court of Anpeals agreed to hear 

a cages It is an attempt by tens of thousands of low-income 

consumers to collectively sue a finance company on the ground 

interest. 
miopaed July 8 

t 

advise a customer 18 per cent of the cost of his television 8 

such 

were printed in type that 4g too small. 

aT
 

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