Consumers have little ability to deal with large corporations on a level playing field. When you sign up for a credit card, obtain a cellphone or buy a home with a mortgage, you have little choice in the terms of the contract. An individual has no ability to negotiate the terms of their agreement and their only choice is to accept the terms or reject them and look elsewhere.
And when some problem occurs with one of those transactions, a single consumer is at the mercy of the agreement and how the entity determines to interpret that agreement. A class action lawsuit is moving to trial against a mortgage servicing company for overcharges borrowers were subjected to by a former unit of the company.
The class action case has been progressing for more than a decade, alleging that the mortgage servicer continued to add late fees on to accounts after the accounts had gone into default. They also are accused of fee-splitting between non-attorneys and their lawyers, which is prohibited by law.
Class-action lawsuits are the one way in which ordinary consumers can challenge the massive power of large corporate entities. While an individual may have only suffered a nominal loss, it would not be economical to sue, because the court filing fees could exceed their potential recovery.
But, because thousands of consumers can be affected by these questionable or illegal business practices, a class action can aggregate all of their damages to create a viable case. In the mortgage case, the total damages were alleged to be $629 million.
Reuters.com, “RPT-Homeowners, Wells Fargo head to trial over mortgage fees,” Nate Raymond, December 8, 2014