Alabama Consumer Law Blog

An interesting web-page entitled "The Importance and Availability of Media in a Portfolio" gives us a brief inside look at the problem of debt buyers not being able to always get the proof they need to show ownership of an account that they allegedly have bought. We have previously blogged on this issue as we have found numerous Alabama consumers are sued by companies that will not or can not prove they own the account they have sued on.

In the web page we are referring to, collection insider Rick Shell makes this fascinating point:

When dealing with credit card portfolios, you will rarely obtain anything beyond a copy of an application, and the last few statements on file. In many cases, the application is not available, so you're forced to take an affidavit in its place. This is usually okay when you’re attempting to validate the debt for a default judgment, but does little for you when a debtor, judge, or magistrate specifically requests a copy of the application.

The author has this very practical seeming approach to the problem of often not obtaining the documents needed:

As a debt buyer, don't be discouraged when you have trouble with this aspect of debt buying, especially when you're dealing with debt that you’re buying at less than two cents on the dollar. Just take it in stride, and know that the price is that low because the portfolio has "issues." It's not uncommon for older portfolios to have a number of issues, so you'll simply need to look for other advantages in the portfolio that will balance out the fact that there may be little or no media available.

While this seems like a sound business approach, when Alabama consumers are sued and the debt buyer does not have the evidence to show ownership of the account, this becomes a very serious problem. This often results in the consumer winning the case. If you have won your case, then keep in mind our observation on what this means to your credit report as we blogged about "What Happens When You Defeat Collectors In A Collection Lawsuit".

Please contact us if you have any questions and we will be glad to help you in any way we can.

[Thanks to Sam Glover's blog post which alerted us to this interesting web-page].

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In a recent decision of Thornton v. Wolpoff and Abramson, No. 07-12016, by the Eleventh Circuit Court of Appeals, the court rejected Wolpoff and Abramson's argument that the Ms. Thornton's attorney should not receive the Court ordered attorney fees as required by the Fair Debt Collection Practices Act ("FDCPA") to a successful plaintiff.

Ms. Thornton had sued Wolpoff for violations of the FDCPA related to Wolpoff's collection activities surrounding a balance on a credit card bill that had belonged to her ex-husband. The jury found that Wolpoff had violated the law, but only awarded Ms. Thornton nominal damages in the amount of $1.

After the trial, the court awarded Ms. Thornton's attorney fees at a rate of $250 per hour and in the amount of $7,500. This was significantly less that what was asked for by the plaintiff, due to the court's finding that the case could have been settled by the parties at an early stage of the litigation for a nominal amount of money. It was also significantly more that asked for by Wolpoff.

Both sides appealed, with Wolpoff arguing that the plaintiff did not bring a "successful action" and thus should not be compensated for her attorney's time. The court squarely rejected Wolpoff's argument that a jury finding of $1 resulted in a meaningless difference than a jury's finding in it is favor or awarding 0 dollars. The court stated simply, "Wolpoff is incorrect. The difference between zero dollars and one dollar is the difference between an unsuccessful action and a successful action." at p. 7.

Wolpoff position that the trial court had no discretion to award Ms. Thornton's attorney fees for her work, the court found, was simply not supported by the law. This is important as debt collectors and debt buyers often think that the award of attorney's fees is not a real possibility - this opinion shows otherwise.

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There is an interesting web page that discusses how debt buyers and collection agencies should approach collecting debts. The title is "Developing a Good Collection Formula" and it does provide an intriguing look into the thought process on collecting debts, including why collectors so often want post dated checks. This is written by those in the collection industry - you can read more about John Pratt and Rick Shell here.

Thanks to Sam Glover for posting on this which alerted us to this collection formula article. Remember, if you are dealing with collection agencies, you can click here to review all of our posts on collection agencies and debt buyers. In addition, we have a general post entitled "What Alabama Consumers Should Do When Contacted By A Collection Agency" which can help you. Always feel free to contact us if you have any questions.

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Before agreeing to pay a debt of a spouse that you do not think you owe, Alabama Consumers should be wary of claims from aggressive and harassing debt collectors. We recently ran across a blog post from the The Divorce Blog entitled, "Woman Pursued for Deceased Ex-Husband's Debt" that reminded us of some of the pitfalls and horror stories we've heard from clients about being pursued for a debt that is not even theirs.

In this article Ms. Killian started receiving calls from a debt collector for a department store credit card that her husband had opened. Simply put, Ms. Killian not owe the debt. The debt was solely her husband's as she was not jointly on the account. Additionally, Ms. Killian believed she would be able to get the matter cleared up quickly and without too much difficulty for two additional reasons. Her husband had passed away and they had been divorced two years prior to his death.

Despite Ms. Killian sending documentation showing she had no responsibility for the debt, none of this mattered to the debt collectors. They called her repeatedly on her home and cell phones attempting to get her to pay for her deceased, ex-husband's debt. She was only able to get the matter resolved after three years and after involving a Chicago Tribune columnist's help.

Continue reading "Are Spouses Responsible for the Other's Debt?" »

Most of us are familiar with credit scores and how they determine, to some extent, the type of loan we may qualify for but yesterday we read about a new type of credit scoring - it will measure your reliability to pay medical bills.

This interesting (and somewhat disturbing) product is discussed in several places and we won't repeat what has already been said - instead we recommend you check out the following posts about this.

http://redtape.msnbc.com/2008/01/the-doctor-wi-1.html#posts
http://www.startribune.com/opinion/editorials/13719526.html
http://consumerist.com/346422/medfico-in-development-its-fico-for-patients
http://www.chicagotribune.com/business/chi-wed_medfico_0102jan02,0,4105866.story

We will continue to monitor this and in particular we will see if this will be covered by the Fair Credit Reporting Act. If it is not, then state law should regulate this so Alabama consumers should have protection either way in case there are errors that are not corrected.

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Alabama (and anyone else in the U.S.) consumers can stop some of the junk mail we receive without having to pay a silly fee. Go to the Direct Marketing Association website page that helps to stop some of the junk mail.

Thanks to the Consumerist for alerting us to this helpful procedure.

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In this post Gary Nitzkin of the Michigan Collection Law Blog discusses a client he represents and the violations of the Fair Debt Collection Practices Act that his client has been subjected to by an abusive collector. Gary puts it very bluntly when he says,

Moreover, I want you to know that collection agencies doing stupid, if not sleazy stuff, is almost common place. If you have any interaction with a collection agency, chances are that they will violate the Fair Debt Collection Practices Act. You could end up being a Plaintiff against the agency.

After describing what happened and why he is suing this collection agency, Gary ends with this lesson that we have found to be so true:

Moral of the story - I am a collection attorney and even I have no great love for collection agencies. I don't like their methods or tactics. If you are contacted by a collection agency and feel offended by that contact, chances are the agency has violated the FDCPA. You can sue them for damages. I would be happy to help you.

Feel free to click to the left on the category of Collectors/Debt Buyers for our posts on dealing with and sometimes suing abusive debt collectors and junk debt buyers.

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We have found a blog which deals with consumer issues (not legal issues) and focuses on surviving and thriving without credit. To give you a taste of this fine blog, please read this post which reviews some of the best posts of 2007 from the blog No Credit Needed. No Credit Needed has lots of good tips and examples of how to lessen our need for credit.

Check this site as the less we depend on credit cards and other forms of credit, the less vulnerable we are to dealing with credit report errors, debt collectors, and other annoying things that we regularly blog about here. We can't eliminate the risk of these but we can reduce our risk and the No Credit Needed blog is a good place to start.

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The Alabama Appellate Watch is an excellent blog by Lightfoot, Franklin and White, LLC. The Appellate Watch blog focuses on the decisions normally released every Friday by the Alabama Supreme Court and the Court of Civil Appeals. It contains the full text of each decision and a good analysis of the civil cases.

We have found the lawyers at Lightfoot to be excellent and honorable opponents and we expect to always find the posts at Appellate Watch to be the same.

We recommend that you take a look at this fine blog as the Alabama Supreme Court and the Court of Civil Appeals do release decisions that affect Alabama consumers.

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We have met and greatly respect Ron Burdge - he is a tremendous consumer lawyer and has developed a nationally recognized lemon law practice. So, when he gives straight on advice we listen.

Please read his wonderful post about how you should document problems with your vehicles before you take them to the repair shop and what you should do (or not do) when you pick up your vehicle.

Here are some wonderful points:

Long before you go to the shop you want to sit down and write out a list of each and every defect and malfunction. Say what it is and explain it. Number each item on your list. Make sure your list is thorough, detailed and absolutely complete. You might even want to look over your vehicle with the list in your hand, so you don't miss anything. Write your name, phone number, and vehicle description at the top of the list (year, make, model is enough).

Then leave a copy of your list at home and take a copy with you to the shop. It is extremely important that you leave a copy of the list of defects at home. You need to be able to prove what you complained about and the shop is likely to throw away their copy of your list later. No list, no proof. Simple as that.

Then, when you arrive at the shop, give the service adviser your list. Don't read it to them. Don't summarize it. Give them the list. That way there's no misunderstanding about what you want done.

The service adviser may type it all into their computer and print out a repair order. That's okay, but watch out. Often they will then ask you to sign the repair order before they start to work. The problem is that the paper they want you to sign may not have listed all of your complaints or it may say it differently from the way you said it. So what do you do? Simple. Write on the repair order "See Owner's List" and then sign it. That way you are "incorporating" your list into the repair order itself and you're covered. The service adviser may not notice or may not care or may scratch out what you wrote but it doesn't matter. The important thing is that you wrote it down.

Continue reading "Great Advice For Alabama Consumers - Don't Sign Repair Order" »

We have discussed in some detail the problems with mandatory arbitration for Alabama consumers. Paul Bland of Public Justice alerted us to an article in the L.A. Times that we had missed dealing with movement in Congress to protect consumers from having to deal with mandatory arbitration.

Here are some excerpts of this well written and balanced article:

Critics of the provisions say they deny consumers and employees a basic American principle: the right to go to court.

"People from all walks of life -- employees, investors, homeowners, those enrolled in HMOs, credit card holders and other consumers -- often find themselves strong-armed into mandatory arbitration agreements," said Sen. Russell D. Feingold (D-Wis.), who is sponsoring one of the measures aimed at making arbitration voluntary rather than mandatory.

Continue reading "Congress Considers Prohibiting Certain Types of Mandatory Arbitration" »

Here is an important press release related to a recent decision striking down a class action ban in an arbitration provision.

FOR IMMEDIATE RELEASE
Contact: Deborah Mathis, Communications Director, at (202) 797-8600 Ext. 246

PAYDAY LENDER’S CLASS ACTION BAN STRUCK DOWN IN FLORIDA

Public Justice, the Washington-based national public interest law firm, helped score a victory for Floridians this week when a Palm Beach County Circuit Court opened the door to payday loan customers who want to sue usurious lenders on a class action basis.

McKenzie Check Advance, which provides check cashing services and payday loans in more than 200 stores across the country, had attempted to force customers with claims to go into individual arbitration in lieu of a class action in court or class arbitration. But Circuit Court Judge Elizabeth Maass found that enforcement of the class action ban embedded in McKenzie’s loan agreements effectively meant no claims would be brought against the lender because individual claims are typically too expensive for customers to pursue. The court’s ruling voids the class action ban in McKenzie’s arbitration clauses.

“Judge Maass saw through the payday lender's smoke screen to the truth: corporations should not be allowed to gut Florida's consumer protection laws in the fine print of contracts just because a given consumer can read,” said Paul Bland, a Public Justice attorney who argued the case on behalf of plaintiffs Tiffany Kelly and Wendy Betts. “The facts made it obvious that this payday lender's contract would undermine important consumer protection statutes passed by the Florida legislature, and Judge Maass did the right and courageous thing by refusing to enforce the illegal part of the contract."

In addition to Bland, the legal team included Ted Leopold of Ricci~Leopold in Palm Beach; Clay Yates of Port St. Lucie; Christopher Casper of Tampa; Richard A. Fisher of Tennessee; and Public Justice Waters & Kraus Fellow Amy Radon. Leopold is a member of the Public Justice Foundation Executive Committee and Fisher is a member of the Public Justice Foundation Board.

The victory was part of Public Justice's Access to Justice Campaign and Class Action Preservation Project.

###

Public Justice (formerly Trial Lawyers for Public Justice) is America’s public interest law firm. Dedicated to using trial lawyers’ and other attorneys’ skills and resources to advance the public good, Public Justice is supported by – and can call on -- a nationwide network of more than 3,000 of the nation’s top lawyers to pursue precedent-setting and socially significant litigation. It has a wide-ranging litigation docket in the areas of consumer rights, worker safety, civil rights and liberties, toxic torts, environmental protection, and access to the courts. Public Justice is the principal project of The Public Justice Foundation, a not-for-profit membership organization headquartered in Washington, DC, with a West Coast office in Oakland, California. The Public Justice web site address is www.publicjustice.net.

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Perhaps our favorite blog, the Consumerist, has a very nice listing of the consumer friendly bills that were at least considered by Congress last year (still feels funny saying 2007 was "last year" but....). Please check this out and encourage your representatives and senators to keep you and these bills in mind as they get back to work.

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A tremendous number of Alabama consumers are sued every day on collection suits. Many of these are brought by debt buyers who either cannot or will not prove that they have the right to sue Alabama consumers. There are other defenses to the collection suits - for example many suits are brought after the statute of limitations has expired.

But there are other arguments that are normally very weak. The Michigan Collection Law Blog has a recent post on "Mythical Defenses To Debt Collection" that is well worth your time to read.

If you are sued, please take the time to consult with a lawyer in Alabama who is knowledgeable about debt collection. You may need to settle or it may be best to fight or even to file a separate suit against the collector but do choose your course of action wisely and don't rely upon the "mythical defenses" described in the post above.

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It is a simple fact of life that credit scores control so much of what Alabama consumers can do in terms of obtaining financing for houses or businesses and even employment. These scores are based on the information in your credit reports. This is why it is so critical to look at your credit reports to make sure they are accurate. We discussed this in an earlier post. Regarding the change in FICO scoring, please look at this video of a FOX news interview of Ben Popken of the Consumerist which discusses this change. An interesting interview and we always recommend checking out the Consumerist which is full of good information that can help consumers.

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This opinion from the Fourth Circuit Court of Appeals rejected the arguments of Equifax in this six figure verdict except on two grounds. The emotional distress damages were reduced to $150,000 and the trial court was instructed to conduct a hearing on the attorney's fee award.

A good analysis of the impact of identity theft is provided by Denise Richardson in her fine blog post. We recommend this to your reading. She also has a link to the opinion so you can read it yourself.

While we disagree with the reduction of the emotional distress damages, overall this opinion benefits consumers and for that we are thankful.

1-3-08 Update - we just saw an excellent blog post on this case at the South Carolina Bankruptcy and Consumer Law Blog written by Sheryl Sisk Schelin. We think you will enjoy this excellent post.

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