Alabama Consumer Law Blog

CNN just put up a fascinating story on debt collectors and collection agencies that are abusive towards consumers. This is something that we are seeing more and more of as Alabama consumers are becoming targeted by abusive collectors as the economy continues to seem to slow down.

Here are some excerpts from this excellent story:

In one case a collector threatened to call a woman's place of work "until she lost her job," according to the National Consumer Law Center.

In another case, a collector threatened to send the police to the person's workplace to arrest them, said Joe Ridout of Consumer Action.

The Better Business Bureau received a complaint about a debt collector contacting someone's grandmother four-to-five times a day, using threats like, "if she dies, then her life insurance can pay this debt off."

John Fugate, a Texas consumer attorney relates a story about a rogue debt collector. The debt collector told the "9-year-old child of my college friend, who is the victim of identity theft, that they were going to take her mommy away forever."

The CNN story goes on to summarize some important rights:

But here are some basic rights:

# A debt collector cannot call you before 8 a.m. or after 9 p.m., unless you agree.

# You cannot be contacted at work if the collector knows your employer disapproves.

# If you don't want to hear from a debt collector, write a letter telling them to stop. By law, they have to. Remember, the debt won't go away and you can still be sued.

# The debt collector can contact your attorney -- if you have one. If not, your friends and family can be asked about how to get in touch with you.

# A debt collector can't misrepresent the amount of your debt.

# A debt collector also cannot use profane or threatening language

# Debt collectors can't say that they will put a lien on your property or file a lawsuit unless the agency really means to do that and it's legal.

# Collectors can't legally claim federal benefits, such as Social Security or your retirement accounts, like your IRA or 401(k).

If you have been attacked by abusive debt collectors, contact a consumer attorney who has experience in fighting back and suing abusive collection agencies. The only way to discourage abusive collectors is to sue them which will encourage collectors to go about collecting in an honorable and legal manner.

Just about any car Alabama consumers buy that is not new will be sold “as is.” Does this mean that the seller can sell you a junker or a lemon and you’re just out of luck because you agreed to purchase the car “as is.”

Under Alabama law, you may be able to revoke the purchase. Even though you buy a car “as is,” you still expect the car to work. The technical term under Alabama law, is that the car must be a “conforming good.” In other words, if the dealer sold you a car that he or she represented would be reliable, or said it would be good for getting you to and from work, or some other such representation and the car breaks down within a reasonable time period after your bought it, then the “good” or car is non-conforming. That is, it doesn’t conform to your expectations.

If you buy a used car that turns out has a lot of problems, you have the right to revoke the car. This does not mean you can automatically revoke any “as is” purchase. To revoke the car, you must meet certain criteria set out in the Alabama Code § 7-2-608. These are basically:

- the revocation or return of the car to the dealer must be within a reasonable period of time after the discovery that the car is non-conforming.

- the revocation or return must occur before any substantial change is made to the car, other than the defect you are complaining of, such as attempted repairs, etc

- revocation is not effective until buyer notifies the seller of the car

Upon revocation, you should be put in the same position as if you had never accepted the car. In other words, if you have made payments, you can ask for them back; if you traded in an older car, you should ask for it back (this will often be difficult as the seller usually sells your trade-in shortly after you drive off the lot)

Revocation does not work in all instances and you should probably consult an attorney before doing so. However, as a consumer you need to be aware that you have a right to expect that you are receiving the benefit of your bargain. Though a dealer cannot guarantee there is nothing wrong with a used car, it should meet your basic expectations and not fall apart shortly after you drive it off the lot.

The Consumerist has a post that contains a "stick figure" slide show that explains, remarkably well, the way the sub-prime mess has occurred. Be warned there is some strong language in the slide show but on the whole it is very well done and, with humor, explains how we got in this terrible position we are in now.

We recently came across this excellent post from our friend Ron Burdge, a consumer lawyer in Ohio. You can visit his website here. Mr. Burdge also has an excellent blog called the Consumer Rights Law Blog.

In a recent post, Mr. Burdge discusses the unfortunate trend of emboldened collection practices by debt buyers and debt collectors. One such collector purchased large volumes of debt for pennies on the dollar and recently sent out letters trying to collect on it.

This particular letter was an attempt to collect on $16.96. As Mr. Burdge noted, the letter was addressed Dear S_____ and the envelope was addressed to S_____ Face. They claim it was a mistake as the letters were automatically generated. However, this highlights a trend we've been seeing against Alabama Consumers by emboldened debt collectors. Since George Bush pushed through a change in the bankruptcy laws making it more difficult to file Chapter 7 bankruptcy, we've seen worse and worse conduct from debt collectors.

First of all, what can you do if you've been harassed by a debt collector. Well, simply put you do not have to put up with it. You can sue them. The Congress passed the Fair Debt Collections Practices Act to govern how debt collectors and debt buyers collect debt. They are not allow use profanity in doing so. However, many of them believe this is an effective means to intimidate consumers in to paying debts they allegedly owe. You do not have to put up with this.

As Mr. Burdge points out to his Ohio Consumers, Alabama Consumers should be aware, that if you have been illegally sued or harassed by a debt collector you do have rights. They can be forced to pay you as much as $1,000 in statutory damages and to pay your attorney's fees in addition to mental anguish damages.

If you have been harassed by a debt collector, please contact us. We sue debt collectors who have violated the law.

Alabama consumers should be aware of this jury duty scam we recently read about on the Houston Consumer Blog. This is a blog that the local ABC News Station has on their website. The blog is maintained by Mike Mcguff, who has done an excellent job of informing Houston consumers of issues they need to be aware of.

Apparently, an identity theft was attempting to obtain individual's personal information by calling them and telling them that they had missed jury duty and were being fined. One person he called reported it this way:

“I received a phone call yesterday from someone claiming to be with the Harris County Jury Assembly Room Staff. They said that I had failed to report to Jury Duty and I would be fined $300 dollars if I did not. Then they told me that I could pay with a credit card and get it taken care of right away. I do not have a credit card, so I told them I had never received a letter/summons and if I was going to be fined, I would rather send in a money order or check. Then I started asking more questions about what I could do to avoid the fine, since I had never received the letter, and they just hung up on me.

First, of all, never give your personal information out over the phone to someone who calls and asks for it. Second, if you receive such a call. Hang up and call the court to report this immediately. If you ever receive a suspicious call from anyone, hand up and call the company back on a number from the phone book or their official website.

In our first part in this series we gave you an overview of why as an Alabama consumer you need to pull your credit reports when you have been sued by a junk debt buyer such as Palisades, Unifund, Asset Acceptance, and the like. We pointed out three reasons:

1. You need to know what the junk debt buyer is saying about you and the date of last activity;
2. Is the junk debt buyer reporting the account as being "in dispute"; and
3. If you win your case will the zombie debt buyer remove the account from your credit reports?

This post will address the first of the these areas - what is the debt buyer saying about you and the age of the account.

Sometimes we see when people have been sued in small claims or district court in Jefferson County or Shelby County or wherever the suit may be filed - we see the amount claimed is significantly higher than the amount listed on the credit report. Most debt scavengers who sue Alabama consumers do NOT claim attorney's fees as they know they cannot obtain attorney's fees when they don't have a valid contract. As we have pointed out, debt buyers normally either do NOT own the account or are unwilling to prove they own the account. So the amount they claim in a lawsuit should be similar to what is on the credit report but often it is not. This can cast doubt on the credibility of the claim - particularly when the amount claimed is (as it almost always is) significantly higher than what they are telling the credit reporting agencies.

The other reason knowing what's on the credit report is so important that we will address in this post is the age of the account. The basic rule is that negative accounts can stay on your credit reports for seven years (sometimes it is seven and a half years). This is measured from the date you first become delinquent - that is normally when you stop making payments. What some junk debt buyers have a nasty habit of doing is to list the starting date as the date they bought the account. This is not an accident. This is to hurt Alabama consumers by forcing the account to stay on your credit reports longer than it is supposed to - here is an example. You default in May 2001. It will come off in May 2008. But Palisades buys the debt in February 2006 and reports the trigger date as February 2006. Now it will stay on until February 2013. When you find this, contact a lawyer immediately so you can file suit if that is appropriate. We have previously posted about this dirty trick of debt buyers. We suggest you respond to this type of malicious conduct with a vigorous and punishing suit.

Part Three of this series will focus on whether the debt buyer is listing your account on your credit report as being in "dispute" as required by law assuming that you have disputed the account.

Credit Slips is a wonderful blog written by professors about consumer issues. The most recent post is by Elizabeth Warren, a Harvard professor. The title is The New Politics of Bankruptcy.

We recommend you read this article as it discusses the beginnings of a backlash against those in Congress who voted for the change in the bankruptcy law that has harmed so many consumers across the country. Here is a brief excerpt:

Recently Albert Winn, a long-time Congressman from Maryland, was challenged in the primary for his seat. His opponent, Donna Edwards, campaigned on several issues, but among the most prominent was her opponent's vote for the 2005 bankruptcy legislation. He had ignored the needs of his constituents, she argued, and favored the financial interests whose executives (not coincidentally) gave his campaign financial support. Ms. Edwards defeated that incumbent in a landslide (60%-32%).

Read the rest of this article and be sure and let your elected officials what you think about them not taking into account the needs of consumers. The big banks may have the money, but we still can be felt by voting and expressing our opinions....

While we don't practice bankruptcy law, we do get calls from time to time to help bankruptcy attorneys who are dealing with various types of improper conduct from creditors and particularly from junk debt buyers. In this fascinating post by Michael Doan, he talks about a proof of claim filed by a debt scavenger who, amazingly, did not even own the debt but was planning on buying the debt. Here is an excerpt:

So while you may have listed Sears, Citibank, and a Shell mastercard in your case, instead you now have claims from Asset Acceptance Corp, B-Line, eCast, Resurgent, and the like. The biggest problems with these claims is that most these debts are VERY OLD and past the statute of limitations to collect upon. Of even greater significance, is the fact that these debt scavengers may have the WRONG DEBTOR or may not have even bought the proper account in the first place!

Stay involved in your bankruptcy case and ask your bankruptcy lawyer what your options are if you have a false proof of claim filed. Often we can go after the junk debt buyers who do this and sometimes that can mean money to you or at least money paid into your plan which helps you get through the bankruptcy quicker.

According to myentrust's article, a staggering five percent of all identity theft victims are children. You should definitely read the entire article but here is a critical part of the article:

Here are some common sense Tips to Protect Children from identity theft and online fraud:

1) Keep info private - Educate children about the importance of keeping personal information private.

2) Protect their SSN - Your kids need to ask your permission from a parent before they give out their Social Security number and address or other personal contact information to anyone.

3) Protect personal info - Warn children about the perils of submitting their email address, name, home address, and birth date to online sites.

4) Check for red flags -If you start to receive promotional mail and especially credit card solicitations in your child’s name, this is a red flag for potential identity theft.

5) Stay off mailing lists - Keep the names of children off mailing lists. Use an adult family member's name instead.

6) SSN's only when necessary - Social Security number theft is on the rise. Don’t give your children’s SSN to anyone, if it's not absolutely necessary. When it is, ask why it's needed and how it will be used.

7) Parental monitoring - Pay attention to sites your children visit and ensure they are not unnecessarily exposing themselves to identity theft.

8) Protect SSN cards - Don't allow your children to carry their Social Security cards. Keep them locked in a secure place.

We need to practice these steps to help protect our children. We just today posted an article about a seven year old boy that had his identity stolen when he was about one year old.

Myentrust is an interesting website with lots of identity theft related articles. Thanks to Julie Tilsner of Walletpop for alerting us to this article.

Lita Epstein of Walletpop has an excellent post on Protecting Your Identity - Understand The Types of Identity Theft. We highly recommend this particular article and this site in general. Identity theft is a terrible problem that we all face and every bit of information we can gain (and that we use - knowledge by itself is worthless) can be the difference between almost being a victim and being an identity theft victim.

This would be funny if it wasn't so serious - a 7 year old boy has been told by the IRS he owes back taxes on $60,000. It turns out a despicable person has been using the boy's identity since 2001. Let's see - using advanced math skills - the boy was, what, one year old when his identity was stolen? Or was he not even one yet? Amazing!

The story is pretty short but it gives the details - we recommend you read it in the San Diego Union Tribune.

Protect yourself and your children from identity theft. If you have been the victim of identity theft contact a consumer attorney. This will help make sure you get it cleared up - or if it doesn't get cleared up you can sue the companies that refuse to honor their obligations under federal and state law.

We ran across this video that discusses the dangers of eating out. Though this happened in April of 2007, you could still potentially be a victim of this scam. The scam involves credit card skimming, which is where someone who uses your credit card runs it through a device, which records your personal information from the card. They can then make a duplicate card, which appears to be and works just like your card. When used, the charges show up on your account.

The only real way to prevent this is to regularly check your credit and bank card statements and balances. If anything looks out of line, contact your bank immediately to report it.

If you have been the victim of identity theft and have difficulty correcting it revew these articles, Identity Theft Credit Issues and Steps for Reporting Credit Errors on some steps you can take to begin repairing your credit.

Most of us have probably heard or seen the commercials from LifeLock - the owner gives out his social security number without fear because he is protected against identity theft. For the curious, his social security number can be found on the website. Rush Limbaugh advertises the service. Apparently LifeLock now has about 700,000 customers who pay about $10 per month. So what's the problem? For one, Experian has now sued LifeLock.

According to Andrew Johnson of The Arizona Republic, Experian is claiming that "LifeLock is violating the Fair Credit Reporting Act by signing up its customers for fraud alerts and removing their names from direct mailing lists."

Here are several more interesting quotes from this good story:

Experian claims that under the Fair Credit Reporting Act, the 90-day alerts are intended for consumers who believe they have become the victim of fraud or will likely become a victim.

The act also stipulates that only consumers or representatives - such as a parent - can sign up for fraud alerts.

Experian argues that by continuously enrolling its customers in fraud alerts, LifeLock is costing credit-reporting agencies money.

Furthermore, Experian also contends that LifeLock does not do enough to let consumers know that they could obtain many of the services it offers on their own for free.

"LifeLock is leading consumers to believe that the service it is providing is something consumers couldn't do themselves and they have to pay a fee for what is a legal right under federal law," said Peg Smith, executive vice president in Experian's Costa Mesa, Calif. office. "We believe what's happening here is LifeLock is not providing adequate disclaimers to consumers about the fact that these are free for consumers who are truly victims of fraud."

Just because something can be done for free doesn't mean its wrong to pay for it - I could do my taxes for free but yet I will pay a CPA to prepare them. That sounds like a bogus argument from Experian. Now what does resonate as true is that LifeLock is costing Experian money. That is the only thing that we have found in numerous suits against Experian, Equifax, Trans Union, and Choicepoint (credit reporting agencies) that will get their attention. The more people that opt out of the mailing lists, the fewer names the agencies such as Experian have to sell to companies who want to bombard us with offers and advertisements.

I don't know if LifeLock is violating the Fair Credit Reporting Act like Experian claims but I do know it is noteworthy that Experian claims this. I've never seen Experian agree or even hint that it had ever seen the Fair Credit Reporting Act violated - every time we sue Experian for this it claims there is no violation and it has never seen a violation. So, perhaps progress is being made by the means of LifeLock - annoying commercials and all....

Update - just saw this post by Denise Richardson on this issue - good stuff to read by clicking here.

Our good friend Matthew Dunaway has an excellent post on his blog - Birmingham Bankruptcy Blog - about zombie debt and those who buy it. We recommend it for your reading as every bit of knowledge you can gain about this industry is helpful when it targets you and normally has no proof of what it claims against you.

Whenever an Alabama resident is contacted by a collection agency or debt buyer or debt collector, we recommend that the Alabama resident contact a consumer attorney. There are several critical reasons why we recommend this.

First, there are some rather strict deadlines about what can be asked of a debt collector in, for example, the first 30 days after contact.

Second, many Alabama residents have been intimidated into paying debts that they do not owe simply because they thought they had no choice but to pay. You should never feel obligated to pay a debt that you do not owe!

Third, many debt collectors or collection law firms or debt buyers are abusive and violate the Fair Debt Collection Practices Act and state law and you can sue them for doing so. It makes sense to know your rights as early as possible in your dealings with collectors.

While being in a car wreck and being contacted by a debt collector is not the same thing, in both cases it makes sense to get a free evaluation of your rights. Just as some insurance companies try to discourage injured victims from getting legal counsel, the collection industry has tried to do the same for the same reason - it is easier to deal with people who don't know their rights. Don't let this happen to you - have a free consultation with a lawyer and know your rights and options and then you can make the best decision for you.

We have focused this blog on consumer issues but we have spent many years developing our personal injury and wrongful death litigation skills over many cases. We have gained some insights into depositions and have shared a few of our preparation skills in our new blog - Birmingham Injury Blog - in five separate posts that we believe will be of use to our consumer readers.

The blog posts are as follows:
Four Keys To Being Prepared For A Deposition
First Key - Hear The Question
Second Key - Understand The Question
Third Key - Think About The Truthful Answer
Fourth Key - Only Answer The Question

While these posts are written with a slant towards personal injury cases and depositions, we still believe they will be useful to any consumer who is facing a deposition and wants some general thoughts on one way to approach deposition preparation.

We appreciate any thoughts or comments you have and if we can be of assistance to you, please feel free to fill out the "contact us" form to the left of the page.

We ran across this recent article titled "Social Insecurity: High-Interest Lenders Tap Elderly, Disabled" in the Wall Street Journal detailing how payday lenders have been targeting the elderly and disabled. This isn't something that is happening just in other parts of the country. The story was out of Dothan, Alabama and shows how Alabama's elderly and disabled have been targeted.
Payday lenders charge rates that would make some loan sharks blush and this article shows how they are targeting our elderly. We all need to be on the guard against this type of activity but particularly those of us who have elderly family and friends who might fall prey to this type of activity.

We have received a number of calls and emails from Alabama consumers who have been sued recently by debt buyers. Many of these people have been sued by junk debt buyers such as Palisades, Asset Acceptance, Midland Credit, etc. and by local lawfirms such as Zarzaur & Schwartz or Nathan & Nathan. We often tell people who are not late on filing an answer to the suit to pul