Alabama Consumer Law Blog

The Federal Trade Commission has posted an article that warns consumers about scams associated with getting stimulus payments. Scammers can use very official looking forms that strongly resemble those used by the IRS, to trick people into submitting their personal information in return for the promise of a stimulus check. Scammers can also contact you by email or telephone.

The FTC advises consumers not to give their personal information to anyone who randomly contacts them about a stimulus payment. The IRS doesn't contact people in that manner. While the idea of receiving a check is certainly enticing, be aware that it might just be an identity theft scheme.

When a stimulus plan does involve a check to you (it may not), you won’t need to fill out a separate form in an email or give out personal information — like account numbers or your Social Security number — to someone who calls you out of the blue.

If you have had problems with identity theft because of fraudulent agencies, feel free to contact us.

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Getting rid of credit report errors is critical - particularly given our economy right now. If you have a negative account this could cause your credit card companies to slash your available credit or even close out your account. If the negative account is in error and should not be on your report, this can be particularly frustrating.

One thing we see over and over is clients who have "disputed" directly with the furnisher of the false information and they have not disputed with the credit reporting agencies (Equifax, Experian, Trans Union, etc). This is a fatal flaw if you intend on suing under the Fair Credit Reporting Act (FCRA).

We recently wrote an article on our website "Alabama Consumer" that explains why you must dispute through the credit reporting agencies. We hope this is helpful to you. Remember to send your disputes by certified mail, return receipt requested.

Please contact us if you have questions about credit reporting errors or how to go about disputing false information on your credit reports.

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Denise Richardson of GiveMeBackMyCredit.com has posted an article about the problem of children being the victims of identity theft. Often, the theft isn't discovered until years later when...

a young adult is denied a student loan, credit or employment, all because of a destroyed credit rating.

Stolen Social Security Numbers and birth certificates are available to be purchased with relative ease, and thieves are able to manipulate children's identities to their advantage. The Social Security Administration doesn't have a "check and balance" system yet that can put names, ages, and genders with Social Security Numbers.

If you, or your child, have been victims of identity theft, feel free to contact us.

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The Michigan Collection Law Blog has posted an article relating to another blog post from Workathometruth.com about the Federal Trade Commission slapping Academy Collection Service, Inc. with the largest penalty fine ever in a debt collection case. Keith Dickstein, owner of the company, has agreed to pay the fine of $2.25 million.

Over 1,000 complaints have been filed against Academy Collection Service for various forms of creditor harassment, such as:

Academy’s collectors allegedly engaged in false or deceptive threats of garnishment, arrest, and legal action; communication with third parties about consumers’ debts; and calls to consumers at their workplace when the employer prohibits such calls. Other practices included frequent, harassing, threatening, and abusive calls; unfair and unauthorized withdrawals from consumers’ bank accounts; and early deposit of postdated checks consumers submitted for debt payment.

Not only does Academy have to pay a fine, but they are now prohibited from misrepresenting themselves to customers as attorneys instead of just debt collectors, and also from:

...misrepresenting to consumers that nonpayment of a debt will result in the garnishment of wages, seizure or attachment of property, or lawsuits...and are also prohibited from improperly communicating with third parties about a debt; using false, deceptive, or misleading representations in debt collection efforts; communicating with a consumer at any unusual time or place, including the workplace; or harassing, oppressing, or abusing any person in connection with debt collection. The settling defendants are also barred from making any withdrawals from consumers’ bank accounts without obtaining the consumers’ express informed consent, and they cannot deposit or threaten to deposit any postdated check or other postdated payment instrument prior to the date on the check or instrument.

Gary Nitzkin, of the Michigan Collection Law Blog, has a few suggestions on how to avoid having a debt collection complaint filed against your company. He says that the collectors should be extensively trained and their training should be documented, should proof ever be needed. He advises that phone conversations should also be monitored and documented. Also, a temperament test isn't a bad idea. Lastly, he says to remember that the debtors are actual human beings and should be treated with "respect and dignity."

If you have had problems with abusive debt collectors, feel free to contact us.
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Denise Richardson of Give Me Back My Credit.com has posted an article in which she discusses "caller ID spoofing." Caller ID Spoofing is when the number displayed on your caller ID isn't the number actually calling.

Scammers can use this method of spoofing to pose as hospitals or banks (or any other place), and then trick you into telling them personal information. This can be as simple as a prank, or lead to identity theft .

Still, precautions should be taken. Richardson advises never giving personal information out to anyone who calls your landline phone. She suggests looking up the company that called you and see if it's a legitimate number and then call them back.

If you have been a victim of identity theft, feel free to contact us.

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We sometimes face the question of "Do I really have to spend five bucks on certified mail with the green card coming back" when our clients are mailing dispute letters to credit reporting agencies (Equifax, Experian, Trans Union, etc) or to debt buyers (Midland, LVNV, Unifund, etc) or collection agencies (AmSher, NCO, etc). The answer is YES!

We explain this in more detail in our new article on this subject but the basic reason is proof. Proof the person or company you are sending the letter to actually received it. If it is important enough to send, spend the five dollars to make sure they get it.

Please feel free to contact us particularly if you are dealing with abusive debt collectors or credit reporting agencies who will not correct false credit information.

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StayViolation.Com has posted an article about a lawsuit between creditor and debtor. In Texas, Brad Collier bought almost $1,000 worth of mobile home parts and supplies from Hill's Mobile Home Parts & Service, owned by Paul Hill.

Collier soon after filed for Chapter 13 bankruptcy and failed to immediately notify Hill. However, after receiving notification, Hill hired Josh B. Maness as a representative "in regard to collection of the pre-petition claim." Maness sent a letter to Collier's bankruptcy attorney and demanded to be paid the full balance of Collier's debt.

Misstatements were made in the letter that Mr. Maness attributed to an unfamiliarity as to how to use the Bankruptcy Court's PACER/ECF system. Regardless, the Court found the letter constituted a willful violation of the automatic stay issued in Mr. Collier's Chapter 13 bankruptcy because no good faith defenses are allowed as to stay violation. The Court concluded this "ill-informed conclusion based upon an insufficient investigation" was "not a technical violation based upon an innocent mistake" as "[t]his is precisely the type of behavior that the automatic stay is intended to preclude".

Following the letter, Hill then posted a sign out at a major intersection of US Highway 80 in Scottsville, TX, near where Collier and his friends, family, etc live, that said: "BRAD COLLIER OWES ME $984.23 WILL YOU PLEASE COME PAY ME!"

Hill refused to remove the sign and it remained posted in public for 21 days.

Paul Hill only agreed to remove the sign at the hearing scheduled by the Bankruptcy Court on Brad Collier's requested expedited hearing for an injunction.

Mr. Hill contended throughout the litigation that the directive on the sign -- "WILL YOU PLEASE COME PAY ME!" - did not constitute an effort to collect a debt because there was no question mark at the end of the sentence. However, the Court found that the use of an exclamation mark in lieu of a question mark demonstrated that the opposite was true. "The exclamation mark transforms the sentence into a directive, which demands that the Debtor pay the debt." The Court further found that the Bankruptcy Code was clear. "Any effort, action, or demand by a creditor to collect a pre-petition debt violates the automatic stay".

Hill also argued that putting up the sign was his right given by the First Amendment. However, Hill's actions caused him to have to pay $21,820 in punitive damages.

If you have problems with debt collectors following bankruptcy, feel free to contact us.

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Consumer Rights Law Blog has posted an article about an online database where consumers can find records from junk yards, insurance companies, and salvage yards about wrecked cars. The idea is to help consumers "avoid buying patched up junk cars and trucks."

However, not all states are cooperating.

14 states are not participating while 10 more say they are "in development" but federal law requires full participation by 2010. Until then, you still can't be sure if that great looking used car was totaled in an accident Illinois, Kansas, Maine, Oregon, Washington DC or 9 other states that are not telling the truth about their records. You can see the full list above and check car records here: http://www.nmvtis.gov/
It is unbelievable that California, New York and Pennsylvania are providing wrecked car data to the federal government but have blocked the government's ability to release that data to consumers. If you live in one of those three states, write your state governor and ask why they want to keep it secret. Some media reports say private record-keeping companies are paying those states big money to sell the data privately to them so they can keep charging consumers to see the stolen car and wrecked car records before buying a used car in those and other states.

If you have been sold a wrecked car under false pretenses, feel free to contact us.

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Debt collectors and their lawyers almost always take the approach that its "no big deal" that the collection agency violated the Fair Debt Collection Practices Act. Read this fascinating story here about what happened to one famous debt collector (Credigy) who did not take its wrongdoing seriously and instead attacked the plaintiffs and their children.

Several excellent consumer lawyers tried a case against Credigy for nine days in Northern California and the jury awarded $500,000 in damages. Attorney fees and expenses will be added to this outstanding result.

Here is the result but definitely read the entire article at Denise Richardson's blog:

Following a nine day trial in the United States District Court for the Northern District of California, the jury returned a verdict of $500,000 against Credigy Services Corporation. The verdict consisted of $100,000 in actual damages and $400,000 in punitive damages. United States District Judge James W. Ware, who presided over the trial, specifically instructed the jury that they could only award punitive damages, if they found by clear and convincing evidence that Credigy Services Corporation "was malicious or in reckless disregard of the rights" of the Fausto's. In order to be "malicious, the jury had to find that the conduct was accompanied by ill will, spite or for the purpose of injuring another. Reckless disregard required a finding of a complete indifference to the rights of others.

We are informed that the verdict is the largest under the Fair Debt Collection Practices Act on behalf of a consumer who owed the debt. The Fausto's are entitled to an award of attorney fees and costs as prevailing party under federal Fair Debt Collection Practices Act and the California Fair Debt Collection Practices Act.

Congratulations to the following lawyers who represented the plaintiffs in this important case:
David Humphreys and Luke Wallace of Humphreys Wallace Humphreys, P.C. Tulsa, OK; Balám Letona, Santa Cruz, CA and Ron Wilcox, San Jose, CA.

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Here is the update on the numbers of debt buyer lawsuits and lawsuits filed by the creditor Capital One during the week of April 6, 2009, in Alabama:

Arrow Financial Services 31
Asset Acceptance 75
Atlantic Credit & Finance 69
Cach, LLC 8
Cap One Bank 222
Cavarly Portfolio Services, LLC 4
Delta Capital Resources, LLC 7
Harvest Credit Management, LLC 1
Hilco Receivables LLC 13
Lionheart Funding LLC 1
LVNV Funding 27
MCM Holdings LLC 3
Merchants Adjustment Services, Inc. 11
Midland Funding LLC 86
Northstar Capital Acquistions, LLC 9
Palisades Collections, LLC 20
Pinnacle Credit Services, LLC 6
Portfolio Recovery Associates 29
RJM Aquisititions 2
TBF Financial 1
Unifund CCR Partners 29
World Acceptance Corporation 15
Worldwide Asset Purchasing 4

Remember we have a free report on Secrets Debt Buyers Don't Want You To Know About - when you learn these secrets it can help you be better able to understand a debt buyer lawsuit. You can call us at 205-879-2447 to request it, or fill out our contact sheet on our website, or fill out the form below.

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One of the worst type of abuses that debt collectors commit is contacting third parties (anyone other than the consumer or the consumer's spouse) to collect the debt.

Sometimes the collectors call co-workers. This is known as an "office party".

Sometimes neighbors are called by the abusive collectors - this is known as a "block party".

The reason this type of illegal conduct is done is simple - it works. Nothing works quite like calling a consumer's mother or preacher to bring that type of pressure down on the consumer.

This is also highly illegal and should normally result in the abusive debt collector being sued. We have more and more clients coming to our office to sue for this type of outrageous behavior. We are always glad to meet with clients but we also want to provide good information before we can meet so our free report on "Why Debt Collectors Call Third Parties And How To Make Them Pay For Breaking The Law". You can get this free report by filling out the form below, calling us at 205-879-2447 or by filling out the contact form on our website - make sure to fill it out completely and mention you want this report.

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The BKBlog has posted an article that discusses if you are responsible for debt incurred by the failure of your business, and if personal bankruptcy can help.

Jonathan Ginsberg, author of the blog, is based in Georgia and thusly "can only speak to how Georgia law works" but he still offers good insight. He says that the owner of the business can be held personally responsible, in spite of bankruptcy, if:

-the lease was in his name and not in a corporate name .
-he personally guaranteed a corporate obligation.
-he engaged in fraudulent conduct that would permit the plaintiff lessor to "pierce the corporate veil."

In most of these cases, commercial landlords do require the individual business owner to personally guarantee the lease. Assuming that is the case here, a personal bankruptcy would create an automatic stay that would prevent the plaintiff landlord from garnishing wages or bank accounts.

Settlement negotiation is also a possibility. The landlord may be approached with a settlement offer and is likely to accept it because if bankruptcy is filed the landlord will get very little or nothing.

If you are considering or dealing with bankruptcy, feel free to contact us.

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We were interested in how many lawsuits are being filed by Capital One and by some of the debt buyers across the state. We will do this every week as we often are asked by consumers who are sued by debt buyers "Am I the only one this debt buyer has sued?". We hope this is helpful to you. Remember you can always contact us for a free consultation or you can call us at 205-879-2447 or fill out the form below to get a free copy of our report on the secrets that debt buyers don't want you to know when they sue you.

Arrow Financial Services 58
Asset Acceptance 106
Atlantic Credit & Finance 245
Cach, LLC 8
Cap One Bank 445
Cavalry Portfolio Services, LLC 18
Cresent Recovery LLC 5
Delta Capital Resources, LLC 54
Harvest Credit Management, LLC 1
Hilco Receivables LLC 15
LHR Inc 1
Lionheart Funding LLC 1
LVNV Funding 48
MCM Holdings LLC 2
Midland Funding LLC 102
NCO Portfolio Management 3
Northstar Capital Acquistions 29
Palisades Collections, LLC 32
Pinnacle Credit Services, LLC 32
Portfolio Recovery Associates 57
RJM Aquisititions 6
Unifund CCR Partners 53
World Acceptance Corporation 19
Worldwide Asset Purchasing 11

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Our clients and those who have requested information from us receive our monthly newsletter that we have been publishing for nearly a year now. We have just put up the issues from this year on our website under the "Articles" portion. Feel free to take a look at these and if you like them you can always contact us through our website, call us at 205-879-2447, or fill out the form below to receive the newsletter automatically free of charge.

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We look forward to staying connected with you!

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Alan Zibel and Christopher S. Rugaber of Associated Press have written an article that discusses the government's response to an increase in

"criminal actors...preying on desperate borrowers caught up in the nation's housing crisis."

The article warns that "scammers" are trying to trick customers into paying hefty upfront fees for "loan modifications" that are rarely successful. Illinois Attorney General Lisa Madigan warns consumers to

"...stay away from anyone who says that they will save your home for money upfront."

The Federal Trade Commission has sent over 70 letters to companies they feel are using questionable advertisements, as well as filing new complaints regarding 3 companies. The FBI is also investigating 2,100 cases of mortgage fraud.

"These are predatory schemes designed to rob Americans of their savings and potentially their homes," Treasury Secretary Timothy Geithner said. "We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar."

However, Federal Loan Modification Law Center founder Bill Anz says he offers a refund to any client who doesn't receive a modification. Anz also says that 20% of his 5,000 clients have received modifications thus far.

Even though some of these mortgage loan modification agencies do offer refunds, caution should still be exercised when enlisting their help.

If you have had problems with fraudulent debt companies, feel free to contact us.

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In this time of economic difficulty, many Alabama residents are hurting financially and just don't have any extra money. Overtime may have been cut back or jobs completely eliminated or perhaps medical expenses have taken the rest of the monthly dollars in a household. Then a debt buyer sues and demands $3000 or $8000. With no money or no job, what do you do?

Many potential clients come to us after having answered the collection lawsuit. Many times the answers are wonderful - they deny the allegations and force the debt buyer to prove that the debt buyer actually owns the debt.

But sometimes (and this is growing) the answers say "I have no job" or "I have no money". Often these are simply letters written to the judge or the collection lawyer (Nadler, Nathan & Nathan, Zarzaur & Schwartz, Ingram & Associates, etc) that are considered "answers" and put in the court file.

We wrote a more detailed article on this subject of answering but here is a quick summary.

Whether or not you can pay is not relevant to whether or not you owe this debt buyer and whether or not the debt buyer owns the debt. Being liable for a debt and having the ability to pay the debt are different things altogether. Answering with "I have no job" or "I don't have any money" can sometimes lead a court to believe that you are admitting that you owe the debt and therefore a judgment is entered against you.

Our suggestion is to not confuse the issues. Either settle the case or fight it but be clear about what you are doing and don't leave any room for confusion with the court.

If you would like more information about fighting debt buyer lawsuits you can call us at 205-879-2447 or fill out our contact us form and mention the free report on secrets debt buyers don't want you to know about or you can fill out the form below. Whatever you do, we wish you the best of success.

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Eleanor Laise, of the Wall Street Journal, has written an article that discusses the problem of dishonest debt settlement agencies. According to the article, the number of complaints about debt-settlement agencies so far this year is double the number of complaints in 2007. The Federal Trade Commission has also seen an increase in complaints. More people are turning to debt-settlement agencies as the economy weakens.

The article uses an Ohio man as an example. Wally Bowman owed $15,000 in credit card debt and enlisted the help of a "debt-settlement" firm. The firm advised him to quit making payments to his creditors, saying they could settle his debt for far less.

Mr. Bowman paid hundreds of dollars in up-front fees and made regular monthly payments of $249 to Hess Kennedy, but the Coral Springs, Fla., firm never settled any of his debts, he says. By the time he dropped out of the program this summer, Mr. Bowman says, his debt had ballooned to about $20,000, due to interest and late fees, and creditors were threatening to garnish his wages. Finally, he filed for bankruptcy last month.
"I wish I had done that to begin with," Mr. Bowman says. "I'd have been much better off."

This particular firm was sued by the Florida attorney general for violating various laws and regulations.

Debt-settlement firms typically advise the client to cease payments to the creditor and, instead, put the would-be payments into a special account that they (allegedly) will use to resolve the debt. This tactic can diminish clients' credit scores and increase boost their taxes on top of the large fees the firm will charge. A typical up front fee can be 10%-15% of the total amount owed, as well as an additional monthly fee.

Clients who follow a firm's advice and stop paying their creditors directly are often subject to raises in interest rates, late fees and nonstop calls. Also, wages can be garnished if the creditor sues the debtor and wins a judgment.

If you have had any issues dealing with debt-settlement firms, feel free to contact us.

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The Michigan Collection Law Blog has posted an article that reminds people to have an "exit strategy" when being faced with foreclosure.

This article suggests to first prioritize what kind of residence you need after having to leave the foreclosed property. Second, it is important to look at the resources available to you and what kind of new home that will get you. Some people find their best option is to move into an apartment or a rental home.

The third suggestion strategy is to

...calculate the date that you have to be out of the foreclosed property... home owner can use this period to save up money for a down payment on a land contract, or a security deposit and moving costs. Think about it, living rent and mortgage free for six months is a great boon to anyone's finances. You just need enough discipline to save what you can.

Gary Nitzkin, author of this article and a Michigan attorney, gives the example of one of his foreclosure cases:

Although we had our exit plan in place, the bank did not appear at the sale. I cannot tell you why the bank did that, but I can give you plenty of good reasons why the bank made the right move. First of all, when the bank owns the home, it incurs substantial holding costs on the property such as taxes and utilities. Moreover, the bank has to hire a property maintenance company to visit the property to keep out trespassers, squaters, thieves and vandals. It is far more economic for the bank to keep people in their homes and perform these functions than for the bank to start forking out bailout dollars. Third, the banks already own tons of property. They were not supposed to be in the real estate business, but now they are. The banks are unhappy about this. Finally, there is talk of legislation to put a moratorium on foreclosures.

If you are facing foreclosure and have questions or concerns, feel free to contact us.

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The BKBlog has posted an article that discusses the effects bakruptcy has on student loans. Student loan creditors have become more active in collecting their money in light of the current economic decline. Different "collection resources" are available for student loan companies looking to collect their money, however

There is one statute that permits student loan creditors to garnish wages without the need to first go to court.Student loan claims can also offset tax refunds.

The blog cites an email that was sent to them.

I am unemployed and have defaulted student loans. I was married last April and my husband's tax return was offset as a lovely wedding gift. I am researching how to file for bankruptcy for my other debts and also looking into how to prove "undue hardship" regarding the student loans. In the meantime, we were curious about whether or not my husband's wages could be garnished? Since I am unemployed, this would devastate us. Also, once I get a job, if they are garnishing my husband's wages, would they be able to garnish mine as well — at the same time?

According to this article, both spouses are subject to wage garnishment, as well as having their tax return seized. Bankruptcy would do little good.

If you are considering or dealing with bankruptcy and have questions or concerns, feel free to contact us.

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Our friend Denise Richardson has posted a blog about the Federal Trade Commission spoofing the freecreditreport.com commercials.

The FTC's spoof video reminds consumers that the only truly free (and legal) way to get a credit report online is with AnnualCreditReport.com instead.

If you have had problems with credit reports, feel free to contact us.

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We have an expanded discussion of this matter on our website but we have noticed a number of Alabama consumers who have filed counterclaims when sued by a debt buyer. We generally do not do this for several reasons.

First, it can complicate an otherwise simple case. The debt buyer sued you. The debt buyer must prove you owe money to the debt buyer. We have not seen this happen. It is simple. Counterclaims can become messy and distracting.

Second, we have never seen a debt buyer or collection law firm give up just because someone has filed a counterclaim. So the reason many on the internet advise to file counterclaims - to scare the collector - is simply not valid.

Finally, if you have a legitimate claim, file it in federal court. Don't file it in district court or small claims court unless the value is $10,000 or under. If, for example, you are the victim of identity theft and the debt buyer sues you anyway and won't dismiss the case with prejudice, you likely have a potential case against the debt buyer. File that good case in federal court. If a claim is worth filing and pursuing, then almost always it is better to do that in a separate lawsuit.

If you have more questions, feel free to call us at 205-879-2447 or fill out the request form below to get a copy of our free report on the secrets that debt buyers don't want you to know about when they sue you. This report exposes a number of things that debt buyers are counting on you not knowing - so educate yourself so you can make the best possible decision on how to handle a debt buyer lawsuit.

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