Alabama Consumer Law Blog

We want to let you know about some of the recent cases we have been involved in, particularly where we have filed lawsuits against companies for abusing consumers in Alabama.

Let us know if you have any questions - you can call us at 205-879-2447 or fill out our contact form on our website.

We filed a wrongful foreclosure case for our client who was sued for ejectment by a trustee. In this case the mortgage company foreclosed on our client and then sued him to kick him out of his house. Since the foreclosure, we believe, was improper, we countersued against Deutsche Bank National Trust Company, which is the trustee of this securitized loan. We also believe that the loan was never properly transferred into the trust which claims that it owns the loan - if this is true then the company foreclosing had no more right to foreclose on our client than you or I would. It will be interesting to see what develops in this case where we have alleged fraud (related to a loan modification) and wrongful foreclosure against Deutsche Bank National Trust and the servicer American Home Mortgage Servicing, Inc.

[Also remember you are invited to our free tele seminar on Alabama Wrongful Foreclosures set for January 19, 2010, at 4 pm CST.]

Illegal voicemail cases are very common because it is probably the most common form of violation of federal law.

We sued Leading Edge Recovery Solutions, LLC. Our client has alleged that Leading Edge Recovery Solutions, LLC violated the Telephone Consumer Protection Act (TCPA) by making illegal calls to our client's cell phone with pre-recorded messages. These are the messages that are left by a computer rather than a live human being. Normally these calls are made by an "auto dialer" which is a computer or telephone system that automatically places the calls. This is when you get a call and the voice says "Please hold for the next operator" - a sure sign that a computer has called and now it is searching for the next operator who is free to transfer your call to. In this suit our client has alleged that Leading Edge Recovery, Solutions, LLC also made an illegal third party disclosure to the client's father.

Another illegal voicemail case involves Enhanced Recovery Corporation out of Florida. Our client alleged that this debt collector violated the Fair Debt Collection Practices Act (FDCPA) by refusing to give the proper disclosures when leaving voicemails, including failing to leave the Mini-Miranda ("this is an attempt to collect a debt" and "we are a debt collector").

In a case filed against The Brachfeld (a/k/a Brachfield) Law Group d/b/a Brachfeld & Associates, PC, a California lawfirm and collection agency, our client alleged that this debt collector violated the TCPA by making a large number of harassing illegal calls to our client's cell phone. The calls, as is common among debt collectors, used pre-recorded messages and were most likely made with the use of an autodialer or predictive dialer.

We filed an additional lawsuit against Brachfeld Law Group (Brachfeld & Associates, PC) for repeated calls without permission to the consumer's cell phone using an autodialer and pre-recorded messages. This alleged conduct would violate the TCPA and state law on harassment and invasion of privacy.

A second case against Leading Edge Recovery Solutions, LLC, out of Illinois, was filed by a client alleging, again, that this debt collector illegally used prerecorded messages and/or predictive/autodialers when calling the client's cell phone. The allegations include that this violates the TCPA.

Harvard Collection Services, Inc., a collection agency out of Illinois, was sued by a client for alleged violations of the FDCPA and the TCPA in the multiple calls to the client's cell phone looking for someone other than the client. It violates the FDCPA to call a "third party" (anyone other than the consumer who allegedly owes the money) after the third party has said they will not or cannot provide location information to the collector. The complaint alleges that the bill collector used pre-recorded messages and/or autodialer calls against the cell phone of the client.

ARS National Services, Inc, a collection agency out of California, was sued by a client claiming that this debt collector violated the FDCPA by refusing to make the proper disclosures when leaving voicemail messages. It is critical that debt collectors comply with this portion of the law - making disclosures - in whatever form they choose to attempt to collect the debt. They do run the risk, however, of violating the prohibition against third party disclosures when they leave voicemails. While the debt collection industry wrings it hands over this "tough situation" of which law to violate (disclosure laws or third party laws) the courts have provided a simple and elegant solution - don't leave voicemails. Collect debts without leaving voicemails - there is no God given right to leave a voicemail despite what many collectors would argue....

A Florida collection agency known as Omni Credit Services of Florida, Inc., was sued by a client for violating the FDCPA in the voicemails left which did not contain the proper disclosures, including the Mini Miranda.

J.C. Christensen & Associates, Inc., a Minnesota collection agency, was sued by a client alleging that illegal voicemails were left which violated the FDCPA. The voicemails did not contain the Mini Miranda or other required disclosures according to the lawsuit filed against J.C. Christensen & Associates, Inc.

A client also sued a company that we have sued a number of times - a debt collector from New York known as Creditors Interchange Receivable Management, LLC. This company allegedly called our clients numerous times on the consumer's cell phone using an autodialer and pre-recorded messages. The consumer alleges he never gave Creditors Interchange or the original creditor the cell phone number and therefore the calls were illegal under the TCPA.

Third party disclosure cases reveal common violations by debt collectors. They love to contact people other than the consumer (or consumer's spouse) because having your boss or parent or neighbor or ex-mother in law call you after being contacted by a debt collector is very intimidating.

Our client sued Viking Collection Service, Inc., a collection agency out of Minnesota, for allegedly repeatedly calling our client's parent even after the parent told the collector the consumer did not live there. In our opinion this type of misconduct violates the FDCPA and Alabama law on privacy - this is known as an "Invasion of Privacy" claim in Alabama.

The Pennsylvania debt collector Academy Collection Service, Inc., was sued by a client for its collection activities. The client alleges that Academy Collection Service, Inc. made third party disclosures to someone other than the client in violation of the FDCPA and Alabama state law.

Fair Credit Reporting Act cases deal with the important subject of our credit reports and inaccuracies that either the credit reporting agencies (Equifax, Experian, Innovis, and Trans Union) or furnishers (such as Bank of America, Discover Card, Capital One, etc) refuse to correct.

A client sued GEMB (GE Money Bank - this bank is behind many store and gas cards), Equifax Information Services, Inc., Trans Union, LLC, and Innovis Data Solutions, Inc. for refusing to correct the client's credit reports. An account that was opened four years before the client was born was reported as the client's individual account! The allegations include that the client disputed the account directly to the credit reporting agencies (Equifax, Innovis, and TransUnion) and after they investigated it and notified GEMB so it could investigate the dispute, all of the defendants decided to keep this account on the consumer's credit reports. The allegations include that the defendants violated the FCRA and Alabama state law.

We will keep you posted on new suits that we file and will continue to look back at some of the suits we filed in 2009 to give you an idea of what your options may be and what to look out for when dealing with these types of consumer issues.

Feel free to visit our other sites - Illegal Voicemails and Sued By A Debt Collector.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

The Associated Press has posted an article about the Alabama Supreme Court rejecting a jury's verdict that would have awarded the state $274 million. The state of Alabama filed the suit was against 3 pharmaceutical companies ( AstraZeneca, Novartis and GlaxoSmithKline).

The state claimed that the drug companies had "fraudulently manipulating prices of drugs for Medicaid recipients." However, in an 8-1 ruling, the court decided that the state didn't have to solely rely on the companies' data to price medication.

The justices said state officials could have done their own research and determined the correct price.The court ruled the state is continuing to rely on the same formulas established by the drug companies to set prices.

"The state has never altered its course of conduct since taking issue with the reporting methods," said the majority ruling written by Justice Tom Woodall. Justice Tom Parker cast the lone dissent.

If you have experienced issues similar to this, feel free to contact us.

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Associated Press has posted an article about two of the three major cigarette companies filing lawsuits in response to a new law. The new law gives the Food and Drug Administration authority over the tobacco industry, which tobacco companies say violates their right of free speech.

R.J. Reynolds Tobacco Co., maker of Camel cigarettes, and Lorillard Inc., which sells the Newport menthol brand, filed the federal lawsuit with several other tobacco companies...It is the first major challenge of the legislation passed and enacted in June, and a lawyer for tobacco consumers doubted the lawsuit will be successful.

The new law lets the FDA regulate and reduce nicotine levels in tobacco products, ban phrases such as "light" and "low tar" and require large graphic warnings to be put over any images on the carton.

The companies say in their lawsuit that the law, which takes full effect in three years, prohibits them from using "color lettering, trademarks, logos or any other imagery in most advertisements, including virtually all point-of-sale and direct-mail advertisements." The complaint also says the law prohibits tobacco companies from "making truthful statements about their products in scientific, public policy and political debates."

Ironically, the tobacco companies aren't so much suing the FDA's regulation of actual tobacco, only suit is largely about the "marketing provisions."

"My expectation is that this lawsuit will be ultimately unsuccessful," said Ed Sweda, a lawyer for the Tobacco Products Liability Project in Boston, pointing to previous laws limiting cigarette advertising and marketing that have been in place for more than 40 years.

We'll definitely keep you updated on this developing case. If you have been sued and have questions, feel free to contact us.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Four title companies, all owned by Stephen Colson, are being sued. The companies, which include Prestige Title of Alabama, are being sued and this inhibits homeowners from refinancing their homes, and in some cases, leaves people wondering if they actually own their homes.
The article , written by April M. Havens, gives two different groups as victims. One being Donna and David Anderson, who are unsure if the house they helped their daughter buy is still theirs after Countrywide, the mortgage holder, returned the check to the title holder. $15,000 of renovations had already been put into the house. The article says the Andersons have filed an online claim with the title agency, but have had no response.
Another example is Nancy James, who thought refinancing her home would “be a simple way to consolidate loans and get a lower interest rate,” but instead was told she owed an additional $30,000 because the check from the title company to the mortgage company bounced.
Kenny Smith, the owner of four Coldwell Banker realty offices in Jackson County, says he has received about a dozen calls on this so far and advises people to hire an attorney. If you are dealing with this, or any other issues related to your mortgage, please feel free to contact us.

At the end of January we filed a federal lawsuit in Birmingham, Alabama against the debt buyer Midland Credit for refusing to stop reporting false information on our client's credit report. We also sued the consumer reporting agency of Equifax for participating in this wrongful reporting.

As we have seen repeated over and over in the courts of Alabama, Midland sues a consumer without any proof being offered at trial that the consumer owes Midland any money. The trial court tells Midland the consumer does not owe any money. The consumer then disputes the credit reporting after noticing that Midland is reporting on the consumer's credit reports. Amazingly, Midland tells Equifax to keep the false reporting.

We sued Midland for violating the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), and state law.

If you are dealing with Midland or other similar debt buyers, know your rights and take action immediately.

Anthony Bush with Anderson Nelms & Associates filed a case on January 22, 2009, against Beneficial Assurance LTD, Inc., Homecomings Financial, LLC, America's First Federal Credit Union, Credit Bureau Services International, Inc. and Experian.

This case arises out of a bankruptcy discharge that the plaintiff received several years ago (2007) but the defendants continued to report discharged debts as having a balance owed. A discharged account must be listed as a zero balance as no money is owed to the defendant/creditor.

This lawsuit alleges violations of the Fair Debt Collection Practices Act, Fair Credit Reporting Act and state law including deceptive trade practices.

This type of misconduct (leaving false balances on accounts that have been discharged) has been going on for some years and we have filed numerous lawsuits over the last three years related to this but creditors and collectors continue to violate the law in attempts to extort money out of consumers who no longer owe the creditors and collectors any money. We wish Anthony Bush the best of success with this suit in his efforts to help encourage creditors and collectors to obey the law.

Our office filed this month our twentieth federal lawsuit against the famous debt buyer Midland for suing our client in a collection case, losing the collection case, and then refusing to remove the false credit reporting from our client's credit report. The three major credit reporting agencies (Equifax, Experian, and Trans Union) were also included in the suit.

This is a situation we see happening again and again with debt buyers in Alabama. They sue in small claims court or district court. They have no proof. They show up to trial with no proof other than the pipe dream of trying to prove their case through a consumer/defendant who has no idea about whether or not the debt buyer owns the debt. Then the debt buyer loses. Then the debt buyer tells the credit or consumer reporting agencies (Equifax, Experian, and Trans Union) to keep the false credit reporting on the consumer's credit reports.

Our clients have received five judgments against Midland in federal court but the wrongful conduct continues.

If you are sued by Midland, or any of these other junk debt buyers, please make sure you protect yourself by learning about your options and taking immediate action.

Our friend Anthony Bush with Anderson Nelms & Associates filed a case on February 2, 2009, against Bay Finance Company, Redstone Federal Credit Union and the consumer reporting agencies of Equifax, Experian and Trans Union.

This case arises out of a bankruptcy discharge that the plaintiffs received last year but the defendants continued to report discharged debts as having a balance owed. A discharged account must be listed as a zero balance as no money is owed to the defendant/creditor.

This lawsuit alleges violations of the Fair Debt Collection Practices Act, Fair Credit Reporting Act and state law including deceptive trade practices.

This type of misconduct (leaving false balances on accounts that have been discharged) has been going on for some years and we have filed numerous lawsuits over the last three years related to this but creditors and collectors continue to violate the law in attempts to extort money out of consumers who no longer owe the creditors and collectors any money. We wish Anthony Bush the best of success with this suit.

A lawsuit was filed this month in the Middle District of Alabama against the well known debt buyer from California Midland Credit Management and Providian Bank. In the suit, our friend Anthony Bush represents Frederick Myers who claims he was contacted by both Providian and Midland on a debt that is not his. He disputed it but still Providian sold it to Midland for collection purposes and ultimately Midland went so far as suing Mr. Myers in small claims court.

We know Anthony Bush sees this as well as we do - so many of these debt buyers are filing suits with no proof and even suing people who do not owe any money to the debt buyers.

We wish Mr. Myers the best of success in his case that alleges violations of the Fair Debt Collection Practices Act (FDCPA), Alabama Deceptive Trade Practices Act, and state law (negligence, harassment, and invasion of privacy).

If you are dealing with a debt buyer, make sure and educate yourself so you know what your options are and what course of action is best for you.

We recently filed suit on behalf of a Jefferson County resident who was sued by the debt buyer firm of Harvest Credit Management on a debt he did not owe. We successfully defended the consumer and then filed a federal lawsuit against the debt buyer Harvest Credit Management.

As is all too common in Alabama, debt buyers file suit against people who do not owe the money. Our client demanded that the lawsuit be dismissed with prejudice so he would not be sued again and the response was "see you at trial". Our client went to court and the case resulted in a judgment in his favor.

We filed suit alleging violations of the Fair Debt Collection Practices Act and state law including malicious prosecution and abuse of process.

If you are facing a lawsuit by a debt buyer feel free to contact us to help you understand your rights.

We recently filed a suit on behalf of an Alabama consumer against three related debt collectors - LVNV, Capital Management, and Resurgent Capital. We also sued Experian for violating the Fair Credit Reporting Act by keeping a false account on our client's credit report.

LVNV sued our client and claimed she owed LVNV money. LVNV lost its collection case against our client. Instead of letting that be the end of it, LVNV had Capital Management and Resurgent Capital to start collecting on this debt that a judge said our client did not owe. LVNV also kept this account on our client's credit report, violating both the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.

We have filed a number of these types of suits against debt buyers who refuse to follow the law and instead keep collecting and keep credit reporting false information. You can find our recent cases by looking at our website here or our blog here.

Please feel free to contact us if you live in Alabama and have questions about your credit reports after you have defeated a bogus collection suit

Hundreds of Alabama consumers are sued in small claims courts and district courts in Jefferson, Shelby, Tuscaloosa, St. Clair and other counties by debt buyers. Our client was sued by LVNV and our client won his case - the judge ruled our client did not owe LVNV any money which is what our client has maintained all along.

Instead of accepting the defeat with grace and correcting our client's credit report by deleting the false information on there - that he owes LVNV money - LVNV told the credit reporting agencies that our client still owes the money. Despite what the judge said. And, to add insult to injury, LVNV then sent the account out to be collected by the collection agency Allied Interstate. Therefore, our client sued LVNV and Allied Interstate for violating the Fair Debt Collection Practices Act and Alabama state law.

This is a growing problem - debt buyers lose the collection case as more and more Alabama consumers are understanding that the debt buyers must prove they own the debt (and consumers are putting this in their answers to the complaints) and the result is debt buyers are losing collection cases. But then the debt buyers send the accounts out to be collected as if the consumer owed the money - completely ignoring what our state court judges have said.

To protect yourself, when sued by a debt buyer defend the case. Hire a lawyer or handle it yourself if you feel comfortable. Then after you win pull your credit reports, review them, then dispute any false information, and finally sue if the false information is not corrected. Please feel free to contact us if you live in Alabama and have questions about your credit reports.

We recently sued CACH, LLC (a debt buyer), Equifax, Experian, and Trans Union for false credit reporting in violation of the Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and state law. This false credit reporting was done after a judge ruled that our client did not owe CACH any money on the alleged debt that CACH sued our client on. Pentagroup Financial was also sued as this debt collector started collection activities against our client who does not owe CACH any money.

We have previously blogged about how debt buyers and consumer reporting agencies (CRAs) refuse to delete accounts after an Alabama state court judge has ruled that our consumer does not owe the debt buyer. The debt buyer sues our client and loses. Our client disputes in writing with the CRAs. Pretty simple, right? Apparently not so simple. In this case CACH out of Colorado and Equifax, Experian, and Trans Union verified (kept) the false account with a balance on our client's credit reports.

CACH also sent the account out to Pentagroup to start collecting against our client for this same debt.

This seems to be a widespread problem in Alabama among debt buyers - when they lose they think they can ignore our state court judges. Of course, when they win the collection cases (as most consumers sued don't defend the case) they are big believers in the power of the state court judgments.... Ironic, isn't it?

If you are sued and win, then you may also face this problem of having false information on your credit reports or dealing with collection agencies hounding you for money after a judge said you don't owe it. Regarding the problem of credit reporting errors, The solution is to pull your credit reports, review them, then dispute any false information, and finally sue if the false information is not corrected. Please feel free to contact us if you live in Alabama and have questions about your credit reports or any collection activities you are facing.

We filed a case in Jefferson County, Alabama, against Verizon and Equifax for false credit reporting and the complaint is on our website. Our client paid a disputed charge and was told, in writing, by Verizon that the Verizon account or trade-line would be removed from all of his credit reports (this would include Equifax, Experian, and Trans Union).

When it was not removed, our client wrote to Verizon and called Verizon to try and get them to honor the deal Verizon made when he paid off the disputed charges. After several promises by Verizon and after disputing the account with Equifax and getting no help, our client was forced to file suit alleging violations of Alabama state law and the Fair Credit Reporting Act.

You may recall this is the second recent suit against Verizon that we have filed.

Many Alabama consumers face false credit reporting and this is a problem that can have very harmful effects on your job, mortgage rates, credit card rates, etc. The solution is to pull your credit reports, review them, then dispute any false information, and finally sue if the false information is not corrected. Please feel free to contact us if you live in Alabama and have questions about your credit reports.

An Alabama consumer has recently sued the debt buyer LHR after LHR sued the consumer. The consumer denied owing the debt buyer LHR any money and the judge agreed, ruling in favor of the consumer. This should have ended the matter but to make sure the consumer disputed with the credit reporting agencies that the account should not be on the credit reports since the consumer won the collection case. Shockingly, LHR told the credit reporting agencies to keep it on the reports and Equifax and Trans Union did so.

We have previously blogged about how debt buyers who sue Alabama consumers must prove they own the debt and how they seem unwilling or unable to do so. We have also discussed disputing the collection accounts after you win your collection case. As always, we recommend you to pull your credit reports, review them, then dispute any false information, and finally sue if the false information is not corrected. Please feel free to contact us if you live in Alabama and have questions about your credit reports or being sued by a debt buyer.

We have blogged about the dangers of debt collectors contacting third parties (neighbors, family, co-workers, etc) to collect debts and we recently filed suit against Tabula Rasa and the debt buyer Cavalry Portfolio for this type of misconduct. Despite what most debt collectors believe and how they act, debt collectors CANNOT contact third parties to collect debts. They can only contact co-workers or neighbors or other third parties to obtain location information - address, phone number, etc - but cannot use third parties to put pressure of any type on Alabama consumers who allegedly owe debts.

If your friend, or family member, or co-worker tells you that they are getting calls from debt collectors that are looking for you, carefully write down what you are told and get dates, times, phone numbers, etc. This will help you to document what has happened. Feel free to contact us if you live in Alabama and are dealing with illegal third party contacts by debt collectors.

An Alabama consumer recently filed suit against Citibank and Compass Bank related to their false reporting of accounts which had been discharged in bankruptcy last year. Citibank and Compass Bank received notice of a bankruptcy and instead of following the law and properly updating the accounts to show that the accounts were discharged in bankruptcy and had a zero balance, they continued to report a current balance of over $9000 for each of the accounts.

We have previously blogged about errors in post-bankruptcy discharge reporting. In other words, oftentimes when you receive a discharge, the creditors refuse to follow the law and instead will either leave a balance (known as “Parking”) or will update the account but refuse to tell the credit reporting agencies (Equifax, Experian, TransUnion) that the account has been discharged and should have a zero balance.

As we often point out, we suggest that everyone should check their credit reports, review them for errors, and dispute them if errors are present. There are situations where it is appropriate to sue before a dispute when it is apparent that the furnisher/creditor has put false information on your report. If you have any questions about any of your discharged accounts and how they should be reporting after bankruptcy, or credit report errors in general, please do not hesitate to contact us for a free consultation.

An Alabama consumer has recently sued the debt buyer and debt collector Arrow Financial Services, LLC for violating the Fair Debt Collection Practices Act (FDCPA) and state law including fraud. This case illustrates the danger when Alabama consumers settle with debt buyers who have sued them - it can be a wise move but this does graphically show the pain that these debt buyers can inflict on you.

Arrow sued our client and then told her if she paid half of the debt Arrow would remove the account (tradeline) from her credit report and would dismiss the case. She upheld her end of the agreement but Arrow requested and received a default judgment against her and has kept the account on her credit reports. Arrow has also pulled her credit reports, which we believe it has no right to do unless it is collecting (and there is nothing to collect - this debt was settled), and has seen the judgment showing up on her credit reports.

We have previously talked about how unfair actions of debt collectors violate the FDCPA. These actions certainly seem unfair to us. We have also seen how untrue statements violate the FDCPA - these statements appear to us to be false and if so they violate Alabama state law prohibiting misrepresentations (lying) and suppressions (hiding the truth).

Remember, if you are dealing with a debt collector, be careful. Guard yourself. Check your credit reports at least once a year. Fortunately when our client realized she had been tricked, she took action. You should do the same - protect yourself but then take action if you have been wronged.

If you are sued by a debt buyer or facing any type of harassing conduct from debt collectors, feel free to contact us as we sue abusive debt collectors and debt buyers.

We have filed numerous lawsuits against Palisades (a prominent debt buyer which sues hundreds of Alabama consumers a month). Palisades lost its collection lawsuit against our client but for some unexplainable reason refused to delete its account from her credit report. Not only did it refuse to delete the account (after the Judge said she did not owe any money to Palisades) but Palisades continued to update her account on a regular basis making it appear that she still owed the money even as recently as this year. In addition, Palisades send the debt out to a collection agency so that the collection agency could attempt to force her to pay the money that a Judge said she did not owe.

As we are blogged about in the past, there is an epidemic in Alabama of debt buyers suing people who do not owe any money to the debt buyer. As if this was not bad enough, the debt buyers refuse to correct their credit reports. The excuse we have always heard is that the debt buyers sue so many consumers in Alabama that they cannot be expected to know who they have sued; much less who has beat the debt buyer in the suit. In this particular case, it is interesting that the debt buyer Palisades lost its case against our client in late 2006, but yet in 2008, it was still reporting the debt as being owed and has referred it out even this year to a collection agency to collect this money from our client. This certainly cast great doubt upon the claims that it simply takes a while for a debt buyer to know when it has lost the case even though the law says that as soon as the debt buyer has lost the case, it is absolutely charged with that knowledge.

If you would like to read the complaint, you can do so by clicking here and reading the pdf version of the filed complaint from our website. If you have been sued by a debt buyer and won your case (verdict for defendant, dismissal or dismissal with prejudice) then we strongly urge you to check your credit reports and if the debt buyer is still listed on there, please feel free to contact us for additional information on what your options are at this point.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

On April 14, 2008, we filed suit on behalf of an Alabama consumer against Bank of America (FIA Card Services, N.A.) related to its false reporting of an account which had been discharged in bankruptcy several years earlier. Bank of America received notice of a bankruptcy and instead of following the law and properly updating the account to show that it is discharged in bankruptcy and has a zero balance, Bank of America deleted the account and then created a new account with a different account number (which was, in fact, the same as the original account) and reported it with a large balance that was past due.

We have previously blogged about errors in post-bankruptcy discharge reporting. In other words, oftentimes when you receive a discharge, the creditors refuse to follow the law and instead will either leave a balance (known as “Parking”) or will update the account but refuse to tell the credit reporting agencies (Equifax, Experian, TransUnion) that the account has been discharged and should have a zero balance.

We will be curious to know what the explanation from Bank of America is as to why a new account number was put in which certainly gives every indication that this was an attempt to avoid having to comply with the law. Of course, anytime your attempt to comply with the law is based upon providing false information, that in and of itself violates the law.

As we often point out, we suggest that everyone should check their credit reports, review them for errors, and dispute them if errors are present. There are situations where it is appropriate to sue before a dispute when it is apparent that the furnisher/creditor has put false information on your report. If you have any questions about a Bank of America Account or how account should be reporting after bankruptcy, or credit report errors in general, please do not hesitate to contact us for a free consultation.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below: