Alabama Consumer Law Blog

I have a profile on Avvo (a legal help website) and I recently wrote a consumer guide to the growing problem of debt collectors calling cell phones with auto dialers or pre-recorded messages. We hope this short guide is of assistance to you in dealing with this type of situation that so many Alabama consumers are finding themselves in now.

If you like it, please feel free to comment on it or indicate that it is helpful to you.

Feel free to contact us through our website or you can call us at 205-879-2447.

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:

We want to give you the text of the FDCPA and our analysis of this important piece of consumer protection litigation which is one of the primary weapons we have to fight back against abusive debt collectors to make them stop abusing us.

This will be a series of posts and the format will be our analysis and then we'll put the actual text of the particular section we are discussing below. We hope you will find this helpful and we look forward to hearing from you.

Section 1692 is the opening section of the law and it gives the reasons and the rationale for why Congress decided, over 30 years ago, that it was necessary to "federalize" debt collection which up until that time was solely and simply a matter of state law. This is a critically important part of the FDCPA as it gives us actual Congressional findings related to the problem of abusive debt collectors.

Subsection (a) tells us that Congress found "abundant evidence" that debt collectors around the nation were using "abusive, deceptive, and unfair debt collection practices" and it says that this was being done by "many debt collectors."

Often when we sue abusive collection agencies, debt buyers, or collection lawyers, they claim that the industry has no problems and they certainly have no problems. Congress found, however, that the problem was so bad that this law was needed.

The next argument from collectors is that "OK so we broke the law - but abusive debt collection tactics don't really hurt anyone." Well, Congress disagrees because it says that these abusive, deceptive and unfair tactics "contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy."

That is a very serious list of problems that often result from illegal debt collection.

Bankruptcies are often condemned by businesses (until they need to file - then that's somehow different) but many bankruptcy lawyers recognize that the primary reason people show up in their office to file bankruptcy is because of abusive debt collection tactics.

Everyone recognizes the value of marriage and the stability of families but do we recognize that abusive debt collectors contribute to homes being shattered and divorces being filed? All debt collectors deny this but Congress found "abundant evidence" that the pressures that can result from illegal debt collection can destroy marriages. Hardly "technical" violations like the debt collectors like to say....

We believe people who have the ability should work, right? Debt collectors like to talk about "dead beats who don't work" but they refuse to take responsibility for destroying people's lives by causing debtors to lose their jobs. Collectors know, especially in this economy, that if they can threaten someone's job, that person is much more likely to pay even debts that they don't owe. Congress found that the "abusive, deceptive, and unfair debt collection practices" contributes "to the loss of jobs." Again, this is not sounding like a minor matter, is it?

Do you value your privacy? Do companies value their privacy? Sure. We have security measures (locks on doors, companies have badges to get access to the building, etc) to protect our privacy. For someone to go through our file cabinet at home is a horrible invasion of privacy. Or for someone to post our medical records on the internet would be an invasion of our privacy. But Congress found that the "abusive, deceptive, and unfair debt collection practices" contributes "to invasions of individual privacy. This is often done through the rampant problem of illegal third party contacts.

So when debt collectors dismiss violations of this federal law as "no big deal" remember that Congress said that these violations result in:
1. Personal bankruptcies;
2. Marital instability;
3. Loss of jobs; and
4. Invasions of personal privacy.

OK, well why did Congress have to step in? Why not just allow the state laws to protect consumers around the country? Because in subsection (b) Congress found "Existing laws and procedures for redressing these injuries are inadequate to protect consumers." So, the FDCPA is absolutely necessary to prevent abuses that result in those four negative effects (bankruptcies, marital instability, loss of jobs, and invasions of privacy) as the existing state laws (including Alabama) were and are inadequate.

Well, collectors will say (with a straight face somehow) that if they are not allowed to abuse consumers then they will not be able to collect debts and the whole economy will come crashing down. Is this true?

Subsection (c) says "No" as Congress found "Means other than misrepresentations or other abusive debt collection practices are available for the effective collection of debts."

Congress is saying "Look, you can collect debts. You can be very effective in collecting debts. But there are ways to do this without abusing consumers and lying to consumers."

In what business do you have leaders of companies and the industry saying "Well, we know we break the law but we sure hope that you understand we do this because we have to. Those pesky laws just get in our way and we certainly don't want federal judges holding us to the highest law in this land. That would be unfair!" This kind of attitude is in part the reason why our economy is in the mess that it is in - mortgage companies couldn't be bothered to follow the law and now they want to be able to foreclose on consumers even though they are breaking the law.

Debt collectors then will say this is not worthy of federal court as it is a minor dispute between a consumer and a collection agency. But Congress found that abusive debt collection activites "directly affect interstate commerce." This is one of the major requirements often in place for deciding whether Congress can pass a law on the subject. Since abusive debt collection affects the country, Congress can regulate it.

Finally, these abusive debt collectors say it is unfair that private citizens can sue them for violating the FDCPA and all this does is get consumers money and puts money in the pockets of consumer lawyers.

It is true that consumers can recover damages. And it is true that consumer lawyers can be paid attorney fees by the abusive debt collectors.

But it is critical to understand that Congress had two purposes in mind in passing the FDCPA: Stop abusive collection and make sure that honorable law abiding collectors were not at a competitive disadvantage to the abusive collectors.

Let's look at these.

First, by regulating abusive conduct and allowing not only the government but also private citizens to file suit against abusive collectors, this does begin the process of eliminating abusive collection tactics. When collectors start having to spend money for their illegal conduct, they will evaluate whether it is wise to continue to break the law. When they are sued often enough and hard enough and long enough, they will become compliant out of their own self interest.

Second, and this is fascinating, Congress wanted to make sure that honorable collectors were not going to lose in the marketplace to abusive collectors. "[T]o insure that those debt collectors who refrain from using abusive collection practices are not competitively disadvantaged." We want law abiding collection agencies to not be at a disadvantage to cheating collection agencies.

Years ago I received an odd call from a collection attorney who was furious with his competition. The law requires that when a debt collector starts collecting against a consumer that the collector notify the consumer that the consumer has "30 days" to dispute the validity of the debt. [Note you can always dispute the debt - there are just some special things that happen if this is done within the first 30 days].

A competitor stole his collection client by promising to only give consumers "14 days" to dispute. So, the client (a large hospital) switched to this aggressive and abusive collector. This is exactly what Congress meant when it said it did not want law abiding collectors to be at a competitive disadvantage. Imagine if an abusive collector threatened to kill debtor's children - the collection rate would sky rocket for that abusive collector and that is unfair for the collectors who play within the rules.

We have quoted from the text but here is the full version of Section 1692 which is entitled "Congressional Findings And Declaration Of Purpose":

(a) Abusive practices
There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.

(b) Inadequacy of laws
Existing laws and procedures for redressing these injuries are inadequate to protect consumers.

(c) Available non-abusive collection methods
Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.

(d) Interstate commerce
Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce.

(e) Purposes
It is the purpose of this subchapter to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.

In closing this section, if you have any questions or concerns about your rights related to abusive debt collectors, and if you live in Alabama, please feel free to call us at 205-879-2447 or contact us through our website. If you live outside of Alabama, we suggest you look for a local consumer lawyer at the National Association of Consumer Advocates website.

We wish you the best....

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We recently sued (as we often do) Portfolio Recovery Associates (PRA). This time it was for repeatedly and illegally calling our client's cell phone while using an auto dialer and/or a pre-recorded message. This is illegal under the Telephone Consumer Protection Act (TCPA).

Much to my surprise, PRA claims that it does not have an auto dialer. I find this amazing and frankly not believable.

If you have either experienced an auto dialer from PRA or if you have clients that have, please contact me (205-879-2447) as I would like to see how this plays out at the deposition of the corporate representative.

If it turns out this statement is incorrect (and it can't be an accident - PRA knows whether it has an autodialer system) then it will be very enlightening to us on the credibility of PRA.

We appreciate it your help...

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:

We recently sued (as we often do) Portfolio Recovery Associates (PRA). This time it was for repeatedly and illegally calling our client's cell phone while using an auto dialer and/or a pre-recorded message. This is illegal under the Telephone Consumer Protection Act (TCPA).

Much to my surprise, PRA claims that it does not have an auto dialer. I find this amazing and frankly not believable.

If you have either experienced an auto dialer from PRA or if you have clients that have, please contact me (205-879-2447) as I would like to see how this plays out at the deposition of the corporate representative.

If it turns out this statement is incorrect (and it can't be an accident - PRA knows whether it has an autodialer system) then it will be very enlightening to us on the credibility of PRA.

We appreciate it your help...

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 Federal Trade Commission has posted an article about a recent debt settlement. Credit Bureau Collection Services, a nationwide debt collecting company, has agreed to pay more than $1 million to the FTC as a settlement for violating "federal law by inaccurately reporting credit information and pressing consumers to pay debts they often did not owe."

The FTC's complaint was that the company violated the Fair Debt Collection Practices Act by illegally trying to collect invalid debts and then reported the debts to credit reporting agencies and ignored disputes from consumers. Also, they are charged with violating the Fair Credit Reporting Act.

In addition, even after receiving information from consumers that a debt was paid off or did not belong to the consumer, the company continued to assert, no longer with a reasonable basis, that the consumer owed the debt, without trying to confirm or dispute the consumer’s information, in violation of the FTC Act.

In addition to imposing the $1.1 million civil penalty on the company, the settlement order:

-Bars the defendants from further violations;
-Prohibits them from making unsupported statements to collect a debt or obtain information about a consumer;
-Bars them from making claims that a debt is owed or about the amount, without a reasonable basis;
-Requires the defendants, when a debt is questionable or a consumer questions it, to either close the account and end collection efforts or investigate the dispute. If they cannot show that the consumer owes a debt, they cannot sell the debt or provide it to any business other than the original client; and
-Bars the company from re-reporting information to credit reporting agencies that it had voluntarily deleted from credit reporting before December 2008.

If you have had problems with debt collector harassment or faulty credit reports, feel free to contact us through our website or by calling 205-879-2447.

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 California Debt Blog has posted an article that gives a basic overview of the different types of attorney fees and how they can relate to a debt collection/creditor harassment case.

A Contingency fee is mainly used for personal injury cases and isn't common in debt collection cases. For this fee, the attorney gets a percentage of the settlement, usually in the range of 30%-40%.

A Flat fee is when the attorney charges a set rate regardless of the amount of work or settlement amount. This is a more common option for dealing with debt collection cases.

Hourly fees are the most common. It's exactly what it sounds like...a flat rate is charged per hour for the work the attorney does.

Usually, a debt collection defense case without a cross complaint against the debt collector is handled this way. So, if the debt collector has not violated any laws and sues you, most attorneys are going to handle it on an hourly basis. Now you know why debt collectors sue people over small amounts like $1,500 or $2,500. If there are no FDCPA or Rosenthal Act violations, it quickly gets expensive to prove that you do not owe the debt!

Hybrid fees are any combination of the above. The attorney can charge hourly for some things and also have a contingency fee. "Or it could be a flat rate with the rest being paid by the collector upon successful completion of the case."

Pro Bono fees mean that the attorney does not charge and you aren't billed.

However, if you call an attorney and ask them to take your case pro bono, most attorneys will tell you no. We like doing pro bono work and most of us take on pro bono cases. But these are cases that we select for a variety of factors.

This is just a basic overview of what fee options to expect, but if you have more questions about this or debt collection feel free to contact us through our website or by calling 205-879-2447.

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:

Our friend Denise Richardson, of givemebackmycredit.com, has posted an article that gives 5 helpful tips on what to avoid when dealing with debt collectors and debt collection agencies.

#1. Doing Business Over The Phone:
If dealing with a debt collection agency, there's a good chance you'll end up in court and will need proper documentation of your dealings with the agency. Conducting your business over the phone makes it harder to have a valid, official record of what has been said should you have grounds to sue the collection agency for harassment. Refuse to conduct business with them over the phone and instead insist all communication be done in writing.

#2. Accepting A Computer Printout As Official Debt Validation:

One of the most basic methods of credit repair is requesting a debt validation from a collection agency. Should the collection agency fail to provide you with a validation, it is required by law to remove any entries it has placed on your credit report. Upon receiving your dispute, many collection agencies will provide you with a printout containing your current account information.

Due to the fact that the Fair Debt Collection Practices Act does not clearly stipulate what constitutes a legitimate debt validation, collection agencies are free to use printouts to "prove" that you owe a debt. Even if it has met the basic criteria for a validation, all collection agencies know that printouts rarely hold up in court. Don't accept a computer printout as a legitimate debt validation. Demand that the collection agency provide you with a copy of the original contract that you supposedly signed. In many cases, they can't do so.

#3. Giving Personal Information:
Just because a collection agency is trying to collect a debt doesn't necessarily mean it has your personal information, like your Social Security number. If you give a customer service representative this information to "locate" your account, they can use it to gain information about you that they don't already have.

By giving a customer service representative at a collection agency any information about yourself other than your name, you may be helping the company validate your debt or report it to the credit bureaus.

#4. Making Payments On An Old Debt:
Although it seems backwards, paying a collection agency can really turn into a hassle and cause even more of a headache. Every state has a different statute of limitation that gives the amount of time a creditor is allowed use a lawsuit to collect a debt. After that time passes, you are safe from a lawsuit and/or wage garnishment. If you give the collection agency a payment the statute of limitation is reset. Also, if you pay with a check or automatic bank draft, the agency now has your bank information and has the ability, even though it's not legal without a court order, to empty your bank account.

#5. Not Getting Agreements In Writing:
When settling with a collection agency, one of the most important things you can do is get a representative of the company to send you a physical copy of the payment agreement. Collection agencies have high turnover rates, so if you and a representative come to a verbal agreement and the representative leaves there's a chance there won't be any record of your settlement. Getting everything in writing eliminates this problem.

We would also like to thank Denise for kindly linking to us on her site!

If you have had problems with creditor harassment or have other questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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:

KFOXTV.com has posted an article about a deputy constable in El Paso, TX who allegedly tried to arrest a man (illegally) for not paying his bills from renting equipment from Buddy's Home Furnishings.

"He told him that he owed Buddy's [Home Furnishings]," said Scott Vogelmeier, an attorney representing the man. "And that if he didn't pay Buddy's, he would arrest him, put him in handcuffs and take him away right then and there."

Debt collection is out of the realm of law enforcement, even when accompanied by a representative from the creditor, as was in this case. Failing to pay a debt is not a crime and people should not be threatened with arrest by debt collectors. Also, debt collectors (and constables) are prohibited from showing up or calling where debtors work.

"To go out there, and suggest that my client committed some sort of criminal act, which in fact he did not, and that he could be arrested and handcuffed and dragged away in front of his co-workers and the patrons of that restaurant, it's just absolutely incredible that anybody would think that's correct," said Vogelmeier.

If you have had problems with creditor harassment, feel free to contact us through our website or by calling 205-879-2447.

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 CL&P Blog has posted an article about some companies beginning to use text messaging as a form of debt collection. This method has some conflicts with the Fair Debt Collection Practices Act's regulations on debt collectors disclosing themselves.

Some of them, like the validation message required under section 1692g, are only required within five days of the initial communication, and so can be sent in other ways, but under section 1692(e)(11), all communications must disclose that the communication is from a debt collector.

Character constraints in texting don't allow for adequate disclosure and then a more detailed statement of the debt from the collector. Also, billing plans charge recipients for text messages and not the sender, so consumers definitely won't be happy about paying for texts that tell them they owe money to debt collectors.

That also brings up section 1692f, which prohibits unfair practices, and in subsection (5) specifically bars:

Causing charges to be made to any person for communications by concealment of the true purpose of the communication. Such charges include, but are not limited to, collect telephone calls and telegram fees.

While the above was written before text messaging it is certainly applicable to this newest development.

If you have had problems with debt collector harassment feel free to contact us through our website or by calling 205-879-2447.
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:

We are often asked questions such as "Why are you guys consumer protection lawyers" or "what is a consumer protection attorney" and we wrote an article on our website to help answer these types of questions. We hope it is helpful to you and let us know if you have any questions - either contact us through our website or call us at 205-879-2447.

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:

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

Mann Bracken is famous (infamous) but it appears to be shutting down and dismissing lawsuits. Keep up to date here - I don't know this blogger but they have a rather wicked sense of humor and obvious joy over the downfall of the giant Mann Bracken.

We don't see much of Mann Bracken directly here in Alabama but all of these collectors are scrambling for money which means they are more likely to break the laws than ever before. Learn more about the Fair Debt Collection Practices Act (FDCPA) and if you live in Alabama and have any questions, please feel free to call us at 205-879-2447 or contact us through our website.

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:

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 California Debt Blog has posted an article that serves as a good reminder to everyone about debt collectors. Even though the economy isn't the best right now, because of the holiday season, debt collectors are willing to settle cases. The article gives the example of:

Recently, I had two debt collectors agree to dismiss cases they brought against my clients and wipe the debt off of the credit report, along with not selling the debt to anyone else. I then had a debt collector pay my client money to cover her legal fees, wipe the debt off of her credit report and not sell the debt.

We are also having similar experiences and are more than willing to help you if you have questions, interested in settling claims with debt collectors, or have had problems with creditor harassment. Feel free to contact us by calling 205-879-2447.

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:

CNN.com has posted an article about a woman's interesting lawsuit regarding her husband's 2005 death. Dianne McLeod, the widow of Stanley McLeod, is suing Green Tree Servicing, their mortgage company, for contributing to his death. Mr. McLeod had a severe heart condition (and was even airlifted to a hospital because of a heart attack in 2002) and went on disability, thus resulting in the couple falling behind on their mortgage payments.

McLeod said she thinks he would be alive if not for the stress caused by Green Tree's debt collectors. She said they sometimes called up to 10 times a day and also called the McLeods' neighbors.

"He would begin to sweat; he would also get very red in the face and complain about chest pains," McLeod said. "We were worried he was gonna have a heart attack right there on the phone."

Mrs. McLeod claims that the constant stress from the debt collectors' harassing and constant phone calls ultimately led to the heart failure that killed her husband in 2005. They would call the couple all throughout the day and night and left rude and threatening messages.
Naturally, Green Tree Servicing claims his death was not caused by their harassment.

"The collection activity did not lead to his death. The claim is meritless," said Senior Vice President and General Counsel Brian Corey of Green Tree Servicing.

"We deny that the content, the number or the timing of the calls had anything to do with him dying in 2005," Corey said.

Debt collection is regulated by the U.S. Federal Trade Commission, which forbids harassing consumers. Companies can be fined $16,000 per incident. This year, as the economy plunged, consumer complaints shot up. More than 45,000 complaints had been received by the FTC through the end of June, up about 20 percent over last year.

If you have problems with creditor harassment, 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:

Abusive debt collectors operate from a place of intense arrogance toward consumers. They are arrogant because of two reasons:

1. You don't know the law and don't know they are breaking the law; and
2. Even if you know, you won't do anything about it.

Example Of Arrogance
Here's the best example I can think of - why do collection agencies leave voicemails where they break the law? Think about it - why would a law breaker want to record their lawbreaking? The abusive debt collector is saying "I want you to have a permanent record of me breaking the Fair Debt Collection Practices Act!" Either they are stupid or they are arrogant and don't think they will get in trouble for it.

Abusive debt collectors are many things but typically they are not stupid. They act in a way that leads to you paying them money, whether you truly owe it or not.

So This Leaves Us With Arrogance.

Arrogance that you don't know when they are breaking the FDCPA or state law. Arrogance that you don't know that it is illegal to threaten to have you arrested or to call your neighbors or family members or to lie to you, etc.

And arrogance that even if you know the collection agency is breaking the law you won't be willing or able to do anything about it. Arrogance that you can't find a lawyer to help you. Arrogance that you won't take the time to document the abuses, save the voicemails, get the statements from your neighbors who have been called, etc. Arrogance that you won't sue these jokers and make them pay for breaking the law.

Why The Arrogance?
What gives them the belief they can get away with abusing you on your phone, or threatening to sue you after you have won your collection case against them, or keeping false credit information on your credit reports, etc?

They get away with it. All the time. Well, nearly all of the time. So when they do something wrong and almost always "get away with it" and violating the law makes them a ton of money, why stop?

Putting morals and right and wrong aside, it makes good economic sense the way that abusive debt collectors run their business. That's why a lot of the owners of these places live in mansions and drive fancy cars. Remember they aren't stupid - they are being very deliberate in breaking the law in order that they can illegally profit off of you.

Three Step Solution
You want to stop them? You want them to stop harassing you? Three steps.

First, learn about your rights. Read this blog, our website, attend our seminars, research the law on line, etc.

Second, document the abuses. Use the collection log that Pete Barry (fantastic FDCPA lawyer in MN) developed. If it is legal, record their calls - we don't think its necessary but if you do it legally then it can be a big help in your case. But whatever you do, document every bit of contact you have with the collection agency.

Third, when appropriate, sue them. Sue them under state law. Or the FDCPA. Or the FCRA. Or all of these. But sue them.

Do your part to stop the arrogance of these abusive debt collectors by suing them to protect yourself and the community. Feel free to call us at 205-879-2447 or through our website.

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:

We have often talked about the outrageous conduct that often occurs when debt collectors start suing Alabama consumers. In general, most of them take a "presumed guilty" position with the Alabama consumers they call or sue. Then when we sue these collectors for suing the wrong person they become outraged at being sued. Ironic, huh?

A recent article in the NY Times by Jim Dwyer gives an example of the typical attitude of big collection lawfirms. [Note most Alabama collection firms are not like this - but some are...]

Here is the gist of what happened:

Clearly, they had the wrong Mark Hoyte. But that did not stop the lawyers at Pressler & Pressler from suing him. They swore out a complaint and sent a summons to Mr. Hoyte, ordering him to be in court last Monday.

Then things took a rare turn.

Every day of the year, 1,000 cases on average are added to the civil court dockets in New York City over credit card debt — a high-volume, low-accuracy moment of reckoning. The suits are usually brought by collection companies that purchase the debt for pennies on the dollar from card issuers and then work with a cadre of law firms that specialize in collection work.

Conducting a digital dragnet, they troll through commercial databases searching for debtors. Because of the vast sloppiness and fraud involved, Attorney General Andrew M. Cuomo has shut down two of the collection firms and is suing 35 law firms tied to the business.

A person who blows off a civil court summons — even if wrongly identified — faces a default judgment and frozen bank accounts. But to date, there have been few penalties against collectors for dragging the wrong people into court.

Until Mr. Hoyte turned up last week in Brooklyn.

On the trial date, the Judge probed into this matter and the collection firm wanted to simply dismiss Mr. Hoyte from the case but not compensate him for suing him even when they knew he did not owe the debt.

Take a look at the attitude of this collection firm as it will give you insight into the arrogance of collection agencies and debt collectors in general:

Under questioning by the judge, Mr. Hoyte recounted being called about the debt, providing his Social Security number and date of birth, and being summoned to court anyhow.

The collections lawyer then began to interrogate Mr. Hoyte.

“You claim you told Pressler & Pressler it wasn’t you,” Mr. Wang said to Mr. Hoyte. “Did you send them proof, as in a copy of your Social Security number with only the last four digits visible?”

“No,” Mr. Hoyte said. “They didn’t ask for it.”

“But you didn’t send any written proof of the claim that it was not you?” Mr. Wang said.

“I told them on the phone it’s not me,” Mr. Hoyte said.

Mr. Wang appeared outraged.

“So without any written proof that it’s not you, you would expect someone just, you know, to go on say-so?” he demanded. “Is that correct?”

Alice had reached Wonderland: The lawyer who had sued the wrong man was blaming the wrong man for getting sued.

You can read a list of frequently asked questions about debt buyer lawsuits on our website or you can go to our speciality site which has information about debt collection lawsuits. You can also call us at 205-879-2447 or contact us through our website.

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:

PS - Great article by Jim Dwyer. If you are wondering, yes this appears to be a violation of the Fair Debt Collection Practices Act even though lawyers that defend collectors argue they can sue the wrong person and take it all the way to trial (to see if the consumer will not show up so a default will be taken) and then dismiss without any penalty. That's bogus folks.....

Due to a great amount of interest, we have decided to hold a free teleseminar on Tuesday, November 24, 2009, at 7 pm CST. This will be the first in a series of seminars that you can attend from the comfort of your home, office, or car (be safe if driving....).

Our first one will be on "How To Fight Back Against Abusive Debt Collectors" and in this hour long discussion we will share with you some ideas on how to use both State law and Federal law to protect yourself from debt collectors who cross the line. Based upon the types of cases coming into our office that result in lawsuits being filed against collection agencies, and based upon the number of calls and emails we receive, debt collection abuse is not slowing down any - instead it is picking up. This seminar will help you understand your rights and options in fighting back against these types of collectors who don't play fair.

There is no charge to attend. Those who register will also receive a bonus four part email series that will expand upon the ideas in the seminar.

Here are some of the topics we will cover:

When does the Fair Debt Collection Practices Act apply?
Can a debt collector contact my neighbors? Family? Co-workers? Friends? References?
If a debt collector breaks the law, can I recover money damages against the collector?
How do I make a debt collector take false information off of my credit report?
Should I record calls from a debt collector?
Are voicemails from debt collectors illegal?
Can a debt collector call my cell phone?
There will be other topics we will cover - I don't know what those are because I need for you to come up with them!

We would like your questions and suggestions - please send those in to us before the call and then you can also ask questions during the call.

We are very excited about doing this and trust this will be very helpful for anyone who is dealing with a debt collector. There is nothing wrong with a debt collector collecting a debt. As long as the laws are followed. So join us and learn more about the laws and what your options are when collectors turn abusive.

Fill out the sign up form below so that you can reserve one of the limited spots on this call.

Or you can call us at 205-879-2447 to reserve a spot. We look forward to "seeing" you on the call!

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 BKBlog has posted an article about consumer protection offered by the Fair Debt Collection Practices Act when dealing with collection agencies. Under the FDCPA, credit card companies and collection agencies have different regulations. A credit card company could contact the debtor and not be under the same regulations as a collection agency.

Two of the protections provided by the FDCPA include:
-a prohibition against communicating with a debtor when the collection agency employee does not identify himself as a debt collector; and
-communicating about your debt with third parties

The article brings up a case that was filed that has "clarified the rules about telephone messages by bill collectors."

The case of Edwards v. Niagara Credit Solutions involved a situation in which the debt collector (Niagara) left "bare bones" messages on a phone answering machine asking Ms. Edwards to call back about an "important matter."

The collection agency argued the caller didn't identify himself as a debt collector in case a someone other than the debtor were to hear the message, which would be a violation of the "third party communications" prohibition." The court stated that...

that it is not permissible to violate one provision of the FDCPA in order to comply with another provision. The Court further noted that the FDCPA does not guarantee a debt collector the right to leave answering machine messages.

If you have received similar phone messages and live in Alabama, feel free to contact us. Or you can go to our website that is devoted to illegal voicemails from collectors and request our free report on "Making Debt Collectors Pay For Illegal Voicemails".

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 Michigan Collection Law Blog has posted an article about an easy way to deal with debt collectors and creditor harassment. The article was originally written by Kat Sanders, who blogs for Court Reporter Schools.

We don't agree with all of these points but you should consider these. We are finishing our free report on what to do when first contacted by a debt collector and will make that available soon. But do consider these points and take whatever is useful from these.

Sanders' first pointer is for the consumer to know their rights. Debt collectors are prohibited from threatening or harassing you into paying by the Fair Debt Collection Practices Act.

Next, you can negotiate with them. Debt collectors cannot force you to pay, but you can negotiate with them to agree on a monthly sum to pay that will keep your creditor satisfied. This also shows the creditor that you do intend to pay the debt back.

You shouldn't be "bullied down with threats" from the debt collector. Collectors often use intimidation as their main weapon, but are legally very limited in what they can do. They cannot seize funds directly from your paycheck unless they have a court order.

So don’t allow yourself to be browbeaten into paying more than you can afford and neglect your food and rent in the process.

Last, don't threaten the debt collector.

It’s best to deal with debt collectors in a conciliatory way and avoid antagonizing them for your own peace of mind. While you must show them that you are aware of your rights. Don’t throw facts in their face. Instead, try talking to them about your situation and asking them for a grace period in which to repay your debt.

If you have had problems with creditor harassment, 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:

The Consumerist.com has posted an article that discusses how a Brooklyn judge has tossed out roughly half of the foreclosure suits brought to him over the last two years because the lending companies and banks had such disorganized paper trails...to the extent of not being able to prove ownership.

The Consumerist references the original New York Times article that goes into more detail of Judge Schack's reasoning.

Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. In the gilded haste of the past decade, bankers handed out millions of mortgages — with terms good, bad and exotically ugly — then repackaged those loans for sale to investors from Connecticut to Singapore. Sloppiness reigned. So many papers have been lost, signatures misplaced and documents dated inaccurately that it is often not clear which bank owns the mortgage.

Justice Schack’s take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose.

“If you are going to take away someone’s house, everything should be legal and correct,” he said. “I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”

Schack's rulings have prompted others in the legal profession to take a hard look at why judges don't hold banks to higher standards. He isn't "coming up with novel readings of the law," but only forcing lenders to obey the rules and making protecting the consumer and their rights a priority.

He also rules against inaccurate and unfair mortgages filing for foreclosure.

I’m a guy from the streets of Brooklyn who happens to become a judge,” he said. “I see a bank giving a $500,000 mortgage on a building worth $300,000 and the interest rate is 20 percent and I ask questions, what can I tell you?”

If you have questions regarding foreclosure and your rights, feel free to contact us. We are going to conduct a free foreclosure seminar in early October at our Birmingham office - if you would like to attend let us know so we can reserve a spot for you. We'll have more details coming soon. The first place we will announce it is in our Consumer Power email newsletter that goes out every Thursday. We would love to include you! Just fill out the form below: