Alabama Consumer Law Blog

This story by Karen McCracken is odd on several levels.

First a collection agency puts WWJD on all of its letters - What Would Jesus Do.

Second, here is the position of the collection agency:

Harry Mihet, lead attorney stated: “They treat their customers with respect, with integrity and the way they would want to be treated. They listen to the debtors. They try to work out solutions for the problems they are facing. They even pray with the debtors over the phone sometimes in certain situations.”
Mihet further states that “The only reason they put it there (WWJD) is they want the world to know they have adopted for themselves a code of conduct that goes above and beyond any federal law requirements to be civil and polite to debtors.”

Third, what has made this particularly newsworthy is that the collection agency is being sued. Under the Fair Debt Collection Practices Act. By another collection agency!

Not surprising to see collectors abusing consumers and I suppose it should not be surprising to see them abuse other collectors....

I would not expect this suit to be successful and if this WWJD collection agency really treats it debtors with respect and follows (or exceeds the law) then congratulations to it.

Thanks to Karen for writing this story in my old city of Louisville, Kentucky, where I lived for a number of years (Pleasure Ridge Park high school - memories!). Keep up the good work!

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Posted In: Collectors/Debt Buyers

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Here is a nice video summarizing many consumer rights when dealing with collections. While this is from South Carolina, most apply to Alabama consumers (except the discussion of garnishment and right to cure).

If you are dealing with abusive debt collectors, please feel free to contact us through our website, our blog, or by phone at 205-879-2447.

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Posted In: Collectors/Debt Buyers , Video

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Almost without exception Alabama consumers who have been sued by debt buyers want to know if they have the right to appeal if they lose their case or if the debt buyer has the right to appeal if it can't prove its case and loses.

The answer is any party can appeal. We discuss the right to appeal in this video:

If we can help you, please contact us through our website, or call us at 205-879-2447, or fill out the form below for our free report on the Five Secrets Debt Buyers Don't Want You To Know About When They Sue You.

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The requests for our "Five Secrets Debt Buyers Don't Want You To Know About" has been wonderful and we appreciate the chance to help Alabama consumers who have been sued. But we realized that the whole idea of testifying at your Alabama collection lawsuit can be intimidating and so we have prepared a 25 page free special report that lays out the seven mistakes we often see consumers make while testifying.

If you would like this report, please contact us through our website, through this blog (contact form to the left), by calling us at 205-879-2447 or by filling out the form below:

You can also check out our new website (still under construction but feel free to visit) - Sued By A Debt Buyer (suedbyadebtbuyer.com). Let us know what you think!

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The final step in dealing with abusive debt collectors who contact third parties in violation of the law is to contact us or other experienced consumer attorneys to determine if it is appropriate to file suit to make these collectors stop. We will discuss more about filing Fair Debt Collection Practices Act (FDCPA) cases in future posts and videos but for now we will discuss contacting a consumer attorney:

If you are dealing with this type of abusive collection agency, request our free report on making these abusive types of collectors pay for breaking the rules. You can call us at 205-879-2447, contact us through our website, or fill out the form below to request the free report.

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Posted In: Collectors/Debt Buyers , Video

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We have previously discussed who is a "third party," why collectors call third parties and some examples of illegal third party contacts by abusive collection agencies. Now we want to remind you to get a statement from the third party who was illegally contacted by the debt collector.

This is important as it helps the third party remember the illegal call and it helps for you to document exactly what was said to the third party by this collector.

Here is a video that discusses obtaining a statement from the third party:

If you are dealing with this type of abusive collection agency, request our free report on making these abusive types of collectors pay for breaking the rules. You can call us at 205-879-2447, contact us through our website, or fill out the form below to request the free report.

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The problem of abusive collectors calling neighbors, co-workers, friends, or family members is not declining but instead is growing. This is the best way to force a consumer to call the collector back - embarass and shame them by calling third parties illegally.

We have been asked what are some examples of this type of illegal conduct so we made this short video:

If you are dealing with this type of abusive collection agency, request our free report on making these abusive types of collectors pay for breaking the rules. You can call us at 205-879-2447, contact us through our website, or fill out the form below to request the free report.

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After you file your federal court FDCPA lawsuit, the court will send a copy of the lawsuit to the defendant. Once the defendant receives a copy of the suit through the court, the defendant has 20 days to answer or respond to the lawsuit.

There are a number of ways to serve a federal court lawsuit but the easiest is to find the "registered agent" of the defendant and have the court serve the agent by certified mail. Normally the debt collector will be registered in Alabama so the secretary of state's website can give us this information. If you don't find it there, check out the websites of California, New York, Texas, Florida, etc. - the debt collector is probably registered in the bigger states or in its home state.

Once the defendant is served, then the response or answer will come next. That is what we will talk about in our next post.

If you are dealing with an abusive debt collector, please feel free to call us at 205-879-2447 or contact us through our website form. We look forward to helping you any way that we can.

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We understand that the economy is in a serious slump. The government is buying shares in banks. Companies are going bankrupt. Billions of dollars of value are being wiped out in stock market declines. What does this mean for the average Alabama consumer with respect to debt collectors and credit reports?

It is now harder than ever to pay debt collectors. On the other hand there is and will be even more bad debt sold to debt buyers or assigned to collection agencies. The legitimate and honorable debt collectors will stay within the law and will be creative in finding ways to help consumers pay debts that are owed. But many debt collectors will cross over the line. The idea is when there is a lot of noise, you have to shout louder to be heard. So many demands now exist for our money that for debt collectors to get our attention, they have to (in their minds) violate the law in order to be paid.

These violations will include threatening to garnish wages or put a lien on your house before filing suit and before having a judgment. It will also include threats (either directly or indirectly) that not paying for a credit card is a crime that can lead to prison. It will also include filing suit on cases well beyond the statute of limitations. Calling third parties - neighbors, co-workers, family members, church members, etc.

With respect to credit reports, debt collectors will be more tempted to put false information on credit reports knowing how important it is, with tight credit markets, to have an excellent credit score. Its hard enough to get credit right now but trying to do so with false collection accounts on your credit report is truly difficult.

Its not just debt collectors that understand the power of credit reporting to "wrench payment from debtors" (as one federal court famously said) - credit card companies know this as well. We have seen more and more cases of credit card companies tell, for example, widows who were not on the credit card that they are responsible for paying their dead husband's debts "because you were married". We have seen credit card companies say that there is no identity theft if your spouse or child stole your identity. We have also seen identity theft victims be rejected by credit card companies who say since a single payment was made by the innocent spouse that somehow the innocent spouse had "agreed" to pay the entire $15,000 balance. Absurd positions but everyone is wanting to get paid and so many companies are willing to cross the line in order to persuade Alabama consumers to pay debts that they do not even owe.

The solution is to educate yourself. If you have questions consult with an experienced consumer attorney. Document all your experiences and interactions with debt collectors very carefully Pull your credit reports and monitor what is on there carefully and dispute false accounts and false information.

Please contact us through our website or by phone at 205-879-2447 if we can be of assistance to you in any way. If you would like one of our free reports on debt buyer lawsuits, collection calls, or collectors calling your neighbors or co-workers, let us know and we'll send those out to you right away.

(I wrote this in October and then forgot to "publish" it - just ran across this and decided it is even more true today than when I wrote it last year. Hope it is helpful to you).

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Posted In: Collectors/Debt Buyers , Credit Report Errors

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In this video I discuss what happens on the day of trial in a debt buyer lawsuit in Jefferson County, Alabama (Birmingham), in District or Small Claims court:

This video does not discuss the actual trial but instead the "calling of the docket" and what happens before the trial. We'll have a follow up video that discusses what actually happens during trial.

If you would like our free report on debt buyer secrets that exposes what debt buyers don't want you to know when they sue you, call me at 205-879-2447, contact us through our website, or fill out the form below:

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In this video we discuss the fatal flaw of almost every debt buyer lawsuit that we have seen - the debt buyer can't or won't prove it owns the debt. We wrote about this two years ago and, if anything, the problem has increased with debt buyers hardly making an attempt to prove ownership. (Or if they do they seem to ignore or not understand basic rules of evidence).

In this video we address this issue:

If you would like more information, and in particular our free report on the Five Secrets Debt Buyer's Don't Want You To Know About, contact us at 205-879-2447, through our website, or by filling out the form below. We wish you the best!

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Posted In: Collectors/Debt Buyers , Video

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In this video you can see and hear one of our clients talk about his experience in being sued by a debt buyer in Jefferson County, Alabama (Birmingham). This video was made right after his trial which he won in the District Court of Jefferson County.

We have discussed the large numbers of cases being filed by debt buyers and the biggest advantage they have over consumers is most consumers don't have good solid information about their rights. To help with this, we have our free report which any consumer being sued by a debt buyer should review as soon as possible as you don't want a default judgment to be entered against you as we discuss in this video below:

To request our free report to help educate yourself on debt buyer lawsuits, call us at 205-879-2447, contact us through our website, or fill out the form below. We wish you the best of success.

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Posted In: Collectors/Debt Buyers , Testimonial , Video

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Here is an update on some of the debt buyer lawsuits filed in the state of Alabama during the week of May 11, 2009.

Arrow Financial Services 26
Asset Acceptance 113
Atlantic Credit & Finance 92
Cach, LLC 4
Cavarly Portfolio Services, LLC 21
Harvest Credit Management, LLC 2
Hilco Receivables LLC 1
LHR Inc 2
Lionheart Funding LLC 61
LVNV Funding 15
MCM Holdings LLC 4
Merchants Adjustment Services, Inc. 5
Midland Funding LLC 98
NCO Portfolio Management 4
Palisades Collections, LLC 8
Portfolio Recovery Associates 5
Unifund CCR Partners 22
World Acceptance Corporation 4
Worldwide Asset Purchasing 3

If you would like our free report on "The Five Secrets Debt Buyers Don't Want You To Know About" then call us at 205-879-2447, contact us through our website, or fill out the form below:

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Here is an update on some of the debt buyer lawsuits filed in the state of Alabama during the week of May 4, 2009.

Arrow Financial Services 30
Asset Acceptance 62
Atlantic Credit & Finance 46
Cach, LLC 3
Cavalry Portfolio Services, LLC 45
Cresent Recovery LLC 1
Delta Capital Resources, LLC 2
Harvest Credit Management, LLC 1
Hilco Receivables LLC 3
Lionheart Funding LLC 107
LVNV Funding 31
MCM Holdings LLC 2
Merchants Adjustment Services, Inc. 13
Midland Funding LLC 168
NCO Portfolio Management 3
Portfolio Recovery Associates 2
RJM Aquisititions 1
Unifund CCR Partners 16
World Acceptance Corporation 5
Worldwide Asset Purchasing 5

If you would like our free report on "The Five Secrets Debt Buyers Don't Want You To Know About" then call us at 205-879-2447, contact us through our website, or fill out the form below:

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This is a question that Alabama consumers often ask us as debt collectors more often than ever before are calling our cell phones. We have previously blogged about this practice of collectors calling cell phones (and we have an article on cell phone calls on our website).

Here is a video we recently made as we know many people prefer to watch a video than read an article (that's why we all love youtube, right?):

If you have any questions, or would like our free report on How To Make Debt Collectors Pay For Illegal Voicemails, please contact us in one of the following ways:

1. Call us at 205-879-2447 and let us know you want the free report or you have questions; or
2. Contact us through the blog - the form is to the left of this post; or
3. Contact us through our website; or
4. Fill out the webform below.

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Posted In: Collectors/Debt Buyers , Video

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Here is an update on some of the debt buyer lawsuits filed in the state of Alabama during the week of April 27, 2009.

Allgate Financial, LLC 1
Arrow Financial Services 12
Asset Acceptance 11
Atlantic Credit & Finance 2
Cavarly Portfolio Services, LLC 1
Delta Capital Resources, LLC 1
Hilco Receivables LLC 2
LHR Inc 2
Lionheart Funding LLC 23
LVNV Funding 1
MCM Holdings LLC 1
Merchants Adjustment Services, Inc. 10
Midland Funding LLC 55
Northstar Capital Acquistions, LLC 1
Palisades Collections, LLC 1
Portfolio Recovery Associates 17
TBF Financial 1
Unifund CCR Partners 9
World Acceptance Corporation 8
Worldwide Asset Purchasing 12

If you would like our free report on "The Five Secrets Debt Buyers Don't Want You To Know About" then call us at 205-879-2447, contact us through our website, or fill out the form below:

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In our last video blog post we discussed that the biggest danger facing Alabama consumers who have been sued is not answering the collection lawsuit filed by a debt buyer. Since we have hopefully convinced you to answer - the question is "How long or how much time do I have to answer?"

In circuit court in Alabama you have 30 days from when you were served. In district or small claims court you have 14 days to answer the collection suit.

Make sure you answer on time! If you would like some guidance, call us at 205-879-2447 or contact us through our website or through this blog or fill out the form below and we will send you our free report on "The Five Secrets Debt Buyers Don't Want You To Know About".

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Posted In: Collectors/Debt Buyers , Video

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The Houston Chronicle has posted an article that very clearly outlines what constitutes debt collector harassment.

Under the Fair Debt Collection Protection Act, debt collectors are not allowed to:

Tell a neighbor, co-worker or non-spouse that you owe money.

Call at work after you've told them you can't receive such calls.

Call before 8 a.m. or after 9 p.m.

Call an excessive number of times.

Continue to call after receiving written request to stop.

Threaten violence, arrest or incarceration.

Use profanity or harassing and abusive language.

Threaten to take your house or garnish your wages in Texas.

The article says that economic hard times make debt collectors more aggressive and more prone to illegal tactics. However, you can sue them to stop the problem. You may be able to receive $1,000 or possibly more if you have been severely harassed.

Dana Karni, a Houston lawyer, is quoted.

"A lot of consumers don't understand that they can go after the debt collectors and they can get paid for their pain and suffering and their attorneys fees can be paid."

Karni sued for a Huntsville woman who was severely harassed. The debt collector threatened she would lose her house, go to jail and never see her children again. She received $17,500 because of the Fair Debt Collection Practices Act and Karni received $50,000 reimbursement in legal fees.

If you are being harassed by debt collectors, feel free to contact us.

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Here is a (belated) update on some of the debt buyer lawsuits filed in the state of Alabama during the week of April 20, 2009.

Arrow Financial Services 28
Asset Acceptance 70
Atlantic Credit & Finance 123
Cach, LLC 3
Cavarly Portfolio Services, LLC 7
Delta Capital Resources, LLC 2
Hilco Receivables LLC 4
LHR Inc 2
Lionheart Funding LLC 3
LVNV Funding 6
MCM Holdings LLC 1
Midland Funding LLC 110
NCO Portfolio Management 2
Northstar Capital Acquistions, LLC 1
Palisades Collections, LLC 2
Portfolio Recovery Associates 27
RJM Aquisititions 3
TBF Financial 1
Unifund CCR Partners 7
World Acceptance Corporation 27
Worldwide Asset Purchasing 8

If you would like our free report on "The Five Secrets Debt Buyers Don't Want You To Know About" then call us at 205-879-2447, contact us through our website, or fill out the form below:

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We recently made a video discussing the biggest danger that consumers face when they are sued in Alabama by a collector or debt buyer - not answering the lawsuit! We are amazed at how often this happens.

Consumers who don't answer the lawsuit face a default judgment which means the collector or debt buyer wins.

But if you answer the lawsuit then you have given yourself a chance to be successful. We discuss these types of issues in more detail in our free report on Debt Buyer Secrets that you can request through our website or by calling us at 205-879-2447 or by filling out the form below the video. We wish you the best!

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Posted In: Collectors/Debt Buyers , Video

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Here is a (belated) update on some of the debt buyer lawsuits filed in the state of Alabama during the week of April 13, 2009.

Arrow Financial Services 65
Asset Acceptance 17
Atlantic Credit & Finance 78
Cach, LLC 11
Capital Financial Credit LLC 1
Cavarly Portfolio Services, LLC 6
Delta Capital Resources, LLC 7
Harvest Credit Management, LLC 2
Hilco Receivables LLC 11
Lionheart Funding LLC 10
LVNV Funding 15
MCM Holdings LLC 2
Merchants Adjustment Services, Inc. 3
Midland Funding LLC 82
NCO Portfolio Management 5
Northstar Capital Acquistions, LLC 21
Palisades Collections, LLC 3
Pinnacle Credit Services, LLC 1
Portfolio Recovery Associates 48
Unifund CCR Partners 39
World Acceptance Corporation 19
Worldwide Asset Purchasing 14

f you would like our free report on "The Five Secrets Debt Buyers Don't Want You To Know About" then call us at 205-879-2447, contact us through our website, or fill out the form below:

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With the economic slowdown, we are seeing more and more abusive debt collectors calling co-workers, neighbors, family members, and others in order to collect debts. These bill collectors know this is illegal but they do it for one simple reason:

It Works!

If you would like to read our free report on Making Collectors Pay For Contacting Third Parties either call us at 205-879-2447 or fill out our contact sheet on our website or on this blog or fill out the report form below and we will send it to you by email or mail - whichever you prefer.

Nothing is quite as effective as applying pressure to an innocent third party. Some favorite targets of collection agencies that willingly break the law:

1. Neighbors ("block parties");
2. Co-workers ("office parties");
3. Family members;
4. Preachers/ministers/pastors;
5. Ex-spouses, inlaws, etc; and
6. Anyone else that the collector knows will let you know that the collector has called.

We recorded a short video on this subject that you are welcome to watch. Be sure and get our free report on how to make collectors pay for illegal third party contacts - this lays out step by step what you should do.

Fill out this form for the free report!

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Posted In: Collectors/Debt Buyers , Video

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The explosion in lawsuits filed against Alabama consumers in Jefferson County, Shelby County, and really all counties in the state continues. So many debt buyer lawsuits are filed that the courts are struggling to handle the burden of the cases. The first question that you are likely to ask yourself when you are sued by a debt buyer is "What is a debt buyer?" Or "I never did business with Midland, Unifund, Asset Acceptance, etc - who are they?"

In this short video I want to give you a little bit of insight into debt buyers and we will continue with a number of videos walking you through some information about debt buyer lawsuits.

We hope this video is helpful to you and we look forward to helping you any way we can. After the video you can fill out a form for a free report on "The Five Secrets Debt Buyers Don't Want You To Know About When They Sue You" as knowing these secrets can help you in your case.

Contact us at 205-879-2447 or through our website which discusses debt buyer lawsuits or you can fill out the form below to get our free report on debt buyer lawsuits.

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Posted In: Collectors/Debt Buyers , Video

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We recently published a new article on our consumer protection website answering the question "Can a bill collector call my cell phone and leave a voice mail?"

In general the answer is "sometimes" but normally the collection agency will violate the law.

We have previously discussed illegal voicemails and everything we said there also applies to cell phones (request our free report if you don't already have it) so the main thing we want to point out here is that using auto-dialers (computer generated calls) are normally illegal. They violate the Telephone Consumer Protection Act unless the debt collector can show that you gave permission to call your cell phone.

We have sued a large number of collectors for violating the TCPA when making collection calls to cell phones and we have not yet seen a time where the defendant collection agency could show it had permission to use an auto dialer.

If you are dealing with a debt collector calling your cell phone and if you live in Alabama, please feel free to contact us for assistance in making the collector stop breaking the law.

You can also request our free report on "Making Debt Collectors Pay For Illegal Voicemails" by filling out the form below or contacting us at 205-879-2447:

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As we have discussed before, abusive debt collectors love to contact third parties to intimidate you into paying a debt. When they do this, they should be sued under federal law (Fair Debt Collection Practices Act) and state law (invasion of privacy, etc).

We are often asked "What" or "Who" is a third party? We shot this quick video to answer this question. We will be adding more videos that we hope will be helpful to you. Always feel free to contact us to discuss your situation or to request our free report on Debt Collectors Contacting Neighbors And Co-Workers. You can feel out the form below or fill out the form on our website or you can call us at 205-879-2447.

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The Michigan Collection Law Blog has posted an article about "outrageous debt collectors' actions." It gives two examples of creditor harassment that violates the Fair Debt Collection Practices Act.

A man was delinquent on his Mercedes payments and the collection agency Universal Tracing Services, Inc tracked down his daughter on Myspace and sent her the following message:

We have been retained by, JPMorgan Chase Bank, to locate and repossess their missing collateral a 2007 Mercedes GL 450. Please contact our office immediately so we can discuss the peaceful recovery of the collateral. Failure to contact me will result in further action against your father James Ricobene. Legal options range from having a replevin order served on you or even worse reporting the collateral as stolen to local authorities in Illinois under the A.R.S. act 18-5-504. Failure to comply with this notice of surrender is a class 5 felony and carries a maximum penalty of imprisonment for two years plus all applicable surcharges. You must contact the writer within 5 days to prevent this action from taking place. You can contact me directly at 800-667-7704 ext 222 or directly at 604-267-1581 ext. 222

Awaiting your immediate response.

Chris Flanagan
Senior investigator

The second example involves a woman who was also behind on car payments. Her car was repossessed and then she was told there was a hidden GPS in the car to track it. She got the car back, but fell behind on payments again. This time Auto Financing Network bought a URL with the name "Jennifer Dicks isn't paying for her Cavalier." They also sent her inappropriate and harassing text messages:

April 10:

Can you quit playing games and give me the car?

April 11:

I'm 2 miles away coming to your house...are you home? Neeee the car.

April 15:

You need to call me...This isn't fair to me. Do you have no soul?

April 18:

All you do is lie. It isn't registered to you so call again. I wish you died when you fell off the roof. If ur not married good. He can do soooo much better.

If you have had problems with creditor harassment that violates the Fair Debt Collection Practices Act, feel free to contact us.

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Posted In: Collectors/Debt Buyers

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There are many reasons why you would want to sue an abusive debt collector. Here is one that we have known about for some time but we are seeing more and more confirmation of it:

When you sue a debt collector there are companies that will put your name in a database (along with my name....I think they must have a long list under "Watts" and "Herring") and then they sell that database to collectors and debt buyers. The reason is for the debt collector or debt buyer to get rid of you because you might sue again.

Check out this website - Webrecon. In their own words (and what a clever business move - got to give them credit there!):

WebRecon LLC's FDCPA Litigant Alert empowers you to protect yourself from overly-litigious debtors by allowing you to compare FDCPA/FCRA/TCPA litigants nationwide with debtors in your own database. Find out immediately if you are collecting against anybody with a history of suing collection agencies.

We give you four different tools to do this.

Our searchable database of over 32,000 FDCPA, FCRA & TCPA cases will help you find individual litigants, defendants or consumer attorneys.
Upload your list of debtors to be crosschecked against our database for an instant display of matches. Scrub an unlimited number of accounts!
We'll give you a spreadsheet of the more than 500 new FDCPA/FCRA/TCPA lawsuits filed twice monthly.
You will be immediately notified if your name appears on any of the more than 30 consumer rights web sites we monitor daily.
Warning: If you are not a member of the collection industry, what we offer
here is not available to you. This service is for industry professionals only.

How will this benefit you directly and immediately?

By knowing who is filing FDCPA/FCRA/TCPA cases, you can check them against your database and if you find a hit, act accordingly. A smart agency will look at those accounts and make a decision among several options including A) return them to the creditor, B) close them, C) immediately file suit, or D) hand them to their most experienced collector to be processed with extra care, knowing the debtor is prone to sue collection agencies.
By knowing which "consumer rights" attorneys are most prolific, as well as which courts and judges hear the most cases, you can monitor trends and use that knowledge to decide if you are doing everything you can to protect yourself from being targeted.
By knowing when and where your business is being discussed on the consumer web sites, you can pre-empt impending traps, lawsuits and even class action recruiting missions by being aware of the situation and heading it off by whatever means are necessary.

Here is the cost which seems very reasonable to me:

Here is the best part - we haven't even talked about cost yet. There is another company that sells just FDCPA case listings for $1595/year. That equates to $132.92/month.

WebRecon's FDCPA Litigant Alert is much less, a bargain at only $99 per month, and you get much more useful information. They only provide FDCPA case information. We combine FDCPA cases with FCRA & TCPA cases, because there is a high likelihood that once somebody sues under them, it is inevitable that they will also sue under FDCPA when they get the chance.

Also, knowing who is filing suit and who is being sued is only half the battle. We go a huge step further by providing intelligence from the consumer web sites. Knowing when and how the enemy is scheming against you will give you crucial information to help protect yourself.

I like the "scheming" part. Something I'm sure collectors never do....

America is truly the land of opportunity - here a collection agency owner figured out this was a better business model to service other collectors rather than having his own collection agency.

So, if you sue a collector you might just make it on Webrecon's database. Not a bad thing.

Remember, if you are dealing with abusive debt collectors who are leaving illegal voice mails, calling third parties, or suing you, contact us as we have special free reports for you to provide you with the more knowledge so you can determine if you want to sue the collector. And make Webrecon's list....

Continue reading "One Benefit Of Suing Debt Collectors - They Tend To Not Want To Talk To You Again..." »

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I don't even know what to say about this one - a collection agency has created a "cute girl" on Facebook and she befriends people who owe money to help track down their contact information.

Check out this story on the Consumerist.

It is only a matter of time before collectors start abusing the more modern technologies like texting, social media, etc. Remember the same laws apply - collectors can't engage in any unfair conduct to collect debts. And all communications must have the mini-miranda which is where the collector informs you that he or she is a debt collector and is attempting to collect a debt.

When the Fair Debt Collection Practices Act is violated, you have the right to sue for damages and attorney fees. Please contact us if you have been abused in an old fashioned way (calling your neighbors, etc) or in a more modern way like this article in the Consumerist discusses.

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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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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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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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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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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.

Fill this form out for the free report!

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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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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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We are filing more and more lawsuits against collection agencies, debt collectors, and debt buyers for leaving illegal messages on our clients' answering machines and voicemail systems. There is a great need for more information as so many Alabama consumers are having to deal with these illegal voicemails so we wrote a short article for you which we hope will be helpful.

This article discusses the three types of common illegal voicemails - threats/lies; third party disclosures; and failure to leave the mini-miranda.

We also have prepared a free report on this subject which covers it in more detail. The report is entitled "How To Make Debt Collectors Pay For Leaving Illegal Voicemails" and is being made available for Alabama consumers who are not connected with or employed by any type of debt collection company. Simply fill out the form below to learn more about this growing problem and how the law, particularly the Fair Debt Collection Practices Act, makes it possible for you to fight back against the debt collectors who so routinely break the law.

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The Atlanta Journal-Constitution has posted an article about problems with a debt collection firm in Georgia. Alison Young, who wrote this fascinating article, says that consumers have complained of the firm using "deceit and abusive tactics" to collect their money...and in some cases money isn't even owed.

Enough people complained that, in Fall 2008, the Georgia Governor’s Office of Consumer Affairs launched an investigation into the matter. The article says that the investigation ordered the offending firm, Frederick J. Hanna & Associates, to

answer questions about collection practices, consumer disputes and what it does to ensure the validity of debts.

If you have had trouble with an abusive debt collector, or one you feel is using questionable tactics, please feel free to contact us.

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Business Week posted an article bringing attention to the decision of some cities and states to enlist private debt collectors to track down and collect "fines", such as speeding tickets and library fines. Jessica Silver-Greenberg and Peter Carbonara, authors of the article, say the idea behind this is to cut costs by having private collectors collecting these unpaid fees rather than government employees.

The idea is that private collectors would have more resources (and possibly time) to collect fines that a government employee wouldn't be likely to pursue, like a library fine. However, private collectors are often less effective. In March the IRS ended a four year contract with private debt collectors and instead hired 1,000 employees at the agency.

Some agencies using private debt collectors haven't been well received.

Not only are private debt collectors less effective than public ones, but a number of companies benefiting from the privatization trend have been slammed by regulators and prosecutors for overcharging municipalities, bribing public officials, and other predatory behavior. Some municipalities have stopped outsourcing their debt collection efforts altogether.

If you have questions or have had problems with a debt collector, feel free to contact us.

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We found there was a need to explain why we suggest you use a collection log and how to use the collection log. Therefore, we wrote an article that we trust will be helpful to you as you deal with collection agencies or debt buyers. Please take a moment and read this article and make sure you take advantage of the free collection communication logs so you can accurately track the communications you receive from debt collectors, particularly collectors that break the law.

Please let us know what questions you have that we can help answer.

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We are often asked by consumers about secretly recording phone calls with abusive debt collectors. Our answer often surprises consumers as we normally say "No". If you would like to find out why, please read our new article entitled "Two Reasons Why We Recommend You Not Record Calls In Alabama".

Please contact us if you have any questions about dealing with abusive debt collectors.

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U.S. Senator Charles E. Schumer (D-NY) has urged a federal investigation to look "into debt collection companies that pursue payments from relatives of deceased debtors, saying the practice appears to violate existing law." Schumer argues that debt collectors who harass a deceased person's family members should be required to state they (the family members) have no obligation to pay the debt unless they were a co-signer.
Senator Schumer wrote a letter to Chairman Leibowitz where he discusses why he feels this tactic is wrong should not be allowed to continue:

"To say the least, this practice is distasteful and unethical. Moreover, this practice may very well violate the Fair Debt Collection Practices Act. I am hereby requesting that the Federal Trade Commission investigate whether debt collection companies are violating the law when they engage in this practice, and exactly what information they are conveying to surviving relatives who are under no obligation to pay off their loved ones’ credit cards."

"I find it shocking that a debt collection company would determine that it is worth causing profound anguish and embarrassment in order to collect debts that are sometimes as low as $50, or which result in a payment of $15 a month from a widow or widower who is struggling to make ends meet. If a debt is large enough to be worth collecting, there are legal ways to obtain payment."

Schumer calls for an investigation into the following:

"Which debt collection companies (“collectors”) are engaging in the practice of collecting credit card debt from widows, widowers, children, and other relatives of the deceased?"

"Which credit card issuers are hiring these collectors, or selling their debts to these collectors? Have the issuers endorsed this practice, either by turning a blind eye toward it or by specifically encouraging it?"

"Does the practice of trying to collect unsecured debts from the living relatives of debtors who have passed on violate the Fair Debt Collection Practices Act’s prohibition on communicating with third parties? If not, why not? What measures could be taken to make sure that these practices are stopped?"

"If these practices are currently legal, are these collectors uniformly making sure that they tell living relatives that they have no legal obligation to pay the debt? Further, are the collectors informing the living relatives of the statute of limitations for collecting these debts? Are the collectors informing the living relatives that any credit card debt would be paid from the estate only after other secured debts, such as mortgage and car payments, are paid?"

If you have been contacted by a debt collector following the loss of a loved one and have questions, feel free to contact us.

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Filing the lawsuit is the first step in an Alabama Fair Debt Collection Practices Act (FDCPA) case against an abusive debt collector. Some lawyers like to negotiate with debt collectors before they sue but (with one exception) we do not do this as we are dealing with abusive collection agencies and debt buyers. These types of companies will often sue the lawyers and clients in the collector's home state if you send them a demand letter. We learned that the best demand letter is a federal lawsuit delivered to the collector.

The lawsuit will lay out the facts of what the collector did and how this violates the law. We don't have to plead or put every detail into the lawsuit but we do want to provide at least a broad outline of what the collector did wrong.

We normally sue for violations of the FDCPA. These types of violations can include third party disclosures or threats of criminal charges or lying or a host of other improper collector conduct.

We sometimes sue for negligent or reckless hiring or supervision of incompetent debt collectors. The type of collectors we sue are absolutely dishonest or incompetent if they did what our clients accuse them of doing and if that is true, and we believe it is, then the collection agency or debt buyer did a lousy job of hiring or supervising or training these dishonest or incompetent collectors.

We also sometimes sue for invasion of privacy. Particularly where debt collectors illegally contact third parties, this is a clear violation of our client's right to privacy.

In federal court we pay the filing fee of $350 and the cost of service which leads to the next post on serving the lawsuit.

If you have any questions about filing an Alabama FDCPA case or if you would like to discuss your experience with an abusive debt collector, please contact us for a consultation.

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CNN.com posted an article, written by Drew Griffin and David Fitzpatrick, highlighting a particular organization that works with prosecutors' offices to collect fees from bad checks.

However, the article says that when the American Corrective Counseling Services contacts individuals who have written bad checks, they often claim to be part of the attorney general's office...which they are not.

The ACCS was hired by the Florida county prosecutors' office to collect fees from bad checks, they are not a part of the prosecutors' office, as they would tell some people, such as Michael and Michelle O'Neil. The couple ended up paying $265 in fees for a bounced check of $14.

The ACCS "splits the money it collects with the prosecutor's office. But it also makes money from financial management courses that people who wrote the checks are required by law to attend at their own expense. And the company's contract with the prosecutor's office states those classes are its "principal business activity."

Lawsuits in three states have been filed in an attempt to stop the ACCS. "Deepak Gupta, the group's chief attorney in Washington, said companies like ACCS are effectively "renting out the prosecutor's seal" to collect money on cases prosecutors would not otherwise pursue."

The ACCS boasts that less than 2% of the people who take the required money management course repeat bouncing checks. However, people who have taken the course say they learned little to nothing they didn't already know.

The article says this is legally allowed, a bill was passed in 2006 that allowed contracts to be made between prosecutors' offices and debt collecting agencies, thinking it would be a more efficient way "to resolve bad-check cases ."

If you have are dealing with this agency and their tactics, feel free to contact us.

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On page two of the FTC Report, it begins to describe the "Debt Collection Process". First, often times creditors use "in house" or their own collection department to attempt to collect the debt. When this is unsuccessful, the creditor will charge off the account and send it to a third party collector. This can be a collection agency or a collection law firm.

Another option is to sell the debt to a debt buyer. The report contains this interesting and short summary of what debt buyers do with debts they buy:

(1) retains the entire porfolio and collects on it;
(2) retains and collects on part of the portfolio and reselss the remaining accounts: or
(3) resells the entire portfolio.

Debt buyers that keep accounts will either collect them in house (for example Midland Funding often does this) or will assign them out to collectors (LVNV does this).

Here are some interesting facts about the collection process from the report:

1. "Debt buyers usually pay five percent or less of the amount owed on delinquent accounts they purchase."
2. "If the contingency agency [collection agency] is successful in collecting on the debts, it will be paid a portion of the amount collected, with the average contingent fee rate in 2005 reported to be 28%."
3. "Collection law firms generally are paid either on an hourly basis or on a contingent fee basis."
4. "Rather than being paid contingency fees or hourly fees, some collection law firms also purchase debts and derive revenue from collections through judicial [lawsuits] or non-judicial [collection or arbitration] processes."

In our first post in this series, we looked at the purpose of the report and in our second post we looked at the overall summary of what the FTC proposed and what it found as areas in the law that needed to be changed. In our next post we will discuss the "Legal Framework" of debt collection - that is the laws that apply, particularly the federal laws that govern debt collectors.

Remember if you are dealing with an abusive debt collector, educate yourself and if you live in Alabama, contact us for a free consultation.

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The current economic state has pushed some debt collectors to “go over the line.” CNN posted an article on the “rogue” debt collectors and how to fight them, should you be on the receiving end.

The Fair Debt Collection Practices Act mandates that debt collectors to treat their clients with a measure of respect, including such things as not calling before 8am and after 9pm and prohibiting profane or offensive language.

If you live in Alabama and are dealing with a rogue debt collector who goes over the line, please feel free to contact us for assistance, as we sue abusive debt collectors.

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Recently a well known lawyer (Evan R. Chesler) wrote a piece in Forbes about why the billable hour method of billing clients should be killed. We agree.

Here is an excerpt from this interesting article:

The billable hour makes no sense, not even for lawyers. If you are successful and win a case early on, you put yourself out of work. If you get bogged down in a land war in Asia, you make more money. That is frankly nuts.

Our primary practice is representing consumers in consumer litigation and injured victims in personal injury cases. We do not bill by the hour. We use either a straight contingency or a combination of flat fee and contingency rate. We also defend consumers who are being sued by debt buyers. Generally we offer our clients an hourly rate approach but we prefer (and almost all clients prefer) a flat fee rate for either the entire litigation or for certain phases of the litigation.

Billing by the hour is ingrained in many lawyers' minds and in the eyes of clients but it seems this is shifting to other alternatives. If you are hiring a lawyer, consider options in addition to the billable hour rate.

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This continues our series on reviewing and summarizing the FTC Report issued last month about changes needed to the Fair Debt Collection Practices Act (FDCPA). In our first post we addressed the purpose of the report and in this post we will look at the Executive Summary of the report that deals with the five conclusions and proposals of the FTC.

Here is the ultimate conclusion of the Federal Trade Commission - "the debt collection legal system needs to be reformed and modernized to reflect changes in consumer debt, the debt collection industry, and technology."

There are five basic conclusions and proposals as follows:

1. "Major problems exist in the flow of information within the debt collection system." The FTC proposes and concludes that debt collectors (collection agencies, collection lawyers, and debt buyers) must have better information so that they will only collect from the correct people and only collect the correct amounts. The commission also found that debt collectors must do a better job of educating consumers of their rights under the FDCPA. Unless we know our rights under the law, we are at a serious disadvantage and are vulnerable to falling prey to abusive debt collectors.

2. "Debt collection laws need to be modernized to take account of changes in technology." It makes sense that debt collectors should be able to contact consumers through a variety of means as long as the collectors don't cost consumers by contacting them (i.e. text messages, cell phone calls, etc) and payments should be allowed through newer technology as long as the debt collector has "express verifiable consent from consumers before accessing their accounts."

3. "Certain debt collection litigation and arbitration practices appear to raise substantial consumer protection concerns." We see this widespread problem in Alabama where debt buyers are filing suits without any proof and showing up to court with no proof. Arbitration, particularly in the National Arbitration Forum (NAF) appears to be very unfair to Alabama consumers. The FTC stated it does not have enough information to make a decision but will be meeting with all concerned parties including state officials. We trust that the FTC will learn the extent of the epidemic of frivolous lawsuits filed by debt buyers.

4. "Debt collection law must evolve to include a regulatory process that ensures that legal requirements keep pace with changes in the marketplace." The FTC wants the ability to issue regulations to implement the FDCPA without having to wait for the entire congress to act. This makes sense.

5. "Debt collection law enforcement must be pursued aggressively to deter collectors from engaging in conduct that harms consumers." This is critical - the FTC writes "Private actions [consumer lawsuits], not FTC actions, were intended to be and should continue to be the main means of promoting industry compliance with the FDCPA." We agree - consumer lawsuits are the best and most efficient way of forcing collectors to comply with the law. One way to increase the effectiveness is to increase the statutory damage amount from $1000 to the equivalent amount in today's dollars, adjusted for inflation since 1977. A thousand bucks is not what it was in 1977.... The FTC also stated it will be more aggressive in suing abusive debt collectors which is an excellent idea.

We will continue this summary of this very important report released by the FTC on the FDCPA and the collection industry. Contact us if you have any questions or comments.

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Posted In: Collectors/Debt Buyers , Recent Consumer News

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The New York Bankruptcy Litigation Blog has posted an article about what debts remain unresolved should you file for bankruptcy.

Exceptions include child support, alimony payments, "certain cooperative housing fees", "debts brought about by intentional injury or property damage caused by the debtor" (this also includes personal injury debts caused by driving under the influence of drugs or alcohol), and any debt owed to a form of a government agency ( such as tax claims and penalties or fines).

If you are filing, or considering filing, for bankruptcy, feel free to contact us for assistance. We don't file bankruptcies but often times what causes a consumer to consider bankruptcy is dealing with abusive debt collectors which we can sue so sometimes this can be a better option that actually filing for bankruptcy.

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Posted In: Bankruptcy , Collectors/Debt Buyers

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At the Debt Collection Lawyer Blog this advice is given to consumers who are dealing with the collection activities of a purchased debt (junk debt):

One of the most effective tacks to take as a debtor is to say, "yes, I may have had a debt with XYZ, but I don't know who in the world you are. If you can send me written documentation that you either own this debt now or are authorized to collect it, then I'll pay it." Immediately follow that verbal request up with a letter (ALWAYS certified mail, return receipt requested) asking for the same documentation. If the collector can't produce that record of ownership or authorization to collect, then they can't collect the debt. Often times, the collection agency or debt buyer has actually legally purchased the debt for real money. But that transaction is part of a complicated and lengthy legal document that they have absolutely no desire to share with you and to which a standard floor collector has no access. It may be simply easier for the collector to move on to the next more compliant debtor.

I'm not sure in this environment that this strategy will stop many collectors or debt buyers but its worth a try as it flows perfectly into one major strategy of defending a junk debt buyer lawsuit (Midland, LVNV, Asset Acceptance, Unifund, etc) filed by a local collection lawfirm (Zarzaur & Schwartz, Nathan & Nathan, Nadler & Associates, etc) - make the debt buyer prove it owns the debt.

Feel free to contact us for more information if you are sued in Alabama by a debt buyer.

(The Debt Collection Lawyer Blog is a good resource from a former debt collection lawyer - we appreciate the good posts and information there).

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Posted In: Collectors/Debt Buyers

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Debt collection is a changing industry that is influenced by technological changes and changes in the method of debt being transferred - more and more it is by debt being sold to debt buyers. In October 2007 the FTC held a workshop to discuss these changes and how the law, particularly the Fair Debt Collection Practices Act (FDCPA), should be amended to keep up with the numerous changes since it was enacted in 1977.

After compiling the data and sifting through the arguments, the FTC released its report last month. This document is over a 100 pages long and is packed full of interesting information for consumers, consumer lawyers, collection agencies, debt buyers, and collection attorneys. We highly recommend you read this if you have any interest in the debt collection industry. In order to help, we will release a series of blog posts related to this report summarizing and providing our commentary on it.

We trust this will be helpful to you and look forward to this new series. Dealing with abusive debt collectors is a growing problem in Alabama and the best way to protect yourself is to educate yourself on your rights. If you have any questions about debt collectors or this report, please feel free to contact us.

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Posted In: Collectors/Debt Buyers , Recent Consumer News

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Our friends at Dean Malone's lawfirm in Texas took this deposition of an employee at the well known IC Systems regarding the number complaints that IC Systems receives per year and what changes in policies occur.

We hope you'll find this interesting, particularly if you are dealing with IC Systems as many Alabama consumers are....

If you have any questions about IC Systems or any other debt collector, please feel free to contact us.

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Posted In: Collectors/Debt Buyers , Video

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Congratulations to the Washington Attorney General, Rob McKenna, for suing Topco Financial, a debt collector for the following reason:

Representatives of Topco Financial Services, Inc., allegedly called debtors names such as “loser,” scum,” “plight on society,” “no good,” “lowlife,” “deadbeat,” “worthless,” or “terrible parents,” as well as profane names not suitable for print.

That kind of language isn’t just abusive – it’s illegal. It’s also the type of unfair business practice that can make it harder for legitimate collectors who play by the rules to do their job.

We see too many cases of abusive debt collectors. They often will do anything to make us emotional - angry, embarrassed, scared, etc. Using profanity or insulting words is all part of the plan. If you are facing one of these abusive debt collectors, keep your cool and contact an experienced consumer attorney who litigates these types of cases.

(By the way - regardless of where you live - subscribe to the Washington AG blog "All Consuming" as it is full of useful information).

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Posted In: Collectors/Debt Buyers

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You go to the hospital for an approved procedure and expect for your insurance company to pay the bills and you pay the co-pay or deductible. But what about the doctor in the operating room that is "out of plan" or not a part of the Blue Cross Blue Shield plan? She may only be paid 50 cents on the dollar and guess who the doctor tries to stick the other 50% to? Yep. You. Welcome to the wild world of "balance billing".

Maria Perotin recently wrote an informative article about this practice which we recommend you read. Detailing one man's experience, Maria writes:

As Heidelberger remembers it, no one discussed his insurer’s network in 2007, when he underwent his medical procedure.

An anesthesiologist at the hospital spent a few minutes giving him a local anesthetic, he said.

Then, his physician tinkered successfully with a device that previously had been implanted in his heart.

Months later, the anesthesiologist’s bill arrived for $1,005.

That’s when Heidelberger discovered that the doctor didn’t have a contract with his PPO.

The anesthesiologist had set a fee of $2,020 for his services, and the insurer had paid only the amount it deemed fair for an out-of-network doctor — $1,015. So, the doctor turned to Heidelberger in October for the remainder of the bill.

Heidelberger has refused to pay.

He said he believes that the bill is too high and took too long to arrive.

And he contends that he should have been warned that the anesthesiologist was a costly out-of-network provider.

"My strong belief is this: If I take my car to a garage or you take your car to a garage, because the engine is acting peculiarly, the garage calls you and says: 'The engine's wrong. This is wrong. It'll cost you thus-and-such to repair it,' " Heidelberger said. "I think I should've been made aware of that and had the option to choose another anesthesiologist."

Be aware of this practice as these bills can quickly be turned over to collection agencies. It has been our position for years that contract law applies to medical bills. If the term of "price" is not agreed to ahead of time, then the law will supply a reasonable price term. If we want to know what is reasonable, we look to the "usual, customary, and reasonable" (UCR) that insurers such as BCBS set forth. We have always had hospitals and doctors back down when challenged as they may try and collect in balance billing or from an uninsured person two to three times what the UCR is which is not reasonable.

We'll keep an eye on developments in this area and keep you posted.

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Posted In: Collectors/Debt Buyers , Recent Consumer News

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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.

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Posted In: Cases Filed , Collectors/Debt Buyers , Credit Report Errors

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We are making available a free report dealing with the five (5) secrets that debt buyers don't want you to know about when they sue you. When you know these five secrets, it can dramatically improve your chances of winning the collection case. As we have previously discussed, when you win your collection case, all sorts of good things happen - your credit report must be corrected, there is no judgment against you, no garnsishment against you, and you have a judge declaring that you do not owe the debt.

If you would like this report, contact us through our request form or call us at 205-879-2447. This free report will be mailed to you. Please note this is only available to Alabama consumers who do NOT work for collection agencies, collection lawfirms, or debt buyers.

Please note you can also request it directly by filling out the form below:

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Posted In: Collectors/Debt Buyers

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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.

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Posted In: Bankruptcy , Cases Filed , Collectors/Debt Buyers , Credit Report Errors

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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.

Posted by John G. Watts & M. Stan Herring | Permalink | Email This Post

Posted In: Cases Filed , Collectors/Debt Buyers , Credit Report Errors

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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.

Posted by John G. Watts & M. Stan Herring | Permalink | Email This Post

Posted In: Bankruptcy , Cases Filed , Collectors/Debt Buyers

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