Welcome to our Q&A on consumer protection issues. The entire video is above, and the transcript is below.
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John Watts =============
Hello, my name is John Watts. I want welcome you to our question and answer on consumer legal issues. Today is August the 7th, 2015. We’ve been a little bit late in doing these. It’s been a few weeks since we did the last one. We’re going to try and do these every Friday and we’ll get the exact time down. If you have legal questions, consumer issues, maybe it’s about debt collectors, credit reports, foreclosures, robo dial calls to your cell phone, whatever it may be, feel free to leave us a comment or you can go to our main consumer website, www.Alabamaconsumer.com. You can do the “Contact Us” and let us know what your question is.
I’ve got a list of them here.
The very first one is, “What do I do if I have paid a medical bill, but then after I pay it, it gets turned over to a collector?” Then, there’s a follow-up about, “Then it ends up on my credit report.”
First of all, if you paid the bill and then it goes to a collector that shouldn’t be because there’s nothing to go to the collector.
We don’t send zero dollars to a debt collector. If it has gone to a collector you may get a letter in the mail, you may get a phone call. You say, “Wait a minute. Wait, wait, wait. I paid that MRI or that co-pay or whatever it may be. I’ve already paid it. I need you to go away. Don’t call me again. Don’t bother me again.” If it’s a legitimate, honorable debt collector they’ll say, “Oh, I’m so sorry. We did not mean to collect the debt that’s been paid,” because that’s illegal. Legitimate debt collectors don’t do that. What do you do if the debt collector continues to write you a letter, continues to call you, or as the person asked the question that we’re having, it gets put on their credit report by the collector? We look at first of all is this a consumer debt? When we look at the FDCPA, Fair Debt Collection Practices Act, we’ve got to have a consumer, not a business but a consumer. You have to have consumer debt, not a business debt and then a debt collector.
Here a medical bill that’s going to be considered a consumer debt or personal debt. The FDCPA applies. A debt collector tries to collect a debt that you do not owe. That violates the FDCPA. Just the fact that they sent you a letter, they call you on the phone that violates the law. First time it happens, you probably say, “Hey, look. I don’t owe this debt. Please leave me alone.” If they continue to do it, you either say, “I’ll just accept that they’re doing this to me and they are ruining my credit, making my phone ring, sending me letters.” I’m not a big fan of that. Or, the other option is you sue them because you’ve already told them, “Look, guys. Leave me alone. I’ve paid this debt.” If they continue to come after you then obviously telling them that again what good is that going to do? You sue them in federal court.
Now, every situation is different. You’ve got to meet with a lawyer, find out in your particular situation does this make sense? Often, this is the best answer because then these guys will understand when they get a copy of that federal court lawsuit like, “Oh, okay.” You’re being serious when you say, “Leave me alone. I paid this debt. Do not collect this from me.” When they get sued then they know that you mean business and then they leave you alone. Now, they also have to write you out a check. They violated the law and damaged you. That is typically our solution. It’s amazing just how quickly when you sue these guys they will come and go, “Oh, oh, oh. We’re sorry. We’re sorry. Now, let’s make it right.” Okay. It never should have got to that point. Hey, if that’s the way that they run their business where they will say, “I’m going to wait until I’m sued before I’ll do the right thing,” okay, we can handle that.
I had a judge tell me one time. He said, “Mr. Watts, that’s why we build these big courthouses and they give me the black robes for when lawsuits are needed.” We understand that sometimes this is what’s needed.
Okay, our next question is what is a robocall?
If you’ve been watching the news you’ll have noticed that the federal government has recently issued a new set of rules. It’s actually incredibly long. We’re going to do a whole webinar on this about the TCPA, Telephone Consumer Protection Act.
When is it allowable to use a robo dialer or an auto dialer, computer dialer to call your cell phone?
A robo dialer just means it’s not a human being dialing in the numbers, but it’s a computer doing them. When is that allowable? It’s allowable if you’ve given permission to the company calling you or to a previous company. Here’s what I mean by that. If you gave permission that’s a whole different subject. We’re not going to get into what constitutes permission or consent.
If you’ve given consent to say, Capital One, and then they transfer it to a debt collector, and now that debt collector is calling your cell phone and you gave consent to call your cell phone with an auto dialer, a computer dialer, then that’s normally going to be okay. It’ll be legal. Now, if you’ve revoked your consent and the new law makes it clear … It’s always been the law, but some companies and even some judges got confused on this. You can always revoke your consent, okay? If you say, “Yes, you may call me on my cell phone,” later on you can say, “You know what? Don’t call me on my cell phone anymore.” If you gave consent, but then you revoked it or if you never gave it in the first place then those calls are illegal.
You can get actual damages or what is more likely is what are called statutory damages. Those are damages that even if you cannot prove or don’t want to prove that you’re actually harmed, you can still get $500 per call or up to $1,500 per call if it was a willful or intentional violation. Now, what’s the point of those damages? It’s to encourage these companies that just routinely break the law. They break it here, here, and here and all these people they’re calling. This law says you know what? If you do that, $500 per call, maybe as much as $1,500 per call.
We’ve had clients that have received hundreds of calls. It’s very motivating to these companies. They can’t stand this law. They just go, “This is so unfair. We ought to be able to just blow up anybody’s cell phone anytime we want.” Sorry, you don’t get to do that. You don’t get to blow up hospital rooms, 911, cell phones. There are reasons why this law has been in place for years and years and years and years. There’s nothing wrong with calling a cell phone if you manually dial it, or you can use a computer or a robo dialer. Yeah. When you get the phone call and it says, “Please hold for an important message,” that’s not a human being saying that line. It’s okay to do that as long as you have consent. This law just says, “Look, make sure you have consent before you start using a computer to dial somebody’s phone maybe once, four, five, ten times a day.” It makes sense to me. Same thing with text messages. Don’t send automated text messages unless you have permission to do that. Again, we’ll go into this law in more detail maybe a couple weeks from now. I forget when we have that scheduled.
We’re doing a national webinar for lawyers. That’s a paid webinar where lawyers all over the country will be in that webinar where we talk about using this in the context of class actions. I’m talking about one for consumers we’ll do this. There’s obviously no charge for it. We put out all of our material free of charge. It’s to let you know what your rights are and that you will know what action to take if you have a company that’s violating this law.
Okay. Our next question is, “I have a prepaid cell phone and I’m getting robocalls. What’s the law?” Then, the follow-up part of this is, “These are not calls for me. These are calls for the previous person that owned the phone.”
It’s been a huge battle.
The debt collection companies, the telemarketing companies, robo dialing companies what they want to say is, “If Joe Blow gave me his cell phone number in 2000 then I have permission to call that phone number apparently for all eternity,” because they say, “The permission is the phone number and we don’t care who has the phone now.” Judges have looked at that and said, “Are you serious?” They go, “Oh, yeah, yeah, yeah. We’re serious. This is what we believe the law is.” No, it’s not the law. The federal government came along and said, “Look. Tell you what we’re going to do. If you call the wrong number you get one free call. That’s it.” What happens after that? After that, let’s say I get a new phone number and I get this call and it’s from some debt collector. I didn’t give them my number. Somebody two years or five years ago did.
The first call is for free under this TCPA Telephone Consumer Protection Act, but second call, third call, fourth call, those all violate the law because I didn’t give them permission to call my phone. Oh, my goodness. These people are just having a complete come apart about this. They’re like, “This is so outrageous.” What’s outrageous is, “I have a cell phone. I bought the cell phone. I have the cell phone number and it’s getting blown up for somebody else. It’s my phone now.” We’ve had cases before. Years and years ago we started doing these cases where we’d say, “You know what? You’re calling the wrong number.” They go, “No. We believe that you are Joe Blow and we’re going to keep calling you.” “Look, my name’s not Joe Blow. Stop calling me.” They go, “No, no, no, no. You’re lying. We’ll keep calling you because if you’re not Joe Blow you’ll tell us who Joe Blow … ” You’re like, “I have no idea. I just got this cell phone.” The law is very clear now they can’t do that. What’s the moral of this? Make sure before you blow up somebody’s phone with a robo dialer that you’ve got the right person. When we’ve sued this was sometime in the maybe mid-2000s we sued a company. The lawyer called me and was crying, “This is so outrageous, so unfair. John, we had permission years ago to call your client’s cell phone.” I’m like, “I don’t care. You didn’t have permission to call my client’s cell phone. Maybe somebody down the road you did.” I said, “Let me ask you this. If I gave you a key to my house and said come over anytime you want. You just walk right in. You’ve got the key to my house. We’ve got a guest room. You can use it anytime you want. Now, would you have permission to come into my house?” He’s like, “Of course. You gave me permission.”I said, “What if I sold my house two years ago? You walked up to the door, you stuck the key in, say that they hadn’t changed the key. You unlock it and you walk in. Is that trespassing?” “That’s different, John.” “No, it’s not different. It’s the same thing. That would be trespassing.” You say, “I had permission.” “Yeah, but the ownership is changed. You had permission to call area code 205-555-5555, but you don’t have it anymore because now somebody else has that phone number.” Again, this is not rocket science. Stop blowing up people’s cell phones with robo dialers unless you know you’re calling the right number. They can figure this out. They go, “Oh, we can’t figure it out. There’s no way to know. There’s no central database and people turn in their number and it gets recycled.”
You know what? That’s a great point. Then stop using a robo dialer. If it’s so unpredictable, you have no way of knowing if you’re calling the right person, then dial the way that legally you’re allowed to dial. Okay? Just don’t go in people’s houses with old keys and then when you get shot complain about it. Like, “Five years ago I had permission to come in here.” It doesn’t matter. Anyway, hope that helps. If you have a prepaid cell phone and you’re getting these calls you’re like, “Who in the world is this?” They’re these robocalls, prerecorded message, auto dial calls, computer dial calls, then definitely check out your rights and your options on that.
Now, our next question is, “I got a collection letter from a lawyer. I disputed it and got no response and then I got sued.”
Pretty common situation.
Let me give you the classic example. You have a debt buyer that’s called Cach, C-a-c-h. They basically have these collection law firms around the nation. I don’t know all the inner workings of it, but it seems like these collection law firms just basically rent their letterhead. Instead of you getting a letter from Cach this debt buyer, it’s like, “Oh, my goodness. This collection lawyer from Arizona or Chicago or Louisville, Kentucky is writing.” You write them a letter. You have 30 days. You can actually do it after that, but to be strict about the rules you have at least the 30 day period from when you first got that letter to write and go, “Look, I dispute this debt.”
If you dispute that debt then they have to give you what’s sometimes called validation or verification. Really, the correct term is validation of that debt if they want to continue to collect. Now, you can write a collection agency, a collection lawyer and say, “Look, I dispute owing this debt. Give me proof.” They don’t have to do anything, but they better not collect against you if they do nothing. In this situation we see this over and over. You get the collection letter from the collection law firm, say from Louisville. You write them a letter. Go, “I dispute this debt. I don’t know who in the world you are. Who is Cach? Send me proof.” They do nothing. Then three months later they sue you.
That violates the Fair Debt Collection Practices Act, the FDCPA. Again, if you dispute it and particularly ask for validation, they don’t have to do anything, but if they do nothing they can’t collect against you. If they want to collect they better validate that debt. They better address your dispute. When that happens that’s a violation of law, not only by the law firm, but more importantly by the debt buyer, Cach, in this situation. It could be Midland Funding, LVNV, Portfolio, whoever it may be, if they had the debt originally when that first collection law firm letter went to you, and then they’re the ones that sue you then they’ve got a problem. That’s something that normally the best way to address it is in a federal court lawsuit against that debt buyer, that debt collector.
Okay, let’s see here. “I read online that the FDCPA, the Fair Debt Collection Practices Act does not apply to a mortgage company. Is that true?”
Let’s take this example. I just go get a loan from Wells Fargo yesterday. My first payment is due in 30 days. Is Wells Fargo a debt collector? No, absolutely not a debt collector. What if they transfer that loan in a week? Remember, my first payment is not due for 30 days. They transfer that loan to Ocwen or Selene Finance or Bank of America or any number of these dozens of servicers we have now. Is that company a debt collector? No. The test is when they first get my loan is it in default? That’s the test. If it is, then they’re normally a debt collector. If it’s not, then they’re normally not a debt collector. What does default mean? Here’s something where in the courts a mortgage company, it’s kind of funny. You’ll be six months behind. It gets transferred to Ocwen or to Nationstar. Nationstar they do something wrong. You sue them under the FDCPA. They go, “Wait, wait. We’re not a debt collector. We’re a mortgage company.” You go, “It was in default.” They go, “No, no, no, no. You weren’t in default. We had not foreclosed against you.” Actually, if they foreclose there’s no loan anymore, normally. Default, though, all we have to do is we look at the contract, look at the note, look at the mortgage. It normally says you’re in default if you do not pay on the due date. That’s it. Due date is the 1st of the month and now it’s the 2nd. You haven’t paid. Their own contract says you’re in default. They go, “Wait, wait, wait, wait. Don’t read it that closely. Don’t be precise about it. Come on, everybody knows you’re not really in default until you’re 30 days, 60 days, 120 days.” What’s funny about that is every other part of the contract they will be so precise, so technical.
If you are one day late they’ll charge you a late fee. Let’s take foreclosures. They say, “John, we’re going to foreclose on you on August the 7th.” Okay. “If you don’t pay us $10,000 we’re going to foreclose.” On August the 8th … Just forget that that’s Saturday. August 8th I bring them $10,000. They go, “No, you missed it.” I go, “Yeah, but it’s one day. Don’t be so precise.” They go, “Oh, no, no, no, no. Letter of the contract. We’re going to follow this contract exactly to the letter.” Okay, but you know what? When it says default, you’re in default if you don’t pay on the exact due date. That’s what it means. We have all these companies out there like, “We’re not in default. We got the loan on say August the 15th and your due date was August 1st.” Yeah, then you paid it on August the 20th. See? You’re still within 30 days.
Let’s look at the contract. It says, “One day.” If I don’t pay on the due date, August 1st, it’s in default. Nationstar, you got it on the 15th. You’re a debt collector. “I hate this. I just hate this law.” That’s what it is. Answer a question. Does the FDCPA apply to mortgage companies? Sometimes it does, sometimes it doesn’t. The test is when they got your loan was it in default? Then, normally at that point they will be a debt collector.
Okay. Our last question is, “What do I do if I want to settle a judgment? What does it do to my credit report? What do I need to do in court?”
$5,000 judgment. Let’s say you contact the law firm and you can settle it for $3,000, okay? They say, “All right. You’re done.” They should fill out a piece of paper and file it called a satisfaction of judgment. It just means the judgment’s been satisfied. It’s been paid.
You didn’t pay the full 5,000, but you paid what they accepted which is 3,000. That’s done. Now, the judgment does not go away. It’s not like we throw that judgment out, but we say, “We owe zero on it now.” It’s been paid. It’s been satisfied. You want to make sure you get that satisfaction judgment. Then, you want to go to the credit bureau as soon as you get that and point out to them, “Hey, you’re showing a $5,000 judgment against me. Really, it’s been satisfied. Here’s a piece of paper.” Of course, normally they’ll reject whatever papers you send to them. You can also say, “Just go to the court house and you’ll find it.” Give them the case number. Of course, they have that on the judgment on your credit report. Say, “Look it up. Get it fixed. Get it to show that it’s been satisfied, that it’s been paid.”
What do you do if the credit bureau doesn’t do that?
You sue them. Sue them in federal court under the Fair Credit Reporting Act, the FCRA. That’s the law that governs credit reports. If you have a credit bureau … It’s very, very common. When they get information from you they reject it. It’s a slightly different context, but our clients would be sued. We would win the lawsuit by some debt collector. Then, we take that order and we send it to the credit bureaus and say, “Get this account off my credit report. I won. I don’t owe the debt.” When we would not send the order they’d say, “If you had just sent us the order then we would have fixed it. See, it’s your fault for not sending the order.” Okay. I know that’s just complete garbage, but we started including the order and then they would reject it. They go, “We’ve looked at this and decided that this is likely a bogus document.”
They keep it on our credit report. We’d sue them and they would go, “You didn’t send us the order.” We go, “We did.” They go, “Oh, okay.” We’d say, “Look right here. You sent us a letter saying you rejected it.” They go, “Yeah, yeah. It was probably a fraud.” “Did you call the credit bureau?” “No.” “Did you write the court?” “No.” “Did you write the court to say is this really the order?” “No.” “Did you call the collection lawyer?” “No.” “Did you do anything?” “No, we just kept it.” That’s the attitude of the credit bureaus. It all comes down to this. We’ll talk about this in another either separate video or maybe another question and answer session. You are not the customer of the credit bureaus. They could care less about you. They don’t care. The customer is Discover, the debt collector, the mortgage companies like Nationstar. Those are the customers of the credit bureaus.
Basically, they will do whatever the customer tells them to do. You can send them all the proof in the world. We sent them big packages sometimes. They don’t even look at it. We say, “What did you do with it?” They go, “Oh, it was too much. We’re on a very tight time frame here. Our workers have three minutes to do a dispute.” I’m being a little bit sarcastic when I said, “They don’t ever come out and admit that,” but that’s the truth. They’ve got to crank through these things. When you send them a bunch of documents they’re like, “We are not reading that stuff.” If you have a judgment, you’re settling it, make sure you get everything in writing, make sure you get that satisfaction judgment. If they put something in probate court, they usually give you something called a release. There are different ways to title it, but you take that to probate court to make sure that lien is not against you or your property anymore.
Always remember about the credit bureaus. You get that satisfaction judgment. Dispute it with the credit bureaus. They’ll either fix it … Hey, that’s great. Or, they don’t fix it and you sue them in federal court. I think that’s all the time we have for our questions this week. Feel free to submit any questions you have. You can comment below this video. You can even call us, 205-879-2447. Third way is you can go our website, Alabama Consumer . There’s a little “Contact Us” form. Again, leave a comment. You can call us. You can go to our website. If we can help you in any way, again two ways to get in touch with us, 205-879-2447 or Alabama Consumer. We have offices in Birmingham and in Madison, Alabama. We really represent people all over the state. Always have clients in Mobile or Dothan. All the way from there, Montgomery, Birmingham, Huntsville and really everywhere in the state of Alabama. If we can help you in any way, let us know. Thanks for watching us. Bye, bye.