Articles Posted in Cases Filed

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

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

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

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

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

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

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

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

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

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

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

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

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After a debt buyer dismissed a case with prejudice that it had filed against one of our clients, a simple question was asked of us – “Since I won, shouldn’t this be taken off my credit report?” As we pondered this question, it occurred to us that our client had asked a critically important question. If you win your lawsuit in Alabama (i.e. the case is dismissed with prejudice), then why should the collection agency or debt buyer be allowed to keep telling the world through your credit report that you still owe the money when a judge has just ruled you do not owe the money?

[Updated November 2011 — you can read a more indepth article here at Sued By A Debt Collector and you can also read a recent lawsuit our client filed against LVNV for this very issue.]

This is one of our longer posts but we hope you will stay with us as the terrible problem in this state is only increasing – mass lawsuits are being filed by debt buyers who have no intention of providing any evidence that you owe the debt. Alabama consumers need to know they do have options when dealing with these kinds of companies who not only sue you but want to destroy your credit as well.
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We recently filed a lawsuit against Choicepoint (and State Farm) for putting and keeping false information related to a wreck on our Alabama client’s credit report. We don’t normally think of car wrecks as having anything to do with credit reports but credit reporting agencies such as Choicepoint do track this information. When the information is wrong, it can have serious consequences. Often insurance companies pull a Choicepoint report when deciding what rates to charge and whether you qualify for insurance. An error on your report can be very costly and frustrating.

We have previously mentioned about Choicepoint related to identity theft and insurance related matters but given the number of recent contacts by Alabama consumers who have been frustrated and hurt by Choicepoint, we thought it might be wise to mention our lawsuit against Choicepoint.

You can read the complaint filed by Angie Duckworth by going to our website under the “Representative Consumer Protection Cases” or by clicking here which will take you directly to the lawsuit.

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