Articles Posted in Recent Case Decisions

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There was a recent decision relating to Nationstar which was sued under the FDCPA and RESPA and we thought it was an interesting opinion so we did a video review of the actual opinion. You can read the decision (Dynott v. Nationstar) and we have copied it below for your convenience.

If you have questions, feel free to give us a call at 205-879-2447 or contact us through our website AlabamaConsumer.com.

John Watts

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We have sued creditors when their debt collectors call our clients’ cell phones in violation of the Telephone Consumer Protection Act (TCPA) law.

Not only do the debt collectors hate this but the creditors go crazy when they get sued.

One reason debt collectors and creditors — such as credit card companies — hate this law is that the damages are either $500 or $1500 per call to your cell phone. We have had these cases where the damages reached six figures.

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Debt collectors and credit card companies like to claim that even though their computer dialed (or texts) are illegal, you can’t sue unless you actually received the call or read the text, etc. But the Telephone Consumer Protection Act (TCPA) talks in terms of the bad act — illegally calling or texting or faxing — not the receiving of it.

Just as someone who fires a gun at you can violate the law, even if it doesn’t hit you, when a company uses a robo-dialer to call your cell phone without your express permission, it does not matter whether you answer the phone or not.

The damage is done when the calls are made.

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The Second Circuit Court of Appeals rejected a debt collection agency’s claim that a class action settlement, with a single notice in USA Today, is enough to bind a consumer so that consumer cannot sue. The case is Hecht v. United Collection Bureau, Inc. (2nd Cir. August 17, 2012).

The settlement smacks of a sweetheart deal between the lawyers for the consumers (supposedly) and the debt collector UCB:

The Settlement Order provided damages and injunctive relief in accordance with the parties’ stipulation. Each named class representative received $1,000, the maximum recovery allowed under the FDCPA for named class representatives, see 15 U.S.C. § 1692k(a)(2)(B)(i), as well as $1,500 “in recognition for their services to the Settlement Class Members.” The Settlement Class was awarded $13,254, 1% of UCB’s net worth, the maximum amount available under the FDCPA for unnamed class members. See 15 U.S.C. § 1692k(a)(2)(B)(ii) (providing that maximum damages amount for unnamed class members, in the aggregate, is “the lesser of $500,000 or 1 per centum of the net worth of the debt collector”). This amount was to be distributed to a national charitable organization as a cy pres payment. Class counsel was awarded up to $90,000 in fees and costs as provided for by the parties’ stipulation.

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When a consumer informs a debt collector, in a phone call, that the consumer has a lawyer, the only thing the collector can do is ask for the name and number of the lawyer. Nothing else in the phone call.

In Backlund v. Messerli & Kramer, P.A., a case decided by the United States District Court for Minnesota (Judge Tunheim), on August 17, 2012, this issue was discussed.

The Fair Debt Collection Practices Act (FDCPA) says the following:

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When we sue debt collectors under the FDCPA for abusive debt collection practices, sometimes the lawyers who are hired to defend these collectors make settlement offers.

These offers are almost always not enough and don’t take into account that we have sued for actual damages and punitive damages. They also don’t take into account that we want a judgment, not just a settlement.

Amazingly, we have had lawyers threaten us — but never follow through — that the whole case should be dismissed because the settlement offer is so good it gives us all the relief we asked for in the lawsuit.

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A federal judge in Texas ruled on August 15 in Garza v. MRS that a debt collector that leaves a single voicemail with just “dead air” and no words did not violate the Fair Debt Collection Practices Act (FDCPA).

Here is what the court wrote:

Assuming that a “communication” is not required for liability under section 1692d(6), the court must address whether MRS should have provided “meaningful disclosure” of its identity on a blank voicemail to comply with section 1692d(6). Neither party has supplied, and this court’s research has not revealed, a case explicitly discussing liability for a debt collector who left a blank voicemail on a debtor’s answering machine. Although plaintiff claims that a misleading voicemail can incur liability under the FDCPA, her cited authorities address only substantive voicemails. Hosseinzadeh v. M.R.S. Assocs., Inc., 387 F. Supp. 2d 1104, 1107 (C.D. Cal. 2005) (discussing oral, automated messages left on the debtor’s answering machine); Costa v. Nat’l Action Fin. Servs., 634 F. Supp. 2d 1069, 1075 (E.D. Cal. 2005). The voicemail in this case, by contrast, contained only dead air and no substance. The court views it as more akin to a missed call than a substantive voicemail and agrees with courts that have held that liability under section 1692d(6) cannot be imposed for hanging up in lieu of leaving a message. Hicks v. Am.’s Recovery Solutions, LLC, 816 F. Supp. 2d 509, 516 (N.D. Ohio 2011); Udell v. Kan. Counselors, Inc., 313 F. Supp. 2d 1135, 1143 (D. Kan. 2004).

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We are often asked by other lawyers to comment on recent consumer cases and the recent case from Georgia, St. Claire v. Trauner (2008 WL 151542), caught our attention so we thought we would mention it here.

On January 11, 2008, Judge Evans from the Northern District of Georgia issued an opinion in a Fair Debt Collection Practices Act case that only involved a dispute over the attorney’s fee to be awarded the consumer lawyer Lisa Wright.

The defendant, Trauner, Cohen, & Thomas, LLP, agreed to settle the case for $1,000 plus attorney’s fees. This was because the defendant had received a validation request but failed to respond appropriately and instead continued its collection activities.

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A growing trend is for abusive debt collectors to start collecting on bad checks – which is fine as long as the law is followed – but the twist is these companies do this as if they were the district attorney.

The Consumer Law & Policy Blog summarizes the decision as follows in its excellent blog post:

Judge Berzon’s opinion is the most thorough and scholarly treatment to date on the question of private entities and sovereign immunity. In a sweeping rejection of ACCS’s arguments, the Ninth Circuit characterized sovereign immunity as “strong medicine” that should be carefully limited, especially in the case of for-profit corporations that are not democratically accountable to the public. Quoting the philosopher Gilbert Ryle, the court called the argument that a private company could enjoy sovereign immunity a “category error” like “inquiring into the gender of a rock or into which day of the week is reptilian.”

To summarize the problem, Deepak Gupta states it well:

I’ve blogged here before about so-called check diversion companies — private debt collectors that use their contracts with prosecutors to gin out collection demands, on official prosecutor stationary, threatening consumers who have written bad checks with criminal prosecution or jail unless they pay exorbitant collection fees. Passing a bad check is only a crime where there’s knowing and intentional fraud, but these companies demand fees regardless of whether a crime has been committed. It’s a lucrative and shady business that essentially criminalizes civil debt collection.

If you have been harassed by one of these masquerading collection agencies, which the Eleventh Circuit Court of Appeals (covering Alabama) has already said do not automatically have immunity, you do have rights. Please contact us and we will be happy to explain your options as we are always interested in suing abusive debt collectors.Another resource for you is to join our Facebook Fan Page – Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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We are seeing more and more Alabama consumers who are being mistreated either during or after a bankruptcy. We have written about discharged creditors (who cannot collect money from the debtor – its been discharged) still trying to collect the money even though it is illegal to do so. You can read about it here and here. Amazingly, abuse even happens by creditors during the bankruptcy process.

The Wall Street Journal has reported that Judge Jim Pappas has sanctioned Countrywide (or its subsidiaries) for wrongful conduct – in this case not answering discovery or showing up to depositions. Please click here to read the rest of this interesting story by WSJ reporter Amir Efrati.

If you are being mistreated by any creditor during or after a bankruptcy, please consult with your bankruptcy lawyer to help determine your rights. Over the years we have been brought into a number of cases by bankruptcy attorneys to help stop abusive creditors (during and after bankruptcy) who are breaking the laws in their obsession to collect money they are not entitled to collect.

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