Michigan Collection Law Blog published By Michigan Creditor Lawyers Nitzkin & Associates

Today, I was hired by a new client to collect a judgment that he obtained against a contractor. Nothing real unusual about this situation except that the client is fairly young man. I would say in his late 20s. He was in Iraq protecting our country when some sleaze bag contractor took advantage of his wife by taking her money and failing to do the work. When I learned that my client was a hero protecting my family and my country, I decided to handle his matter for free. I am too old to go to war for our wonderful country. But at least...at least...I can try to help our protectors even if it is in some small way such as this. I would sure like to see a cadre of us lawyers form to protect and aide our protectors families while they protect ours. I would welcome anyone else that would like to join me. How about you?

The New York Law Journal reports that a New York law firm sent debt collection letters in violation of the Fair Debt Collection Practices Act.. If the law firm is found liable, it could be made to pay damages of 1 percent of its net worth plus attorneys 'fees. Apparently, the firm is accused of send a validation notice without verifying the balance due. The FDCPA has a requirement of active involvement by an attorney who sends out consumer collectoin notices. This requirement under the FDCPA imposes a large, if not an ambiguous duty upon attorneys involved in consumer collectoin. Just exactly what is meaningful attorney involvement is not defined by the statute. Nevertheless, there are quite a few cases that tell us what it isn't and courts are not hesitant to award damages to consumers along with attorneys fees when an attorneys involvement does not meet the standard that a court may perceive to meet the statute.

There are some things that a Consumer Collection attorney can do to avoid this trap of not complying with the meaningful attorney invovlement under the FDCPA.

1. For attorneys that handle a large volume of cases, make sure that an attorney takes a moment or two to review a file before sending out a demand letter.

2. When a consumer sends in a dispute letter, make sure that an attorney review the letter. Document the file to show that an attorney has reviewed the letter and has responded accordingly. Document the file to show that the attorney has reviewed the response letter as well.

3. Under the FDCPA, when a consumer timely sends in a dispute letter, the attorney must provide confirmation of the debt. Neither the FDCPA nor the FTC define what constitutes accceptable confirmation of the debt. However, an attorney would be well advised not to punt with internally generated documents. Rather, an affidavit from the client or preferrably, a statment of account would remove any doubt concerning an attorneys meaningful involvement in a consumer case.

USA Today reports that the Internal Revenue Service has begun its tax recovery program with private debt collectors. The IRS states that it is doing all that it can to protect taxpayer rights and privacy. However, one should note that the Fair Debt Collection Practices Act, an act designed to curb such abuses, does NOT apply to governmental agencies. An interesting question that will undoubtedly come up is whether the FDCPA applies to these private collectors who are collecting a debt for their governmental client. The FDCPA excludes from the definition of "Debt Collector" "any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties." Ostensibly, these agencies appear to be governed by the FDCPA since they are not officers or employees of the United States. But it is equally possible that in light of this new federal program that allows for the use of private debt collectors, that the IRS may execute an agreement with the collection agencies wherein the agencies become employees of the IRS. This has not come to light yet. At least, not in the media. It will make for some very interesting litigation.

I am amazed at collection agencies that try to get creative with the collection letters. After all, the FDCPA provides safe harbor language to include in a demand letter. When collection agencies avoid this safe harbor, they usually get Pearl Harbored. Take, for instance,

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