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

I usually don't blog about current litigation for a number of reasons. Suffice it to say that this case that I am blogging about below is interesting enough to share with you. Moreover, I want you to know that collection agencies doing stupid, if not sleazy stuff, is almost common place. If you have any interaction with a collection agency, chances are that they will violate the Fair Debt Collection Practices Act. You could end up being a Plaintiff against the agency.

Ms. J contacted me complaining that her husband's identity had been stolen a few years ago. Last year, when she and her husband went to purchase a house, Detroit Edison (DTE) had posted a debt to their credit report. They paid the debt and then contacted DTE to explain the problem. DTE promptly refunded their money. However, someone else had opened an account in Ms. J's name. DTE placed this debt with a collection agency that I will call....for now....Bad Collection Agency ("BCA"). Ms. J faxed a police report to BCA and BCA promised to remove the debt. They did not do so. Ms. J called BCA for several months and received promises each time that the debt would be removed. It never was.

Finally, Ms. J called DTE to complain. DTE held a conference call with BCA and directed BCA to remove the debt. DTE also told Ms. J that BCA had not been its collection agency since 2004.

Today, I am suing BCA for violation of the Fair Debt Collection Practices Act. I am going to amend this complaint to include fraud and misrepresentation. If BCA does not settle this case soon, I intend to turn this case into a class action against BCA.

Moral of the story - I am a collection attorney and even I have no great love for collection agencies. I don't like their methods or tactics. If you are contacted by a collection agency and feel offended by that contact, chances are the agency has violated the FDCPA. You can sue them for damages. I would be happy to help you.

I just had to report this. An article in the Boston Globe reports about a debt collector who punched a lady in face in front of her 5 year old while trying to repossess her car. I thought it was interesting because these debt collectors and their employer have probably just made this woman and her child fairly wealthy even though they may not realize it yet. The Fair Debt Collection Practices Act ("FDCPA") prohibits certain collector activity that tends to harrass the debtor. Do you think punching a lady to repossess a vehicle might tend to be harrassing?

Before I jump on the FDCPA bandwagon and begin blowing the horn, you should note that the FDCPA does not apply to a creditor that is collecting on its own debts. Moreovre, process servers are also exempt from its strictures. Still, one has to wonder what possible justification tthere could be for pounding a mom, especially in front of her kid. World gone crazy? May be. Collectors out of control? Definitely.

Following a three-day civil jury trial, a Los Angeles jury unanimously ordered debt collector Arrow Financial Services to pay Laura Nelson a total sum of $100,000.00 for false credit reporting and unfair debt collection practices. The jury awarded Ms. Nelson $85,000.00 for her emotional distress and mental anguish, and also added a $15,000.00 penalty against Arrow for its repeated violations of the Fair Debt Collection Practices Act. Laura Nelson v. Arrow Financial Services, LLC, United States District Court Case No. CV06-1568 RGK (PLAx).

I have not seen the opinion. Under the Fair Debt Collection Practices Act, a collector is liable to a consumer for the greater of the consumer's actual damages or $1,000. The collector is also liable for the consumer's reasonable attorney's fees. Now I will admit to you that I am not familiar with this case other than from blub which I have stated above. But I will say that if a jury was inflamed enough to award this kind of a verdict, the collector was certainly doing things that he knew was wrong.

The Illinois Attorney General recently filed a lawsuit against Arrow Financial Services, LLC, an Illinois company. Arrow is a collection agency that collects debts ranging from $100 to over $10,000.00 Arrow's majority owner is Sallie Mae. Apparently, the AG's office in Illinois has received 669 consumer complaints about Arrow since 1999.

What shocks me is that one of the complaints made by the AG's office is that Arrow had attempted to collect on time barred debt. I think this will be a very interesting case for debt collectors because the Statute of Limitations is an affirmative defense. That means that even though a debt may not be legally enforceable, it is nonetheless an obligation of the debtor. If a creditor sues a debtor on an out of statute debt, it is up to the debtor to file an answer and to assert the Statute of Limitations.

This case that the the AG of Illinois brings seeks to reprimand a collection agency for attempting to collect debt that is out of statute. Do collectors violate the FDCPA if they attempt, without sending the case to a lawyer, to collect the debt by telephone and mail? I don't think so. The debt, while not enforceable by law, is still a debt that it is owed....right? I guess we will find out.

I am a collection attorney. I represent collection agencies...most of the time. Last month, I filed three lawsuits against three different collection agencies for blatently ignoring the FDCPA. I don't file frivolous lawsuits. These collection agencies egregiously violated the FDCPA. For example, one agency's collector threatened ME with legal action that she could not take. When I informed her that she violated the FDCPA for threatening to turn a $500 debt into a $3,000 debt after judgment, I did not sue this agency. After firing off a nasty letter to the agency, they cancelled my client's debt. I also had a long conversation with agency owners about how to training their collectors on the stricturs of the Fair Debt Collection Practices Act.

Another agency out of New York was pointedly told by my client to not contact her at work anymore. Did they listen? Nooooooooo. I sued them. Did they pay my client $1,000 in damages, plus costs and my attorneys' fees? Yeeeeessss. Are they going to think twice before contacting her again? I would tend to think so. Mind you, these cases make vey little money for our firm. These cases are more in the nature of pro bono. We file these lawsuits to "fight the good fight." There is a large number of collection agencies that take the time to train their collectors properly. Unfortunately, there appears to be a growing number of agencies that like to simply run rough shod over debtors. The collectors at these poorly run agencies give our profession a bad name and reputation.

Lets face it. Without debt collectors, you would not have the marvelous credit card in your wallet. Credit would only be granted on a heavily secured basis, if at all. Imagine a world with little credit and you should picture yourself living in a cave.

I have never filed so many FDCPA actions in such a short period of time. But beware, just because I am a collection attorney and usually represent creditors and collection agencies doesn't mean that I will sit on the sidelines while collectors misuse their telephones and positions of authority to mistreat people. Today, more people than ever are falling on hard times. I am seeing more and more people that have had jobs for the past several years losing these jobs and their life savings. Yes, I collect debts for a living, but I will not ever treat a debtor disrespectfully. Indeed, I will step in and defend anyone who is bullied at the hands of a debt collector.

I am sure that some of my collection agency clients will care for this post. To those who may not like my position on FDCPA abuses, I can only say "Too bad... Train your staff to treat debtors as human beings and accord them the respect and rights that Congress has told you to under the FDCPA and then we will have no problem." If you need help training your staff on FDCPA strictures, just call me. I will set up an appointment with you and get your staff trained and flying right. A little common sense and courtesy will avoid a great deal of issues under the Act.

If you have a problem with a debt collector or a collection agency, call me. I am a debt collector and I speak their language. It may be that I can get your problem handled with a telephone call or a letter. Who better to fight your fight with a collection agency than a collection attorney?

Mr. Patrick Lunsford of CollectionIndustry.com wrote the following article:

A man in Indiana has filed suit against a hospital and a collection agency – and their respective parent groups — over a security lapse that exposed the personal information of some 260,000 patients.

The litigant, Michael Chaney, claims that The Sisters of St. Francis Health Services and its collection agency, Advanced Receivables Strategy (ARS), violated HIPAA regulations and failed to effectively notify potential victims that their information was exposed.

The breach stems from an incident in July involving an employee of ARS. When returning a computer bag to a store, the employee apparently left several data disks in the bag that contained patients’ names and Social Security numbers. The hospital did not notify the patients until October.

Chaney’s lawyers are seeking class action status for the suit. They are claiming that each member of the class is entitled to no less than $5,000.

ARS is owned by Perot Systems.

Continue reading "HIPPA Violation may lead to class action" »

Collection Industry reports reports that "Attorney General Eliot Spitzer today announced that his office has filed a lawsuit against a debt collection company alleged to have engaged in illegal and abusive practices to coerce payment on time-barred or unverified debts.." There is nothing new about a collection agency that engages in abusive practices. In its report, Mr. Spitzer has accused JBC & Associates, P.C. and its successor companies, JBC Legal Group, P.C. and Boyajian Law Offices, P.C., and their operator, Jack H. Boyajian of New Jersey are accused of violations of both federal and state laws regarding debt collection practices.

The allegations against the agency include threating to sue on checks when they had no such intention to do so. It also appears that the agency would attempt to bully their debtors with questions such as "do you look good in stripes?" intimating that criminal action would be taken against them.

Continue reading "Michigan Collection Law - Collection Agency gets nailed by NY Attorney General" »

The Chicago Sun Times reports that it is going to hire ex cons, fresh from the big house to collect debts for the city.  I don't know how you feel about it, but I think its a great idea.  I am all for giving someone a fresh start and a break.  Besides, municipalities are exempt from the strictures of the Fair Debt Collection Practices Act.  Thus, if the collector/convict gets a little too rough with the consumer, too bad.  The consumer can't do anything about it because he is a debtor.  Besides, if the consumer/debtor complains, he should remember that the convict/collector in all likelihood, has the debtor's home address right in front of him....do you suppose that this was an intended benefit?

The Illinois Attorney General has filed a lawsuit against a very aggressive collection agency.    Several debtors complained that they were unfairly pressured into making payments.  While there are a number of very fine and reputable collection agencies, there are always a few in the bunch that taint the reputation of the industry and its members.  No one should have to tell a collector to refrain from foul language and making idle threats such as intimating that a lawsuit would be filed on a debt that is 20 years old.  I guess that is why we have the Fair Debt Collection Practices Act.