Michigan Collection Law Blog

For the past several years, I have blogged about issues affecting debt collectors and their opponents, consumers. Some people have taken issue with the fact that I help both the proverbial Coyote and Road Runner. Too bad. Running a successful law firm such as Nitzkin and Associates has its advantages such as taking the cases that I want to take and representing the people that I want to represent.

I have decided to form an division in my firm dedicated strictly to helping consumers; its called Michigan Consumer Credit Lawyers. The website is still under construction. When it is complete, I will let you know. I anticipate that it will be live in the next few weeks. This new website will contain several self help videos for consumers on issues from what to do when they get sued to how to handle an abusive debt collector. Take heart as we also republishing our Nitzkin and Associates website with many instructional videos too.

The MCCL blog is already up at www.micreditlawyerblog.com. On this new blog, I will talk only about issues that affect consumers who have been wronged by debt collectors, banks, credit reporting agencies and anyone else that would treat a consumer like crap. MCCL's website will be up shortly to coach consumers on what to do when they are faced down by their larger and financially better heeled opponents. We are here for them to even those odds.

We are still and will always be debt collection attorneys. However, we mostly represent businesses and do commercial debt collection and hence, we really have no conflict of interest. I, Gary Nitzkin, will continue to write this blog coaching debt collectors on how to avoid violating the FDCPA and the FCRA.

If you have any questions, please feel free to email me, Attorney Gary Nitzkin or call me, tool free at 877-293-2882.

Some states have a bad check diversion program that is designed to facilitate the payment of bad checks to merchant victims. These programs usually involve a district attorney and sometimes even, a private collection agency. The idea behind these programs is to give the bad check writers a chance to make their bounced checks good without further escalation of the issue to the DA’s office. Pennsylvania has one such program and it was abused by a collection agency.

American Corrective Counseling Services is a collection agency based in California. It was involved in helping Pennsylvania merchants recoup funds on bad checks. Unfortunately, it got a little carried away. It, allegedly, sent letters to debtors on letterhead that was purportedly from district attorneys. These letters threatened the debtors with criminal action if they failed to not only pay the bad check, but if they failed to pay a $170 fee for an “accountability class.” Indeed, according to a report by the Associated Press, one elderly woman who wrote a check for $27 to Kmart, which bounced, was told she would have to pay fees of $72 to clear the matter up, "plus another $170 for the accountability class." The case is entitled Del Campo v American Corrective Counseling, in the 9th Circuit. The violations of the Fair Debt Collection Practices Act, in this case, are enoromous.

A class action lawsuit was filed against American Corrective Counseling Services. It settled the case for $2.55 million.

According to an article in the Associated Press, New York authorities shut down a collection agency for threatening consumers with jail if they did not pay. Did this agency ever hear of the FDCPA? Probably not since it was owned by some ex-convicts. They probably didn't really care about the law.

But its interesting to note that this agency did work nationwide. Their tactics must have produced results, right?

Social networking websites such as Facebook and Myspace have offered us new opportunities to reach out and communicate with one another. For the less scrupulous collection agencies, it has offered many other possibilities.
Consider the the case of JP Morgan Chase and its collection agency, Universal Tracing Services, Inc. Chase's customer, Mr. James Ricobene fell behind on his Mercedes payment. Chase hired UTS to collect on this debt. UTS, priding itself on using "the latest technology" to track down "the harest to find missing persons and debtors" decided to post the following demand letter on Mr. Ricobene's daughter's Myspace account:

We have been retained by, JPMorgan Chase Bank, to locate and repossess their missing collateral a 2007 Mercedes GL 450. Please contact our office immediately so we can discuss the peaceful recovery of the collateral. Failure to contact me will result in further action against your father James Ricobene. Legal options range from having a replevin order served on you or even worse reporting the collateral as stolen to local authorities in Illinois under the A.R.S. act 18-5-504. Failure to comply with this notice of surrender is a class 5 felony and carries a maximum penalty of imprisonment for two years plus all applicable surcharges. You must contact the writer within 5 days to prevent this action from taking place. You can contact me directly at 800-667-7704 ext 222 or directly at 604-267-1581 ext. 222

Chris Flanagan
Senior investigator

This was posted on March 20, 2009. Not only did UTS violate a host of Fair Debt Collection Practices Act laws, it has embarrassed and mortified the daughter as well. This makes two new Plaintiffs who can and should sue UTS and JP Morgan Chase. UTS obviously views social networking as an opportunity to cyberstalk. Gina Ricobene has filed her lawsuit against Chase and UTS. Her father also filed his complaint as well. There are certain lines that no one should ever cross. Using a daughter to reach a father in order to collect a debt is shameful, vile and as a father, it infuriates me. Click here for more information about this story.

But wait...I got another for you. Auto Financing Network is developing a reputation for its "no hostages taken" policy towards debt collection. It financed a car for Ms. Jennifer Dicks. When she two payments on her car note, APN repossessed it. When she went to pick up the car from APN, they informed her that they had hidden a GPS device in her car to track its whereabouts. It gets better. APN decided to shame Ms. Dicks when she fell behind again in her payment, by purchasing an URL that matches her name with the site titled "Jennifer Dicks isn't paying for her Cavalier."
If this weren't enough, APN then began a campaign of sending text messages to Ms. Dicks. Some excerpts, allegedly are as follows:

You need to call me. This has put me in a bad spot. I know you don't give a shit but I do. I need the car back.

April 10:

Can you quit playing games and give me the car?

April 11:

I'm 2 miles away coming to your house...are you home? Neeee the car.

April 15:

You need to call me...This isn't fair to me. Do you have no soul?

April 18:

All you do is lie. It isn't registered to you so call again. I wish you died when you fell off the roof. If ur not married good. He can do soooo much better.

And:

LOL. I'm sure he is really good. You will need him because az allows us to call the car in stolen. Please send him this, you are fucked!

As you can see, social networking has really provided people with new opportunities to connect and cyber stalkers with new opportunities to step into crap and get in trouble.

Moral of the story:

Debt Collectors - Web 2.0 does NOT provide you with any special exemptions from the FDCPA. IT STILL APPLIES which means you have to treat debtors as human beings. Next, remember that debtors are not failing to pay because they don't like you, so stop making debt collection a personal thing. Its about business and dollars. There no room for hurt feelings and such in debt collection. Just like Tom Hanks said "There's no crying in baseball" and there's no whining in debt collection. Here is my last bit of advice for you in this post; charm, kindness and consideration always win the day. Be kind and charming always and you will always avoid getting into trouble. Seriously...think about it.

Debtors - Learn from Mr. Ricobene and his daughter. They stood up to these tyrannical if not manical debt collectors. They will ultimately prevail and win sizable awards. If you have been disrespected, email me, Gary Nitzkin or call me at (888) 293-2882.

For the past few years, I have been blogging on how collection agencies have been spiraling out of control. Late last year, the FTC assessed the largest penalty it ever has against a collection agency for harassing and intimidating debtors. I found this blog post about Academy Collection Service, Inc. and its owner, Keith Dickstein. The FTC assessed a penalty of $2.25 million for their actions. Guys, it ain't just me noticing how collection agencies and collectors are losing control.

Today, perhaps more than ever, its important for people to know your rights under the Fair Debt Collection Practices Act. This statute levels the playing field between collectors who have the power to threaten legal action against people who owe money. The Act requires the collector to act as human beings and not tyrants.The Act was actually formed to be a shield for debtors. Over the years, case law has morphed the FDCPA into a sword used by debtors to attack unscrupulous and sleazy collectors. Don't get me wrong. I am a lawyer that specializes in debt collection. However, I don't abide sleazy collectors and have sued them without hesitation.

Because our economy is in such a down turn, I am seeing more and more debt collectors actually stooping to these lowly tactics that violate the law. Many are purposely violating the law in order to bully debtors into paying. I predict that the FTC will be collecting more and more penalties as these agencies and their tactics come to light. I have the following advice for you, depending on who you are:

Debt Collection Agencies - Train your collectors on the FDCPA. Make sure that you spend time and money not only training them, but document the fact that your collectors have learned the ins and outs of the statute. It ain't that complicated. Moreover, you must watch and monitor your collectors on the telephone. Be sure that they document every conversation that they have with every debtor. Lastly, screen them for temperament. If you hire a loose cannon, an attorney (such as I), will absolutely go after you and your agency because you have the deep pockets.

Humans who owe money. Remember that you are not just a "debtor." Rather, you are a human being entitled to be treated to with respect and dignity. If you are abused by a debt collector, chances are excellent that you the debt collector has violated the FDCPA. Do not roll over and take this laying down. You can and should sue the collector.

I was shocked and saddened to read about a story of an individual who received so many dunning notices and collection calls from a New Jersey Rent-a-Center, that he walked into the store and set himself on fire. As a debt collector, this is the sort of thing that gives me great pause.

People are under a lot of pressure these days. People are losing their jobs and their homes. A good debt collector plies pressure to people to get them to pay their debts. However, it is the rare instance when a debt collector knows about a person's other pressures in life. When a debt collector chronically duns someone who is already under a great deal of pressure, well its just like pushing a balloon against a pin...something has to give. In this case, it was Mr. Saladriagas' sanity. He was the individual who torched himself.

Thankfully, the employees at Rent-A-Center came to his aid and doused him with water. Their lives, like Mr. Saladriagas' skin, will never be the same.

As debt collectors, the people at Rent-A-Center will have to ask themselves if they went too far in attempting to collect their debt from Mr. Saladrigas. Its too easy to write him off as a nut job, although it is not out of the question. This story gives me great pause and causes me to examine our procedures for collecting debts as well.

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.