WASHINGTON, June 21, 2015 − You would think that the rules for fair debt collection practices are understood and followed, right? Debt collection has been governed and regulated by federal law since the mid 1970s under the Fair Debt Collection Practices Act (FDCPA). Clearly, enough time has passed to allow those in that industry to get past the learning curve.
Unfortunately, despite a generally clear understanding of the law, it is often a reality in the collection industry that success is built by creating fear and intimidation through false threats and lies.
In point of fact, the tactics of some debt collectors are illegal. Revenge can be found in the courtroom. The law can even the playing field. Juries and judges are not hesitant to slap debt collectors on the proverbial wrist, or, more accurately and even better, in the pocketbook.
Last month a Missouri jury first stung a debt collector to the tune of $251,000 in damages for specific violations of the FDCPA for suing a woman over a $1,130.14 credit card debt. The jury next awarded the woman $82.99 million in punitive damages.
The woman, who lived in Kansas City, Mo., did not owe this debt. A man who lived in Kansas City, Kan., allegedly owed the money. Nonetheless, Portfolio Recovery Associates pursued the woman, and, despite months of efforts by an attorney to convince them that his female client did not owe the money and that they were pursuing the wrong person, the company continued its efforts.
Like many debt collectors, Portfolio lacked the proper documentation for the debt that it purchased, but ruthlessly pursued the claim anyway.
In 2011, a New Mexico federal jury awarded Luinda Yazzie $1.26 million against a collection law firm that twice attempted to garnish her wages for a debt she did not owe. The Law Offices of Farrell & Sandlin were hired to collect the debt, which had been run up on a Target credit card. Yazzie told them she never had a Target credit card and that another person in the area also had her name.
The firm filed suit against her anyway and got a garnishment order against her paycheck. Even then, Yazzie’s employer told them that they had the wrong person. The lawsuit was dropped, but reinitiated two years later. It was discovered that Target had given the law firm the correct debtor’s address and social security number, not those for the Lucinda Yazzie named in their garnishment actions.
The jury awarded $161,000 in actual damages and $1.1 million in punitive damages.
A San Jose, Calif., couple, Manuel and Luz Faustos, experienced a nightmare encounter with a credit collection company. Their ordeal began seven years after they paid off one of those gimmicky charge card accounts that keeps increasing the balance owed. Court records detail that the couple made monthly payments but the balance kept increasing. They finally went to a local debt negotiator who helped them pay off the card.
Seven years later, in August 2006, they received a telephone call from Credigy Services Corp., a collection agency based in Georgia. The caller told them they owed almost $17,000 on the account.
For over two years Credigy callers in Georgia and Brazil called the couple more than 90 times and sent numerous mailings to them demanding payment.
Manuel and Luz filed suit. Credigy resorted to unbelievable tactics once in court. They mounted a smear campaign against the couple and their family, none of whom had anything to do with whether the debt was owed or whether Credigy violated federal laws trying to collect.
Credigy also subpoenaed most of the couple’s children and sought their credit, mortgage and medical records. It brought up past driving charges filed against Manuel Faustos.
A verdict in the case finally came in 2009, after nine days in court. The jurors awarded the couple $100,000 in damages and $400,000 in punitive damages.
If you legitimately owe a debt, make efforts to communicate with your creditor. If discussions fail and if the matter is turned over to a collection agency, document everything and consider hiring an attorney immediately. Then send a letter to the agency, by certified mail, return receipt requested, telling the agency to communicate only with your attorney going forward.
If you are a victim of illegal activity by a debt collector, you can seek relief in the courts. Odds generally increase in your favor if you have everything properly documented.
The following is a summary that takes in most provisions of the current law.
- Cannot communicate with you at any unusual time or place that would be known to be inconvenient, meaning before 8 a.m. or after 9 p.m.
- Cannot communicate with you if you have hired an attorney concerning the matter.
- Cannot contact you at your place of employment if they know or should know your employer objects.
- Cannot communicate with third parties about your debt other than with your attorney or a consumer-reporting agency.
- Cannot continue communicating with you if you notify the creditor in writing to stop communicating with you.
- Cannot harass, oppress or abuse you.
- Cannot use or threaten violence, or use criminal means to harm you, your reputation or your property.
- Cannot use obscene or profane language or language that abuses.
- Cannot publish a list of consumers who allegedly refuse to pay debts, except to a consumer-reporting agency.
- Cannot call you or engage any person in telephone conversation repeatedly with intent to annoy, abuse or harass any person at the called number.
- Cannot communicate with you without disclosing their correct identity.
- Cannot use false, deceptive or misleading representation.
- Cannot falsely represent or imply that they are vouched for, bonded by or affiliated with the United States or any state, including the use of any badge or uniform.
- Cannot falsely represent the character, amount or legal status of any debt.
- Cannot falsely represent or imply that the caller is any attorney or that any communication is from an attorney.
- Cannot represent that nonpayment of any debt will result in the arrest or imprisonment of any person or the garnishment, attachment or sale of any property or wages, unless such action is lawful and the debt collector intends to take such action.
- Cannot falsely represent or imply that you committed any crime or conduct in order to disgrace you.
- Cannot use or distribute any written communication that falsely represents to be authorized, issued or approved by any court, official or agency of the United States or any state.
- Cannot fail to disclose at the initial communication that the purpose of the communication is to collect a debt and to inform that any information obtained will be used for that purpose.
- Cannot use any false business, company or organization’s name.
- Cannot falsely represent or imply that the collector operates or is employed by a consumer-reporting agency.
A concluding thought: In 2011, a North Dakota law firm pursued a debt after the legal time to do so had run out (statute of limitations violation). When the man sued the law firm for wrongfully suing him, he won $1,000 in statutory damages, $60,000 more in punitive damages, and $250,000 more for emotional distress.
Note also that your family members, the receptionist at your work, your neighbors and anyone else who has been burdened or harassed by the debt collector may also sue the debt collector under the FDCPA.
You’d think they’d get it…
Paul A. Samakow is an attorney licensed in Maryland and Virginia and has been practicing since 1980. He represents injury victims and routinely battles insurance companies and big businesses that will not accept full responsibility for the harms and losses they cause. He can be reached at any time by calling 1-866-SAMAKOW (1-866-726-2569), via email, or through his website.
His new book “Who Will Pay My Auto Accident Bills?, The Most Comprehensive Nationwide Auto Accident Resolution Book, Ever” can be reviewed on http://www.completeaccidentbook.com and can be ordered there, or obtained directly on Amazon: Click here to order
Mr. Samakow’s “Don’t Text and Drive” campaign, El Textarudo, has become nationally recognized. Please visit the website http://www.textarudo.com and “like” the concept on the Facebook page http://www.facebook.com/textarudo.