I’ve written a great deal (for example: see this post, this post, and this post) about what specific debt collector conduct violates the Fair Debt Collection Practices Act. But the easiest way, perhaps, to figure out whether a debt collector has run afoul of the FDCPA is to think about the Act more broadly.
Without getting into specifics, the FDPCA prohibits debt collectors from doing anything that is (1) unfair; (2) untrue; or (3) harassing or abusive. Obviously, the Act lists a number of specific debt collection tactics that fall into these three categories. But the FDCPA also makes it very clear that any debt collection conduct–whether specifically listed in the Act or not–that is unfair, untrue, or harassing and abusive is a FDCPA violation.
So rather than poring over the text of the FDCPA or reading dozens of articles on the internet, just ask yourself this question: did the collector do something that was unfair; untrue; or harassing or abusive? If your answer to this simple question is yes, there’s a good chance that the debt collector violated the FDCPA and your next move should be to contact a consumer rights lawyer.
If you’re dealing with debt collectors, make sure to download and use my free debt collection call log so that you can document all of the debt collectors’ communications. And if a debt collector does anything that you think was unfair; untrue; or harassing or abusive, please contact me to discuss the situation further. I offer a free case review for all FDCPA cases and if I agree to handle your case, you won’t have to pay me any money up front. My fees come from the money I recover from you if you win your case or accept a negotiated settlement.
The Chief Judge of the Court of Common Pleas in Delaware has issued an administrative directive that requires debt buyers to submit detailed proof with each collection lawsuit. The order mandates that debt buyers include the name of the original creditor, the last four digits of the account number, the name of the debt buyer purporting to currently own the debt, a complete list of every prior owner of the debt, and an itemized breakdown of the balance sought. Debt buyers are also required to attach a copy of the original contract and the complete chain of assignments from the original creditor to the current debt buyer. If a debt buyer fails to include the required information and documents, the directive gives the court the power–on its own initiative–to dismiss the debt buyer’s lawsuit.
These requirements may seem like common sense, but debt buyers often obtain judgments without submitting any proof that: (a) the consumer owes the debt; and (b) that the debt buyer is the rightful owner of the debt. This usually happens when the consumer fails to properly respond to the lawsuit, which happens in the majority of debt buyer lawsuits.
The Minnesota legislature has flirted with bills that require debt buyers to submit similar proof with their lawsuits, but as far as I know, Delaware is the first state where the judiciary has taken this matter into their own hands.
According to Consumerist and the Wall Street Journal, Chase has dismissed a bunch of debt collection lawsuits against consumers nationwide. Several of my consumer colleagues have speculated that this move is spurred by the recent robo-signing scandal. I’ve even heard (unsubstantiated) rumors that there has been some housecleaning in upper management of Chase’s credit card litigation department. In any event, this is good news for consumers.
Chase Drops Thousands Of Debt Collection Cases Against Borrowers | Consumerist | July 1, 2011
Lender Drops Pursuit of Debt | The Wall Street Journal | June 24, 2011 (subscriber content)
I often get calls from people whose vehicles are about to be repossessed. The callers sometimes tell me that the repossession agent threatened to have them arrested if they don’t tell him where the vehicle is located and want to know whether they are guilty of a crime by refusing to tell the repo agent where the vehicle is.
Under Minnesota law, it’s a crime if:
(1) You are (a) legally obligated for an auto loan; (b) you know where the vehicle that is secured by the auto loan is located; and (c) with intent to defraud, you refuse to disclose the vehicle’s location to a creditor or repossession agent that is legally entitled to repossess the vehicle.
(2) You–whether you are the borrower or not–conceal the vehicle if you know that the creditor is legally entitled to repossess the vehicle.
The potential penalty, provided by Minnesota Statute section 609.62, is imprisonment for up to three years or a fine of up to $6,000.
So under Minnesota law, it may be a crime to refuse to disclose the location of, or otherwise conceal, a vehicle that your lender is legally entitled to repossess. The key phrase here, though, is “legally entitled to repossess.” You may have defenses to the repossession, which would alleviate the potential criminal penalties because the lender isn’t legally entitled to repossess your vehicle. It’s probably best to be proactive and discuss the situation with an attorney before the repo man is knocking on your door. You should also check out this post for some suggestions that may allow you to keep your vehicle. Again–and I can’t emphasize this enough–don’t wait until the repo man is at your house to consider your options and talk to an attorney.
It’s definitely worth noting that I’ve never been involved in a case where a repossession agent or lender filed criminal charges against someone for refusing to tell them where the vehicle was or for concealing the vehicle. In my experience, repo agents use the threat of arrest to intimidate consumers into turning over the vehicle and rarely, if ever, act on them. But there’s a first time for everything and consumers should tread carefully because of the potential for criminal penalties.
If you’re facing repossession and want to discuss your legal rights with an attorney experienced in vehicle repossession cases, feel free to contact me. I offer 30 minute consultations for $175 and can help you figure out the best course of action for your situation.
A group of U.S. Congressmen, including Minnesota’s Al Franken, introduced a new bill that would eliminate forced arbitration clauses in employment, consumer, and civil rights contracts. The impetus behind the proposed law appears to be the recent U.S. Supreme Court decision in AT&T v. Concepcion. In Concepcion, consumers sued AT&T for false advertising. Because the value of their case was only $30, it was consolidated into a class action. AT&T tried to stop the lawsuit by activating the mandatory arbitration clause in the service contract, which not only required the case to be heard in a behind-closed-doors private arbitration forum, but also banned class actions altogether. This contractual language was buried in the fine print of the consumers’ contract and, like most consumer contracts, was not negotiable and offered on a take-it-or-leave-it basis. Both lower courts rejected AT&T’s argument and struck down the arbitration clause in the contract as unconscionable because it severely limited the consumers’ rights.
In an already notorious 5-4 decision, the U.S. Supreme Court struck down these lower court decisions. The Court applied the Federal Arbitration Act to uphold the contractual ban on class actions and forced arbitration. Although the FAA was originally passed to ensure that courts enforced commercial arbitration agreements between two companies, the Court’s decision expands the scope of the FAA and effectively allows companies to insulate themselves from liability when they defraud a large number of customers of a relatively small amount of money.
Because the Court’s decision involved interpretation of a federal statute and not the Constitution, it can essentially be overturned through legislation, which is where Franken’s bill comes in. From the press release:
What the Arbitration Fairness Act Does:
- Restores the original intent of the FAA by clarifying the scope of its application.
- Amends the FAA by adding a new chapter invalidating agreements that require the arbitration of employment, consumer, or civil rights disputes made before the dispute arises.
- Restores the rights of workers and consumers to seek justice in our courts.
- Ensures transparency in civil litigation.
- Protects the integrity of the Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, among others.
“Workers and consumers should never be forced to give up their rights to get hired for a job, or to get a cell phone,” said Senator Franken.“I’ve introduced the Arbitration Fairness Act to ensure that workers and consumers have the right to choose arbitration over litigation, instead of being forced into it by corporations.”
Press Release | May 17, 2011