Five reasons to sue a debt collector that violates the FDCPA

August 9, 2011 by Todd Murray · Leave a Comment 

1. Up to $1,000 in statutory damages. If you bring a successful FDCPA case, the court will award you up to $1,000 in statutory damages. These damages are provided by law as a penalty against a debt collector that violated the FDCPA and you don’t have to prove that you suffered any actual harm to be awarded statutory damages. Although there are rare cases where a court awards a consumer less than $1,000, in most cases the consumer is awarded the full $1,000.

2. Provable actual damages. If a debt collector’s abuse has caused you to cry or lose sleep or if the collector’s harassment has affected your relationship with your loved ones or your performance at work, you may be able to recover actual damages. Not every consumer will suffer actual damages due to a collector’s conduct, but if you can successfully prove that you’ve suffered tangible harm, you’re entitled to compensation for that suffering.

3. A free attorney. Probably the most important remedy under the FDCPA is the fee-shifting provision. This means that if you win your case, the collector has to pay your attorney fees. Because of this, most consumer attorneys take FDCPA cases on a full contingency fee, which means that you don’t have to give your lawyer any money up front. Your attorney gets paid by the debt collector or gets a percentage of any out-of-court settlement.

4. Your litigation costs are covered. Litigation can be expensive. The costs for filing fees, service fees, deposition transcripts, etc. can quickly add up. But if you win your FDCPA case, the debt collector has to pay all of your court costs.

5. Hold the debt collector accountable. When the FDCPA was enacted, Congress gave each individual consumer the right to sue a debt collector for violating the Act. The idea was that consumers and their attorneys would act as “private attorney generals” by holding debt collectors that violate the FDCPA accountable for their conduct through private lawsuits. Debt collectors love to lecture consumers about taking “personal responsibility” for paying their bills. An FDCPA lawsuit is a chance to turn this argument right back around at the debt collector and force them to take responsibility for their illegal debt collection tactics.

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.

Plaintiff awarded $1.26 million in New Mexico FDCPA case

August 1, 2011 by Todd Murray · Leave a Comment 

Last week, a New Mexico jury awarded a consumer $1.26 million in a FDCPA suit in New Mexico. The jury awarded $161,000 in actual damages and whopping $1.1 million in punitive damages.

The case involved repeated attempts–including two wage garnishments–to collect a debt from a person that did not owe it. Although the plaintiff in the case had the same name as the actual debtor, she persistently told the debt collector that the debt did not belong to her. Even her employer got involved: when the debt collector served the garnishment papers, the employer told the debt collector that they were attempting to garnish the wrong person. And it turns out that they were. During the proceedings, it was revealed that the original creditor had provided the debt collector with the contact information for the correct debtor, but that the debt collector manually changed the contact information to that of the similarly-named non-debtor. And although the debt collector asserted that the mistake was a result of a bona fide error–which is a defense to a FDCPA claim–apparently, the jury did not buy their argument. And probably for a good reason. In my opinion, it’s difficult to argue bona fide error when you originally had the correct contact information, altered it to pursue the wrong person, and ignored that person’s (and her employer’s) repeated warnings that the collector had the wrong person.

Jury Awards Plaintiff $1.26 million in FDCPA Violation Lawsuit | InsideARM | July 31, 2011

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.

Florida court rules that debt collector can’t use Facebook to contact a debtor’s family

April 28, 2011 by Todd Murray · Leave a Comment 

Last December, I posted about a Florida woman who sued a debt collector for contacting her family on Facebook. It turns out that the judge agreed with her and ruled last month that the debt collector could no longer contact her–or her family and friends–on Facebook or any other social-networking site. Click below for all of the details.

Debt collectors must tread lightly on social media | Orlando Sentinel | April 17, 2011 (via Consumerist)

Why debt collectors are wrong to label FDCPA law firms as “lawsuit mills”

March 10, 2011 by Todd Murray · Leave a Comment 

There’s a fairly well-known passage in The Adventures of Huckleberry Finn where Huck, after patiently enduring the Widow Douglas’ attempts to “sivilize” him by reading him passages from the Bible, asks the Widow if he can take break to smoke a cigarette. The Widow refuses, scolding Huck that smoking is a mean, nasty habit. Huck immediately points out the obvious hypocrisy in the Widow’s disapproval of cigarettes, noting that the Widow “took snuff, too; of course that was all right, because she done it herself.”

For the last few years, debt collectors have engaged in a relentless public relations campaign against consumer lawyers that far exceeds the hypocrisy in the Widow’s admonition to Huck. A recent example is a Denver Post article that bemoans the rise in Fair Debt Collection Practices lawsuits. The article alleges that the FDCPA has “morphed into little more than fodder for lawsuit mills cranking out hundreds of cases yearly–thousands nationally–enriching the lawyers filing them and minimally helping the consumers for whom the laws were written.” What I find most interesting about this argument, which is often repeated by debt collectors and their allies, is that debt collectors themselves file hundreds of thousands of collection lawsuits each year.

In my former life as a debt collection attorney, for example, my medium-sized collection firm alone issued between 500 and 1,000 collection lawsuits per month. A 2008 Minneapolis Star Tribune article revealed that debt collectors filed approximately 51,000 lawsuits in 2008 (up from 36,000 in 2007), and that was just in Minnesota. Consumer bankruptcy attorney Jay Fleischman notes that in New York, debt buyers “filed over 450,000 lawsuits–in New York City alone–between January 2006 and July 2008. That’s about 300,000 such cases brought each year in a single metropolitan area.” Yet debt collectors are accusing FDCPA lawyers, who file a couple thousand lawsuits a year, of being overly litigious. That’s like Jenna Jameson calling a girl who just lost her virginity a slut.

Now, I know what some of you are thinking: despite her own tobacco use, wasn’t the Widow Douglas right to warn Huck Finn about cigarettes? And isn’t it also possible that, despite their appalling hypocrisy, debt collectors are right about these “mill” consumer law firms lining their pockets by churning out frivolous FDCPA lawsuits? Possibly, but I doubt it.

First, all of the FDCPA attorneys that I know work in either solo or very small firms, which, of course, is the complete opposite of a “mill.” Second, I can tell you from experience that being a FDCPA lawyer is hardly lucrative; certainly not as lucrative as, say, defending large debt collectors. And I screen each of my potential FDCPA cases very carefully. If I get the impression that my potential client is not telling the truth or that they set up or provoked the debt collector, I won’t take the case. And since I, like just about every other FDCPA lawyer, take FDCPA cases on a contingency fee, I’m only interested in cases where there is strong, if not airtight, evidence of a violation. I’m not interested in risking my own money or time to pursue a case where liability will be difficult to prove. Every FDCPA lawyer that I’ve met is just as cautious. So I have a really hard time believing that there’s an army of unscrupulous consumer lawyers out there harassing innocent debt collectors with waves of frivolous FDCPA lawsuits.

The much more logical explanation for the supposed increase in FDCPA lawsuits is that debt collectors are resorting to more aggressive–and illegal–tactics as they pursue debtors with less money to pay due to the poor economy. The Denver Post article quotes Charity Olson, an attorney that defends debt collectors in FDCPA cases, who argues that “I can call 10 collectors right now and I can get a dialogue in all of them that would have a basis for a suit.” Ms. Olson apparently meant this as an indictment of consumers and consumer lawyers. But really, what does it say about the debt collectors that she represents that virtually every conversation with a debt collector will result in an FDCPA violation? Debt collectors and their allies love to lecture debtors about taking “personal responsibility” for paying their debts. Maybe instead of hypocritically blaming consumers and consumer lawyers for the increased FDCPA litigation, they should follow their own advice and clean up their act.

Consumers dealing with debt collectors become stuck in a vicious cycle of lawsuits | Denver Post | February 27, 2011


How to stop fraudulent debt collection calls

March 8, 2011 by Todd Murray · Leave a Comment 

I occasionally get calls from people dealing with debt collection scammers. The scammers acquire an innocent consumer’s contact information and begin bombarding him with debt collection calls. The callers, who usually call from overseas with a VOIP phone line, make blatantly illegal threats, such as threatening to have the consumer arrested. When I talk to victims of this scam, I usually explain the nature of the scam and tell them that an FDCPA lawsuit isn’t appropriate because there’s no way to identify the scammers. But I’ve never really had a good answer for making the annoying calls stop. Until now, that is, thanks to “Steve”. Steve (it’s not his real name) was an innocent consumer suffering from this very problem. Rather than live with the harassing calls, Steve decided to set up a website with information about how to put a stop to the calls. Here’s his tips for protecting yourself:

* Inform your employer.  You are likely getting calls at home and/or at work, so make sure your employer is aware the calls are part of a scam and to not take them seriously.  Advise the callers that they are no longer allowed to call you at work.  If they continue to call, document the date and time of the calls you received.  Save voice mails left if at all possible.

* Change your number(s).  For some this may not be an option, for others a one-time number change can be done free of charge.

Be advised – any references you listed on your payday loan application will be contacted.  Let those people know that this is a scam, and they can disregard.

* Use Google Voice.  Google Voice is a great replacement voice mail system for just about any phone number you use.  Messages can be transcribed and voice mail recordings can be saved as mp3 files.

Pro Tip – call the fraudsters with a Google Voice number before turning off your old phone numbers.  Make sure when you call you identify yourself so they can start up their script.  At any point after they have your information pulled up just hang up.  They will then start religiously calling your Google Voice number.  At this point, you are free to change your regular phone number(s) and enjoy not having these people ever call you again.  (And laugh at the fact these people are basically talking to a brick wall several times a day).

I would only use this approach with a scammer. If you want to stop calls from a “legitimate” debt collector, take a look at this post.

Payday Loan Collection Scheme / Get the Facts! (via Consumerist)