Tag: FDCPA

Stay in control: Being a better consumer by keeping prepared for debt collectors

It is not easy being a consumer sometimes, especially when you owe creditors money and the debt collectors start calling you. Knowing your rights under the law is important, but that is just half the battle. The best debt collectors, and best meaning they collect the most money due, are the ones who have a way of getting you to pay, despite ethics and sound business practices. Many of them completely ignore consumer laws. For some, we often wonder if their business model assumes they will have to pay a few fines here and there when smart consumers catch them doing wrong. When you do know the law, there are additional steps you can take and practice becoming a better defender of your rights. Keeping good records and following the steps in this article can help you bring a case against an unscrupulous collector. When more consumers who stand up for their rights, collectors may take notice. Class action lawsuits particularly affect the bottom line for companies in the business of collecting. The Zamparo Group is advocating for consumers and helping fight back against predators engaging in bad acts.

There are few things you should do to prepare for talking to collectors to best protect yourself.

Wherever you manage consumer business from your home and office, consider creating and managing individual file folders for everyone with whom you enter into financial and credit transactions. Keeping a notebook or notepad and a pen nearby is important so you can take notes of each and every phone call. Always ask for the name or operator identification number of everyone you talk to and note the date and time of the call. It can be helpful and empowering later to tell a supervisor who you spoke with, at what time, and exactly what they said. You may also want to keep a recording device nearby and record the telephone calls, on an app on your phone, for example. Be careful however, when it comes to recording others, as the laws are different in every state when it comes to recording conversations and whether you need consent of the other person to record them. Here is a link to Illinois law on recording conversations. Please feel free to contact us to learn more.

Learn the basics of the consumer laws written to protect consumers from unfair debt collectors.

The Fair Debt Collection Practices Act (FDCPA) is the federal statute that protects consumers by limiting what a creditor can do when working to collect a debt. It might be helpful to print and keep the FDCPA basics nearby, to use as a reference when on the phone, or when making notes about what you think may be a consumer law violation.

The FDCPA prohibits debt collectors from:

  • Calling you before 8 a.m. and after 9 p.m.
  • Intentionally annoying or harassing you
  • Calling you at work if your employer does not allow personal office calls
  • Calling or communicating with you after you request them not to in writing
  • Using abusive language or threatening lawsuits they could not legally file or initiate

These are the common violation signs to watch for, and there are additional violations listed in the FDCPA text, published by the Federal Trade Commission (FTC) website. If you believe a collector is doing something that violates the law, we can review your notes and information about the communications and determine what action, if any, can be taken against the collector.

How would you know if they are in their rights to file a lawsuit against you?

First, if a debt collector says they are a lawyer and that is not true, there may be a violation. If someone tells you they have a lawsuit ready to file and they are not a law firm, there may be a violation. Another common concern of consumer attorneys are the collectors or law firms calling for a collector about a lawsuit that is barred by the statute of limitations to sue on a debt. Every state has its own set of limitations laws that prohibit a collector from filing a lawsuit to collect on a debt after a certain time. The best practice for a smart consumer is to make notes of any threats or comments about lawsuits when talking to a collector.

Before you pay, get the proof you need to know you actually owe a collector money.

Collection companies frequently buy lists of debts and try to collect. When the collectors are unable to collect, they might make notes on the list and move on to the next consumer. These lists can be bought and sold many times, and all it takes is one instance of human error and you may receive collection calls, years later, when you do not owe any money. If you paid a debt, keep records of the payment, and demand proof that you owe the debt. It is not on our short list above, but the FDCPA requires a debt collector to send you written proof that you owe a debt.

Prepare for phone calls and communications with debt collectors, and refuse to let them anger you.

Why do debt collectors often call during breakfast, lunch and dinner time? They know if you are busy, there is a better chance your guard will be down and they can push you around. It may be a judgment call for another to make if a collector is abusive or harassing, so good notes of what they say can be important later. If you are cooking or working or otherwise busy, feel free to tell the collector it is not a good time to talk and ask when you may return their call when it is convenient. When you call them back or take their original call, it is a good idea to sit at a desk so you can take notes and treat the phone call like an important business call. Remember that they are likely recording your conversation, and it is important to be careful what you say, because it could come back to haunt you later. When preparing for the phone call, try taking some notes of what you want to ask the collector about the debt. This is helpful if you are working with them to negotiate a reasonable payment arrangement.

Remember that any process of collection takes time and so do legal actions. Do not be worried that the collector is going to run to court the same day, obtain a judgment against you and garnish your wages or seize your bank accounts if you do not pay them immediately over the phone. If anyone tells you that, your next call should be to the Zamparo Law Group!

The Zamparo Law Group is advocating for consumers and sharing information about protecting against unethical and abusive debt collectors who violate the law. When more people stand up for their rights, consumers can win. Together we can protect one another from the wolves in sheep’s clothing.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

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CFPB shuts down law firm using automated lawsuit generator

The automated lawsuit generator used by the debt buying collection firm and a law firm makes automated dialers seem like going on a walk in the park with an old love interest. The Consumer Financial Protection Bureau (CFPB) had no love for these law firms when it issued a Consent Order, on April 25, 2016, stopping them in their tracks. What is being called a high-volume lawsuit machine, violated the Consumer Financial Protection Act (CFPA), the Fair Debt Collection Practices Act (FDCPA), was not supervised by any lawyers, and it did not produce reliably credible lawsuits. The order was issued to stop the debt buying law firm of Pressler & Pressler, LLP and New Century Financial Services, Inc., who have both engaged in firing off automatic lawsuits at creditors for years, often based on “flimsy or nonexistent evidence.[i]

Collection efforts and lawsuits filed near the statute of limitations

States have limitations on the time in which they can file a lawsuit to enforce a debt, seeking an enforceable judgment, with which the law firm can go after your bank accounts, assets, income and tax refunds to collect on the judgment amount. We often hear stories about collection agencies making threats of lawsuits, something they cannot do if they are not lawyers. In this case, however, the lawyers were the ones who bought up and tried to collect on debts.

Stated in a recent Time article, “For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray in a press release. “Debt Collectors that file lawsuits with not regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.[ii]

Automated lawsuit generators undermining the integrity of the legal system

If a debtor fails to pay by a set due date, a computerized system can automatically populate the name, address and vital data necessary to produce a summons and complaint for the amount the computer believes is owed, and these lawsuits can be printed in bulk, filed online, and otherwise populate the court docket, all without a lawyer reviewing everything to make sure the lawsuit is proper.

The law firm filing automatically generated cases did not ensure an attorney reviewed the petitions before they were filed with courts, rather they used, “untrained support staff, which spent less than 30 seconds a piece in some cases to verify the claims of each lawsuit.[iii]” When activity like this is allowed to occur, where lawyers are not reviewing lawsuits being filed, and a computer makes the judgment call to file the lawsuit, there is a breakdown in the integrity of the legal system because no reasonable person could rely on the authenticity of the documents or proceedings.

The CFPB found violations of the FDCPA and the CFPA 

After investigating and reviewing the allegations against and practices of Pressler & Pressler law firm and its debt-buying firm (collectively “respondents”), the CFPB issued a consent order, in agreement with the respondents, setting forth the findings, penalties and the further orders of the CFPB.

The CFPB findings state, “Respondents’ debt-collection litigation activities relied substantially on a non-attorney support staff that far outnumbers the Firm’s attorneys, along with a proprietary collection software system that the Firm uses to automate, review, and ensure compliance with its processes for receiving and preparing new lawsuits for its clients.[iv]

Finding that the respondents engaged in deceptive practices, the CFPB enjoined and restrained the respondents from continuing certain activities, such as:

  1. Prohibiting Debt-Collection Litigation Activities Without a Reasonable Basis;
  2. Prohibiting the Use of Deceptive Affidavits;
  3. Prohibiting Certain Pre-Judgment Discovery Practices; and
  4. Additional Conduct Provisions

The CFPB ordered fines to be paid to the bureau in the amount of $1 million for the law firm and $1.5 million for the debt buyer. In addition to the fines, there are significant and ongoing reporting and compliance requirements the respondents must satisfy.

The CFPB and the Zamparo Law Group are advocating for consumers and fighting back against deceptive and abusive collection firms that use tactics like computerized lawsuit generators.

If you believe a bill collector is trying to collect a debt you do not owe, and if you are receiving what seem like improper threats of lawsuits and documents that look like court filings, you might be a victim of a consumer law violation. The Zamparo Law Group can advise you of your rights and whether you have a case and what it may be worth.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.

To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our FacebookTwitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

 

[i] Time.com, Money, It Just Got Harder for Debt Collection Agencies to Auto-Sue Borrowers, by Ethan Wolff-Mann, Apr. 25, 2016.

[ii] See HNi above.

[iii] See HNi above.

[iv] US CFPB Administrative Proceeding, In the Matter of: Pressler & Pressler, LLP, Sheldon H. Pressler, and Gerarld J. Felt, Apr. 25, 2016.

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Consumer protection overview of the Fair Debt Collection Practices Act

Consumers and debt collectors are the primary parties considered in the Fair Debt Collection Practice Act (FDCPA), (the Act), written to protect consumers from unfair business practices by third party debt collectors. The FDCPA protects consumers of goods in the marketplace for personal consumer use, where a debt is due, and a debt collector attempts to collect the amount due. The FDCPA only applies to the actions of debt collectors who are third parties with right to collect the debts of another. The FDCPA does not apply to original creditors collecting debts originally owed to them. Third parties, usually credit references, are referred to by the Act and there are limitations to how a debt collector can make contact with a third party of the debtor, when attempting to collect a debt.

There are three main legislative objectives of the FDCPA:

  1. Stopping, preventing and remedying unfair consumer debt collection practices;
  2. Protecting legitimate and rule abiding debt collectors from competitors with unfair debt collection practices; and
  3. Establishing a congressionally enacted uniform body of law controlling the legal collection of consumer debts with statutory standard practices.

There FDCPA contains multiple requirements debt collectors must follow exactly or be in violation of the Act, triggering remedial penalties.

Violations of the FDCPA include several prohibited actions that are abusive or harassing, false and/or deceptive, and unfair and unconscionable acts. These violations of these congressional prohibitions can lead to financial and marital instability, bankruptcies, loss of work and invasions of individual privacy. When a debt collector breaks one of the following consumer debt collection rules, they are subject to the legal penalties and fines and attorneys fees when a lawsuit is filed in the local federal court within one year of the date of violation.

Abusive or Harassing Acts by a debt collector, Violating the FDCPA are generally prohibited.[i] Acts or threats of violence or criminal activity violate the Act. Using obscene, profane or racially motivated language is a violation of the Act. Publishing or advertising a list of bad debtors, or threatening to put a consumer debtor on such a list is an Act violation. Debt collectors making excessive telephone calls to a debtor, or third party, or making their phone ring repeatedly to harass them are violators of the Act. A violation of the Act also occurs if the debt collector makes phone calls to the consumer debtor and fails to make meaningful disclosures of their identity.

False and/or Deceptive Acts by a debt collector, Violating the FDCPA are generally prohibited.[ii] If a debt collector falsely represents himself or herself as a lawyer, there is a violation of the Act. Debt collectors are prohibited from threatening criminal prosecution for nonpayment, or they violate the Act. Debt collectors also may not threaten lawsuits, garnishments or property seizures if they have no real legal ability to do so, for example, when the debt is old and past the statute of limitations to collect on the debt, and if the debt collectors do make those threats, there is an Act violation. Threatening to report false credit information is also prohibited and a debt collector violates the Act in making that credit reporting theft.

Unfair and Unconscionable Acts by a debt collector, Violating the FDCPA are generally prohibited.[iii] Debt collectors may not collect any monies from consumer debtors except for the amounts authorized by law, and extra fees and charges for payments of full or partial amounts cannot be charged to the consumer debtor or there is a violation of the Act. Post-dated checks also have special rules if they are accepted by debt collectors. First, is a debt collector agrees to accept a post-dated check, they must give the consumer debtor a minimum of three days written notice before endorsing and depositing the check for collection. Second, a debt collector may not ask for or accept a post-dated check under the debt collectors’ threat of criminal prosecution.

In addition to several bad debt collector acts that lead to Act violations there are FDCPA regulations and duties to comply with the rules for communication among debt collectors and consumer debtors.

The FDCPA regulates how a debt collector must communicate with a consumer owing a debt. The original communication in which the debt collector makes contact, they must specifically speak or state the language: “This communication is from a debt collector in an attempt to collect a debt. Any information obtained will be used for that purpose.” All subsequent communications must include a spoken or written statement, “This communication is from a debt collector,” or “This is an attempt to collect a debt.” [iv] In addition, there are five-day notice requirements a debt collector must satisfy to legally inform a consumer debtor of the nature of details of the debt they seek to collect.

Enforcement of the FDCPA rights and remedies for consumers involves damages, fines and the compensation for actual and statutory attorney fees where applicable.

Within one year of an act by a debt collector in violation of the Act, the consumer debtor, or third party receiving an abusive amount of phone calls, for example may file a lawsuit against the debt collector in a federal district court.

The remedies for violations of the Act include the following:

  1. A court’s award of actual damages suffered by the consumer debtor;
  2. Statutory damages allowed by the Act, up to $1,000; and
  3. Actual amounts of attorneys fees incurred and/or allowed by the Act.

In some cases, a violation of the FDCPA can be used as leverage in settlement efforts where debt collector may agree to accept less money than originally sought if the consumer debtor agrees to not file a lawsuit for violations of the Act.

The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs harmed by debt collectors violating the FDCPA and other similar federal and state laws. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the collection companies who refuse to follow the law and use illegal tactics to force consumers to pay the debts they are hired to collect. To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our Facebook page. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.

[i] 15 USC § 1692d

[ii] 15 USC § 1692e

[iii] 15 USC § 1692f

[iv] 15 USC § 1692e(11)

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