Sunday, November 25, 2012

"Wrong Number" Calls or Voicemails from Debt Collectors

Have you ever received calls from debt collectors for a person completely unknown to you? These “wrong number” calls are usually the result of collection calls being made to the person who owned the telephone number immediately prior to you. What do you do about these wrong number calls? My advice is to tell the debt collector that you are not the person that she/he is trying to contact and ask them to stop calling. However, this common sense approach often does not work because the debt collector does not believe the person that she/he spoke with. The collecting caller may believe that the person called is actually the true debtor and is trying to avoid the call by saying that it was a “wrong number.” If the debt collector keeps calling after being told that they have the wrong number, in this author’s opinion, the continued calls constitute harassment under the Fair Debt Collection Practices Act.

In addition, the “wrong number” calls could be in violation of the Telephone Consumer Protection Act (TCPA). The TCPA prohibits calls using a pre-recorded or artificial voice to deliver a message to a consumer unless there is a previous business relationship or consent for the call by the consumer. With most calls made by the debt industry to a consumer, the previous business relationship between the creditor and the consumer is sufficient to allow the debt collector to utilize a pre-recorded message. However, with wrong number collection calls, such a previous business relationship is lacking. Bringing suit under the TCPA premised on wrong number debt collection calls can result in substantial claimed damages. The TCPA provides for a statutory penalty of $500.00 per call and that amount increases to $1500.00 per intentional violation.

For more information, visit us at Stop Debtor Harassment or Consumer Rights Orlando.

Thursday, November 15, 2012

Consumer Protection from Unwanted Cellphone Calls

Recent headlines have drawn attention to a prevalent consumer complaint - unwanted cell phone calls. A class action lawsuit against Papa John’s involves franchises that sent customers a total of 500,000 unwanted text messages in early 2010 offering deals for pizza. Some of these texts were sent during the middle of the night. The lawsuit is based upon the Telephone Consumer Protection Act of 1991 (TCPA).

The TCPA was enacted into law to “protect the privacy interests of residential telephone subscribers” by placing certain restrictions on the use of unsolicited, automated phone calls made by telemarketers who were “blasting” out advertising by the use of both “facsimile machines and automatic dialers. An essential requirement of a TCPA claim is that the phone call be sent to a cell phone by use of auto dialing technology which either (1) utilizes a so-called “random or sequential number generator” or (2) automatically leaves a prerecorded, as opposed to a live, message.

In the context of debt collection practices, creditors have contacted consumers by cell phones on a regular basis. If a debt collector is found to have violated the TCPA, the consumer is entitled to recover statutory damages of $500 per call, and up to $1500 per call if the violation is willful, without any cap on damages. Claims under the TCPA by consumers against debt collectors are frequently joined with actions brought under the Fair Debt Collection Practices Act.

For more information, visit us at Consumer Rights Orlando.

Saturday, November 10, 2012

What is a "false, misleading and deceptive" communication under the Fair Debt Collection Practices Act


The Fair Debt Collection Practice Act (FDCPA) was enacted to “eliminate abusive debt collection practices.”   Among the abusive tactics that the FDCPA sought to eliminate was the proscription of “false, misleading and deceptive” communications from debt collectors to consumers.

Consumer, Paula Maple, took out a loan from Midland Funding, LLC successor in interest to Bank of America, N.A., for personal, family, or household services.  Sometime thereafter the debt was transferred to the law firm of Sprechman & Associates, P.A. for collection.
On March 6, 2012, Sprechman & Associates, P.A. sent a letter to Paula Maple which stated in part:

“If your client fails to make payment or fails to make appropriate arrangements they will leave us with no choice but to subject all of their assets to actions to collect this Judgment.”

Paula Maple filed a lawsuit in United States District Court, Middle District of Florida, against Sprechman & Associates, P.A. alleging, among other things, that the statement in the letter were false given the numerous exemptions to executions on judgments.

Paula Maple also alleged in her lawsuit that the letter sent to her by Sprechman & Associates, P.A. violated the Fair Debt Collections Practices Act and the Florida Unfair and Deceptive Practices Act.

Whether a collection letter or other communication is false, deceptive, or misleading under the FDCPA is determined from the perspective of the objective least sophisticated consumer.  Under this standard, collection notices can be deceptive if they are open to more than one reasonable interpretation, at least one of which is inaccurate.   Debt collectors that violate the FDCPA are strictly liable, meaning that a consumer need not show intentional conduct by the debt collector to be entitled to damages.

For more information about debt collection harassment, or Sprechman & Associates, P.A., visit us at http://www.ConsumerRightsOrlando.com.

Sunday, October 21, 2012

Voicemails from Debt Collectors

The Fair Debt Collection Practice Act (FDCPA) was enacted to “eliminate abusive debt collection practices.” The FDCPA applies to, among other things, communications with the consumer, including voicemails.

If you have received a voicemail from a debt collector, these are some questions a consumer should consider:

  • Did the voice message disclose the debt collectors’ identity – his/her name, employer and phone number and a statement that the purpose of the call was to collect a debt?

  • Did the voicemail disclose the identity of the consumer so the debt collectors are sure they have the right phone number?

  • Did the consumer authorize the debt collector to speak with a third party? (If so, probably no FDCPA violation).

  • Was the message limited to determining the debtor’ residence, telephone number or the debtor’ place of employment? (With some exceptions, this is a permitted third party communication and so probably no FDCPA violation).

If you have received a voicemail from a debt collector and it does not comply with the above requirement or just think it may be improper, give us a call and let us hear the message to make sure it complies with the law.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Thursday, October 18, 2012

Claim of $50 for attorney’s fees violates FDCPA (in Ohio)

Consumer, Mary, Moxley, entered into a consumer loan agreement with Cash Stop in order to borrow $279.96. The loan Agreement contained an attorney fee shifting provision. The provision purported to allow Cash Stop to charge Plaintiff attorney fees incurred to collect under the contract in the event of Plaintiff’s default. When the consumer defaulted, Cash Stop hired attorney Pfundstein to collect the debt under the loan agreement. Pfundstein filed a complaint against consumer to collect the debt. The complaint requested judgment in the amount of $319.96, which included default charges and other fees. In addition, the complaint sought $50.00 for attorney fees. The complaint stated: “In addition, whereas the defendant(s) agreed in the contract to pay reasonable attorneys’ fees, the plaintiff requests $50.00.”

Consumer filed a complaint in federal court against Pfundstein claiming that was guilty of violating the Fair Debt Collection Practices Act (FDCPA) by making a false, misleading and deceptive statement in the lawsuit that he filed on behalf of Cash Stop against her with regard to the claim for recovery of attorney’s fees. The consumer then moved for summary judgment on her claim.
The unique aspect of this case is that under Ohio law, creditors are not permitted to recover attorney fees incurred in connection with debt collection suits involving personal, family, or household debt.
Defendant/attorney claimed that the request for attorney's fees was a good faith mistake of law.
The Court granted the consumer’s motion for summary judgment noting that because the FDCPA has been generally recognized as a strict-liability statute, even a good-faith error can give rise to liability. The Court found that attorney Pfunstein had violated the FDCPA by seeking to recover $50 in attorney’s fees in the underlying action, when such fees were not permitted by Ohio law.
Moxley v. Pfundstein, 2012 U.S. Dist. LEXIS 146868 (N.D. Ohio Oct. 11, 2012).

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Monday, September 24, 2012

Plaintiff accused by Court of intentionally defaulting on debts in order to create FDCPA claims

The Fair Debt Collection Practice Act (FDCPA), enacted in 1977, aimed to "eliminate abusive debt collection practices.” Among many other reforms, the FDCPA prohibits harassing or oppressive conduct on the part of debt collectors, and it requires debt collectors to provide notice to debtors of their right to require verification of a debt. Both the text of the FDCPA and its legislative history emphasize the intent of Congress to address the previously common and severe problem of abusive debt collection practices and to protect unsophisticated consumers from unscrupulous debt collection tactics. The Act, as a U.S. District court recently stated, was not intended to enable plaintiffs to bring serial lawsuits against different debt collector defendants alleging various and often insignificant deviations from the Act’s provisions.

In Ehrich v. Credit Prot. Ass’n, 2012 U.S. Dist. LEXIS 134142 (E.D.N.Y. Sept. 19, 2012), accused the plaintiff in that case of abusing the FDCPA by, among other things, filing a total of nine complaints, including the present case, over the past seven years. The court stated that the record suggests that the plaintiff may be deliberately defaulting on his debts in order to provoke collection letters which are then combed by his lawyer for technical violations of the FDCPA.
The facts of this unique case are that Ehrich filed a complaint against Credit Protection Association, L.P., alleging violations of the FDCPA. Ehrich alleged that CPA sent him a collection note seeking to recover a debt owed to Time Warner Cable Company. Ehrich did not dispute the validity of the debt CPA sought to collect, nor did he claim that the primary text of the letter violates the FDCPA. Rather, Ehrich based his claim on two Spanish sentences at the top and bottom of the letter.
Printed at the top of the letter is the phrase “aviso importante de cobro,” which Ehrich, relying on a Google translation, translated as “important collection notice.” At the bottom of the collection notice were three Spanish phrases: “Opciones de pago,” “Llame” followed by a phone number, and “EnvĂ­e MoneyGram,” which Ehrich translated as “Payment options,” “Call" and “Send MoneyGram.” Ehrich, who does not speak Spanish, claimed that the notice’s inclusion of these Spanish phrases without a Spanish translation of the FDCPA-mandated disclosures and notices provided in English could mislead Spanish-speaking consumers and cause them to inadvertently waive their rights under the FDCPA.

CPA moved for summary judgment which was granted by the court based on lack of standing. The basis for the Court’s ruling was that the collection notice contained all disclosures required by the FDCPA and that Ehrich fully understood it. Therefore, he suffered no injury sufficient to support standing.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Thursday, September 20, 2012

Debt Collectors May Seek You Out Via Facebook

Facebook is great for looking up that girl who stole your lunchbox in preschool. Being clever enough on Twitter can land you a book deal. And if you're a debt collector, social media is remarkably helpful in helping you to track down people who haven't paid their bills.

"Between Facebook and LinkedIn—a lot of people show up online in different places. They don't even realize," says Howard Beloff, president of CSRS Collections, a small collection agency in Rockville, Md.

Beloff's company collects on a variety of debts: late rent, medical companies, delinquent private school tuition. In many cases, he says, especially in those of people who have amassed rent bills, these debtors have moved and are hard to find. That's where the investigative work of debt collecting comes in. And in the arsenal of tools at their disposal, debt collectors find social media an immensely helpful addition.

A few decades ago, collectors had to rely old-school tools like the White Pages for basic information on whether a debtor had moved or changed phone numbers. The Internet changed that completely, says Mark Schiffman, spokesperson for ACA International, a trade group of credit and collection professionals.

"From a tech perspective, it's easier access to public information, versus having 50 phone books or 100 phone books in my office," Schiffman says. "Now you have the Internet and people putting information that's publicly available out there. People are putting out a little billboard" for themselves, he says.

That's not all of the help that the Internet affords collectors. Some states put their court records online, and online "skip tracing" sites help agencies find potential addresses for debtors.

It sounds like a lot of avenues to pursue, just to track down where someone lives. But all this online information can be used for much larger purposes. An up-to-date LinkedIn site can give a collector easy information on if and where that person works, says Beloff, which is valuable information for a collection agency that wants to garnish a debtor's wages. In other words, put information—a public Facebook status, a LinkedIn update, a tweet—about getting hired at a new job onto the internet and collectors get a signal that you might have money available.

Simply reading what a debtor has made public on social media is not illegal, and it's hard to argue it's unethical; collectors are simply using available information. Still, there are strict laws ensuring that the investigation goes little further. While a debt collector can look at a debtor's Facebook page, Twitter feed, or LinkedIn listing for information, for example, she can't tweet, message, or even E-mail the debtor with information about outstanding balances.

One collector talks about the difference between acceptable tactics and those that venture into deceptive territory.

"If I were to be a bit surreptitious and if I were to actually try to become your friend on Facebook and you were to accept me as a friend on Facebook, I would get access to all kinds of really, really good information on you," says Bill Bartmann, CEO of Oklahoma-based debt collection company CFS II. That kind of deception, he says, is different from simply Googling or Facebook-searching a debtor.

Schiffman says that while complaints have been filed with the government over the use of social media in collections, he does not believe that the use of social media has led to a spike in complaints. Still, debt collection complaints have risen in recent years, from 128,000 in 2009 to nearly 152,000 in 2010, and again to nearly 181,000 in 2011.

According to data supplied by ACA, debt collections have also grown recently. Collections at third-party debt collectors totaled $44.6 billion in 2010 , up more than $4 billion from 2007, before the crisis, though employment at those firms was down slightly over the same period.

However, the population of debtors to pursue is growing: Roughly one in seven Americans—slightly more than 14 percent—is being pursued by a debt collector, according to the Federal Reserve Bank of New York. That's up substantially from mid 2003, when the figure was around 9 percent. The amount available to collect is up, too, from around $900 per debtor then to over $1,500 now.

While a certain, small percentage of debtors habitually run up bills and neglect to pay them, says Bartmann. the recent economic downturn brought a new population onto the debtor rolls: people not used to being pursued. While some may be facing financial hardship and be unable to pay, there are many others who want to get their debts discharged quickly.

He feels that this new population has, in some ways, made collections easier.

"Are customers more apt to pay now than in previous economic cycles? That answer is yes," Bartmann says.

Still, he advises caution to anyone making too much of their lives public online. His word of advice to debtors: "Be careful what you put out there."

That, he says, or just pay your bills as best you can. Neglecting to pay altogether can make prices higher and credit tougher to get for everyone.

Beloff agrees: "The thing is, is that for anybody who pays their bills, they should hate people who don't."

U.S. News & World Report

By Danielle Kurtzleben

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Wednesday, September 12, 2012

Letter Stating that Student Loan is “Ineligible for Bankruptcy Discharge” is False, Deceptive and Misleading Statement under FDCPA


Student loans are presumptively nondischargeable in bankruptcy.  However, student loans can be discharged in bankruptcy if a debtor demonstrates, by a preponderance of the evidence, that requiring their repayment would impose an undue hardship on the debtor.   To seek an undue hardship discharge of student loans, a debtor must commence an adversary proceeding by serving a summons and complaint on affected creditors. To succeed in such a proceeding, the debtor must show: (1) that the debtor cannot maintain, based on current income and expenses, a ”minimal” standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.

 
With this state of the law as a background, would a statement to a consumer that her/his student loan was “ineligible for discharge in bankruptcy” be deemed a false statement under the FDCPA? The Second Circuit recently responded to this question in the affirmative.
 

In  Easterling v. Collecto, Inc., 2012 U.S. App. LEXIS 18444 (2d Cir. N.Y. Aug. 30, 2012), Berlincia Easterling obtained a student loan. Approximately 4 years later she filed for bankruptcy, however, in her petition, she classified the student loan as non-dischargeable. Accordingly, her student loan was not discharged. When the debt collector for the Department of Education learned about the bankruptcy, it sent Easterling a letter advising her that her account was “NOT eligible for bankruptcy discharge. After receiving the letter, Easterling filed a claim under the Fair Debt Collection Practices Act ("FDCPA"), contending that the collection letter’s statement that her student loan was “ineligible for bankruptcy discharge” was false, deceptive, or misleading under the least sophisticated consumer standard. The District Court granted defendant/debt collector's motion for summary judgment.  Easterling appealed.

 
The Second Circuit held that the debt collector violated the FDCPA’s proscription against false, misleading, or deceptive practices by sending the debtor a collection letter incorrectly informing her that her student loans were “ineligible for bankruptcy discharge” because, although the debtor may have faced significant hurdles to discharging her student loans in bankruptcy, the least sophisticated consumer would have interpreted the letter as representing, incorrectly, that bankruptcy discharge of her loans was wholly unavailable to her. The Court concluded that the letter’s capacity to discourage debtors from fully availing themselves of their legal rights rendered its misrepresentation exactly the kind of abusive debt collection practice that the FDCPA was designed to target.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at: Stop Collection Harassment; or Consumer Rights Orlando

Tuesday, September 11, 2012

Settlement Offer Does Not Moot FDCPA Claims


Plaintiffs alleged claims under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.S. § 1692 et seq.  In each case, defendant/debt collectors sent emails offering to settle the case for $1,001 – an amount exceeding by $1.00 the maximum that each plaintiff could recover, plus legal fees and costs.  The offers were not accepted. The  District Court granted the defendants’ motions to dismiss, holding the offers left the consumers with "no remaining stake" in the litigation and that the cases were moot.


The Eleventh Circuit reversed the trial courts holding that the defendants s did not offer judgment as part of the settlement, an important distinction in the mootness analysis. It was error to have found the settlement offers rendered the FDCPA claims moot because the offers did not offer to have judgment entered against them.  The Court went on to state that because the settlement offers were not for the full relief requested, a live controversy remained over the issue of a judgment, and the cases were not moot.  Furthermore, the Court stated, a judgment was important to the consumers because the district court could enforce it. Instead, with no offer of judgment accompanying the settlement offers, the consumers were left with a mere promise to pay.  If payment was not made, the consumers faced the prospect of filing a breach of contract suit in state court with its attendant filing fees — resulting in two lawsuits instead of just one.

Zinni v. ER Solutions, Inc., 2012 U.S. App. LEXIS 18163 (11th Cir. Fla. Aug. 27, 2012)

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Offer of Judgment Halts FDCPA Lawsuit


Federal Rule of Civil Procedure 68 provides that, at least fourteen days before trial, a defending party may serve a plaintiff with an offer to allow a judgment on specified terms.   Several recent district court opinions have rules that an offer of judgment providing the plaintiff with the maximum allowable relief will moot the plaintiff’s  FDCPA claim.  Moten v. Broward Cnty., No. 10-62398-CIV, 2012 U.S. Dist. LEXIS 19332, 2012 WL 526790, at 2 (S.D. Fla. Feb. 16, 2012); see also  Mackenzie v. Kindred Hosp. E., LLC, 276 F. Supp. 2d 1211, 1218-19 (M.D. Fla. 2003) (dismissing FLSA claim as moot after plaintiff rejected  Rule 68 offer where offer exceeded amount plaintiff could have received at trial).

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In Young v. AmeriFinancial Solutions, LLC, 2012 U.S. Dist. LEXIS 125661 (S.D. Fla. Sept. 5,2012), plaintiff filed an action against defendant under the Fair Debt Collection Practices Act which provides that damages in an action brought by an individual shall not exceed $1,000.00. Defendant served an Offer of Judgment proposing to have judgment entered in the about of $1,001, plus attorney's fees incurred prior to the date of the offer. Defendant then moved the trial court to dismiss the action for lack of subject matter jurisdiction contending that the action is moot because the Offer would grant Plaintiff more than the full amount of relief that Plaintiff could obtain under the FDCPA. The Court granted the defendant’s motion to dismiss for lack of subject matter jurisdiction because the offer of  judgment would provide plaintiff with the maximum allowable relief on her claims.  Therefore, the court concluded, that the action was moot and the Court would no longer have subject matter jurisdiction over the suit. 

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Tuesday, August 21, 2012

Frequently Asked Questions about the FDCPA

Frequently Asked Questions

Q. What is the Fair Debt Collection Practices Act?

A. The Fair Debt Collection Practices Act ("FDCPA") requires that debt collectors treat you fairly by prohibiting certain methods of debt collection.

Q. What debts are covered?

A. Personal, family, and household debts are covered under the Act.  This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.

Q. Who is a debt collector under the FDCPA?

A. A debt collector is any person, other than the creditor, who regularly collects debts owed to others. Under a 1986 amendment to the Fair Debt Collection Practices Act, this includes attorneys who collect debts on a regular basis.

Q. Who is a debt collector under the Florida Consumer Collection Practices Act?

A. Under Florida law, the definition of a "debt collector" is much broader than under its federal counterpart. Under the Florida Consumer Collection Practices Act (“FCCPA”), a “debt collector” is defined as: “any person who uses any instrumentality of commerce within this state, . . . in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. The term ’debt collector’ includes any creditor who, in the process of collecting her or his own debts, uses any name other than her or his own which would indicate that a third person is collecting or attempting to collect such debts.”

So, the FCCPA applies to any person or persons, collecting his/her own debts. Under that broad definition, the FCCPA would apply to a law or accounting firm attempting to collect its own fees, as well as the employees engaged in such collection activity on the law firm's behalf.

Q. How may a debt collector contact you?

A.  A collector may contact you in person, by mail, telephone, telegram, or FAX. However, a debt collector may not contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves.

Q. Can you stop a debt collector from contacting you?

A. You may stop a collector from contacting you by writing a letter to the collection agency telling them to stop.  Once the agency receives your letter, they may not contact you again except to say there will be no further contact. Another exception is that the agency may notify you if the debt collector or creditor intends to take some specific action.

Q. May a debt collector contact any person other than you concerning your debt?

A. If you have an attorney, the debt collector may not contact anyone other than your attorney. If you do not have an attorney, a collector may contact other people, but only to find out where you live and work. Collectors usually are prohibited from contacting such permissible third parties more than one. In most cases, the collector is not permitted to tell anyone other than you and your attorney that you owe money.

Q. What is the debt collector required to tell you about the debt?

A.  Within five days after you are first contacted, the collector must send you a written notice telling you the money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

Q. May a debt collector continue to contact you if you believe you do not owe money?

A.  A debt collector may not contact you if, within 30 days after you are first contacted, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

Q.  What control do you have over payment of debts?

A.  If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.

Q.  What can you do if you believe a debt collector violated the law?

A.  You have the right to sue a collector in a state or federal court within one year from the date you believe the law was violated. If your win, you may recover money for the damages you suffered. Court costs and attorney's fees also can be recovered.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Sunday, July 22, 2012

Eleventh Circuit reaffirms application of FDCPA to mortgage foreclosure actions

Since 2009, debt collectors in the Eleventh Circuit (Florida, Georgia and Alabama) who were contacting consumers in connection with mortgage foreclosure actions relied on the decision of Warren v. Countrywide Home Loans, Inc. , 342 F. App’x 458 (11th Cir. 2009) for protection from suit because that decision held that enforcement of a security interest through the foreclosure process is not debt collection for purposes of the FDCPA.  However, creditors can no longer seek refuge in Warren v. Countrywide Home Loans, supra, since publication of the opinion in Reese v. Ellis, Painter, Ratterree & Adams, LLP , 678 F.3d 1211 (11th Cir. 2012).  Reese held that an entity that regularly attempts to collect debts can be a “debt collector” under the FDCPA even when that entity is also enforcing a security interest. 


The Reese holding was recently reaffirmed in Birster v. Am. Home Mortg. Servicing, 2012 U.S. App. LEXIS 14660 (11th Cir. Fla. July 18, 2012).  In this recent case, the Birsters owned a home in Jupiter, Florida which they refinanced through Option One.  The Birsters ceased making mortgage payments on or around June 1, 2008.  The promissory note and mortgage provided that any missed payment by the Birsters places the loan into a default status.  On July 30, 2008, AHMSI began servicing the loan and initiating collection activities.  On February 2, 2009, U.S. Bank, N.A., as the trustee for the lienholder, initiated foreclosure proceedings against the Birsters. In their FDCPA lawsuit, the Birsters alleged that AHMSI began its relentless assault on them in 2008.  According to the Birsters, AHMSI called them multiple times on a daily basis to collect the past due amounts.  The Birsters further alleged that most of these calls occurred after AHMSI knew that Angela suffered from an inoperable glioma (brain tumor) that cannot be diagnosed as cancerous or non-cancerous.  As early as April 16, 2009, the Birsters informed AHMSI that they were represented by an attorney, and provided AHMSI with the attorney’s name and phone number.  The Birsters advised AHMSI to contact their attorney and to cease contacting them directly.  AHMSI nevertheless continued its direct communications with the Birsters.  The Complaint further alleged that during these calls, AHMSI used offensive and abusive language towards Mrs. Birster and made false representations that the Birsters’ home was scheduled for a foreclosure sale.  Mrs. Birster also alleged that after a particularly abusive call on May 5, 2009, she collapsed in her front yard and was rushed to a nearby hospital.  Once the calls ceased, the Birsters claim AHMSI then began intimidating and harassing them at their home.  AHMSI sent agents to “inspect” the property, despite knowing the Birsters resided there.  Although AHMSI was initially inspecting the property on a monthly basis, AHMSI soon began visiting the Birsters’ home every day or every other day.  AHMSI’s home inspections even occurred on Thanksgiving and Christmas days. The Birsters alleged AHMSI’s actions caused Angela to suffer a deep depression and anxiety, resulting in her attempted suicide. 


The district court granted summary judgment to AHMSI after concluding the Birsters’ allegations related solely to efforts by AHMSI to enforce a security interest, rather than to collect a debt. Thus, the district judge concluded that the actions of AHMSI were not covered by the FDCPA.  Based on the holding in Reese, supra, the Eleventh Circuit reversed the order granting summary judgment.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Sunday, July 8, 2012

Confusing Debt Validation Notice violates FDCPA

The Fair Debt Collection Practices Act (“FDCPA”) requires, among other things, that debt collectors, within five days after first communicating with an individual debtor about a debt, to provide the debtor with a validation notice provides the consumer a written notice containing -- along with other information – the name of the creditor to whom the debt is owed and the amount of the debt. This notice is sometimes referred to as a debt validation notice. Simply stating the amount due is not enough, however. The notice must state the amount of the debt clearly enough that the recipient is likely to understand it. It is not enough for a debt collection agency simply to include the proper debt validation notice in a mailing to a consumer. Congress intended that such notice be clearly conveyed. Therefore, a notice that letter fails to state amount of debt where a consumer reading it could reasonably interpret the amount of debt in two ways, is a violation of the FDCPA. In Melillo v. Shendell & Assocs., 2012 U.S. Dist. LEXIS 9248 (S.D. Fla. Jan. 26, 2012), the plaintiff recieved a collection letter from a law firm representing his condominium association. Plaintiff alleged in his Complaint that the collection letter failed to state a clear amount of the debt owed because it referred to different amounts. The Court applied the objective "least sophisticated consumer" standard to the collection letter. In denying defendant’s motion to dismiss, the Court stated that in reading the complaint in the light most favorable to plaintiff, to the extent that the parties dispute factual issues regarding whether the collection letter was actually confusing will ultimately be for the jury to decide at trial.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Tuesday, July 3, 2012

Who is a "debt collector" under Florida Law


Under Florida law, and more specifically the Florida Consumer Collection Practices Act (“FCCPA”), a “debt collector” is defined as: “any person who uses any instrumentality of commerce within this state,  . . . in any business the principal purpose of which is the collection of debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.  The term ’debt collector’ includes any creditor who, in the process of collecting her or his own debts, uses any name other than her or his own which would indicate that a third person is collecting or attempting to collect such debts.”

So, the FCCPA applies to any person or persons, collecting his/her own debts.  Under that broad definition, the FCCPA would apply to alaw firm attempting to collect its own fees, as well as the employees engaged in such collection activity on the law firm's behalf.

Robin Morgan retained the law firm of Arnold & Wilkins.   Morgan did not pay the law firm and they sued her is Small Claims Court.  She counterclaimed against the law firm, as well as the attorney and his assistant, individually, for violations of the FCCPA.  The law firm and the individuals moved to dismiss the counterclaim because they were not “debt collectors” under the FCCPA.   Morgan responded to the motion to dismiss by arguing that the FCCPA applies not only to a collection agency, but to any party seeking to collect a consumer debt.  The trial court granted the motion to dismiss finding that the FCCPA only apples to debt collectors not creditors collecting their own accounts as Morgan has alleged counter-defendants were doing.
On appeal, the law firm and the individual counterdefendants conceded that the trial court was in error when it ruled that FCCPA pertains only to debt collectors, however, they argued that that the trial court reached the right result for the wrong reason because Morgan’s debt was not a debt within the purview of the FCCPA since the debt did not flow from an extension of credit.  The appellate court reversed holding that that the obligation to the law firm was a debt covered by the FCCPA.

Morgan v. Wilkins, 74 So. 3d 179 (Fla. 1st DCA 2011). 

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Monday, July 2, 2012

Florida Consumer Collection Practices Act ("FCCPA")


In 1993, the Florida Legislature enacted the Florida Consumer Collection Practices Act ("FCCPA") which law targets unfair debt collection tactics, including those inflicted upon residential mortgage customers. The statute proscribes a broad range of deceptive, harassing, and abusive practices.  It also provides a right to bring litigation against wrongdoers and to recover actual damages, costs, and attorney fees.

The following are some of the most common possible violations of the FCCPA:

•    Harassment - frequent phone calls to alleged debtors, their family and friends, repeated calls with no messages, hang-ups, lies, misleading comments, speaking in a belittling manner, embarrassing, argumentative and rude conduct are examples of harassing conduct.

•    Collecting money not owed - if an alleged debtor doesn’t owe the money it is a violation of the law for a collector to try and force the alleged debtor to pay the money.

•    Threats - creating a “false sense of urgency” or suggesting arrest, criminal prosecution, jail.

•    Calls at work - calls to the workplace, especially after a collector is told not to call, such as speaking to or leaving messages with a receptionist, calling the cell phone while alleged debtor is at work or calling alleged debtors direct line, is a violation.

•    Contacting 3rd parties - collectors may not contact any party about a debt without the express permission of the alleged debtor, including the spouse or any other family member, neighbors, friends, or co-workers.

•    Contact after attorney representation - once a collector is told a individual is represented by all conversations, messages, letters or any other communication must immediately stop.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Monday, June 25, 2012

Mistakes in Debt Validation Notice result in FDCPA lawsuit

The FDCPA, among other things, mandates that, as part of noticing a debt, a “debt collector” must send the consumer a written notice containing -- along with other information – “the name of the creditor to whom the debt is owed.” This requirement is sometimes referred to as the "Debt Validation Notice." In addition, the Act prohibits a “debt collector” from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” For purposes of the FDCPA, a false representation in connection with the collection of a debt is sufficient to violate the FDCPA facially, even where no misleading or deception is claimed. In Bourff v. Rubin Lublin, LLC., 674 F.3d 1238 (11th Cir. 2012), the plaintiff claimed that the creditor’s law firm violated the prohibition on false, deceptive, or misleading representations by falsely stating in its collection statutory notice that BAC was the creditor when it was really the assignee of the original creditor - America’s Wholesale Lender (AWL). The facts of the case are that when the debtor failed to make a payment on the loan causing a default, AWL assigned the loan and security agreement to BAC. The law firm hired by BAC sent the debtor a letter stating that it was notice pursuant to the FDCPA and that it was an attempt to collect a debt; the notice identified BAC as the creditor. In his suit, the debtor claimed that the notice violated the FDCPA because it falsely represented that the company, BAC, was the creditor on the loan. The district court concluded that the error was a harmless mistake and dismissed the Complaint. In reversing the trial court and vacating the order of dismissal, the Court found that the statement in the notice that BAC was the creditor was a false representation and that it was made by a debt collector under the FDCPA. The Court considered that the identity of the “creditor” in the statutory notices is “a serious matter.”

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Does the FDCPA apply to mortgage foreclosures?

A recent Eleventh Circuit decision responded to this question in the affirmative. In Reese v. Ellis, Painter, Ratterree & Adams LLP, 678 F.3d 1211 (11th Cir 2012) the Reeses defaulted on a loan and mortgage. A law firm representing the lender sent the Reeses a letter and documents demanding payment of the debt and threatening to foreclose on the property if they did not pay it. The Reeses then filed a lawsuit against the law firm alleging that the communication violated the Federal Debt Collection Practices Act. The district court dismissed the complaint finding that the law firm was not a “debt collector” under the FDCPA and that the letter and documents it sent were not covered by the FDCPA. The basis for the trial Court’s dismissal was, in part, based on the decision in Warren v. Countrywide Home Loans, 342 Fed. Appx. 458 (11th Cir. Ga. 2009) which held that the FDCPA, except for limited circumstances, does not apply to mortgage foreclosures and such collection activity does not constitute debt collection activities governed by the FDCPA. In holding that the FDCPA applied to the collection efforts of the lender’s law firm, the Court rejected defendant’s arguments that the purpose of the letter was to inform the Reeses that the lender intended to enforce its security deed. That argument, the Court observed, wrongly assumed that the letter could not have had a dual purpose – to give notice of foreclose and to demand payment on the note. The Court went on to state that the rule the law firm was asking the Court to adopt would exempt from the provisions of the FDCPA any communication that attempted to enforce a security interest regardless of whether it also attempted to collect the underlying debt. That rule, the Court said, would create a loophole in the FDCPA and the practical result of such a rule would be that the FDCPA would apply only to efforts to collect unsecured debts. Under such a rule, the court noted, a lender (or its law firm) could harass or mislead a debtor without violating the FDCPA as long as a debt was secured. That, the Court said: “can’t be right.” In summarizing its ruling on this point, the Court said: “A communication related to debt collection does not become unrelated to debt collection simply because it also relates to the enforcement of a security interest.”

Tuesday, June 12, 2012

Creditors still trying to collect debts after bankruptcy

James and Shannon Humphrey filed bankruptcy on October 4, 2010 listing Bank of America as a creditor.  After the bankruptcy was filed, Bank of America, illegally contacted the Humphreys on 38 separate occasions.  Bank of America ignored protests from the Humphreys and their lawyer, telling them they didn't care about the bankruptcy and that phone calls would continue until the Humphreys contacted the bankruptcy department so Bank of America could update its computer system. The Court only penalized Bank of America $10,000 plus attorney's fees for these violations. 
Portfolio Recovery, a debt collector, purchased $1.52 billion of bankruptcy debt in 2011 for 9 cents on the dollar.   In the first quarter of 2012 alone, Portfolio Recovery reported earnings of $79,994,000 in fees collecting on bankruptcy debt.  In 2011, Capital One had to refund $2.35 million for illegally collecting on 15,500 claims already discharged in bankruptcy.  Capital One received $3.55 billion in bailout money from the federal government in 2008. EMC Mortgage -- a company purchased by JP Morgan Chase from Bear Stearns -- has illegally billed debtors in bankruptcy so often that bankruptcy judges have assessed punitive damages against it in four different court cases. Gagliardi v. EMC Mortgage, 290 B.R. 808 (Bankr.D.Colo. 2003); Curtis v. EMC Mortgage, 322 B.R. 470 (Bankr.D.Mass.2005); Castro v. EMC Mortgage, 08-01135 (Bankr.D.N.C. 2008); Harlan v. EMC Mortgage, 402 B.R. 703 (Bankr.W.D.Va.2009).   JP Morgan Chase obtained a bailout of $25 billion.   Despite reliance on the public dole to cure their own financial problems, banks have become more voracious in collecting consumer debt.

Excerpted from article written by Richard Gaudreau of the Huffington Post.

For more information about the Fair Debt Collection Practices Act, or, its state law counterpart, the Florida Consumer Collection Practices Act, visit us at:

Saturday, June 9, 2012

The twists and turns of the Colorado River Doctrine

A Property Owners Association (Alaqua) retained a law firm to recover delinquent homeowner association maintenance assessments from plaintiff. The law firm mailed to plaintiff a letter demanding payment of the assessments, interest, and other charges.  The debt remained unpaid so the law firm sued the plaintiff Acosta on behalf of Alaqua in Florida state court to foreclose a lien on Acosta’s property or recover a money judgment (the “State Action”).  Alaqua later replaced the first law firm with James A. Gustino and his law firm to litigate the State Action.
While the State Action was pending against him, Acosta filed suit in federal court alleging that Alaqua, the first law firm and Gustino, violated, among other state and federal statutes, the Fair Debt Collection Practices Act in attempting to collect the assessments.  The defendants filed a motion to dismiss the amended complaint.  In the alternative, the motion asked the court to stay the action pursuant to the Colorado Riverabstention doctrine pending the outcome of the State Action.
The district court granted the motion insofar as it sought dismissal pursuant to theColorado River doctrine and dismissed the case without prejudice.  Acosta appealed and the Court of Appeals framed the issue as having to decide whether the federal and state proceedings were parallel for purposes of the Colorado River abstention doctrine.   The court concluded they were not parallel and reversed the trial court’s dismissal, without prejudice.
The Court first emphasized the virtually unflagging obligation of the federal courts to exercise the jurisdiction given them.  It stated that “The doctrine of abstention . . . is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it.”   Furthermore, the Court stated, that the threshold requirement for application of the Colorado River doctrine is that the federal and state cases be sufficiently parallel.    In other words, whether the cases “involve substantially the same parties and substantially the same issues.”   And, if the federal and state proceedings are not parallel, then, the Court opined, that the Colorado River doctrine should not apply.
On appeal, plaintiff, Acosta, argued that the district court erred by applying theColorado River doctrine because the State Action and his federal suit were not parallel because, the two actions involve different parties because the federal action is against Alaqua’s attorneys, not Alaqua.   He also maintained that the two cases presented different legal issues.
The Court of Appeals stated that the district court’s decision depended on its conclusion that if the State Action were decided against Acosta, he would have no viable claims in federal court.  However, the appellate Court observed that the key to the federal case is not only whether the debt was enforceable but also whether the defendants’ conduct when collecting that debt complied with the Fair Debt Collection Practices Act.   This, according to the reviewing panel, raises some doubt about whether resolution of the State Action would decide the FDCPA issues along with the other federal claims that were brought.  Based on its analysis, the Court of Appeals reversed the trial court’s order dismissing the complaint, without prejudice. 
Acosta v. Gustino, 2012 U.S. App. LEXIS 11339 (11th Cir. Fla. June 6, 2012)

Failure to list pending FDCPA case in subsequent bankruptcy filing dooms claim

Plaintiff incurred a debt on a Target National Bank credit card which transferred plaintiff’s debt to Defendant for collection.  Plaintiff filed a lawsuit alleging violations of the FDCPA for conduct in collecting this debt.  Approximately 6 months after filing the FDCPA lawsuit, plaintiff filed for bankruptcy using different counsel.  Plaintiff failed to list FDCPA suit as an asset in his bankruptcy Schedule B or otherwise indicate to the court or the trustee that such lawsuit existed.  In the State of Financial Affairs, the form requested plaintiff to List all suits, etc.  to which the debtor is or was a party within one year immediately preceding the filing of the bankruptcy case.  Plaintiff checked “None.”  Additionally, plaintiff did not list defendant as either a secured or unsecured creditor, but did list Target National Bank as a creditor with an unknown credit card claim. Defendant filed its motion for summary judgment on the grounds, among others, that judicial estoppel bars plaintiff from proceeding on his FDCPA.

The U.S. District Court judge granted the defendant’s motion for summary judgment on the grounds of judicial estoppels finding that the plaintiff’s actions were a deliberate attempt to deceive the bankruptcy court and manipulate the judicial system to gain an unfair advantage over his creditors, including defendant, which is exactly what judicial estoppel is designed to prevent.

Barker v. Asset Acceptance, 2012 U.S. Dist. LEXIS 77315 (D. Kan. June 5, 2012)

Friday, June 1, 2012

Plaintiff sues surety and law firm over bond forfeiture that was set aside

Plaintiff paid a bail bondsman a premium for a bond to bail her son out of jail. At the time she obtained the bond, she signed papers which had the legal effect of holding her responsible for the full amount of the bond, $3,500, if her son failed to appear. Plaintiff’s son failed to appear for his arraignment and he bond was revoked. Thereafter, the Court executed a judgment against plaintiff’s son as principal and National Casualty Corporation as surety for $3,500. However, plaintiff’s son eventually appeared in court and the bond forfeiture judgment was set aside. A law firm and two collection agencies sent correspondence and made telephone calls to the plaintiff claiming that she owed National Casualty Corp. $3,500.00. The law firm later sued the plaintiff on this alleged debt. Plaintiff filed suit against National Casualty, the law firm and the debt collectors for violations of the Fair Debt Collection Practices Act principally because they were trying to collect a debt that, as she alleged, did not exist. The Defendants moved to dismiss on various grounds. The Court, in denying the motions to dismiss the FDCPA claims stated that it was bound to accept as true all of the allegations in the plaintiff’s complaint and that if true, would constitute violations of the FDCPA. In its ruling, the Court stated: “An amount misstated by the debt collector need not be deliberate, reckless, or even negligent to trigger liability – it need only be false. Id. In other words, the FDCPA recognizes a strict liability approach.” Barlow v. Safety Nat’l Cas. Corp., 2012 U.S. Dist. LEXIS 75585 (decided May 30, 2012))


Thursday, May 31, 2012

Dunning letter from attorney falls under Fair Debt Collection Practice Act

Before the creditor sends a delinquent account to a collection agency, the creditor can send a dunning notice to a consumer. However, when a lawyer attempts to send a similar communication, according to recent case law, it can be considered an attempt at debt collection under the Fair Debt Collection Practices Act.


When Izell and Raven Reese defaulted on a loan obtained from Provident Funding Associates, L.P. after giving the lender their mortgage, the lender's law firm sent a letter looking for the missed payment and threatening to foreclose on the Reeses' home if the sum was not attained, the written opinion of the court explained. The Reeses claimed this was an attempt at a collection and violated the Fair Debt Collection Practices Act, though a district court disagreed.


A panel of judges in the Eleventh Circuit court of appeals reversed the district court's ruling. The written opinion of the court cited the fact that the letter sent to the Reeses featured the disclaimer reading "This law firm may be attempting to collect a debt on behalf of the above-referenced lender."


The court said the Reeses were correct in asserting there were misleading representations in violation of Section 807 of the FDCPA. According to the opinion, the couple owed a debt to the company, so asking for repayment essentially made the lawyers debt collectors under the FDCPA.


Lawyers may want to cite this case and take care in the future to abide by the FDCPA when contacting any individual who has the possibility of owing a debt to the attorney's client.


Reese v. Ellis, 2012 U.S. App. LEXIS 8839 (11th Cir. Ga. May 1, 2012).

Defendant was not a "debt collector" under the FDCPA


Plaintiff secured a line of credit with Defendant to purchase computer equipment.  Thereafter, Plaintiff became delinquent in her payments to Defendant, and Defendant began calling Plaintiff's mobile phone with prerecorded messages regarding the debt.  Plaintiff sent Defendant a letter asking Defendant to cease calling her which was received by Defendant.  Plaintiff asserts that this "letter revoked her consent that she had previously given to the Defendant to place calls to her cellular telephone number."   Plaintiff maintains, however, that Defendant continued to place an additional "forty calls to her cellular phone in less than three weeks.


Defendant filed a Motion to Dismiss the Complaint.  The Court held that Defendant did not qualify as a "debt collector" under the FDCPA.   Creditors who collect in their own name and whose principal business is not debt collection . . . are not subject to the [FDCPA]. . . . Because creditors are generally presumed to restrain their abusive collection practices out of a desire to protect their corporate goodwill, their debt collection activities are not subject to the [FDCPA] unless they collect under a name other than their own.  "Creditors—as opposed to debt collectors—generally are not subject to the FDCPA."   "A 'debt collector' is broadly defined as one who attempts to collect debts 'owed or due or asserted to be owed or due to another.'"   A "creditor," on the other hand, is one who "offers or extends to offer credit creating a debt or to whom a debt is owed."  One cannot be both a "creditor" and a "debt  collector" as defined under the FDCPA because the terms are mutually exclusive.

Motion to Dismiss was granted.

Gager v. Dell Fin. Servs., 2012 U.S. Dist. LEXIS 73752 (M.D. Pa. May 29, 2012).

Fair Credit Billing Act



The Fair Credit Billing Act (FCBA) was passed to protect consumers from unfair billing practices, such as being billed for merchandise that was never received or failure to post credits in a timely manner. It also sets a consumer's responsibility for unauthorized charges or ways to seek clarification of items on a bill.
Anytime you dispute a charge, you are using the provisions of the Fair Credit Billing Act.  It is designed to help consumers when erroneous charges or fees appear in their credit card statement.

In order to use the provisions of this law, you must send a letter to the creditor within 60 days of the first incorrect bill mailing. The creditor must acknowledge your dispute in writing within 30 days of receiving it, and must have settled the matter within two billing cycles of receiving the dispute letter.


Supreme Court Grants Certiorari in FDCPA Case on Awarding Costs


On May 29, 2012, the U.S. Supreme Court announced it would hear a case in which a debt collection agency was awarded costs in a Fair Debt Collection Practices Act (FDCPA) lawsuit pursuant to Federal Rule of Civil Procedure 54(d). The question before the Supreme Court is whether a prevailing defendant in an FDCPA case is entitled to costs, regardless of whether the plaintiff brought the suit in bad faith and for the purpose of harassment.
The case, Marx v. General Revenue Corp., No. 11-1175, was originally brought by a consumer who defaulted on her student loan and alleged that a debt collection agency violated the FDCPA by sending a fax to her workplace that requested information about her employment status. The district court dismissed the consumer’s claim and concluded the collection agency’s fax did not violate the FDPCA because it was not a “communication” as defined by the Act. The district court awarded the collection agency costs pursuant to Federal Rule of Civil Procedure 54(d) and did not find that the consumer’s action was not brought in bad faith and for the purpose of harassment. The consumer appealed.
Although Federal Rule of Civil Procedure 54(d) allows a prevailing party to recover costs, the consumer argued the FDCPA’s cost provision, § 813(a)(3), makes clear that a court may award costs to a successful defendant only if the court finds that the plaintiff brought the action in bad faith and for the purpose of harassment.
The U.S. Court of Appeals for the Tenth Circuit affirmed the district court’s decision and held that the FDCPA’s cost provision does not supersede Rule 54(d). The appellate court reasoned that although the FDCPA’s cost provision only provides for an award to the defendant when a court finds the plaintiff brought the case in bad faith and for the purpose of harassment—which was not the case here—it does not specifically prohibit a court from awarding costs to a prevailing defendant in other instances.
The Supreme Court’s decision will determine whether a debt collector who prevails in an FDCPA action may recover the costs incurred in defending the action, even when a court does not find that the consumer brought the action in bad faith and for the purpose of harassment. ACA will continue to monitor this appeal and update the membership of new developments.


www.consumerlaworlando.com

Wednesday, May 30, 2012

Calling debtor at home and at work 82 times attempting to collect debt is not harassment


Yalitza Valle sues National Recovery Agency ("National")  alleging violations of the Fair Debt Collection Practices Act by calling Valle at home and at work eighty-two times in an attempt to collect debt incurred from emergency medical service.  The parties dispute no fact.   The telephone log confirms that between December 30, 2009, and September 7, 2010, National telephoned Valle at home and at work for a total of eighty-two calls, twenty-two of which occurred in February, 2010.  On seventeen occasions, National called both Valle's home telephone number and work telephone number during the same day.  National never called the same number more than once per day.  Valle never answered.  National never left a voice message. Speaking with National for the first and only time, Valle telephoned National on September 9, 2010, and National stopped calling Valle.  Valle produces no other evidence of potentially harassing conduct.   National never called Valle twice at the same phone number during the same day. National conversed with Valle only once and only when Valle called National, who never again called Valle.   National never threatened Valle; never called Valle at an odd hour; never contacted a friend, employer, co-worker, or family member; and never engaged in other conduct "naturally" resulting, or intending to result, in harassment, oppression, or abuse. Valle never disputed the debt, never demanded cessation of the calls, and never answered the phone.     Judgment for Debt Collector, National.

Valle v. Nat'l Recovery Agency, 2012 U.S. Dist. LEXIS 69564 (M.D. Fla. May 18, 2012).


Tuesday, May 29, 2012

Post Discharge Collection Activities


Many debtors who file for bankruptcy and obtain a discharge still receive collection letters or calls from creditors.  This is a clear violation of the FDCPA.  It is anticipated that most debt collectors will claim as a defense to a FDCPA that the collection activities were a result of a bona fide error in that they had no actual knowledge of the bankruptcy.

Hyman v. Tate,  362 F.3d 965, 968 (7th Cir. 2004) holds that (a) an understanding with creditor-clients that they will not knowingly refer accounts subject to a bankruptcy filing and will notify the debt collector if they afterwards discover the fact together with (b) prompt cessation of collection efforts upon notification of a bankruptcy filing are procedures reasonably adapted to avoid errors of this kind.

In Bacelli v. MFB, Inc., 729 F. Supp. 2d 1328 (M.D. Fla. 2010), the debt collector claimed that it had no actual knowledge of the debtor's bankruptcy which fact was undisputed.   However, the Court denied summary judgment on the bona fide error defense because the debt collector/defendant presented no evidence of an agreement or understanding with the original creditor that it would not to refer accounts in bankruptcy and no evidence that its reliance on the original creditor had proved effective in avoiding errors in the past.   Lastly, the Court stated that the debt collector/defendant presented no evidence whatsoever to show that its reliance on the original creditor about knowledge of the plaintiff's bankruptcy discharge was reasonable.

  




Emotional damages under the FDCPA


Cases in the Middle District of Florida have survived Motions for Summary Judgment on the issue of emotional distress where plaintiff states that as a result of Defendants’ debt collection activities, he has suffered stress related injuries of angina, chest constrictions, shock, loss of appetite, insomnia, anxiety, nervousness, irritability, embarrassment, humiliation, indignation, and pain and suffering.  Crespo v. Brachfeld Law Group, 2011 U.S. Dist. LEXIS 110700 (S.D. Fla. 2011).


Wednesday, May 16, 2012

Can you sue for mistakes in collection letters?

The plaintiff debtor in  Jerman sued a law firm and an attorney for FDCPA violations, committed while they were acting as debt collectors. The FDCPA has a notice provision that requires debt collectors to send written notice to the debtor that the debt will be assumed valid unless the debtor disputes it.  15 U.S.C. § 1692g(a).  The collection attorney’s notice letter in  Jerman stated that the mortgage debt at issue would be assumed valid unless the debtor disputed that debt  in writing
The  Jerman plaintiff debtor contended that the collection attorney violated the FDCPA by imposing a requirement that the debtor dispute the debt  in writing, when the FDCPA required only that the debtor dispute the debt and did not specify that it be in writing.  Observing that authority was split on the issue, the district court ultimately agreed with the plaintiff debtor that this writing requirement in the collection attorney’s notice letter constituted an FDCPA violation. ).  In a later proceeding, however, the district court held that the collection attorney was entitled to the bona fide error defense. 

The Supreme Court ruled that the FDCPA’s bona fide error defense does not encompass mistakes of law or misinterpretations of the requirements of the Act itself.  Instead, the seven-member majority concluded that  § 1692k(c)’s requirement that debt collectors maintain procedures reasonably adapted to avoid any bona fide errors referred only to measures designed to avoid errors like clerical or factual mistakes.

Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. , 130 S. Ct. 1605, 176 L. Ed. 2d 519 (2010).