I recently attended a settlement conference on an FDCPA case somewhere outside of Chicago.  In this particular jurisdiction, the Judge had the parties split up into two different rooms and went back and forth between the rooms trying to get the parties to reach middle ground regarding the settlement figure.  Our case was what we considered to be a slam dunk.  Not only was my client steadfast in its recollection of the events, we also had recordings to substantiate her claims. 

Believe it or not, the parties were not that far off in their settlement figures; it wasn’t settling for another reason.  My client didn’t necessarily want money; she wanted an apology and for this collection agencies representative to promise they were going to change their ways.  When my client told this to the Judge the Judge, who has a lot of experience handling FDCPA cases, said something I will never forget.  He said, “Mrs. XYZ, you’re not going to get them to change their ways.  I see them getting sued day after day and their ways don’t change.  I guarantee you that I am going to see them again later this week.  There is nothing that will happen in this courtroom today that is going to make them act differently.  As we speak there is a collection agency violating the law”.

I have frequently reflected on this comment since I’ve returned to Chicago and its raised so many questions in my head.  First, how could this be?  How can someone or something constantly violate the law and their lawlessness be reduced to a simple nonchalant recognition from the Judge that its absolutely certainly going to happen again.   If the judges that are hearing these cases recognize that regardless of what takes place in their courtroom the defendant’s actions are not going to change, what difference am I really making? 

This incident, more than any other, has solidified my belief that the FDCPA needs amended.  I mean really; the statute that was supposed to prevent and deter collection agencies from stepping over the line has become a joke to the offenders.  The statute provides for damages up to $1,000.00 and actual damages if they can be proven.  The statute was written in the early seventies and the amount of damages has never been increased.  If the Judges that are hearing these cases can conclude that regardless of what happens the defendant’s behavior isn’t going to change then its pretty obvious we need a new mechanism for deterrence.   If the punishment doesn’t modify their behavior then you need to tailor the punishment to one that is effective.

Also, the thing that ……..oooh sorry, I need to answer my phone; a potential client is calling.  Guess the Judge knew what he was talking about…..

Jeffrey S. Hyslip

As previously mentioned on the FDCPA blog, times are tough for both consumers and Collection Agencies.  Often times Collection Agencies will offer consumers a significantly reduced “settlement” amount, if they are able to remit payment immediately.  This can either be an opportunity for the consumer to satisfy his/her obligation for a reduced amount, or an underhanded ploy used by unethical collectors to get a person to pay.

In order to protect oneself from the latter, ALWAYS obtain the proposed settlement offer in writing from the Collection Agency.  Keep detailed records of your transaction with the Collection Agency.  If everything was done on the up and up, then congratulations, your delinquent debt has been settled.

However, making a payment that you were led to believe was a payment in full does not always end your trials and tribulations with the Collection Agency.

There are two potential issues that could arise.

The first is that the same collection agency could continue to collect on what would have been the remaining balance of the debt.  We have heard stories of Collection Agencies offering a “Settlement Payment for 50% of the balance.”  After receiving the payment, the collection agency then tries to collect the other 50%, claiming that the settlement payment made by the consumer was for only half the debt.

If this occurs, then this collection agency has violated the FDCPA by making misrepresentations in an effort to collect a debt.

The second problem that we have witnessed arises when the Collection Agency offers a settlement for less than the entire debt but is not the owner of the debt and is not authorized by the holder of the debt  to eliminate the remainder of the debt not covered by the “settlement” payment.  After making a payment which the consumer was led to believe was a payment in full, the Collection Agency takes their commission and returns the remainder of the balance to the original creditor; often to have it passed to another Collection Agency, starting the process again.  Again, if this occurs, the first Collection Agency has violated the FDCPA through its misrepresentation.

If you feel that you have been misled into accepting a “settlement” payment by a collection agency, please complete our case review questionnaire at www.fairdebthelpers.com.

Not all Collection Agencies engage in these unfair and misleading practices, and often consumers are able to settle their obligations for less than the total balance owed.  This is a good way to see yourself out of a difficult situation.  Whenever dealing with Collection Agencies Caveat Emptor, buyer beware.

Matthew S.

There has been growing concern over supposed collection agencies that have been calling debtors, typically with regard PayDay Loans or Cash Advance debts that are several years old. These “companies” have titles that are usually a nonsensical string of legal terms, such as ‘Legal Affidavit Processing’ or ‘Litigation Processing Division’. The agents sometimes have thick accents and sound like their phone calls are coming from overseas from outsourced department. These debt collectors often threaten imminent legal action if a payment is not made or if bank account information is not surrendered to them immediately.  Such threats include U.S. Marshals on their way to arrest the debtor or threatening to send the sheriff to arrest the debtor immediately if a payment was not made. In most cases like these that we have encountered, the supposed “company” in question turns out not to be a company at all, but a scam.  Occasionally, this may be an actual debt collector violating the Fair Debt Collection Practices Act, which we may be able to pursue under the FDCPA. If you receive phone calls of a similar nature, with agents demanding payment or bank account information, DO NOT give these companies anything without documentation or proof that you owe the debt. Obtain as much information about them as you can (company name, phone number, address, etc.) Report their number, the address where they want you to send the money and phony company name to the FBI, the FTC, and the BBB. You should also submit a Free Case Review via our homepage www.fairdebthelpers.com in the event that this is a legitimate debt collector, so we can pursue them under the FDCPA.

Jonathan H.

While I realize that I have a lot to discuss regarding collection agency harassment, I am going to take a quasi new direction on the blog.  Starting immediately, I will start publishing some posts written by my current employees.  These posts will give credit to their respective authors at the bottom of the post.  Fear not, I will continue to blog as well.

Jeffrey S. Hyslip