Indiana consumers beware. The Consumer Financial Protection Bureau (“CFPB”) recently released its list of the top debt collectors generating complaints for the period of February through April, 2015. Since its inception, the CFPB has received an average of over 7,000 collection-related consumer complaints a month. In fact, debt collection is the number one category of complaints to the CFPB. And now, the CFPB is naming names. Here is the most recent list of the top complaint-receiving debt collectors nationwide (from most to least): Enhanced Recovery Company, LLC, Encore Capital Group, Portfolio Recovery Associates, Inc., Transworld Systems Inc., Convergent Resources, Inc., Allied Interstate LLC, EOS Holdings, Inc., Resurgent Capital Services L.P., Afni, Inc. and Diversified Consultants, Inc.

If you believe one of these companies or any other debt collector has violated the FDCPA, and you want help protecting your rights, submit your potential claim here.

I often receive inquiries from Indiana consumers about statutes of limitation on debt collection. A statute of limitation establishes an affirmative defense for a defendant when a lawsuit has not been filed in a timely manner. That means that a defendant can have a lawsuit dismissed when the lawsuit was filed past the statute of limitation.

For the most part, statutes of limitation range from one year to ten years depending on the claim. The most common statute of limitation in Indiana is two years. Personal injury claims in Indiana are generally barred (subject to dismissal) if they are not filed two years from the date of the injury. But debt collection statutes of limitation based on contracts are longer. Here are some examples:

Medical Debt – 10 years if written contract and 6 years if no written contract Credit Card Debt and other revolving credit – 6 years Contract for Sale of Goods (like the purchase of a car) – 4 years
Generally, the statute of limitation begins to run at the date of first delinquency or last payment made (whichever is later). It is important to note that making a payment to a debt collector can restart the statute of limitation – even if it is about to expire. Debt collectors will sometimes attempt to coax a small payment out of a consumer for just this reason.

It is also important to note that debt collectors are prohibited by the Fair Debt Collection Practices Act from filing lawsuits that are barred by the statute of limitation, threatening to file such a lawsuit or even giving the impression in a letter or telephone call that the debt is legally enforceable! If a debt collector has sued you, threatened to sue you or communicated with you concerning a debt barred by the statute of limitations without advising you the debt cannot be sued upon, or if you have a question about the application of a statute of limitation, you may submit your claim or question here.

Debt collectors and creditors often use what is called an autodialer to make calls to consumers. One of the ways you can tell an autodialer is being used is that when you answer the call you will experience a slight delay before a live person actually comes on the phone. There are several reasons creditors and debt collectors use autodialers, but one of them is that it allows them to pepper a consumer with calls when the consumer isn’t answering. This can be harassing, but you can make them stop.

A debt collector needs what is called “prior express consent” to legally use an autodialer to call your cell phone. Typically, this prior express consent is obtained when you list your cell phone number on the paperwork when you arrange a business or credit transaction. But your consent can easily be revoked or retracted simply by informing the business calling you that you no longer wish to receive phone calls from them. It can be done either orally or in writing. This won’t necessarily stop autodialed calls to a landline, but it SHOULD stop autodialed calls to a cell phone. If it doesn’t, each call thereafter may be a violation of the Telephone Consumer Protection Act (“TCPA”) and could be worth at least $500 PER CALL.

For more information about the TCPA or to submit your potential TCPA claim for review, please visit my website at www.indianaconsumerlawgroup.com.

PRESS RELEASE

Indiana Consumer Law Group/The Law Office of Robert E. Duff announces the filing of a lawsuit against Indiana law firm Thrasher, Buschmann & Voelkel, P.C. arising out of the collection of an assessment by the Huntwick Community Association. The lawsuit, which has been filed in the United States District Court for the Southern District of Indiana, alleges that Thrasher, Buschmann & Voelkel, P.C. sent a collection letter to a resident of the Huntwick subdivision in an attempt to collect dues owed to the Huntwick Community Association, Inc. The letter is alleged to attempt to collect attorney fees that were not owed. The Complaint alleges that this was a violation of the Fair Debt Collection Practices Act (“FDCPA”) because it is a violation of the FDCPA to attempt to collect any amount that is not owed. The consumer/plaintiff in the FDCPA lawsuit is seeking an award of actual damages, statutory damages, costs and attorney fees.

The consumer’s lawsuit highlights one of the most important parts of the FDCPA. In this case, the attorney fees that were added to the debt ($125) were nearly as much as the original debt itself ($144). But the FDCPA prohibits a debt collector from collecting or attempting to collect ANY amount that is not owed. That means that a debt collector violates the FDCPA both by attempting to collect a debt that you don’t owe (because you already paid it, for instance) or by attempting to collect interest in the amount of $1.50 that you don’t owe. Attempting to collect any amount not owed is a violation.

On Thursday, September 18, I attended a field hearing the CFPB held in Indianapolis on auto finance. I also was invited to a private community roundtable meeting with Director Cordray prior to the hearing. I must say that I was extremely encouraged. I believe Director Cordray and the CFPB staff are doing their best to look out for and protect the interests of consumers. There is no doubt they face significant hurdles and opposition. And I’m sure there will be times where we, as consumer advocates, will be disappointed with the actions or inaction of the CFPB. But I left the meeting with Director Cordray and his staff with the belief that the CFPB truly is attempting to do what its name says: protect consumers’ financial interests from unfair business practices. What a breath of fresh air!

The other thing I learned of note is that the CFPB actively works to resolve consumer complaints and THEY WANT CONSUMERS TO FILE COMPLAINTS WITH THEM. That was news to me. In Indiana, the consumers I speak with often file complaints with the Better Business Bureau and the Attorney General’s Office. These entities will take the complaint and then solicit a response from the business, but if the business maintains they did nothing wrong the consumer will generally get a letter saying “we’ve done all we can, to pursue this further you may need to consult an attorney.” But my understanding is that the CFPB will, when it believes the consumer has been treated unfairly, push the business to correct the situation. I haven’t gone through the process personally, nor have I spoken with any consumer who has (as of the time of this writing), but I am anxious to see if it really works like that. If so, this will be a tremendous resource for consumers in Indiana and throughout the United States.

Complaints can be submitted at http://www.consumerfinance.gov/complaint/ or by calling 855-411-2372. They are even set up to take complaints over the telephone in over 175 different languages!

Finally, I want to conclude with a brief word of caution. If you believe you have a significant claim worthy of a lawsuit, I would encourage you to speak with an attorney before taking any action yourself (like filing a CFPB complaint). The attorney can advise you concerning what actions to take and how to take them so that you don’t do anything to compromise a potential claim that you might have.

I just read an article called “Paper Boys – Inside the Dark, Labryinthine, and Extremely Lucrative World of Consumer Debt Collection” by Jake Halpern in the New York Times Magazine. If you have half an hour and are interested in learning about the debt buying/debt collection industry, it is a great read. You can find the article here: http://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html?_r=0

The takeaway for me as an Indiana consumer law attorney is that debt collectors, or collection agencies if you prefer to call them that, cannot be trusted. Mistakes are common when debt is transferred because there is no incentive for the original creditor, debt broker, debt buyer or debt collector who is selling the debt to make sure the information provided is accurate. Most debt sales are “as-is” and the sales contract makes clear to the purchaser that the seller is making no warranty, guarantee or representation that the information being sold is in any way accurate. So the seller has no motivation to make sure it is accurate.

Not only are mistakes made when debt is sold, but sellers have reason to falsify the information provided simply to make money. An example the article touches on is the date of last payment information. If a debt is “re-aged,” in other words the date of (supposed) last payment or first delinquency is made more recent, the debt can become significantly more valuable on the open market because generally more recent debts are easier to collect. The problem is, the date of last payment or first delinquency is the event that starts running of the statute of limitations. So providing a consumer, or even a court, false information about this date could have negative consequences for the consumer.

The point is, representations by debt collectors whether in letters, on the phone or in court documents should be carefully evaluated for accuracy. Because all too often – for various reasons – the representations simply are not true.

Center Township. Decatur Township. Franklin Township. Lawrence Township. Perry Township. Pike Township. Warren Township. Washington Township. Wayne Township. These are the small claims courts that together comprise the Marion County Small Claims Court. For years, anyone who had any dealings with these courts knew what was going on: creditors and debt collectors would file all of their debt collection cases in a single township, regardless of where the consumer who was being sued lived. Court rules permit this “forum shopping.” There were many reasons for it, but the reasons all had to do with providing an advantage to the debt collector plaintiffs and a disadvantage to the consumer defendants. Some of the reasons are detailed in a July 18, 2011 article in the Wall Street Journal titled “In Debt Collecting, Location Matters.” The article can be found here: http://online.wsj.com/news/articles/SB10001424052702303365804576433763597389214. Despite some “reforms” occasioned by the Wall Street Journal article, Indiana law still permits this forum shopping to the detriment of Indiana consumers.

Federal law – namely, the Fair Debt Collection Practices Act, or “FDCPA,” now, however, has put significant restrictions on the ability of debt collectors (unfortunately, the FDCPA does not apply to most original creditors) to file in whatever township small claims court they choose.

Let me explain. The FDCPA has, for a long time, said that it is an unfair collection practice for a debt collector to sue a consumer in any “judicial district” other than where the contract was signed or the consumer lives. In Indiana, “judicial district” is typically a county. So, the FDCPA prohibits a debt collector from suing a consumer in any county other than were the consumer lives or the contract creating the debt was entered into. Using this provision, Indiana consumer Mark Suesz sued debt collector Med-1 Solutions and contended that in Marion County Small Claims Court, “judicial district” meant township small claim court. If this were true, argued Suesz, suing in any township small claims court other than where the consumer lived or entered into the contract would violate the FDCPA. The district court disagreed. The district court thought “judicial district” meant county and therefore a debt collector could pick any small claims court in Marion County and it would not be unfair. Mr. Suesz appealed to the Seventh Circuit Court of Appeals. Initially, a three judge panel of the Seventh Circuit agreed with the district court. Undaunted, Mr. Suesz asked for a rehearing en banc (before all the judges of the Seventh Circuit) and it was granted. On rehearing, the Seventh Circuit ruled on July 2, 2014 that the term “judicial district” under the FDCPA means the “the smallest geographic area that is relevant for determining venue in the court system in which the case is filed.” What that means in practical terms is that, because the small claims court in Marion County is broken down into various townships (unlike all other small claims courts in Indiana), “judicial district” in Marion County Small Claims Court means the township. The citation to this case is Suesz v. Med-1 Solutions, LLC, 2014 WL 2964771 (7th Cir. July 2, 2014).

The big takeaway from the Suesz case and this post is that if you are sued by a debt collector in Marion County Small Claims Court in a township other than where you live or where the debt arose, the debt collector (note: collection attorneys are also bound to follow the FDCPA) has violated the FDCPA. Contact us. We may be able to assist you by filing an FDCPA lawsuit on your behalf and might even be able to help you get rid of the small claims lawsuit and the debt from which it arose.

Medical debt collection in Indiana is a unique kind of debt collection in several ways. One of the things I see in medical debt collection that I don’t see in other types of collection cases is a hospital or surgery center collecting debts not only for itself but also for other service providers like facility-based physicians.

To illustrate, say Ms. Consumer has outpatient surgery at the Acme Surgery Center (“ASC”). Prior to the surgery, ASC has Ms. Consumer sign an agreement to be responsible for medical charges that are not covered by insurance. After the surgery, ASC bills Ms. Consumer’s insurance for all the care provided, including that by ASC itself for the facilities, drugs and nursing care, but also for the doctor performing the surgery (who is with the Hip and Knee Medical Group) and the anesthesiologist (Dr. Jane Doe). Insurance of course does not pay all of the charges and then ASC sends Ms. Consumer a bill – in this case for a deductible amount owed to Dr. Doe. Ms. Consumer begins making payments but apparently not fast enough so ASC refers the account to Collection Attorney. Collection Attorney files a lawsuit on behalf of ASC or Dr. Doe against Ms. Consumer for not only the unpaid medical bills but also attorney fees.

Collection Attorney may have violated the Fair Debt Collection Practices Act (“FDCPA”). Actually, there may be several different violations but the one I want to focus on here has to do with the request for attorney fees. Attorney fees in this situation are generally only available if the agreement between the parties provides for them. Here, the agreement Ms. Consumer signed was with ASC. The agreement provides for the potential recovery of attorney fees, but there is no agreement between Ms. Consumer and Dr. Doe so attorney fees are not recoverable for the collection of a debt owed to Dr. Doe.

The recent case of Deca Financial Services, LLC v. Tina Gray from the Indiana Court Appeals (dated June 20, 2014) addresses this. The court found that attorney fees were not properly awarded where Tina Gray signed an agreement with Dupont Hospital that provided for the recovery of collection attorney fees, but there was no such agreement between Ms. Gray and Emergency Medicine of Indiana, PC. Since the debt collector, Deca, was an assignee of Emergency Medicine, Deca could not recover attorney fees.

PRESS RELEASE

Indiana Consumer Law Group/The Law Office of Robert E. Duff announces the filing of a lawsuit against Indiana attorney W. Christian Meyer. The lawsuit, which has been filed in the United States District Court for the Norther District of Indiana, alleges that Attorney Meyer filed a debt collection lawsuit on behalf of his client, Unity Surgical Center, LLC, against the wife of man who received medical treatment at the Unity Surgical Center. The Complaint alleges that this was a violation of the Fair Debt Collection Practices Act (“FDCPA”) because the wife was not liable for her husband’s debt. The debt collection lawsuit remains pending at this time. The consumer/plaintiff in the FDCPA lawsuit is seeking an award of actual damages, statutory damages, costs and attorney fees.

The consumer’s lawsuit highlights two issues worth noting here. First, attorneys, if they do sufficient debt collection work, are covered by the FDCPA. If they sue the wrong person, as is alleged here, the attorney can be held liable under the FDCPA. Second, a husband or wife is generally NOT liable for the debts of their spouse. There is an ancient doctrine that is an exception to this called the Doctrine of Necessaries. The doctrine is a holdover from the time when women were unable to legally enter into a contract. The doctrine arose to allow women to obtain the necessities of life on their husband’s credit, making the husband liable. Last year, the Indiana Court of Appeals noted, in the case of Hickory Creek at Connersville v. Estate of Combs, 992 N.E.2d 209 (Ind. Ct. App. 2013) that the doctrine continues to survive, albeit now in a gender neutral form. However, the Court of Appeals clarified that a creditor must first obtain a judgment against the contractually-liable spouse and unsuccessfully attempt to collect on that judgment BEFORE making a claim (in other words suing, or otherwise attempting to collect) against the non-contractually-liable spouse.

The takeaway from this is that if a debt collector is attempting to collect a debt from you that was incurred by your husband or wife, in many (if not most) instances that debt collector will be violating the FDCPA.

PRESS RELEASE

Indiana Consumer Law Group/The Law Office of Robert E. Duff announces the filing of a lawsuit against debt collector American Financial Credit Services, Inc. and the law firm of Bleecker, Brodey & Andrews. The lawsuit, which has been filed in the United States District Court for the Southern District of Indiana, alleges that American Financial Credit Services, Inc. attempted to collect a debt without providing validation of the debt as required by the Fair Debt Collection Practices Act (“FDCPA”). The lawsuit also alleges that Bleecker, Brodey & Andrews made material misrepresentations in a state court debt collection lawsuit against the consumer. The debt collection lawsuit remains pending at this time. The consumer/plaintiff in the FDCPA lawsuit is seeking an award of actual damages, statutory damages, costs and attorney fees.