November 26, 2012

NCO Financial Systems, Inc.

The biggest debt collector in the U.S., measured by income, is NCO Financial Systems, Inc. In 2010, their parent company, NCO Group, Inc., reported total revenues of $1.6 billion. They don't have a very good reputation either, having been ranked as one of America's Worst Collection Agencies by Personally, I have not found them to be one of the worst I have seen, but the Indiana Consumer Law Group/The Law Office of Robert E. Duff has sued them multiple times for FDCPA violations. I took a look at the electronic docket for the United States District Court for the Southern District of Indiana and found that they have been sued several times a year over the last ten years.

If you have been contacted by NCO Financial Systems, Inc. and believe that they have violated the Fair Debt Collection Practices Act (read about the most common violations here), you can contact our office by submitting this form.

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November 22, 2012

Sallie Mae Allegedly Violates Telephone Consumer Protection Act

Indiana Consumer Law Group/The Law Office of Robert E. Duff has recently filed a lawsuit against Sallie Mae, Inc. in the United States District Court for the Southern District of Indiana alleging that Sallie Mae violated the Telephone Consumer Protection Act ("TCPA"). Our client has alleged that he was a borrower/co-borrower and was obligated on student loan debt to Sallie Mae. Our client alleges in the Complaint that he did not provide Sallie Mae with his cellphone number at any time during the transaction that gave rise to debt or at any other time. Nevertheless, he alleges, Sallie Mae began calling his cellphone numerous times with an autodialer in an attempt to collect the debt, in violation of the TCPA (for more about what constitutes a TCPA violation, click here).

The TCPA provides for an award of damages of up to $500 per call and up to $1500 per call if the violation was knowing or willful. We believe we will be able to show that the calls in this case were knowing and willful because, among other reasons, our client expressly requested that Sallie Mae stop calling his cellphone yet the calls continued.

On February 2, 2010, a class action lawsuit was filed against Sallie Mae alleging that Sallie Mae violated the TCPA by placing collection calls to cellular telephones through the use of an automated dialing system and/or artificial or prerecorded voice without the prior express consent of the class members. That case is captioned Arthur, et al. v. Sallie Mae, Inc., Case No. C10-0198JLR, and was filed in federal court in Washington State. The class, i.e., the people that Sallie Mae allegedly did this to, numbers over 8,000,000. The case was settled on terms that appear to be pretty outrageous (bad for consumers). Despite the fact that a single call can be worth up to $1500, each class member who makes a claim is anticipated to receive $20.00 to $40.00 in cash or credit toward their indebtedness no matter how many calls they actually received. Meanwhile, the attorneys for the class have received an award of $4,830,000.00. Outcomes like this are what give attorneys a bad name.

The settlement was approved by the District Court, but has been appealed. Despite settling the case for over $24,000,000, Sallie Mae has denied that it did anything wrong. Sure.

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November 20, 2012

Advanced Debt Collection, Inc./CSL Community Association, Inc.

Indiana Consumer Law Group/The Law Office of Robert E. Duff has recently filed an FDCPA lawsuit against Advanced Debt Collection, Inc. Advanced Debt Collection, Inc. was collecting a debt that was allegedly originally incurred to CSL Community Association, Inc., a homeowner's association. Advanced Debt Collection, Inc. sent our client a letter a collection letter. To see a copy of the letter click here.

The letter does not identify to whom the debt is allegedly presently owed. The letter states that Advanced Debt Collection, Inc. has been hired by CSL Community Association, Inc. to collect an unpaid balance. If true, this means the debt is owed to CSL Community Association, Inc. However, the letter also states that Advanced Debt Collection, Inc. is now the creditor. These statements cannot both be true.

The FDCPA requires that the initial collection letter to a consumer state "the name of the creditor to whom the debt is owed." The FDCPA also states that a debt collector cannot use a false or misleading representation in connection with the collection of any debt. We believe, and have alleged in the above-referenced lawsuit, that this letter therefore violates the FDCPA.

If you have received an identical or similar letter, please contact the Indiana Consumer Law Group/The Law Office of Robert E. Duff. You may have an FDCPA claim against Advanced Debt Collection, Inc.

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November 19, 2012

Default Judgments in Indiana

The vast majority of judgments obtained by debt collectors are by default. That means the alleged debtor didn't show up to court to contest the case. Unfortunately, I believe that debtors often don't show up to contest a case because they feel that there is no use since the debt was once a legitimate debt. This is a mistake and results, no doubt, in many judgments (and for amounts) that never should have been. But that's an issue for another day.

Sometimes a default judgment is obtained because the alleged debtor never actually became aware of the lawsuit. The Indiana Rules of Trial Procedure outline how an individual defendant is to be served with the Summons and Complaint. Rule 4.1 states that service may be made on a person by:
1. certified mail to their residence, place of business or employment;
2. handing it to them in person;
3. leaving a copy at their house or where they live (followed up by a copy mailed to the same address); or
4. serving their agent as provided by rule, statute or valid agreement.
These are the only ways, almost, that a person can be served with a lawsuit that has been filed in state court in Indiana. I say almost because a 2008 unpublished Indiana Court of Appeals decision says that an individual can also be served by sending certified mail to their post office box.

If service of the summons and complain is accomplished in one of these ways, service is valid even if the defendant never received actual notice of the lawsuit. That may sound unfair, but it is the law.

The good news is that service to an old residence, or a place where the defendant does not live at the time, IS NOT GOOD SERVICE. In fact, the judgment is void and can be set aside. If you just found out that a default judgment was granted against you that you had no idea about, go to the court and check the court file to find out where you were supposedly served. If it was at an old address, which is quite common, we can help you get the judgment set aside.

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November 17, 2012

Telephone Consumer Protection Act

The Telephone Consumer Protection Act, or TCPA for short, is a great consumer protection statute for Indiana consumers. Its application is pretty specific, however. The primary goal of the TCPA is to prevent unauthorized telephone calls to your cell phone made by an autodialer. So, to prevail in a TCPA lawsuit, the consumer must show:

(1) phone calls to a cell phone;
(2) by means of an autodialer;
(3) without the consumer's prior express consent.

Let's briefly discuss these requirements. First, the cell phone requirement is easy. The calls must be placed to a cell phone. The second requirement, that the call be made by an autodialer, isn't that complicated either. Generally, you will know that an autodialer is being used if, when you answer, there is a slight delay between the time you answer and a real person responds to you. This delay is time it takes for the autodialer to notify the operator that a person has answered and for the operator to pick up the phone and begin talking. You can also know that an autodialer is being used if you hear a computerized voice or prerecorded message or a voicemail is left by a computerized voice or prerecorded message.

The third requirement can be a little more tricky. The courts have concluded that if you provided your cell phone number to the original creditor in connection with the debt, that constitutes prior express consent. So the easiest way to know that there is no prior express consent is to know that you did not provide your cell phone number to the original creditor, or anyone else trying to collect the debt if it is not the original creditor calling you. Revocation of that prior express consent may be possible, with written revocation being preferable to oral revocation, but one court has recently held, in a poorly reasoned decision, that the TCPA does not permit such revocation. See Gager v. Dell Financial Services, LLC, 2012 WL 1942079 (M.D.Pa. May 29, 2012) (Robert D. Mariani, District Judge).

The TCPA has some real teeth. A consumer can recover up to $500 per phone call that violates the TCPA, and up to $1500 per phone call if the consumer can show that the TCPA was violated knowingly or willfully. Often when an autodialer is being used, there are a lot of calls. A harrassing number of calls. So you can imagine the total liability can get quite high.

If a creditor or debt collector has called your cell phone with an autodialer without your consent, please contact the Indiana Consumer Law Group/The Law Office of Robert E. Duff at 800-817-0461.

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November 13, 2012

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act, or FDCPA for short, provides very broad protections for consumers. It is a great statute, and today I want to go over some of the most common violations.

If a debt collector attempts to collect a debt from you that you don't owe, the debt collector has violated the FDCPA. Even if the debt collector attempts to collect the wrong amount from you, like charging you a fee that you don't owe or too high an interest rate, it is a violation of the FDCPA.

A debt collector may not harass or abuse a person in connection with the collection of a debt. This can include threats of violence, yelling, cursing and repeated or continuous phone calls to a particular number. It can also include making phone calls without disclosing the caller's identity.

If you write to a debt collector and advise them that you refuse to pay the debt or request that they cease contacting you, the debt collector cannot thereafter contact you in an attempt to collect the debt.

The FDCPA prohibits a debt collector from calling a consumer at their place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such phone calls at work. If a debt collector calls you at work after you have advised them that you are not allowed to receive personal calls at work, the debt collector has violated the FDCPA.

If the debt collector knows you are represented by an attorney and knows or can readily ascertain the attorney's name and address, the debt collector can no longer have any direct communications with the consumer, either by phone or mail.

A debt collector may only contact other persons about your debt in order to obtain contact information for you. In making contact with these people, the debt collector is not permitted to state the reason they are calling and is not permitted to reveal the name of the company that is calling unless this information is specifically requested.

I see this quite a bit. Debt collectors get a little too aggressive and say things like: "we will garnish your wages next week if you don't pay." Wage garnishment cannot happen until there is a judgment, so if the debt collector has not yet sued you and obtained a judgment then they are not going to be able to garnish your wages next week. Other debt collectors will say things like "you will be arrested if you don't pay this debt." That simply isn't true and saying that to a consumer (who may not know better) is a violation of the FDCPA.

Within five days of a debt collector's initial communication with a consumer, the debt collector must advise the consumer in writing of the consumer's opportunity to request validation of the debt. If the consumer requests validation within thirty days of receiving this notice, the debt collector must cease all collection activity until the debt collector has mailed the consumer documentation verifying the debt. Unfortunately, since the courts have not required this so-called verification to be much beyond a letter saying how much the debt is and who the original creditor is, debt collectors typically respond pretty quickly to these validation requests with a letter that contains very little information. Even so, sometimes debt collectors forget to respond to validation requests but continue to attempt to collect the debt. This is a violation of the FDCPA.

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November 12, 2012

Collection Calls

This post is primarily aimed at assisting consumers who are dealing with debt collectors, but it can also be of benefit to consumers dealing with other issues such as automobile dealership fraud or the lemon law. The minute you sense something might be wrong with a consumer transaction or interaction (and it probably won't take long when certain debt collectors call you), immediately go out and equip yourself with the means to record telephone and/or in-person communications. Then surreptitiously record all future communications. In Indiana (note that other states' laws are different, if you are not recording in Indiana please check the law of the state where you intend to record), this is legal as long as one party to the conversation is aware that the communication is being recorded. Do not, and I repeat DO NOT, let the other party know they are being recorded. If you do, they'll be on their best behavior and won't show their true colors.

Recordings like this can be INVALUABLE if you end up having to go to court to protect your rights. They are a great way to hold companies and people accountable for what they say and what they have done. With debt collectors, you just never know when they are going to say something that violates the FDCPA (Fair Debt Collection Practices Act) and you want to be ready when they do.

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November 11, 2012

Debt Collector Lawsuit

If you've been sued by a debt collector or creditor in Indiana, the first thing you probably wondered while reviewing the summons and complaint is: "what am I going to do?" I can't emphasize how important it is at this stage to be proactive and take immediate action. You may give up some of your rights if you don't take action in as little as a week or ten days. For instance, in most small claims courts around the State of Indiana, you lose your right to move the case to a real court if you don't request it within ten days of receiving the small claims notice of claim. (Note: Small claims courts are essentially collection courts since a huge part of their docket is collection cases. They are generally favorable for debt collectors and unfavorable for consumers. I never, ever, ever, ever want to be in a small claims court if I can help it.) And, you have to respond to a summons and complaint within 20 days or risk a default judgment.

Hiring an attorney to defend you in one of these cases unfortunately costs money. But you might be surprised at how affordable you can obtain representation. Our office handles most of these cases on a flat-fee basis. Depending on the size of the debt, our evaluation of the complexity of the issues of the case, the location of the court where the case is pending, and other factors, the flat fee is generally one to five thousand dollars. Our clients like the flat-fee arrangement because they know just how much the representation will cost. When paying by the hour, you never know just how much the representation will cost until is over.

Personally, these are some of my favorite cases to handle. All too often, debt collectors sue the wrong person or sue on a debt that is past the statute of limitations. They don't deserve to win, and I enjoy making sure they don't. Even when they do have the right person and the debt isn't stale, they very seldom have the documentation they should have in order to file a lawsuit against someone. This is because debt collection is all about volume and minimizing expenses. I understand that debt collection is a business, but that doesn't mean you can cut whatever corners you like in search of the almighty dollar. I've seen too many people's lives and well-being injured by greedy debt collectors. I don't think there is much of a difference between a debt collector who sues the wrong person because their practice is to attempt to collect debts without the appropriate documentation and a bus company who injures a customer because they neglected maintenance on their bus.

Another reason I like these cases is because they often lead to lawsuits against the debt collector or the opposing attorney for violation of the Fair Debt Collection Practices Act. Sometimes, I can even recover some or all of the flat-fee you paid me in the first place!

If you would like to consider hiring the Indiana Consumer Law Group/The Law Office of Robert E. Duff to defend you against a debt collector or creditor lawsuit, please give our office a call at 800-817-0461 and we would be happy to discuss the possibility with you.

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November 9, 2012

Called by a Debt Collector

You just received a telephone call from a debt collector. The debt collector was mean and nasty and threatening and you don't know what to do. First, relax.

Then wait. The debt collector has five days (from the initial communication) to send you a letter with this information:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

If the debt collector doesn't send you a letter within five days, or the letter doesn't contain this information, that's a violation of the Fair Debt Collection Practices Act. Contact The Law Office of Robert E. Duff!

When you receive the required letter, and you find it contains all the information it is supposed to, your next step is to dispute the debt. This must be done within 30 days of receipt of the letter. You should ALWAYS dispute the debt. Even if you recognize the debt, even if you know you owe it, even if you feel a moral obligation to pay it, you should still dispute the debt. Disputing the debt doesn't mean that you are saying the debt isn't yours. It is simply requiring the debt collector to provide verification to you that the debt is yours. This is information that the debt collector is required to have by law in order to collect the debt, and so it should be very easy for them to provide it to you. Unfortunately, don't expect to receive much. The courts have found that virtually anything they send you constitutes verification of the debt, such as the original creditor, account number and amount of the debt. Sometimes, though, the debt collector will not provide any verification at all, in which case by law they must cease all debt collection efforts.

What does this dispute letter look like? It's very simple. Click here to see a sample letter.

If you've looked up debt collection issues on the web, you've probably seen It's a great website. It's got a lot of great information on the sometimes ugly industry of debt collection. I visit it occasionally and receive valuable information there. I have to respectfully disagree, however, when it comes to the content of the dispute letter.

You can see the "Cease Communication Letter" here.

It is, as he correctly terms it, a cease communication letter under 15 U.S.C. sec. 1692c, not a dispute letter under 15 U.S.C. sec. 1692g. He says it needs to be sent within 30 days from the debt collector's letter, but as I read the Fair Debt Collection Practices Act ("FDCPA"), I disagree. The dispute letter has to be sent within 30 days, but there is no such requirement for the cease communication letter. The cease communication letter can be sent at any time.

The dispute letter puts additional burdens on a debt collector (and verification is a prerequisite to a lawsuit, whereas the cease communication will not prevent the debt collector from filing a lawsuit), and I think it should be sent first. If the debt collector indeed verifies the debt, then there is a place for the cease communication letter at that time. It may result in the debt collector filing a lawsuit against you, but then again it may not. If a debt collector contacts you after you have sent a cease communication letter, other than to tell you they won't contact you again or to tell you they are going to file a lawsuit against you, then they have violated the FDCPA.

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November 8, 2012

Indiana Statute of Limitations on Credit Card Debt

Q: I live in Indianapolis, Indiana. I recently received a phone call from a debt collector about an old credit card debt that my former spouse and I had a long time ago. We have been divorced for over seven years, and this delinquent credit card debt was his per the divorce decree. Can I be held responsible for this debt?

A: First, it's important to note that if you were a joint owner of the account (which means you both signed for the credit card and were jointly responsible for it) as opposed to simply an authorized user, then the fact that your husband was ordered to pay the debt by the divorce court unfortunately does not release you from legal responsibility for the debt. If your husband doesn't pay, the credit card company can come after you to collect the debt and can report any delinquency or non-payment to the credit reporting agencies to be placed on your record. If you were to pay the debt to avoid this derogatory information on your credit report, your husband would be liable to you in the amount you paid and you could enforce this obligation in the court which ordered the divorce. But as between you and the credit card company, your divorce decree means nothing. However...

In Indiana, the statute of limitations on the collection of credit card debt is six years. The statute of limitations is an affirmative defense to a lawsuit, so what that means is that if the credit card account was delinquent for more than six years at the time the lawsuit against you was filed, your attorney can have the lawsuit dismissed. IT DOES NOT MEAN A DEBT COLLECTOR IS NOT ALLOWED TO TRY TO COLLECT THE DEBT FROM YOU. A debt collector can attempt to collect the debt forever. But since you know any lawsuit they brought against you could be dismissed, the bottom line is that you don't have to pay the debt. And since derogatory information like this can only stay on your credit report for seven years (from the date the account was first delinquent), the debt collector has nothing whatsoever to hold over your head. But as long as the debt collector follows the Fair Debt Collection Practices Act, it can write you and call you and try to convince you to pay the debt.

Providing you don't feel compelled to pay this debt out of the goodness of your heart, I suggest that you send the debt collector a letter advising them to cease contacting you about the debt. If they call or write you again after that, contact Indiana Consumer Law Group/The Law Office of Robert E. Duff immediately, because that's a violation of the Fair Debt Collection Practices Act and we can help.

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