Indiana Consumer Lawyer Blog

Is a debt collector calling you all the time, to the point that it is harassing and you just don't want to deal with it anymore? I have a remedy for you, but before I tell you about it I want to point out that I usually recommend to Indiana consumers that they be PROACTIVE in handling their debt. Most of the time, being proactive is the way to go, whether it be by contacting creditors to set up payment plans, contacting a consumer law attorney to defend you against a debt collector (even before the debt collector files a lawsuit against you), hiring a debt payment service to handle the process of paying your debts down or making an appointment with a bankruptcy attorney. The remedy I am about to tell you about is simple, but not very proactive.

The Fair Debt Collection Practices Act, a federal law that regulates debt collectors, states that a debt collector must cease all communication with you if you inform them IN WRITING that you refuse to pay the debt or wish the debt collector to cease further communication with you. The letter to the debt collector can be as simple as: "You contacted me concerning x debt. Please cease all communication with me concerning this debt. Thank you." If you don't owe the debt or all that they say you do, tell them that. I highly recommend that you send this notice by certified mail, return receipt requested. The notice is effective as of the date they sign for it. The debt collector can then only contact you to tell you they aren't going to contact you anymore, to tell you they are going to sue you, or by actually suing you. If the debt collector contacts you by any method and it's not for one of these three reasons, they have violated the Fair Debt Collection Practices Act. You should contact a consumer law attorney.

I should note that sometimes the debt collector will NEVER END UP SUING YOU after you ask them to cease all communication. Let's say just for the sake of total speculation that the odds that a lawsuit will be filed, for every debt in the U.S., is 50/50. There are many reasons why no lawsuit is ever filed, but unfortunately it is not possible to predict your prospects for any particular debt. So you are taking a chance that you will eventually be sued, but if you do not intend to pay the debt collector anyway, I am not sure what you have to lose.

Finally, this method for stopping harassment applies only to legal harassment. If the debt collector is contacting others to try to get you to pay the debt, calls before 8 a.m. or after 9 p.m., is threatening or abusive, threatens action that can't really be taken, misrepresents who they are or lies, you need to contact a consumer law attorney immediately. A consumer law attorney can help you bring this kind of conduct to a halt, and can hold the debt collector accountable for their actions. Perhaps they can even help you stop this from happening to someone else.

Reliant Capital Solutions is a debt collection agency headquartered in the State of Ohio. They use a lot of different telephone numbers, but some of the numbers they use are: 866-547-5413, 866-738-3181, 866-837-5096, 614-452-6097, 614-328-0518, 614-328-0514, 614-452-6101, and 614-452-6093. I'm sure there are many others. I have a client who has filed a lawsuit against Reliant Capital Solutions alleging, among other things, that a debt collector working for Reliant Capital Solutions left voicemail messages stating and implying that he is with the "Attorney General's Office" and that a complaint has been filed against my client. The messages neglect to state that the caller is with Reliant Capital Solutions. It is a violation of the Fair Debt Collection Practices Act to falsely state that a complaint has been filed against a consumer, to fail to disclose that a communication is from a debt collector, to make a telephone call without meaningful disclosure of the caller's identity or to falsely state and/or imply that the caller is with the attorney general's office.

I believe that collectors working for Reliant Capital Solutions often represent themselves as being with or calling on behalf of the attorney general's office and use this illegal tactic to intimidate consumers and collect debt. When caught, they claim it was a mistake because they do actually work for the Ohio Attorney General (but should they Mr. Attorney General???). Apparently they do collect student loan debt that is referred to them by the Ohio Attorney General's Office. However, this does not allow them to state or imply they are with "the Attorney General's Office" and does not allow them to state they are "representing" or "calling on behalf of" "the Attorney General's Office" without disclosing that they work for Reliant Capital Solutions, all of which I believe the collectors are doing.

I believe this not only because of my client's experience, but also because I have uncovered numerous similar complaints to the Better Business Bureau and, ironically, to the Ohio Attorney General's Office of this same practice by Reliant Capital Services. HAS THIS HAPPENED TO YOU ALSO? If it has, please contact me by telephone (800-817-0461) or by e-mail (robert@robertdufflaw.com). You may be able to help my client show that this a regular practice of Reliant Capital Solutions, and I may be able to help you vindicate your rights under the Fair Debt Collection Practices Act.

I want to discuss a couple decisions from the Indiana Court of Appeals that will likely have a profound impact on Indiana consumers for years. The decisions are noteworthy because they are both a significant departure from and/or addition to prior Indiana law and they make it much easier for credit card companies and debt collectors to obtain judgments against Indiana consumers. Do I believe the cases were wrongly decided? Yes I do. But I don't place much of the blame for that with the Indiana Court of Appeals. The Court of Appeals has to decide a case within the confines of the facts and arguments presented to them. I place the blame on the consumer/defendants who tried to represent themselves in these cases.

Blame can be a harsh word. I don't mean to say that these consumers meant to do anything wrong. In fact, I feel for them. I know that sometimes there is simply no money to hire an attorney and no way to come up with the money. I understand that. I also know that it can be difficult to find an attorney who knows how to handle debt defense cases and who won't charge an outrageous fee for doing so. I have clients tell me this often. Nevertheless, the fact remains that we have these two Court of Appeals decisions that are potentially harmful to every Indiana consumer in debt because Kevin Weldon and Diana Meyer decided to defend themselves, lost in the trial court and then made the very unfortunate decision to appeal. And if the Court of Appeals opinions are to be believed, neither did a good job of defending their own interests or the interests of Indiana consumers.

The cases are Weldon v. Asset Acceptance, LLC, 896 N.E.2d 1181 (Ind. Ct. App. 2008) and Meyer v. National City Bank, No. 44A03-0808-CV-391 (March 31, 2009). There is no need to get into the facts of the cases or the legal intracacies. I'll just tell you what they mean for Indiana consumers.

The Weldon case makes it very difficult for Indiana consumers to challenge an arbitration award. First, and this is critically important, the challenge must be filed within three months after the award is "filed or delivered." What "filed or delivered" means apparently will depend on the rules of the entity agreed-upon (allegedly) to conduct the arbitration. In Weldon's case, it was the mailing of the award by U.S. Mail. Proof of receipt of the mailing is not required. This means that, as Weldon alleged in his case, the time to challenge the arbitration award could expire before the consumer has any idea that an arbitration was ever filed! If that happens, under the Weldon decision, the consumer is simply out of luck.

Second, the arbitration award challenge must allege one of the following:
(1) the award was procured by corruption, fraud, or undue means;
(2) there was evident partiality or corruption in the arbitrators, or either of them;
(3) the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

I hope that consumer attorneys are successful in strictly limiting the application of Weldon to its facts. Only time will tell. But what we do know, and what Weldon makes so much more important, is that when you are notified of the initiation of an arbitration proceeding, you cannot sit back and ignore it. YOU HAVE TO FILE AN OBJECTION TO THE ARBITRATION IMMEDIATELY. See MBNA America Bank, N.A. v. Kay, 888 N.E. 2d (Ind. Ct. App. 2008). And what if you never received any notice until you are sued in Indiana state court in a proceeding to confirm the arbitration award? Well, if you received notice of the lawsuit later than three months from when the award was allegedly mailed to you, you are very likely completely out of luck. That simply doesn't seem right to me.

Next time we'll talk about the Meyer case, a potentially even more damaging to blow to Indiana consumers.

It may be too late for many Indiana consumers, but it's still noteworthy. Congress just passed legislation that will shortly be signed by the President that cracks down on some of the abusive practices long used by the credit card industry. Although the law won't go into effect for nine months, the bill will generally bar interest rate increases on existing balances unless a cardholder has failed to make even a minimum payment for 60 days, require 45 days' notice before any interest rate increase, and prohibit increases any time in the first year after an account is activated. The legislation would also require card companies to apply a consumer's monthly payment to the debt with the highest interest rate, or to all debts equally.

It doesn't go far enough, but it's a good first start. And, perhaps more important than the details of the law, is the fact that the tide has turned and the credit card companies know it. Will it result in a restriction of credit? Sure. But I don't think that's a bad thing. I think it is a very good thing.

Credit must be given where credit is due (pun intended). This legislation clearly was spearheaded and made possible by President Obama. "I've been in Washington 20 years," said Ed Mierzwinski, the consumer program director with the U.S. Public Interest Research Group. "For the first 19, we couldn't even get a committee vote on credit card reform despite these practices." I am excited and optimistic about the benefits I hope consumers will reap under the Obama administration.

Unfortunately, as I noted above, it's already too late for many Indiana consumers who have suffered under the credit card industry's abusive practices. There have been a couple recent Indiana Court of Appeals decisions that have made it even worse for Indiana consumers who have been sued over credit card debt. I will discuss those decisions in a future blog post.

Peace!

I received a press release the other day - why, I'm not sure - about a company offering new technology to law firms. Here is how it was described: "Technology Company Offers Voice Recognition Solution with Settlement Overtures to Reduce Operational Burden of Collection Attorneys." Did you get that? If you're like me, you had to read it about four times and still couldn't grasp what they meant. I had to read on, and I'm still not sure I completely understand it, but apparently it is computerized auto-dialer and caller that makes collection calls and, get this, through the voice recognition technology, even makes payment arrangements with the alleged debtors. It "has been designed specifically for law firms that are purchasing debt or working on behalf of clients for collection purposes."

First, did you know that some law firms are actually purchasing debt themselves? That's right. Just like debt collectors like Asset Acceptance, LVNV and others, some law firms now buy old debt for pennies on the dollar and proceed to attempt to collect on it. Being a law firm, it's easy for them to sue people since they don't have to hire an attorney. And they get to keep every penny they collect. What keeps them in check? Supposedly the Fair Debt Collection Practices Act, but that only works if people know their rights and do something about it when they are violated. Also, law firms have to worry about their lawyers' law licenses, which can be revoked for unethical conduct.

I think it just kind of looks bad to judges when a law firm is suing someone on a debt they bought. I've often wondered how often these firms sue under the name of the original creditor (not very often, I hope) or some kind of holding company they use to buy the debt (all the time, I imagine).

Moving on to the technology itself, I'm not sure what I think about it. On the one hand, I can't see the robo collector being nearly as nasty and verbally abusive as some real-people-debt-collectors are. So I guess that would be a good thing. On the other hand, how do you explain to this machine that they have the wrong person? Not that real-people-debt-collectors really listen to the people they call anyway, but it seems to me it would be even more difficult to get this machine to listen to a person's explanation of why they don't owe this debt and to take action to resolve the situation. Hmmmmm. I guess we'll see...

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 do.

If you've been sued by a debt collector 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 (yes, I said it!) 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 in one of these cases. Our office handles most of these cases on a flat-fee/contingency 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, there is an initial flat-fee of one to four thousand dollars. A debt of up to six thousand dollars will usually have a flat fee of one thousand to fifteen hundred dollars. (Remember, though, that the fee is set on a case-by-case basis.)

The contingency part of the fee is based on the outcome or results that we obtain for the client. If the case is ultimately resolved with the client paying 50% or more of the amount demanded in the complaint, we receive nothing more. If the case is resolved with the client paying any amount of money up to 50% percent of the amount demanded in the complaint, we receive an additional amount roughly equal to half the flat fee. If the case is resolved with the client paying nothing, we receive an amount roughly equal to the flat fee or slightly less. Our clients like this fee arrangement because it has a relationship to the amount of the debt at issue, an incentive for a favorable result and because it is predictable. 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 injuries a customer because they neglected maintenance on their bus.

Another reason I like these cases is because they sometimes lead to lawsuits against the debt collector or the attorney for violation of the Fair Debt Collection Practices Act.

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, please give me a call at 800-817-0461 and I would be happy to discuss the possibility with you.

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 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; and
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 recent unpublished Indiana Court of Appeals decision says that an individual can also be served by sending certified mail to their post office box. See Timothy E. Wellington v. Asset Acceptance, LLC, 49A02-0706-CV-466 (February 20, 2008). I suspect this case will be accepted and reversed by the Indiana Supreme Court because it clearly ignores the plain language of the rule, but I guess we'll see.

If you are surprised that leaving a copy of the summons and complaint at someone's house, or, probably more accurately, their last known address, is valid service, you aren't the first. I regularly speak with defaulted consumers who are surprised and angered by this. But it's true. It's right there in the rule.

If you have been unfortunate enough to discover that a default judgment has been taken against you (often, by seeing it on your credit report), all hope is not lost. A default judgment can be set aside, but it is much, much easier if the motion is filed within one year of the judgment. After a year, it can be very difficult and often impossible to set aside a default judgment.

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, especially with older debt, the debt collector will not take the time or expense to either obtain this information or to respond to your letter, 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 Bud Hibbs' website. 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 with Mr. Hibbs, however, when it comes to the content of the dispute letter.

You can see Mr. Hibbs' "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, 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.

Q: I live in Indianapolis, Indiana. I recently received a phone call from a debt collector about a debt on a credit card 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 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. 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 (perhaps you feel a moral obligation?!?!?).

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 The Law Office of Robert E. Duff immediately, because that's a violation of the Fair Debt Collection Practices Act.