Debt Buyers and Debt Collection

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:

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.

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Sued in Marion County Small Claims Court?

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: 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.

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Medical Debt Collection in Indiana

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.

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Indiana Consumer Sues Attorney Christian Meyer


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.

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Indiana Consumer Sues American Financial Credit Services, Inc. and Bleecker, Brodey & Andrews


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.

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Indiana Consumer Sues Portfolio Recovery Associates and Morgan & Pottinger


Indiana Consumer Law Group/The Law Office of Robert E. Duff announces the filing of a lawsuit against debt collector Portfolio Recovery Associates, LLC and the law firm of Morgan & Pottinger, P.S.C. The lawsuit, which has been filed in the United States District Court for the Southern District of Indiana, alleges that the defendants misrepresented the origin of the debt they were attempting to collect and thereby violated the Fair Debt Collection Practices Act (FDCPA). The FDCPA lawsuit arises out of another lawsuit where Portfolio Recovery Associates and Morgan & Pottinger filed suit against the consumer plaintiff in Indiana state court alleging that she owed a credit card debt. That lawsuit remains pending at this time. The plaintiff in the FDCPA lawsuit is seeking an award of actual damages, statutory damages, costs and attorney fees.

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Seventh Circuit Rules Calling Son About Mother's Debt Not Unfair

The United States Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a pro se plaintiff's complaint in the case of Todd v. Collecto, Inc., 2013 WL 5452071. Michael Todd alleged that Collecto had violated the FDCPA by calling him and discussing his mother's debt with him. Specifically, Mr. Todd first alleged that this violated Section 1692b of the FDCPA. Section 1692b generally prohibits a debt collector from communicating with anyone but the debtor about a debt, except to obtain contact information. (Note: This means a debt collector cannot legally call friends, relatives or co-workers and discuss the debt, and cannot call them at all if the debt collector knows how to contact the debtor.). The Court found that Mr. Todd's complaint did not state a claim under this section because, under the terms of the section, only the debtor (his mother) could sue to enforce it.

Mr. Todd also alleged that Collecto's conduct was unfair and unconscionable under Section 1692f. This section generally prohibits a debt collector from engaging in unfair and unconscionable conduct in the course of collecting a debt. The Court ruled that the allegations of the complaint did not state a claim under this section. Important to the Court's ruling was that there was only one conversation, there was no request for payment and no express or implied threat of repercussions for Mr. Todd or his mother.

The takeaway from this case is that drafting the complaint is very important in an FDCPA lawsuit, just as it is in any case. Reading between the lines, it appears to me that, while no explicit request for payment was made, one of the reasons the Collecto representative engaged in this conversation with Mr. Todd was to get him to pay the debt on his mother's behalf. An explicit request for payment need not be made for the call to be an attempt to collect a debt. Had Mr. Todd alleged that the phone call to him was an attempt to collect a debt from him, that would make him an alleged debtor under the FDCPA and would provide him with considerably more protections under the Act. If Mr. Todd could have truthfully make this allegation, I believe his claim would have survived the defendant's motion to dismiss.

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Indiana Consumers Sue Deca Financial Services, LLC


Indiana Consumer Law Group/The Law Office of Robert E. Duff announces the filing of a lawsuit against Deca Financial Services, LLC, a debt collector based in Fishers, Indiana. The lawsuit, which has been filed in the United States District Court in the Southern District of Indiana, alleges that Deca Financial lied about when and whether a lawsuit had been filed, sued the wrong person, misrepresented the amount of the debt that was owed, attempted to collect certain amounts that were not owed and filed and maintained a lawsuit despite knowing that the debt had been paid, all in violation of the Fair Debt Collection Practices Act. The lawsuit seeks an award of actual damages, statutory damages, costs and attorney fees.

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DSG Services Group Inc.

DSG Services Group Inc. is a debt collector operating out of Chicago, Illinois. The Indiana Consumer Law Group/The Law Office of Robert E. Duff is preparing to file a Fair Debt Collection Practices Act (FDCPA) lawsuit against DSG Services Group Inc. for sending our client a letter which we believe violates the FDCPA. The FDCPA requires that, within five days of a debt collector's initial communication with a consumer in connection with the collection of a debt, the debt collector send the consumer a written notice containing certain information, including the amount of the debt and the name of the creditor to whom the debt is owed. The letter from DSG Services Group Inc. does not state the name of the creditor to whom the debt is owed. Click here to view a redacted copy of the letter sent to our client.

If you have received a letter from DSG Services Group Inc. like this one, or a similar one from DSG Services Group Inc. that does not reveal the name of the creditor to whom the debt is owed, please consider contacting us. We may be able to help you, regardless of where you live in the United States. Please note that only the initial written communication from DSG Services Group, Inc. need contain the name of the creditor to whom the debt is owed. There is no requirement under the FDCPA that every follow-up letter from DSG Services Group Inc. attempting to collect a debt contain this information.

Feel free to call our office at 800-817-0461 or complete this short form if you believe we might be of service to you.

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Debt Collector Put An Account On Your Credit Report That Is Not Yours?

Indiana Consumer Law Group/The Law Office of Robert E. Duff occasionally is contacted by a consumer who has just found a debt collection account on their credit report that is not theirs. We can help.

There are many ways these situations can be handled, but in my experience the best way to handle them, as long as you are sure the debt is not yours, is to file an FDCPA lawsuit against the debt collector. It is a violation of the FDCPA for a debt collector to attempt to collect a debt that is not owed. Putting a collection account on your credit report is collection activity, i.e., an attempt to collect a debt, and if the debt is not owed the debt collector has violated the FDCPA.

We represent the consumer in filing an FDCPA lawsuit against the collection agency. Typically (of course we cannot guarantee a particular result in any particular case, all cases are different), these cases are settled within a month or two when the collection agency agrees to delete the collection account, pay our client $1,000 statutory damages, refund our client's $350 filing fee and pay our client's attorney fees. In exchange, typically, the collection agency requires our client to sign a settlement agreement/release and dismiss the FDCPA lawsuit with prejudice (permanently). Because our client's objective was just to get this erroneous account off their credit report, the client is pleased with the result.

If you have found a debt collection account on your credit report that you don't owe, please submit this form and we will contact you.

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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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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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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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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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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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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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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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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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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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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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Debt Collection Agency Trying to Collect an Amount You Don't Owe?

In the world of debt collection, as in the world of sports, sometimes the best defense is a good offense. The Fair Debt Collection Practices Act is a powerful consumer protection tool that can be used to stop a debt collector from trying to collect a debt that you don't owe or an amount that you don't owe. Debt collectors usually attempt to collect a debt by putting it on your credit report, calling you, writing you and/or filing a lawsuit against you. The Fair Debt Collection Practices Act says that it is a violation of the Act for a debt collector to attempt to collect a supposed debt that is not owed or an amount that is not owed.

When a debt collector violates the Fair Debt Collection Practices Act, they can be sued in Federal court. The resolution of such a lawsuit often may include an agreement to stop collecting on the supposed debt, zero it out and/or delete any credit reporting of the supposed debt.

If a debt collector is trying to collect a debt from you that you don't owe, or is trying to collect an amount that you don't owe, the Fair Debt Collection Practices Act and our office may be able to help you take care of the debt and remove it from your credit report. Please contact our office for a consultation.

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How to Stop Debt Collector Harassment

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.

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Reliant Capital Solutions

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 ( 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.

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Sued Over Credit Card Debt? Don't Represent Yourself

I want to mention 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 also believe that part of the problem is that the consumer/defendants tried to represent themselves in these cases.

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 these consumers 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.

One of the cases deals with arbitration. It 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 this particular 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 the consumer 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 this 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 this case to its facts. Only time will tell. But what we do know, and what this case 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.

Please think twice about representing yourself in these cases. I realize that sometimes you simply have no choice. However, if you find yourself in the situation, please do not appeal. When you do, you run the very strong risk of creating bad law for everyone.

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Credit Card Legislation Passed by Congress

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.


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Robo Debt Collector

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...

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