Indiana Consumer Lawyer Blog

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.

Indiana radio station WIBC FM 93.1 is focusing on identity theft this week on their Morning News Program. I was interviewed this morning for the program and had a great time speaking with Terri and Jake about my experiences assisting victims of identity theft. I appreciate them taking the time to highlight this issue. Unfortunately, I did not have an opportunity to express my opinion that the identity theft victims I come into contact with have trouble recovering from this crime primarily because the credit reporting agencies do not take the dispute process seriously. They don't take it seriously because the dispute process doesn't make them money. But I guess that's for another day...

National Consumer Protection Week is March 2-8, 2008. In honor of this highly publicized week (not), I am going to write today about the importance of being proactive rather than reactive.

Whether the issue is a lawsuit by a debt collector, fraud perpetrated by an auto dealer, credit report errors or any one of a number of other issues, I speak with Indiana consumers all the time who put off addressing the issue for far too long. I'm sure there are many reasons for this. One of the primary ones, I believe, is a feeling of helplessness. But KNOWLEDGE IS POWER and it's NEVER TOO LATE TO BECOME PROACTIVE. Some knowledge costs money, and I understand that, but there is a lot of knowledge out there on the internet on so many consumer issues that is totally free.

For instance, I give free initial consultations. I'm guessing, but I bet only 10-15% of the consumers I speak with become clients. Some I can't help, some I can help with some simple advice, some choose not to hire me and some I can help and they become a client. The point is that if you look hard enough for information, free information, it can be found. Now I know I am really preaching to the choir here, because if you are reading this blog entry chances are you are looking for information on the web on a consumer issue and are being proactive. But we all need to be reminded of how critical it is to take the bull by the horns, so to speak, including myself!

The reason it's so critical is that often the longer you wait the fewer the options that are available. Options are a good thing. So be proactive and keep your options open!

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.

Within the last week, the Associated Press reported that a lady who won a car on the game show "The Price is Right" had filed a lawsuit against the game show, CBS Broadcasting and the dealer who sold her the car. Back in 2004, she won a new 2004 Pontiac GTO Coupe while appearing on the show. She had the car for approximately a year when she took it in for service and learned that it had been wrecked and repaired before it was delivered to her as a "new" car.

This lawsuit has garnered publicity simply because of the connection with "The Price is Right." Before I became a consumer lawyer, I would have read this article and thought what a freaky set of circumstances this was. A car dealer took a car that they knew had been wrecked, repaired it and passed it off to this contest winner, ripping her off for potentially thousands of dollars. Then the contest winner somehow finds out about it and sues. Wow. Sadly, these are not freaky circumstances. It happens every day all over the United States, and as I say that I don't believe I'm exaggerating.

You see, before I became a consumer lawyer I didn't realize how much money is involved in buying and selling cars in the U.S. Or how competitive the market is. Or how greedy dealers can be. Or how people who work in the industry, for whatever reason, get to a place where misleading consumers and taking advantage of them isn't seen as wrong but as a legitimate way to do business.

I receive numerous calls from Indiana consumers every week about all kinds of issues. A majority of those calls, though, are from Indiana consumers who believe they have been ripped off by car dealers. Often, they have. The misrepresentations abound: never been wrecked, one owner - woman driver, warranty, actual mileage and on and on. Plus, my favorite misrepresentation, typically made in a phone call twenty or thirty days after the sale: we couldn't get you financed so you need to bring the car back since there's no deal - and if you keep the car you've stolen it and you're a thief.

I used to be blissfully unaware of these things, but now I enjoy pursuing justice for victims of this kind of conduct. And, hopefully, somewhere along the way, I hope I can help some car dealers understand that, for dealers who make money off of Indiana consumers, The Price is Wrong.

I just read a letter to the editor of a Henderson County, North Carolina newspaper on the dangers of arbitration agreements. Having seen the impact of mandatory arbitration agreements, I couldn't agree more with the writer's comments. Here is a reprint of the letter in its entirety:

Published Friday, September 28, 2007

Protect your right to go to court

To The Editor: Today a local automotive dealership refused to sell me a car because I refused to forfeit my constitutional right to a jury trial. I refused to sign their arbitration agreement.

Consumers, if you have a dispute with the dealership and you have signed this document, you are required to use an arbitration organization of their choice. You relinquish all rights to a trial by jury, all rights to participate in a class action suit and have very limited access to discovery.

I have never participated in a lawsuit and hopefully never will. I support voluntary arbitration, but this is mandatory. Search online for car dealership arbitration agreements. You won't find one positive comment for this practice.

Question the integrity of a dealership requiring this. Ironically, manufacturers once required dealerships to sign these. Dealerships lobbied for a law (H.R. 534/S 1020) preventing it.

Proponents argued "It is unfair for the stronger party in a contract to insist that the weaker party forfeit the right to access the courts as a condition of doing business."

Ask a dealership in advance if they require arbitration agreements. If they do, walk away. Protect your rights.

Susan Holder

Mills River

The newspaper's online edition is found at BlueRidgeNow.com.

Importantly, Ms. Holder doesn't mention one of the main drawbacks of arbitration: it can cost consumers hundreds or thousands of dollars to protect rights that could be vindicated in the court system for a filing fee of $133.

Since most people don't really think about the possibility of having to file a lawsuit at the time they purchase a car, I seriously doubt many consumers will follow Ms. Holder's advice. But that doesn't make it any less wise. If you have any problems down the road, and you signed an arbitration agreement or your purchase order contained one, I can guarantee you will wish you had.

Indiana's new security freeze law goes into effect September 1, 2007. Here's what the Indiana Attorney General's Office says about the new law:

What is a security freeze? A 'security freeze' is a new consumer right provided by Indiana law. Placing a security freeze on your credit reports can block an identity thief from opening a new account or obtaining credit in your name. A security freeze, also known as a credit freeze or a file freeze, keeps new creditors from accessing your credit report without your say so. If you activate a security freeze, an identity thief cannot take out new credit in your name, even if the thief has your Social Security number or other personal information, because creditors cannot access your credit report.

How to Place a Security Freeze

Beginning September 1, 2007, any Indiana resident can request a security freeze free of charge. There is no fee for Indiana residents to place, temporarily lift, remove or request a new password or PIN. To place a freeze, send a letter by certified mail to each of the three credit bureaus:

Equifax Security Freeze
P.O. Box 105788
Atlanta, GA 30348

Experian Security Freeze
P.O. Box 9554
Allen, TX 75013

Trans Union Security Freeze
P.O. Box 6790
Fullerton, CA 92834-6790

For each, you must:

* Provide your full name (including middle initial as well as Jr., Sr., II, III, etc.,) address, Social Security number, and date of birth;
* If you have moved in the past 5 years, supply the addresses where you have lived over the prior 5 years.
* Provide proof of current address such as a current utility bill or phone bill
* Provide a photocopy of a government issued identification card (state driver’s license or ID card, military identification, etc.)

*Click here for sample letters to send to all three credit bureaus. After 1/1/09, you may also place the security freeze by a secure electronic mail connection.

FREQUENTLY ASKED QUESTIONS

How long does it take for a security freeze to be in effect?

After five (5) business days from receiving your letter, the credit reporting agencies listed above will place a freeze on the provision of your credit reports to potential creditors. Within ten (10) business days of receiving your freeze request, the credit reporting agencies will send you a confirmation letter containing a unique PIN (personal identification number) or password. Keep this PIN or password in a safe place.

Can I open new credit accounts if my files are frozen?

If you want to take out a loan, get a new credit card or apply for a job or certain services, you can lift the security freeze for a certain period of time or for a specific party by notifying the credit bureau according to its procedures.

Can I remove a security freeze?

Yes. You can have a security freeze lifted for a specific party, temporary period of time, or permanently. There is no fee for Indiana residents. The steps to do so are as follows:

* Contact the credit reporting agencies above.
* Before 1/1/09, you must contact the credit reporting agencies by mail. After that date, you can contact the agencies by mail, telephone or e-mail;
* You must provide proper identification;
* You must provide your unique PIN or password;
* If lifting temporarily, you must include the party that you wish to release a report to and/or during what time period your credit report will be accessible.

How long does it take for a security freeze to be lifted?

Three (3) business days before 1/1/09 when request is made by mail. After 1/1/09, the consumer reporting agencies must lift the freeze within 15 minutes under reasonable circumstances and if requests are made by telephone or e-mail during normal business hours.

What will a creditor who requests my file see if it is frozen?

A creditor will see a message or a code indicating the file is frozen.

Can a creditor get my credit score if my file is frozen?

No. A creditor who requests your file from one of the three credit bureaus will only get a message or a code indicating that the file is frozen.

Can I order my own credit report if my file is frozen?

Yes.

Can anyone see my credit file if it is frozen?

When you have a security freeze on your credit file, certain entities still have access to it. Your report can still be released to your existing creditors or to collection agencies acting on their own behalf. They can use it to review or collect on your account. Other creditors may also use your information to make offers of credit. Government agencies may also have access in response to a court or administrative order, a subpoena, or a search warrant.

Do I have to freeze my file with all three credit bureaus?

Yes. Different credit issuers may use different credit bureaus. If you want to stop your credit file from being viewed, you must freeze it with Equifax, Experian, and Trans Union.

Will a freeze lower my credit score?

No.

Can an employer do a background check on my credit file?

No. You would have to lift the freeze to allow a background check, just as you would to apply for credit. The process for lifting the freeze is described above.

Does freezing my file mean that I won’t receive pre-approved credit offers?

No. You can stop the pre-approved credit offers by calling 888-5OPTOUT (888-567-8688). Or you can do this online at www.optoutprescreen.com. This will stop most of the offers, the ones that go through the credit bureaus. It’s good for five years or you can make it permanent.

What law requires security freezes?

The Indiana security freeze bill passed as Senate Bill 403. It is effective September 1, 2007.

Can I still get a copy of my credit report?

You will still be able to get a free copy of your credit report annually from each credit bureau by visiting www.annualcreditreport.com.

I am glad Indiana has taken this step. It will help some people. If you know your personal information has been compromised in some way, a freeze should be a good way to prevent identity theft. Unfortunately, I don't think most people are aware of the theft of their personal information prior to the thief using it to obtain credit. The average consumer is therefore left with the dilemma of choosing to leave his credit file vulnerable to identity theft or to freeze it and have to go through the trouble of lifting the freeze every time he wants to apply for credit.

Much more needs to be done...

A couple of months ago, the United States Supreme Court issued what will no doubt become a landmark opinion in the FCRA litigation arena. That case, Safeco Insurance Co. of America v. Burr, clarified for all the courts in the land, including the Seventh Circuit (that had wrongly imposed a higher standard), that punitive damages may be awarded under the FCRA for the reckless disregard of a statutorily-imposed standard of conduct. Many courts had previously said that only intentional or knowing conduct would suffice.

What does this mean? Well, it's HUGE! Quite simply, it means that punitive damages will be much, much easier for consumers to obtain under the FCRA. It means that FCRA defendants will have a much more difficult time obtaining summary judgment on punitive damages claims. It means the value of many FCRA lawsuits just went up astronomically, because now consumers can get these claims before a jury. And when that happens, look out! I think we'll see a slew of large punitive damage verdicts in the next year.

Hopefully, this will make both the furnishers and credit reporting agencies care a little bit more about maintaining standards designed to ensure accurate credit reporting.

By the way, I can't believe it's been a month since my last blog entry! That's way too long. I have just been so incredibly busy that I simply haven't had the time. I'm not sure there's anyone out there who really cares, ha ha, but if there is, then I apologize!

The United States Court of Appeals for the Seventh Circuit decided the case of Heather Gillespie and Angela Cinson v. Equifax Information Services, L.L.C. on May 3, 2007. The case contains some language of which every FCRA/Consumer lawyer in the United States should be aware.

Plaintiffs in this case claimed that Equifax's consumer disclosure was not clear and accurate as required by sec. 1681g(a)(1) of the FCRA because the disclosure does not allow a consumer to determine whether Equifax is properly calculating when a debt must be removed from a consumer's credit report as required by sec. 1681c(a)(4) (seven years for most adverse accounts). The court agreed, finding that the disclosure was accurate but not clear:

We conclude that the consumer reporting agency must do more than simply make an accurate disclosure of the information in the consumer's credit file. The disclosure must be made in a manner sufficient to allow the consumer to compare the disclosed information from the credit file against the consumer's personal information in order to allow the consumer to determine the accuracy of the information set forth in her credit file. In writing sec. 1681g(a)(1), Congress requires disclosure that is both "clearly and accurately" made. An accurate disclosure of unclear information defeats the consumer's ability to review the credit file, eliminating a consumer protection procedure established by Congress under the FCRA.

Now that's good stuff! That is the kind of language that allows consumer lawyers to keep the credit reporting agencies honest, which in turn benefits all consumers.

Justice prevails!

You may recall that I wrote recently about Judge Roy L. Pearson - the guy who was suing a dry cleaner's for losing his pants for a couple days and was asking for 67 million dollars. Well, he lost. "Judge Bartnoff has spoken loudly in suggesting that, while consumers should be protected, abusive lawsuits like this will not be tolerated," said the lawyer for the owners of the dry cleaners.

Will this repair all the damage done by Mr. Pearson in terms of the public's confidence in our legal system? I doubt it. But it definitely makes me feel better, knowing that I can explain to people that the system, in the end, worked.

In the course of doing some research this week, I discovered that Indiana is one of only three states that does not require automobile dealer's to post a bond of some kind. See, look for yourself by clicking here.

Being in the minority isn't always a bad thing; sometimes Indiana is progressive. But I don't think that's what is going on here.

A bond, from my perspective, is a guarantee that my client who wins a lawsuit against the dealership will be able to collect at least some, if not all, of the judgment. Indiana consumers, unfortunately, have been left unprotected in this area. Unfortunately, I'm not sure why. Has it simply slipped through the cracks? Has the dealers' lobby been successful in stopping the legislation? I don't know.

It's the corner car lots, the ones that may not be able to pay your judgment, where having a bond could matter.

I think I'm going to try to find out why Indiana auto consumers are less protected than consumers in almost every other state.

I have been really, really busy lately... and it's been a while since I wrote a blog entry. I have a couple topics that I hope to write on soon, but today I thought I'd put my 13 year-old son to work and perhaps obtain an amusing blog entry at the same time. His assignment? Answer the question: What does a consumer lawyer do?

Hello, I really have no clue what a consumer lawyer is even though I come to my dad's office sometimes and try to help. He told me to write down what a consumer lawyer was on a pad of paper and wouldn't give me any clues. I tried to get him to tell me what things were but he wouldn't say anything so I just went for it not knowing very much at all. Here it is.

A consumer lawyer is a lawyer that helps people if they were scammed buying or selling something. My dad helps people get the money that was cheated from them earlier. He helps to get scamming people in trouble like they should be. He sort of helps people with financial stuff, sometimes to get money for them that they should have. A consumer lawyer can sometimes be a big financial aid if you were scammed big money or you could save big money on something you didn't know you could. I pretty much don't know what a consumer lawyer is but I think I'm on the right track, maybe.

So there it is. I bet you had no idea I could do all that. Indiana Consumer Law Group/The Law Office of Robert E. Duff