Archive for the ‘How To Beat Collection Agencies’ Category

How to Sue Debt Collectors for Fair Debt Collection Practices Act (FDCPA) Violations

The purpose of this article is to outline the steps needed to sue debt collectors for Fair Debt Collection Practices Act (FDCPA), or violations without an attorney. If you want to get an attorney involved, it is best to wait until you get your case on a court docket. This way the attorney can take your case more seriously, and possibly use the pending trial to force a settlement with the debt collector.

  • Keep a journal and log ALL contact between you and the debt collectors. This journal should contain all phone calls, demand letters, and any other types of communications you have with debt collectors. Also be sure to note the date and time every time they contact you. It is important to be vigilant here. The amount of evidence you have will have a direct impact on your chances of a successful lawsuit or settlement.

  • Try to take a pictures of your Caller ID, so you will have photographic evidence to support your harassment claims. This evidence can be either used in court when you sue, or as leverage to extract a settlement from them.

  • Record all phone communications with debt collectors. Most states require that all parties involved in phone conversation be notified when the phone call is being recorded. Fortunately, most debt collector’s record calls themselves and must notify you that they are recording the phone conversation. This gives you a chance to say ‘Well, I am too.’ They probably will not believe you, but you have fulfilled your notification obligations. Be sure to save all phone recordings for a possible lawsuit or as settlement leverage.

  • Dispute your debt in writing, and send it back to debt collector via certified mail. This should be handled by sending them a Debt Validation Request. Often times, debt collectors (especially junk debt buyers) do not have the requisite information to prove the debt is yours. They cannot continue their collection efforts until they can provide proof. If they continue collection efforts without providing you proof, they are in violation of FDCPA. You can possibly use this to settle for pennies on the dollar, or even get your case thrown out.

  • Take note of ‘dead silence’ when answering your cell phone. Dead silence after you answer your cell phone is a good indicator that an auto dialer is being used to contact you. If a debt collector is using an automated dialer, this is a clear violation of federal law (TCPA or Telephone Consumer Protection Act). It may also be a violation of FDCPA. Either way, it gives you more evidence to use against them.

Be sure to always file a FDCPA violation complaint against the Debt Collector for each and every violation with the Federal Trade Commission. While it is highly doubtful the FTC will follow up with you, filing complaints gives you of paper trail to present when taking legal action against a debt collector.

Additional Resources

Click here to review full text of the Fair Debt Collection Practices Act.

Click here to for information about Debt Validation Letter.

Debtors’ Rights: Dealing with Collection Agencies

The legal team at Northwest Justice project has put together an excellent publication regarding consumers’ rights with respect to dealing with Collection Agencies. While the publication specifically focuses on laws in Washington State, many of the same consumer’s protection are available in other states. If you live outside the state of Washington, we recommend you download this publication and use it as a source of research regarding laws in your own states.

Below are some of the questions this publication covers:

  • What if you do not think you owe the debt?
  • How do I stop the collection agency from contacting me?
  • Unlawful collection practices

Learn how to protect yourself against unlawful collection practices, click here ‘Debtors’ Rights: Dealing with Collection Agencies PDF.

This document is copyrighted by the Northwest Justice Project

What if Debt Collectors Harass Me?

This video is put together by the proud legal professionals at the Northwest Justice Project. The video touches on the legal protection, rights consumers have to prevent debt collector harassment. While this video is primarily produced for residents of Washington State, many of the rights and protections discussed are federal based, and can apply to every state in the country.

The video also links to other debt videos, including:

  • Prevent Debt Collector Harassment
  • Wage Garnishment Protection
  • Pros and Cons to filing for Bankruptcy

See, Debt Collection Defense video below:

How to Answer Debt Validation Letters

If you are currently dealing with debt collectors or trying to clear your credit report, you have probably found a lot of information regarding Debt Validation Letters.

This is a letter that a consumer sends to the debt collector requesting validation of a debt that is on their credit report or that the collection agency is trying to collect.

Most experts advise doing this when you feel that the debt is not valid and you fear that you may be a victim of identity fraud or another system error. In these cases, you want proof that you have a legal responsibility to pay the cited debt.

Furthermore, it is noteworthy that the collection agency has a legal obligation to respond to the debt validation letter only IF it is sent before the 30-day validation period expires. Although you can send a debt validation letter after this 30-day period, the collection agency isn’t legally required to respond and can continue attempts to collect the debt.

Debt Validation Responses

You may or may not receive an answer to this letter. Research shows that debt collection companies respond to around 50% of debt validation letters, probably for the most ‘collectable’ accounts, i.e. accounts they feel are worth the most or they feel are easier to win.

As soon as debt validation has been received by the collection agency, they must cease all collection efforts until they verify and present you with their response. If they fail to respond, this may result in success for you and you can go about requesting that your credit report is cleared.

However, for the 50% of consumers that receive a response, the battle is not yet over. If you find yourself in receipt of a debt validation letter, you need to evaluate the information they have provided alongside your own records. Of course, there are many reasons why you are disputing that this debt is not valid. For example:

  • you have paid the debt;
  • you believe that your identity has been stolen;
  • the amount of the debt is incorrect; or
  • you have never defaulted on a credit card or loan agreement.

Therefore, the information you need in your validation letter depends on the reason you believe it to be invalid. For example, if you believe that you are a victim of identity fraud, you need proof of a signed agreement with your name and personal details on.

Automated Debt Validation

However, you need to be aware that debt collection companies sue in bulk, collect in bulk and validate in bulk. Very little attention is given to each individual account unless absolutely necessary and so you might find yourself with an automated validation letter.

These tend to include statements similar to the following:

Our records indicate that you requested a debt validation on 01/02/2013. According to our records, you owe $XXXXX. Please review the enclosed information and contract from the original creditor and contact our office immediately to discuss payment.

They then may include a blank, recent contract agreement from the original creditor.

This may fool or scare some consumers into believing that this is sufficient verification of the debt. However, what you requested was not a copy of a non-specific contract, but proof connecting you, by name, to that contract. In the case where you have not received what you deem as legitimate validation, you might consider drafting a further request detailing exactly the information you are demanding.

In the letter you may want to request specific information such as exact calculations of the debt amount including interest and fees; copies of contracts and agreements; information from the original creditor; proof that the statute of limitations has not expired; license information of the debt collector.

Unfortunately, the law doesn’t detail exactly what qualifies as ‘validation’ and does not require the company to provide any specific information. However, it is still worth requesting it as it shows that you are going to fight this case and not make it so easy for them. If the case were to go to court, it will also show the judge that legitimate proof of the debt has not been provided.

At this point, the collector may well decide that your case is not as collectable as previously thought and leave the dispute.

Moreover, if you have paid the debt in question and you have receipts, bank account statements or deposit slips to prove it, make copies of all of these and mail them to the collection agency with a covering letter stating that the debt has been paid in full and they have no legal right to pursue collection.

You can also file a credit report dispute with the credit bureau requesting that your credit report be adjusted. Include copies of your communications with the collection agency as well as any proof you have of the debt payment.

Remember that anything you send to the collection agency, from the very first validation notice, you must send by certified mail. This will prove that validation requests, payment proof and anything else has been received by the collection agency and as a result, they cannot claim that they never received communication from you. You would be surprised how often these letters ‘get lost’ in the mail.

Resist Harassment

Debt collection agencies will use any tactics in order to collect debt. Fear and intimidation are age old ploys that continue to work on many consumers. Don’t become one of them. Educate yourself on the laws from the FDCPA which are there to protect you against harassment and be aware of your rights. Remember that if you sent your Debt Validation Notice within the 30-day period, they must not try to collect or even threaten collection until they have provided a response.

Even though this can be a terrifying experience, you can get through it without being trampled on. The Defendant’s Package is there to help every day consumers battle collection agencies and original creditors. It has helped thousands of people so far and it can help you too.

How to Beat a Law Suit from a Junk Debt Buyer

In recent years, local state courts have become increasingly clogged up with cases involving third party debt buyers. These companies are also known as ‘junk debt buyers’ and ‘ghost debt buyers’.

As a consumer, you probably have not done any direct business with them yourself and you may not have even heard about them before. That is because they don’t arrive on the scene until you have financial difficulties and even then, it might be a while until you are acquainted with them.

Long before you received a Summons and Complaint from this junk debt buyer you, the consumer, applied for a credit card with a bank or Credit Card Company. Later, a job loss or other unforeseen circumstances makes it very difficult for you to make payments on your Credit Card balance. You may try to work something out with the Credit Card Company but unfortunately, it does not work out and you cannot continue paying back the debt.

After a few months of unsuccessful attempts at retrieving the debt, the Credit Card Company charges off your account. This means that they write it off and deem it as an uncollectable debt. Although this doesn’t clear you of the debt, it means they have given up trying to collect it from you and they can dismiss it as a tax loss or make a claim under some form of insurance.

The original creditor then may bundle up your debt with thousands of other accounts and sell them onto a debt buyer. Even though the face value of the debt may be high, the accounts are bought for pennies on the dollar. Now, the debt buyer will attempt to sue you for the full debt that you owe plus their own largely inflated fees and interest.

At that point, to the junk debt buyer, you are nothing more than a name, telephone number and dollar figure. In the portfolio they receive, they may not have anything more than that along with some robo-signed documents to ‘support’ their case.

These junk debt buyers will then file a lawsuit against you in an attempt to collect their pay out and currently it is estimated that they are successful in over 90% of their cases. Before you panic and abandon all hope, it is important to note that there is a very good reason why they win over 90% of their cases: it is because over 90% of consumers ignore their lawsuit.

Most of these cases are won by the junk debt buyer because the defendant either doesn’t respond to the Summons and Complaint or further down the line they fail to show up in court. All of those things play very nicely into the hands of the junk debt buyer and means a cheap win for them. In these instances the judge will award a default judgment against you giving the junk debt buyer access to your wages, bank accounts and essentially, your livelihood.

You must respond to the Summons and Complaint and it is essential you attend any pre-court hearings and the trial itself in order to avoid a default judgment. Many consumers have found The Defendant’s Package a huge aid to knowing how to respond to the Summons and Complaint.

As mentioned above, the junk debt buyer may not have much documentation regarding your debt and what they do have may not be valid. This may surprise many consumers but if in over 90% of cases the junk debt buyers have no opposition to their case as the defendant doesn’t even turn up, there appears to be little point in sweating over the legally required documents.

For that reason, it’s essential to check the documents they provide as proof. Try and check that the signatures are authentic and belonging to real people. Some lawyers have suggested searching for the names on the internet to see what comes up.

A robo-signer is someone who signs all kinds of documents without looking at or checking what they are signing. For example, the junk debt buyer needs to hold and present an affidavit which is a statement confirmed by oath saying that the information is accurate, in this case that the defendant owes the amount stated.

You must check to see who has signed the affidavit. Is it someone from the original creditor, someone from the junk debt company or someone else?

To be a valid affidavit, it must be signed by an employee from the original creditor and who was employed there when your account was opened. If not, all the evidence provided by the junk debt buyer is classed as ‘hearsay’. In other words, their so called evidence is nothing more than unfounded, speculative allegations and these cannot hold up in court.

Similarly, the junk debt buyer must prove that they have the right to sue on the debt. To do this they should present the chain of title beginning with the original creditor and terminating with their company. There should be an assignment of debt establishing legal ownership of the account. Once again, verify the signatures and names on the documentation, if they even provide you with it.

Unfortunately, the practices of junk debt buyers are far from ethical and many times are not even legal. You have to be alert and ready to fight back to be in with a chance of success. Research every aspect and step of the case and follow the direction of your local court. Familiarize yourself with the Fair Debt Collection Practices Act (FDCPA) to be able to identify which of the junk debt buyer’s tactics are in fact illegal.

Consumers who have done these things have successfully defeated the likes of LVNV and Midland Funding, some of the nation’s biggest junk debt buyers. You too can beat a lawsuit from a junk debt buyer and it may not even be as hard as you first thought.

For real case examples, tips, templates and more information on how to win your case, check out The Defendant’s Package.

Tricks Debt Collectors Use

It shouldn’t be surprising that Debt Collectors are never depicted well in movies or TV shows. We know that they are not charitable folk who care about your new baby or your four year old who broke his arm. Neither do they lose a moment’s sleep because you have been made redundant or have been hit by a major illness. In fact, they are quite the contrary and will use all of these factors against you in order to try and squeeze you for every penny they can.

So, that being said, it will come as no surprise to you that debt collectors are not going to pursue their dispute in a direct and straightforward manner. These are not honorable people. They will hunt payment for debt like a hawk that cleverly stalks its prey, waiting for the right moment to sneak an attack.

Are you prepared for an attack? It can help to predict some of your predator’s tactics before he attempts his sneak attack. So don’t wave your flag of surrender just yet. Gain an insight into a debt collector’s ploys and tricks and you will have a chance at escaping their snares.

The Not-so-Fine line between Communication and Harassment

It starts with one phone call and before you know it the phone is ringing off the hook with persistent calls from debt collectors. Once they know that this is your telephone number, they will not give up. What are they hoping to achieve? They hope that each phone call, letter, email, fax and SMS erodes a little bit of your resolve. Little by little you lose morale, you become irritated, frustrated and, they hope, eventually so exasperated that you will give in to their demands.

Some debt collectors will try the friendly approach, calling you ‘pal’ and using your first name as if they are a long lost friend trying to do you a favor. Others will berate you, belittle your status, and question everything you stand for. They want you to be so overwhelmed by guilt, intimidation and fear that you will do anything to make them stop and to protect your loved ones.

However, being in debt doesn’t mean that you relinquish all human rights and thankfully there are laws against this kind of harassment. The Fair Debt Collection Practices Act protects consumers from this type of harassment. The FDCPA (15 U.S.C. §§ 1692 to 1692p) obliges that debt collectors make certain disclosures and prohibits the collecting agency from engaging in many kinds of abusive or deceptive behavior.

The collection agency will most certainly be in breach of this law if you have requested, by letter, that they cease all forms of communication, unless in writing, with you or your family, friends or acquaintances.

The Defendant’s Package contains more details regarding how you might include this as one of your affirmative defenses in a credit card lawsuit.

Pursuing Family and Friends

You may wonder why you even need to request that the debt collectors cease communication with your family and friends. This is just another trick of their trade. If the collection agency cannot reach you or get information from you, the agency will not hesitate to pursue your nearest and dearest. Make your friends and family aware that you don’t want to be found and not to give out any information about you.

They may even target your children. If they discover where your child goes to school, they may attempt to extract information such as your address or where you work. It might be a good idea to gently re-emphasize to your children your rules regarding talking to strangers and giving out personal information.

Obtaining Information

With the above points in mind, it would be understandable if you were asking yourself ‘Well, how would they ever find my child’s school or my father’s golf club? I’m not going to give them that information!’ And it’s true – you wouldn’t intentionally supply that information to anyone, let alone debt collection wolves. At the same time, just think about the amount of information you share with your ‘friends’ on social networking sites or in forums. A recent survey showed that around 44% of people admit that there are details of their employer available on the internet. 30% admit to revealing their home address along with any clubs they belong to.

For someone who knows where to look and has reason to, this kind of data is easy to find. Be extremely careful about the information you and your family post online and take action to remove anything that could attract and assist the debt collectors.

Discovery in a Credit Card Lawsuit

If, after all of your attempts to avoid a lawsuit fail and you are indeed served with a summons, collection agencies employ numerous tactics to trick the consumer. During the pre-trial Discovery phase of the lawsuit, each party can request information and evidence from the opposing party. This may include answers to interrogatories, requests for production of documents and requests for admissions and depositions.

When answering Discovery, be extremely careful that you don’t unintentionally incriminate yourself. By using confusing questions and repeating questions in different ways, that’s exactly what the collection agency is hoping for. They may ask something directly and then later disguise the same question in a different format, hoping that this time, you answer differently.

Phrases within the interrogatories such as ‘Please explain’, ‘please give the date’ and ‘please state’ are all expressions to be alert to. They are triggers that could lead to you disclosing incriminating evidence. If you are feeling unsure about how to respond to your Discovery, The Defendant’s Package is full of helpful tips and examples to help you avoid the pitfalls.

These are just a handful of the tricks that debt collection agencies use to get their money. Remember that they are hoping that you will make it easy for them to collect it and unfortunately, all too many people do just that and let them walk in and collect. Do your research and do not make it so easy for them to do that to you.

Defending Yourself Against Collection Agency Lawsuits – Questions to Ask Yourself

When you were served your Summons and Complaint, were you thinking the same things I was? Here are the questions that went through my head when I was served by several collection agencies and an original creditor.

I won three cases in a court of law. I’ve mixed all three cases up. I wanted to give you all an idea of exactly why I chose to fight every single one of them back! And if you feel the same way as I did, you will fight them back as well.

Keep in mind that just because a company says you owe them all this money, they need to prove it. And just because they claim that they are the Assignee of a certain bank that needs to be proved as well, along with many other things.

  • Who is LVNV Funding? This is the first time I have ever heard of this company and debt and you think you can just serve me a Summons and Complaint and claim that I owe you all this money? Prove this in a court of law.

  • (LVNV Funding and Red Rock Lake Financial) The money that you claim on your Complaint is inflated by thousands and thousands of dollars and you have attached no proof what so ever showing how it is possible that I owe all of this money. Prove it to me in a court of law.

  • (LVNV Funding) You have never sent me any letters and you have never called my house in an attempt to collect this alleged debt. Now you think that you can just sue me in court and not attach any documents proving anything? Prove to me in a court of law that I owe you money. (my guess is that you want me to not answer my Summons so you can get your default judgment).

  • (LVNV Funding) I don’t even know who you are and I have never heard of your company before. I don’t see any assignment attached with proof that the original creditor sold you this debt. I don’t remember ever signing a contract with your company and you most certainly have not attached any documented proof that I owe you anything. Prove to me, in a court of law, that you own this debt.

  • (Red Rock Lake Financial) I don’t remember opening an account with this original creditor as you claim I did per your complaint. Show me the original credit card contract that proves I did so. Prove this in a court of law.

  • (Capital One) How did $300.00 turn into $2,500.00? You have stated on the complaint that I owe you over $2,000.00? Prove to me, in a court of law, that I owe every penny that you say I do.

  • (LVNV Funding) You claim on the Complaint that you are the assignee of Providian Bank. Where are the documents that show that the original creditor signed this debt over to your company? Do you think you can sue me without that proof? Prove to me, in a court of law, that you can legally sue me.

  • (Capital One Bank) Your credit card agreement has a copyright date of 2005 on it and yet I allegedly defaulted on this account back in 2002. You are suing me under the terms of that agreement. This agreement’s terms are 3 years later that the 2002 agreement that I allegedly agreed to. Prove to me, in a court of law, that the terms of the 2002 agreement are the same as the terms on the 2005 agreement. That ticked off the lawyer big time. By providing me with a 2005 agreement, he would have to come up with the 2002 agreement to prove that those two agreements were the same. I knew that if they’d had a 2002 card agreement to begin with, they would have filed that with the court and not the 2005 agreement, so I knew I had them right then and there. (I filed a Motion to Strike this agreement and won the entire case).

I could keep going but my entire point is that almost every single complaint filed by a collection agency is flawed. They claim many things but I don’t see any proof to back up the claims so, prove it to me in a court of law. So please understand that just because they are suing you, it does not mean they will win.

Just by answering your Summons, you will make them have to come up with every single document necessary to win in a court of law. Collection agencies don’t have every single document to do this but because they are suing you, they want you to assume that they do. They have thousands and thousands of accounts so do you really think they have all the proper documents, assignments, credit card statements, original contracts etc., to win all of their cases?

If you are being sued by the original creditor, you obviously have work ahead of you but they still can be beaten. Collection agencies don’t have any records of your contracts, statements, payments etc., They have a lot to prove in a court of law.

So take a good look at that Complaint you have just received and ask yourself all of those questions. Now my question to you is: “are you going to defend yourself against this lawsuit now?”

I hope so.

Old Credit Card Debt Lawsuits Can You Get Away With It?

If you have old credit card debt, will it come back to haunt you? Absolutely. There is no doubt about it.

The process is simple for creditors:

You stop making your payments. Then they keep sending you bills tacking on interest and late fees until your bill is amazingly high and that $30.00 payment you first decided not to pay turns into a $300.00 payment now due and owing.

If you couldn’t make the $30.00 payment, you are now in hot water and cannot possibly make the $300.00 payment (mostly interest and late fees) and you decide to throw it in the garbage and wait to see what happens.

The next thing that will happen is that you will get more bills, with more interest and late fees tacked on and endless collection phone calls from the bank. After about six months the banks will give up or will they?

Here is where collection agencies and junk debt buyers come in and take over.

Capital One is notorious for hiring collection agencies to do their dirty work and they do not care if you owe them $50.00 or $500.00 – they will sue you and continue to bad mark your credit reports every month like clockwork. They are only one example of a bank that just does not simply give up and let you get away with not paying them.

Other banks will wait six months and simply write it off and a junk debt buyer buys your account from them for pennies on the dollar.

The junk debt buyer will wait anything from a few months to about the time the statute of limitations run out on that bill to come and sue you. So, if years have gone by and you think you’ve gotten away with it, honestly, it is just a matter of time before the lawsuit arrives.

I don’t know about you but I would rather a junk debt buyer sue me than the original creditor, because the junk debt buyer never has any documents to back up his case and is a money hungry thief.

So do people get away with not paying their credit card bills? If you think they do you, couldn’t be more wrong. It may not be today, but it most likely will be tomorrow that the Sheriff starts knocking at your door and telling you that you’ve been served.

When A Junk Debt Buyer Checks Your Credit Reports

What this usually means, in my opinion, is that they are checking out your assets to see if you are worth suing or not. Your employer is most likely listed within your credit report which lets them know where you are working. That’s scary.

They are checking to see if you own a home, car, and anything else of value. They want to see if you have opened up new credit cards and how you’ve been paying them (timely) etc.,

Most of the time, it would be a lawyer who works for the junk debt buyer who snoops through your credit report.

The bad news is that if you do own a home or car, the chances that you’ll be sued in the next 90 days are pretty much a guarantee. They’ll go after a default judgment and then put a lien on your property.

Basically, when they are snooping through your credit, they are checking out your assets to see if you are worth their time and energy to serve a lawsuit to.

If you have horrible credit, don’t own a home or auto, they’ll most likely move on and/or if you have a good job, probably still sue you and go after wage garnishment if they win.

I had an attorney check my credit in August and I was handed a summons in December.

Debt Collector Threats Jail

Under no circumstances can a collection agency call you up and threaten you with jail or say that they are going to send the FBI after you to scare you so that you pay up.

Believe it or not, that is what some collection agencies will do. They try to scare you into thinking that there is some kind of debtors prison that awaits you if you fail to pay your debt.

That could not be further from the truth. They are using scare tactics so that you pay them and they make a huge commission. That is how they make their living. I cannot say that all collection agencies use scare tactics because they do not. In all honesty, I would never talk with anyone from a collection agency and that is my opinion. I would rather talk with the original creditor and come to an agreement.

If a debt collector is threatening you by saying they are going to take your house, your car or send you to prison, you need to contact an attorney immediately!

Do not believe any debt collectors threats. Do not ever let them scare you. It is against the Fair Debt Collection Practices Act for any debt collector to threaten you and you could file a lawsuit against them and prevail!

If you received a call and were threatened with jail time for debt, contact the Better Business Bureau, an attorney and your attorney general’s office and report them immediately.