California Debt Blog

Don't let bill collectors bite

I wish I could claim credit for the creative title, but I am borrowing it from the Dallas Morning News and Pamela Yip. Ms. Yip has a great column on making sure you don't let debt collectors bite, even though they are getting more aggressive.

Her tips include:

1. Don't ignore calls or letters;
2. Make the debt collector prove the debt;
3. If the collector calls on a bill you have already paid, show proof that you paid it;
4. Don't tolerate abuse from debt collectors;
5. Take action if the debt collector breaks the law.

Regular readers of my blog know that I have been advocating this for years. It is nice to see the media get involved. Remember, I offer you a free debt validation letter at this website. Use it, especially if you receive a call from Brachfeld and Associates. Most debt collectors will go away once you follow step 2 of Ms. Yip's advice.

Sample Validation Letter to Debt Collector

I have had a lot of people calling lately asking what to do when a debt collector sends the first letter. By law, you have 30 days to dispute the debt and ask for validation of the debt. You should put your request in writing to the debt collector, preferably by certified mail, return receipt requested. This way you have proof of receipt.

I am providing an updated validation letter to use when you are contacted by a debt collector.

Debt Collector
12345 Difficult Street
Very Difficult, CA 90015

Re: Account Number

Dear Debt Collector:

I am in receipt of your letter of July 1, 2009. Please note that I dispute the above-referenced debt. Therefore, please verify this debt as required by the Fair Debt Collection Practices Act and the Rosenthal Act. 

While this debt is being disputed, you cannot report this debt to the credit reporting agencies. If you have already reported it the credit reporting agencies, please contact the credit reporting agencies, inform them that the debt is disputed, and ask them to delete it from my credit report.

As you know, reporting information that you know to be inaccurate, or failing to report information correctly, is a violation of the Fair Credit Reporting Act and other applicable laws.

Sincerely,

Mr. (or Mrs.) Consumer

Upon receiving this, the debt collector must stop all collection activity until they can validate the debt. Once the debt is validated, they can continue with their collection efforts. But, many debt collectors cannot validate the debt.

More on Erica Brachfeld and Brachfeld and Associates

One concern for attorneys, especially attorney bloggers, is how much you can write about existing cases. Obviously, I cannot list my client names or violate the attorney client privilege. But, I can write about things that happen in cases.

I have a half dozen or so cases with Erica Brachfeld. I called on Friday to her office at Brachfeld and Associates. I asked for her, but alas, she was not in - again. Interestingly, she has never been in  when I have called. But I spoke to a collector.

I asked the collector where my money was from the three sanctions awards I have against them. He said he did not know but would take a message. I asked when I could expect my money. He said "Good luck with collecting from us." Really? Good luck?

Am I the only one who finds it ironic that a debt collector, or in this case, a debt collection attorney, does not pay its own bills? Ms. Brachfeld takes an aggressive approach in trying to collect money from people, whether it is owed or not, but she will not pay court ordered awards.

If you have been sued by Ms. Brachfeld or her firm, Brachfeld and Associates, or even if you have just received a letter from them about a debt, call me. Or, better yet - email me at debt@jonathangstein.com for a free consultation and 1 hour free work if you retain me.

FAQ: Where can I be sued?

I have a credit card debt. The debt collection company is located across the country and told me they are suing me there. Can the debt collector sue me somewhere other than where I live?

A: This question deals with venue. Venue is the legal issue of where a lawsuit can be brought. So, the question is what is the proper venue for a debt collection lawsuit?

Under the Rosenthal Act, or the California Fair Debt Collection Practices Act, proper venue is under Civil Code 1788.15. That section states that a debt collector can sue in the county where the debtor lives at the time of the filing of the lawsuit or in the county where the debt was incurred.

Under the FDCPA, the Fair Debt Collection Practices Act, the debt collector can sue where the debtor lives at the time of the filing of the lawsuit or where the consumer signed the contract. Since most debt collectors do not know where the contract was signed, this only leaves the place where the defendant lives.

This is important because the debt collector may not want to sue you where you live. If they sue you in the wrong county, you have a complaint against the debt collector for violating the FDCPA and the Rosenthal Act.

You should immediately contact an attorney to review the situation if you are sued by a debt collector.

New Survey Results Show Most Consumers Do Not Understand FDCPA

A new KGTV 10News Survey USA Poll shows that most consumers do not know their rights under state and federal debt collection law. The poll showed the following:

• Only 25% of respondents were familiar with the FDCPA;
• 10% of respondents think that consumers have too much protection;
• Over 40% of respondents had been contacted by a debt collector in the past 5 years;
• Almost 90% of respondents said that the debt collector did not inform them of their rights;
• Only a quarter of respondents were treated respectfully by the debt collector;
• Almost half of the people said that they were threatened in some way by the collector;
• More than three quarters of people were contacted by the collector after telling the collector not to call them.

The results are not surprising.Remember, once a collector is told not to call you, they must stop calling you. And if you are threatened, that is a debt collection violation.

Debt collectors, not all of them, but a large number, do not seem to care about the law. The reasons: it is hard for the government to enforce and few individuals want to enforce their rights. They are usually intimidated and pushed into letting the debt collector run roughshod over them.

The important thing is that consumers need to learn their rights under the FDPCA (Fair Debt Collection Practices Act) and the Rosenthal FDCPA, also called the Rosenthal Act.

Debt Collection: Fatal Attraction Style

Talking Points Memo has an interesting article on the alleged fatal attraction style of collection by Auto Financing Network. According to the lawsuit filed by Jennifer Dicks "AFN registered the URL to Dicks' name and created a site titled 'Jennifer Dicks isn't paying for her Cavalier!'"

Now that is bad. But then "that's when the relentless text message campaign of shame began." One text message reads "All you do is lie. It isn't registered to you so call again. I wish you died when you fell off the roof. If ur not married good. He can do soooo much better."

Now these are some nice collection methods. (Please note the sarcasm.) First, text someone. Then set up a website that says she does not pay for her car. Is it amazing that people do not like debt collectors?  

By the way, these are all Rosenthal Act violations and FDCPA violations. 

Zombie Debt: A real life story

I have written before about zombie debt. This is a debt that is not owed but debt collectors try to collect on. Here is a story from an emailer about her zombie debt:

I owed money to a Macy's card that had 2 accounts on it. When the account went in to collection, the two accounts were merged and collected under 1 reference number, and was being collected by NCO Financial Systems Inc.  I settled the debt in July 2008 with NCO and I have a letter from them stating that my account has been settled.

In Nov 2008 a new collection agency, Allied Data Corporation started trying to collect the difference of the balance claimed by the creditor and the settlement amount, to the cent.  I called several times stating the account was not valid, without any response from the collection agency who said over the phone I had not settled the account. I have sent the letter stating the account is settled and the payment receipt via fax to Allied Data Corp. I called to follow up and they said my account was no longer with their office, and I thought that was the end of it.

I recently received another letter dated April 6th offering to settle for 55% of the total balance due from an agency called FMS Inc. I spoke with them on 4/20/09 and they said they will send me some paperwork asking for proof of prior payment and they said I can send the settlement letter.  As of today, I have still not received the paperwork they said they sent last week. 

From me: This is another sad commentary about the debt collection industry. The debt is not owed, but in an effort to generate revenue, the debt is sold and sold and sold and each time this nice emailer must respond to the debt collector wasting her time and effort.

If you are being pursued over a zombie debt, please let me know.

Midland Funding

I admit it. I am amazed at Midland Funding. They file an awful lot of lawsuits. At least, they do in Sacramento County. At my last count, they had filed over 50 lawsuits in Sacramento County alone in March, 2009. They were all filed by one attorney, Erica Brachfeld. For one person's perspective on Ms. Brachfeld, visit Bud Hibbs' website. (For general information, visit Bud's website as well.)

I am starting to get calls on these cases and they are defendable. Ms. Brachfeld has no information other than a piece of paper. She files these lawsuits and hopes, maybe even prays, for default judgments. I am starting to get sanctions awards against her and expect this to continue.

If you have been sued by Ms. Brachfeld in California or by Midland Funding, contact my office for a free consultation on your possible defenses.

UPDATE: If you have been sued by FIA Card Services, the same thing applies to you. This is another outfit for which Ms. Brachfeld is filing a large number of lawsuits on a regular basis.   

Debt Collector Posted on Myspace

Yes, a debt collector posted about someone's debt on Myspace. The collector decided it would be a good idea to post something on the debtor's Myspace page about the debt. This is a violation of the FDCPA. The only thing I can think that would be worse would be if a debt collector tried to friend someone on Facebook while knowing the defendant is represented by an attorney. But a debt collector would never do that, would they?

If you have a Myspace page, or a Facebook account or anything else online, you should monitor it. Debt collectors are trying to get more tech savvy and part of that is communicating via the internet and Web 2.0. You must make sure you are checking all of this to protect your privacy and keep debt collectors in line.   

Death Does Not Stop the Collector

The NY Times has a fascinating story about a debt collection firm in MN that calls the relatives of deceased people asking for money on old debts.

This is horrible. It is an outrage. There is no good reason for the debt collector to call the loved ones of the deceased except one: to make money. This is the worst of the worst. The conduct is just simply despicable.

In California, you are not responsible for the debts of the deceased. The estate for the deceased is responsible. You should not pay money to a debt collector for a debt that is not yours.