You should record all collection calls, if it is legal for you to do so (see below for more on this). Here’s why.
First, you must keep a record of any agreements or promises the debt collector makes. Without a recording, any agreements or promises will be difficult, if not impossible, to prove. You also need to protect your legal rights. If a debt collector violates the Fair Debt Collection Practices Act during a call, you need to be able to prove what they said or did to violate the FDCPA.
Class action lawsuits are an extremely important tool, but the case of Seraji v. Capital Management Services is an example of a class action handled very badly. Capital Management Services is a debt collection agency that, according to the complaint, left—potentially—millions of voicemail messages that violated the Fair Debt Collection Practices Act. The messages violated the FDCPA because collectors for Capital Management did not identify the company or disclose that they were debt collectors collecting a debt.
In an effort to resolve federal allegations, debt collector Allied Interstate has agreed to pay a $1.75 million dollar fine. Allied Interstate was accused of collecting on debts that people did not actually owe, contacting third parties, and threatening legal action that it did not intend to take.
Unsurprisingly, this type of behavior is illegal.
The foreclosure mess got messier over a month ago, when GMAC, Bank of America, and others were caught faking (essentially) affidavits supporting their foreclosure lawsuits. The irony of banks acting irresponsibly with their finances was not lost on the media. Of course, robo-signing, as it was soon termed, was already commonplace in another kind of business: debt buyers.
Getting a debt collector to “cease and desist” is easy, thanks to the Fair Debt Collection Practices Act (FDCPA). If you are getting calls or letters regarding a consumer debt (credit card, medical debt, rent, etc.), and you want them to stop, all you have to do is send a letter to the debt collector who is contacting you. This is all the letter needs to say:
Stop contacting me.
Just make sure you include your name, address, and phone number so the debt collector knows who to stop contacting.
If the calls or letters continue after you send this letter, the debt collector may be liable to you for $1,000, plus actual damages, costs of litigation, and attorney fees. If that happens, contact a consumer lawyer right away.
North Star Capital Acquisition, a Minnesota debt buyer, threatened one of my clients, called him repeatedly, and used profanity in several of the phone calls. For example: “You can do anything you f**cking want, but we are going to get this money from you one way or another.”
Shortly after we filed the Fair Debt Collection Practices Act lawsuit, North Star offered to settle for statutory damages, plus attorney fees and costs. Interestingly, North Star offered $500 as a “default” for attorney fees and costs. I find this amusing, since North Star’s law firm, Messerli & Kramer, regularly demands well over $1,000 in attorney fees for collection lawsuits it drafts by the hundreds. (North Star paid our actual fees in the end.)
Here are some of the key allegations from the lawsuit:
This is old-ish news, but I just got wind of it. Debt buyers and prolific lawsuit-filers CACV and Portfolio Recovery Associates, together with debt collection law firm Johnson, Rodenberg & Lauinger, were supporting their lawsuits with affidavits of Martha Kunkle. Apparently, an employee of Washington Mutual Bank (now bankrupt) told others to sign Martha Kunkle’s names to those affidavits.
The problem was that Martha Kunkle died fifteen years ago, in 1995.
The defendants settled for over one million dollars.
This is not the first time Johnson, Rodenberg & Lauinger has appeared here. Last April, a jury awarded a Montana consumer $311,000 for violations of the Fair Debt Collection Practices Act.