Articles Posted in Creditor Harassment and FDCPA

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robocalls
From time to time, our consumer law practice here in Tampa, Fl has had to shift gears to better use our state and federal laws that protect consumers faced with debt – and the inevitable robocalls and erroneous credit reports that come with that.

The current state of robocalls is very similar to the days of emails before spam filters.  With the advent of the internet, businesses don’t need expensive hardware.  Anyone can start a mini call center with software that auto dials and spoofs caller IDs.  Many of the calls appear local and they avoid detection as a debt collector.  Small and large companies both still use predictive dialers capable of making hundreds of thousands of calls daily despite a consumer withdrawing consent to call their cell phone.

Thankfully, over the next year or two, the FCC and phone companies will implement a call certification protocol where the phone carrier can verify the caller is legitimately using the number — and Caller IDs may once again mean something!

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consumer-protectionMost of our debt collection laws in Florida apply only for consumer debt, not business debt.  Sometimes the answer is not quite clear as to what type of debt is involved.  What if for instance you operate a business and took out a loan, but signed a personal guarantee.  Sometimes, that personal guarantee will have language referring to the debt being for personal, family or household use.  That would likely make the guarantee a consumer debt.

By the way, that terminology comes from the Florida Consumer Collection Practices Act (“FCCPA”), Fla. Stat. Section 559.55-559.77 which defines a consumer debt as a debt incurred for “personal, family or household use.”

What happens if you buy a house, live in it for years, but then ultimately end up moving and renting it out?  Or you rent out a room while you are living there?  Commericial or consumer debt?

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How much is too much?  Unfortunately, the Fair Debt Collection Practices Act and its Florida counterpart do not specify a particular number of calls per day that a creditor can make when trying to collect a debt.

An older Florida case is somewhat illustrative in finding the answer.  In Story v. J.M. Fields, Inc., 343 So. 2d 675, 677 (Fla. 1st DCA 1977), the Court looked at what conduct was considered harassing, such as:  a) the frequency of the creditor’s calls; b) the number of calls; c) the time of day when calls were received (whether during normal business hours); and d) whether the purpose of the calls was appropriate, such as calling to i) remind the debtor of the debt; ii) determine the reasons for non-payment; iii) discuss a plan for making payments.

My rule of thumb that I like to use is if a creditor calls in the morning and talks with you, and then calls again the same day, that only works if you said something like I may get paid at lunchtime and might have some money for you.  Otherwise, I doubt that anything changed that day and there was no reasonable reason for a second call the same day other than to harass you.

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aribtration
It’s simple.  If you are wronged, you should be able to pick the forum to go after the lender, bank, student loan company, credit card company, car rental company, credit bureau, you name it — and that forum should include the local courthouse and not just arbitration.  The CFPB recently ruled that mandatory arbitration clauses in the fine print of your contract is wrong.  Now Congress wants to repeal that rule.

Call Your Senators; Tell Them NOT to Take Away Your Day in Court Against Big Banks.

For too long, Wall Street lawyers and lobbyists have used a secret tactic, fine print contracts, to take away Americans’ constitutional right to go to court. After more than five years of studying and working on the problem, the Consumer Financial Protection Bureau issued a rule to restore our right to join together and hold big banks and lenders accountable in court for unlawful behavior that rips us off and puts the American economy at risk. When financial bad actors are not held responsible for their bad behavior, disasters like the Equifax data breach and Wells Fargo fake-account scandal occur.

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stop-debt-harassmentThere are limits as to when a student loan servicer can contact someone other than the borrower.  They cannot call the borrower’s place of employment if the borrower asks them not to.  They cannot robocall the borrower’s cell phone when the borrower asks them not to.  They cannot discuss the debt with a third party.  They cannot contact the debtor when the debtor has retained legal counsel.  These are all very clear rules proscribed by the Fair Debt Collection Practices Act (“FDCPA”) and its Florida counterpart, the Florida Consumer Collection Practices Act (“FCCPA”) or the Telephone Consumer Protection Act (“TCPA”).

One quirk that I’d like to see how widespread it is, involves student loan servicer contacts with the debtor’s family members after the debtor has retained counsel.  In this particular instance, the contact involves asking for contact info for the debtor as well as their employment info.  At that time, the student loan servicer knows how to reach the debtor.  They know all contact regarding the debt is to go through legal counsel.  So why contact a reference or family member pretending they don’t know how to reach the debtor.  And ask for employment information from this relative.

There are two sub-sections of the FCCPA in play on this question:

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do-not-call
Florida, Georgia and Alabama consumers need not worry about a recent case out of the Second Circuit, Reyes v. Lincoln Automotive Financial Services, (2nd Cir. June 22, 2017) that held today that if the contract allows for robocalls, you can never revoke consent to call under the Telephone Consumer Protection Act (“TCPA”).  The 2nd Circuit recognizes that this may be an abuse, but determined that this was ultimately a problem for Congress to fix, not the Court.  It distinguished a 2015 FCC revocation order by asserting that the FCC order just references common law principals of revocation, as opposed to contractual terms previously agreed upon by the parties.

Fortunately, our clients need not worry since in Florida, our Eleventh Circuit takes a more expansive view on revocation that protects consumers against harassing robocalls when they elect to revoke any prior consent.

The Third, Sixth and Eleventh all have favorable decisions on this issue:

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cell-phone-hand
For anyone who reached out to file a comment with the FCC as we requested, we thank you.  The FCC received over 10,000 comments filed by consumers opposing ringless voicemails, plus actions were filed against this change in the law by the Attorney Generals in NY, MA and Kentucky.

A change to the TCPA (Telephone Consumer Protection Act) to exclude ringless voicemails would give free rein to debt collectors and creditors to relentlessly invade every consumer’s privacy, and deluge their private voicemail with unlimited, harassing messages.  Consumers could easily check their phone and have hundreds of voice messages at the end of a workday.

Fortunately, the news media has picked up on this story as well and is helping to get the word out for people to oppose this change to the TCPA.

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Were you aware that when you tell a bill collector (including a student loan collector) to stop calling your cell phone, they must do so immediately?  Well usually.  It depends upon the type of telephone system the collector is using.  If they are manually dialing the phone, then they can continue to call you.  The reason is simple:  there is a human being on the other side making a conscious decision to call you at a certain time and date seeking payment.

But what if it is a machine calling you?  The Telephone Consumer Protection Act (TCPA) states that calls using an auto dialer or an ATDS must stop if you ask them to stop.  The reason is clear here as well:  a machine is capable of calling hundreds of thousands of people incessantly following a pre-determined script or campaign.  It often seems that nothing can stop it.  So a law was enacted to help protect people from a barrage of calls and save valuable minutes on their cell phone plans.  I had a client just last week tell us that when she spoke with someone asking the calls to stop, she was told she was on an autodialer and the calls couldn’t be stopped.  Really.  Well that statement certainly made it into a Complaint we prepared for filing.

In the last couple years, the industry has attempted to change its equipment to get around the TCPA.  They say that this equipment is TCPA compliant.  The equipment uses some parts human and some parts machinery.  So how much human intervention is enough to allow for the calls to continue?   The industry has taken to using entire systems that as a whole appear to be an ATDS, but each component standing on its own may not independently be an ATDS.  What capacity must the equipment have in order to fall under the TCPA’s protections? The answer I’m afraid is less than certain.

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breaking bad
Useful information can be obtained from the Consent Orders relating to improper debt collection activities obtained by the Consumer Financial Protection Bureau.  Recent orders applicable to Fred Hanna, Encore Capital Group, Inc., Midland Funding, LLC, Midland Credit Management, Inc., Asset Acceptance Capital Corp., PRA, LLC, Porfolio Recovery Associates, Chase Bankcard Services, Santander Bank, N.A., Solomon & Solomon P.C., Westlake and Wilshire etc. can be found here on the CFPB site. (searchable filters).

Debt collectors are not permitted to provide false or deceptive information to you in their attempts to collect a debt.  This may include the things they can do to you if you do not pay (such as take your home, sue you etc.).  This may include who they are affiliated with.  We are evaluating a case right now where the debt collector is private company.  But they’ve told my client that they are the Department of Education.  This is contrary to their website which we noted states no affiliation with the DOE.  Basically, our marching orders are if what they say is not the whole truth and nothing but the truth, they run the risk of violating the law.  This means if they try to explain your options, but leave perhaps the best one out – this would be a violation of the FDCPA, FCCPA and perhaps even unlicensed practice of law.  All these consumer law violations give us excellent leverage to negotiate lower balances, better payment plans and sometimes even a write off of the entire debt.

This applies to all consumer debt.  Auto finance, second mortgages, credit cards, signature loans and best of all student loan debt.  When we are hired to settle any kind of debt we first take the time to educate our client on their consumer rights, what kinds of behavior can lead to violations and we have them document any phone calls they are receiving.  Then we use all this to settle the debt.

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expiredIf a creditor waits too long to sue, the creditor can be barred from ever bringing suit.  The purpose of having a statute of limitations is so that lawsuits are brought when the matter is still fresh:  before documents are destroyed and memories fade.  If they can no longer bring a lawsuit, then there is no way to legally enforce the debt.  Each state has their own laws as to how long the statute of limitations is and it varies tremendously by state and also by the type of action.  In Florida, the statute lasts five years for a written contract and four years for a credit card account.  While this seems simple, it is often amazingly difficult for a lay person to analyze because a contract may provide that a different state law applies, even a state that neither party has anything to do with.  The answer may also vary depending upon whether it is a procedural or substantive question of law or how complete the writing was.  The Florida Statute of Limitations on this is contained in Section 95.11:

Actions other than for recovery of real property shall be commenced as follows:

(2) Within five years.–

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