Experian was sued for yet another mixed file case in New York. The plaintiff alleges Experian mixed his credit file with more than one nonrelated person. It sounds like the other individuals have somewhat similar names, but they are clearly different people. This is a familiar story to our attorneys, although we normally see people’s files being mixed with just one other person’s file. If you are experiencing problems with a mixed credit file, contact us, we can help you put an end to the problem.
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This is an interesting article by the Bank of America mortgage whistleblower. Our firm has assisted numerous clients with mortgage servicing and loan modification mishaps caused by Bank of America and other large mortgage servicers.
One of the specialty banking credit bureaus is paying a huge fine to the FTC for alleged violations of the Fair Credit Reporting Act. Hopefully the FTC’s actions will help the consumer victims of inaccurate credit reporting. Many consumers are being barred from opening bank accounts due to information being reported by companies like Certegy. Consumers have the right to dispute inaccurate entries on their Certegy credit reports, and if the disputes are not handled properly, they can sue for damages under the FCRA.
Collection attorneys are attempting to exempt themselves from the Fair Debt Collection Practices Act for engaging in such conduct as filing suit on obviously time barred debts, suing the wrong person, using patently false affidavits signed by “robosigners” who have no basis for swearing to anything, “sewer service” (throwing away a summons and complaint and misrepresenting that it was in fact served) and misrepresenting what is owed in court papers. Courts have held that all of these practices violate the FDCPA, and that some of them exist on a widespread basis. For example, some 100,000 New York judgments were found to have been obtained by “sewer service,” and a major debt buyer settled claims that thousands of false affidavits were filed in collection lawsuits.
The collection attorneys are calling the proposed exemption a “technical fix” to the Fair Debt Collection Practices Act. It is neither “technical” nor a “fix.”
Here is what the collection industry has to say about the measure:
A bill introduced last week in the U.S. House of Representatives would exempt debt collection attorneys from the Fair Debt Collection Practices Act (FDCPA) “when taking certain actions.”
The bill’s supporters say that it is a technical fix that does not erode the consumer protections of the FDCPA.
H.R. 2892 (http://thomas.loc.gov/cgi-bin/bdquery/z?d113:hr2892:) was introduced Wednesday by Rep. Ed Perlmutter (D-Colo.), a member of the House Financial Services Committee. The bill has one co-sponsor so far, Rep. Spencer Bachus (R-Ala.), the Chairman Emeritus of the Financial Services Committee, the third highest-ranking Republican. The bill’s official title, or purpose, is “To amend the Fair Debt Collection Practices Act to preclude lawfirms and licensed attorneys from the definition of a debt collector when taking certain actions.” The bill has been referred to the House Financial Services Committee for further action.
Although the text of the bill is not yet available from the Government Printing Office, the proposal is very similar to a bill introduced in the waning days of the last Congress. That bill proposed to insert an additional exemption to the definition of “debt collector” in the FDCPA as follows:
…The term (debt collector) does not include –
(F) any lawfirm or licensed attorney–
(i) serving, filing, or conveying formal legal pleadings, discovery requests, or other documents pursuant to the applicable rules of civil procedure; or
(ii) communicating in, or at the direction of, a court of law or in depositions or settlement conferences, in connection with a pending legal action to collect a debt on behalf of a client; and…
Lou Freedman, president of the National Association of Retail Collection Attorneys (NARCA), said that it is important to note that consumer protections under the FDCPA will not be harmed by the bill. “All other communications from collection attorneys must still comply with the FDCPA,” he said. “This is a technical amendment to the law.” Freedman is also Chair of the Collections Group at Freedman Anselmo Lindberg, LLC.
The bill attempts to shield attorneys from liability when they are arguing in court on behalf of clients. For example, some states have ambiguous statutes of limitations for certain types of credit (written vs. oral contracts, or different standards for revolving debt). If an attorney argues that the account falls under one definition and the court rules that, in fact, the account is time-barred, that attorney could be liable under the current FDCPA. (From Inside ARM, August 5, 2013)
In fact, the Fair Debt Collection Practices Act has a “good faith error” defense that already protects collection attorneys when they argue legitimately debatable points of law or fact. The only thing this proposal does is give collection attorneys a blank check to engage in improper conduct without fear of civil liability.
Write your Representatives and Senators to urge defeat of this proposal.
Question: What can I do if I am being harassed by a collections agency? A year ago, I got a bill from a hospital. I made a verbal agreement with hospital to pay $200 with no interest which I’ve been doing every single month. The account was transferred to a collector which is harassing me to pay off the balance more quickly. What are my rights and obligations?
Answer: Inform the collector in writing of the agreement and that you do not want any further contact. Use means that provides proof of receipt (fax, certified mail, etc.). If they continue harassing you, file suit under the Fair Debt Collection Practices Act. We would undertake such a case without charge to you, for the statutory attorney’s fees available against the defendant.
Question: Can an online pay loan that I defaulted on press criminal charges like bad checks? A pay loan company is calling my family members and threatening that they are going to press charges against me for issuing a bad check.
- Under no circumstances is nonpayment of a loan criminal.
- In Illinois, the bad check statutes do not apply to a postdated check issued in connection with a loan, or any postdated check, because there is no representation that you have the funds in the account. On the contrary, it is obvious that you would not be borrowing the money if you had it in your account. The bad check statutes also do not apply to ACH authorizations and the like. Finally, they do not apply to checks (postdated or not) issued to pay existing private debts, as you are not getting any money, property or services in exchange for the check.
- Most online lenders are unlicensed. Check with the Illinois Department of Financial and Professional Regulation. Their loans are unenforceable. You may be entitled to substantial statutory damages from them. If you have such a lender, send them a letter stating that you refuse to pay.
- The type of collection conduct you describe is abusive. Report it to law enforcement (Federal Trade Commission, Consumer Financial Protection Bureau, state Attorney General). It is not covered by the Fair Debt Collection Practices Act unless a third party debt collector is involved, or the creditor pretends that a third party debt collector is involved. It may violate state laws relating to defamation and the like.
- The main problem with taking legal action against such lenders is finding them.
Question: Can a financial institution sue me for an account on which I was a cosigner? The institution already obtained a judgment against my father on the same account a year ago.
Answer: Yes, with one exception. There is a requirement that you be notified in writing of the principal debtor’s default on a consumer debt in advance of any collection action:
815 ILCS 505/2S
Formerly cited as IL ST CH 121 1/2 ¶ 262S
505/2S. Cosigners of obligations; reports of adverse information
§ 2S. No person may report adverse information to a consumer reporting agency, provide information to a collection agency or take any collection action regarding a cosigner of an obligation unless prior thereto, such person has notified the cosigner by first class mail that the primary obligor has become delinquent or defaulted on the loan, that the cosigner is responsible for the payment of the obligation and that the cosigner must, within 15 days from the date such notice was sent, either pay the amount due under the obligation or make arrangements for payment of the obligation. In the event that the cosigner pays or makes arrangements to pay the obligation, no adverse information shall be reported regarding the cosigner.
Any person violating this Section commits an unlawful practice within the meaning of this Act and, in addition, is liable in a civil action for actual damages of up to $250 plus reasonable attorney’s fees.
Question: If I paid the amount the pay day loan company told me I owe and then now they say I owe additional $1100, can they put me in jail?
I have several pay day loans outstanding. One loan company said I owe $432 and I need to pay it or they will put me in jail. I paid the $432 and now they say I owe $1100 and I need to pay that today or they can put me in jail. Is this true?
- Failure to repay a loan is not a crime and cannot result in your being put in jail.
- If these are internet lenders, check if they are licensed by the Illinois Department of Financial and Professional Regulation. If the answer is “no,” the loans are not enforceable, and both the making of the loans subjects the lender and anyone attempting to collect them to substantial statutory damages in your favor.
- No legitimate lender or collector will tell you that you will be put in jail if you don’t make a payment today.
- Your account info has been compromised; notify your bank and change it at once if you do not want your account drained.
Question: What can I do regarding erroneous credit reports? Credit bureaus have been issuing erroneous credit reports on me. They confuse my credit history with my brother’s.
Answer: Send a certified letter to each of the 3 credit bureaus stating what the problem is and what entries on your report are not yours. Copy the furnishers of the erroneous information if possible. (There should be addresses for each on the credit report.) The bureaus have 30 days from receipt to contact the furnishers, investigate and act. If they do not clear up the problem, you probably will have to file suit against the bureaus and/or the furnishers.
We would normally take such a case on a contingency/ for the statutory fees.