The StopCollector Case Files: Rogers vs. Capital One

Over the past few days, we’ve discussed a class action lawsuit being brought by Lemberg & Associates against Capital One Services, NCO Financial Systems, and Capital One Bank. The law firm is also bringing a class action lawsuit against Capital One Services, United Recovery Systems, and Capital One Bank for sending similar letters that are in violation of the federal Fair Debt Collection Practices Act (FDCPA). Like Mr. Wood, Henry Rogers received a letter that he thought was from his creditor, Capital One Bank. Yet calls to the toll-free number were redirected to United Recovery Systems, which is a misleading debt collection practice. In addition, the letter fails to mention that Mr. Rogers has the right to dispute or obtain verification of the debt, which is also a violation of the FDCPA. Similarly, the letter doesn’t clearly state that it’s from a debt collector. Instead, that information is buried on the back of the letter.

The letter was a mass-mailed form letter that offered an annual percentage rate (APR) of 0% if Mr. Rogers agreed to a payment plan, but threatened that his APR would “return to 19.90%” on the entire debt if that agreement was not honored.

If you live in Connecticut and received a letter similar to the one Mr. Rogers received, and would like to join the group of consumers intent on holding Capital One Services, United Recovery Systems, and Capital One Bank accountable for their actions, complete the form here or call 1-888-384-3576.

The StopCollector Files: Class Action in Woods v. Capital One

Yesterday we gave you an overview of the ways in which Gareth Wood was victimized by Capital One Services and NCO Financial Systems on behalf of Capital One Bank. Essentially, when they sent Mr. Wood a “Pre-Legal Notice,” these debt collectors violated the Fair Debt Collection Practices Act (FDCPA) in a number of ways.

Lemberg & Associates is in the process putting together a class action lawsuit for these violations. Why a class action suit? Because it appears as though the letter Mr. Wood received was a form letter. This form letter is likely to have been mass-mailed to thousands of consumers whose accounts are past due. When a situation like this arises, it’s impractical to expect every single consumer to hire a fair debt attorney and individually obtain justice. Class actions are made available to help consumers get relief when a company injures many people in the same manner.

If you live in New York and received a letter similar to the one Mr. Wood received, and would like to join the group of consumers intent on holding Capital One Services, NCO Financial Systems, and Capital One Bank accountable for their actions, complete the form here or call 1-888-384-3576.

The StopCollector Case Files: Part II

Yesterday, we gave you an overview of Wood v. Capital One. Lemberg & Associates is charging that the letter Mr. Wood received is deceptive and misleading, and therefore violates the federal Fair Debt Collection Practices Act (FDCPA). The FDCPA says that a debt collector can’t falsely represent the character, amount, or legal status of any debt. In other words, declaring that the letter was a “Pre-Legal Notice,” without actually ever intending to take Mr. Wood to court, is a violation. The FDCPA also says that a debt collector can’t use false representation or deceptive means to collect a debt. By making it look as though the letter came from Mr. Wood’s original creditor, Capital One Collections and NCO Collections were acting deceptively.

In addition, the notice didn’t mention Mr. Wood’s right, under the FDCPA, to dispute the debt or to obtain verification of the debt. Plus, the letter didn’t effectively communicate that it was sent by a debt collector (that information was on the back of the letter in fine print) – another FDCPA violation.

Tomorrow, we’ll discuss why Lemberg & Associates is filing a class action lawsuit on behalf of consumers who experienced similar abuses.

The StopCollector Case Files: Wood v. Capital One

justiceLemberg & Associates, which maintains the StopCollector website, works tirelessly to help consumers stand up to rogue debt collection agencies. From time to time, we’ll bring you news about some of the firm’s most prominent cases. Today, we’ll take a look at how Gareth Wood was victimized by Capital One Services and NCO Financial Systems on behalf of Capital One Bank.

Mr. Wood received a “Pre-Legal Notice” letter on Capital One letterhead saying that his account with the creditor Capital One Bank was “seriously delinquent and meets the guidelines for legal action if payment is not made….” The front of the letter also told him he could call a toll free number or visit a website “to see what your options are or to make a payment.” It was signed, “Capital One Services, LLC.”

Mr. Wood understandably thought that the notice was from his creditor, Capital One Bank. In fact, the letter was sent by Capital One Collections and NCO Collections. NCO Collections comes into play because the toll-free number was automatically redirected to NCO Collections.

Tomorrow, we’ll discuss why these debt collectors violated the Fair Debt Collection Practices Act.

An Insider’s Look at Collection Agency Mergers

Collections and Credit Risk recently ran an article written by Experian Vice President Dan Buell that offers an interesting insight into collection agency trends. In the article, the credit bureau executive discusses whether or debt collection agency mergers and acquisitions will see an uptick against the current economic backdrop.

Buell makes a strong case that smaller and mid-size debt collection agencies are feeling the squeeze, and may be gobbled up by larger debt collectors, such as NCO Financial Systems and Alliance One. He discusses a number of other factors affecting mergers and acquisitions, including the potential for increased federal and state regulation, security and compliance issues, and the scarcity of available capital. He anticipates that collection agencies with a strong offshore presence – and therefore lower operating costs – will be well-positioned to buy other debt collection agencies, and notes that companies that buy debt are less attractive takeover targets than agencies that don’t buy debt.

Why It’s Important to Open Debt Collectors’ Mail

Many smaller newspapers routinely report on community issues, and publish police logs, fire logs, and even public court records. In perusing the online edition of the East Oregonian, from Portland, Oregon, we ran across a list of court actions taken on Monday, May 1. Click on the link in the previous sentence and scroll down, looking at the “Suits Filed” and “Judgments.” You’ll see that some of the biggest debt collection agencies are filing small town lawsuits against consumers. For this one day, the big dog third-party debt collectors who filed lawsuits included Midland Funding, NCO, and Asset Acceptance. Those that had their day in court and were granted judgments against consumers included Arrow Financial Services, along with (we assume) original creditors American Express, Capital One, and Discover Bank. The judgments ranged from $1,600 to $11,700, PLUS interest, costs, and attorney fees.

This is just one day in one small city in America. It brought into sharp relief just how relentless debt collectors are. More importantly, we couldn’t help but wonder whether the consumers named in those suits, and who now have judgments against them (which can lead to wage garnishment, among other things), even knew about the lawsuits or showed up in court to defend themselves.

All too often, people either avoid opening the mail when the sender is a debt collection agency. When they do open the mail, they often can’t make heads or tails of the legalese contained in some of the letters. As a result, they don’t know that they have to respond to a lawsuit. When they don’t show up in court, the judge has no option but to assume that the debt is valid and rule in favor of the debt collector.

The takeaway is two-fold. First, even though you want to avoid it, it’s important to open the mail. Second, if you’re being sued by a debt collector, it’s important to contact a fair debt attorney who can represent you. If the debt collector has violated the Fair Debt Collection Practices Act or Fair Credit Reporting Act, the judge may throw out the case. Even if you choose not to get legal advice, definitely show up for your day in court. The judge will listen to your side of the story, and perhaps you can avoid paying an enormous debt that includes the debt collection agency’s attorney fees.

Harassment Not Limited to Those Who Owe Money

As Bakersfield station KGET reported, debt collector harassment can happen to anyone. KGET notes that, for the past two years, a Bakersfield man received up to five calls per day from NCO Financial. The debt collection agency was looking for someone who didn’t live there, but no matter what the man did, the calls from NCO wouldn’t stop. It took the intervention of the TV station’s help line to convince the debt collection agency to remove the man’s number from their books. An attorney weighing on the matter opined that the consumer may be able to sue NCO for harassment under the Fair Debt Collection Practices Act, even though the man was not a debtor.

Sergei Lemberg, Esq., focuses his practice on defending consumer rights in the areas of Fair Debt Collection Law, Consumer Fraud, Auto Warranty and Auto Injury litigation.

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