According to an article in the Albuquerque Journal, a woman from Santa Fe, NM, was awarded $1.26 million in a federal lawsuit brought against Target National Bank (a division of the mass merchandiser) and the law firm of Farrell & Sandlin. The circumstances of the case are chilling, and are a consumer’s worst nightmare. Apparently, Target forwarded Lucinda Yazzie’s account to Farrell & Sandlin for collection; the amount owed was about $5,000. Farrell & Sandlin went after Lucinda Yazzie – but they went after a different Lucinda Yazzie. The law firm managed contacted the wrong person, who told them that she’d never had a Target card and that there was another person with the same name who lived in the area.
Nevertheless, Farrell & Sandlin successfully filed a suit against the wrong person and were given permission to garnish her wages. Yazzie’s employer told the law firm that they had the wrong person, and the garnishment was dropped. Yet two years later, Farrell & Sandlin went after Yazzie again, trying to garnish her wages. Again Yazzie’s employer told them it was a case of mistaken identity. Even then the law firm wouldn’t back down. It took Yazzie filing a case in federal court to get the law firm’s attention.
It turns out that a Farrell & Sandlin employee had gone into their records and changed the social security number and other identifying information so that the information matched the wrong Lucinda Yazzie. This type of behavior is outrageous, and while it remains to be seen whether or not the $1.2 million award will stand, a large award would send an important signal to the debt collection industry that it isn’t acceptable to play loose and fast with the truth.
New Mexico Attorney General Gary King recently issued a rule designed to combat debt collectors who attempt to collect “uncollectible” debts – those that are beyond the statute of limitations. According to the new rule, if the debt is “time-barred,” or past the statute of limitations, the debt collector must communicate this to the consumer in all written and telephone communications. Moreover – and this is even more important – the debt collection agency must tell the consumer that making a payment, or signing paperwork that says the consumer owes the debt or promises to pay the debt resets the clock, and makes the debt current again (and thus collectible). All too often, consumers are tricked into making a small payment, thus enabling debt collectors to take consumers to court in order to get legal judgments against them.
The 
Sergei Lemberg
