WebRecon tracks statistics regarding the number of consumer lawsuits filed alleging violations of the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Truth in Lending Act, and the Telephone Consumer Protection Act. As reported in debt collection industry publication InsideARM, StopCollector’s Sergei Lemberg was named the “most active consumer attorney” for the second half of July. The team at Lemberg & Associates is proud to represent consumers who are victimized by unscrupulous debt collectors.
Investigative Reporters Win Prestigious Award for Debt Collection Series
Chris Serres and Glenn Howatt were accorded the 2011 Gerald Loeb Award for Distinguished Business and Financial Journalism for their investigative series, “Hounded: Debtors and the New Breed of Collectors,” which appeared in the Minneapolis Star-Tribune. According to an article in the Star-Tribune, the journalists also won the American Bar Association’s Silver Gavel Award, which is accorded for work that advances public understanding of the legal system.
Congratulations to both reporters for much-deserved recognition for an outstanding series of articles. If you didn’t get a chance to read “Hounded,” you can find it here.
How Low Can You Go? Defense Attorney Tactics in Debt Collection Cases
We all know that some debt collectors will go to any length – even if it means breaking the law – to squeeze money out of consumers. Our clients have told us horror stories about debt collector harassment and abuse, and the media has reported on egregious and all-too-common violations of the Fair Debt Collection Practices Act.
On occasion, we’ve discussed the ways in which debt collection agencies manipulate and clog the taxpayer-funded court system in order to obtain summary judgments against unwitting consumers. What we haven’t talked about, though, is the callous tactics that debt collection agency attorneys use when we fight for our clients’ rights.
Case in point: Witness depositions in one of our debt collection cases – Ray Tedeschi v. Kason Credit Corporation (U.S. District Court, District of Connecticut, 3:10-cv-612-WWE) were scheduled for this week. Last weekend, I learned that a close relative’s death was imminent. I emailed James Mulholland, the debt collection agency’s attorney, explaining the situation and asking him if we could file a joint motion to extend discovery – not an unusual request under the circumstances, and one rooted in an acknowledgement of basic human decency. Mulholland didn’t respond to my message or confirm its receipt.
Sadly, my relative did pass away, so I notified Mulholland that I would be leaving town to be with family and attend the funeral. Again, no response or acknowledgement. When I returned, I wrote him again, asking to reschedule our client’s deposition. Mulholland refused to grant my request. As a result, I was forced to file a court motion and obtain a judge’s ruling to extend the deadline two and a half weeks. The judge, showing more compassion than opposing counsel, granted our motion. But it made me think… How low can you go?
Get Out of Debt Guy Needs to Get a Clue
If you’ve never heard of Steve Rhode, well, neither had we until we saw his ludicrous blog post, “Does the Wave of Fair Debt Collection Practices Act (FDCPA) Suits Benefit Consumers or Lawyers?” Rhode credits a “tipster” with forwarding an article about a fair debt attorney in Minnesota who was disbarred. He then regurgitates the article, from debt collection industry newsletter InsideARM. Rhode, who touts himself as the “get out of debt guy,” then reprints statistics from InsideARM (which InsideARM reprinted from WebRecon) listing “FDCPA and Other Consumer Lawsuit Statistics, October 1-15, 2010.” Rhode then goes on to diss other fair debt attorneys, and insinuates that active fair debt attorneys may be in line to lose their licenses.
Given that Sergei Lemberg is listed among the “most active consumer attorneys of the year (a badge he wears with pride), we take exception to Rhode’s insinuation that fair debt attorneys are only out to make a buck. Given the egregious collection practices of untold numbers of debt collectors, and the Fair Debt Collection Practices Act’s crystal clarity about what constitutes unfair debt collection practices, debt collectors have no excuse for crossing the line. If consumer attorneys don’t hold them accountable, who will?
It’s more than a bit ironic that Rhode, who positions himself (with Beck-ian overtones) as a truth-teller that others are trying to silence, disses lawyers while infusing his website with Google ads for “credit law attorneys,” “ask a lawyer online now,” “find a lawyer – free” and the like. Then there are the ads encouraging people to “Get a Personal Loan!” In our eyes, that’s a bit hypocritical for the “get out of debt guy.”
Cleaning Up Old Debts
Fox Business recently offered a reminder that, if you have the cash to settle a debt, you can often negotiate a terrific deal. Debt buyers purchase written-off debt for pennies on the dollar, so if you offer to settle for a quarter on the dollar, they’ll often do so. The article, which was written in response to a consumer who wondered how to locate the owner of an old debt, noted that your credit reports will likely record the debt owner, and that states have statutes of limitations, after which time a debt is uncollectible. What it didn’t mention, however, was that if you choose to negotiate a settlement, it’s important to get the deal in writing. After all, debt collection agencies have high staff turnover, so the deal you broker with one debt collector won’t necessarily be recognized by the next.
Lemberg Quoted by ABC News
It’s a common occurrence for children to ask their parents to co-sign for a loan. These days, though, turnabout is fair play, and parents are sometimes in the unfortunate position of asking their children to co-sign on the parents’ behalf. ABC News recently called upon Sergei Lemberg to discuss the implications when a parent falls behind on his or her payments, and the child’s credit score takes a hit. You can read the article by clicking here.
Federal Reserve Releases Consumer Debt Data
According to the Los Angeles Times, the Federal Reserve Bank of New York released data suggesting that consumer debt has contracted for seven quarters in a row, but that bankruptcies and foreclosures both increased. Since 2008, household debt has decreased 6.5%, but second quarter bankruptcies have increased 34% and new foreclosures increased 8.7%. Californians had the largest per-person debt at $77,500, while Ohio had the lowest per capita debt at around $40,000. The average American owes $48,800.
EEOC Questions Legality of Using Credit Checks for Hiring Decisions
The Associated Press reports that the Equal Employment Opportunity Commission, the federal agency tasked with enforcing employment discrimination legislation, has stepped up its investigations of employers who use credit checks as the basis of hiring decisions. Pre-employment credit checks can have a disproportionately negative effect on African Americans and Latinos, and the EEOC says that employers have to prove that not hiring someone because of bad credit is relevant to the job being sought.
The AP report references a study by the Society for Human Resource Management that found half of major companies check the credit reports of some job applicants, while 13% do credit checks for every applicant.
The EEOC filed a class action lawsuit against Dallas-based Freeman Companies, saying that the company allegedly discriminated against men, African Americans, and Hispanics because they used credit history and criminal records to reject employment applications.
Report Finds Consumers Without Attorneys Fare Worse
The American Bar Association recently released the results of a survey of state judges, which pointed to stark differences in legal outcomes between people who are represented by attorneys and those who are not. The judges surveyed said that, against the backdrop of the recession, they are seeing more consumers represent themselves. But 62% of the judges said that consumers are being negatively impacted by this trend. The ABA’s press release noted, “Nearly half of the judges responding believe that there is a middle-class gap with respect to access to justice, stating that the number of people who are not represented and who do not qualify for aid has increased.”
McClatchy Publishes Article About StopCollector’s Sergei Lemberg
McClatchy Newspapers recently published an article highlighting the work that StopCollector’s Sergei Lemberg conducts on behalf of his clients. After telling the story of Lemberg & Associates’ client Shawn Traylor, the story quotes Lemberg as saying that the increase in lawsuits against debt collection agencies is a result of increasingly aggressive debt collector tactics that cross the line into illegal behavior under the Fair Debt Collection Practices Act:
“I think debt collectors have become more aggressive by necessity because folks just have less money. And how do you collect more from people who have less money? You have to become more aggressive,” Lemberg reasoned.
Sergei Lemberg
