Indiana Consumer Lawyer Blog

Indiana Consumer Law Group/The Law Office of Robert E. Duff has recently filed a lawsuit against Sallie Mae, Inc. in the United States District Court for the Southern District of Indiana alleging that Sallie Mae violated the Telephone Consumer Protection Act (“TCPA”). Our client has alleged that he was a borrower/co-borrower and was obligated on student loan debt to Sallie Mae. Our client alleges in the Complaint that he did not provide Sallie Mae with his cellphone number at any time during the transaction that gave rise to debt or at any other time. Nevertheless, he alleges, Sallie Mae began calling his cellphone numerous times with an autodialer in an attempt to collect the debt, in violation of the TCPA (for more about what constitutes a TCPA violation, click here).

The TCPA provides for an award of damages of up to $500 per call and up to $1500 per call if the violation was knowing or willful. We believe we will be able to show that the calls in this case were knowing and willful because, among other reasons, our client expressly requested that Sallie Mae stop calling his cellphone yet the calls continued.

On February 2, 2010, a class action lawsuit was filed against Sallie Mae alleging that Sallie Mae violated the TCPA by placing collection calls to cellular telephones through the use of an automated dialing system and/or artificial or prerecorded voice without the prior express consent of the class members. That case is captioned Arthur, et al. v. Sallie Mae, Inc., Case No. C10-0198JLR, and was filed in federal court in Washington State. The class, i.e., the people that Sallie Mae allegedly did this to, numbers over 8,000,000. The case was settled on terms that appear to be pretty outrageous (bad for consumers). Despite the fact that a single call can be worth up to $1500, each class member who makes a claim is anticipated to receive $20.00 to $40.00 in cash or credit toward their indebtedness no matter how many calls they actually received. Meanwhile, the attorneys for the class have received an award of $4,830,000.00. Outcomes like this are what give attorneys a bad name.

Indiana Consumer Law Group/The Law Office of Robert E. Duff has recently filed an FDCPA lawsuit against Advanced Debt Collection, Inc. Advanced Debt Collection, Inc. was collecting a debt that was allegedly originally incurred to CSL Community Association, Inc., a homeowner’s association. Advanced Debt Collection, Inc. sent our client a letter a collection letter. To see a copy of the letter click here.

The letter does not identify to whom the debt is allegedly presently owed. The letter states that Advanced Debt Collection, Inc. has been hired by CSL Community Association, Inc. to collect an unpaid balance. If true, this means the debt is owed to CSL Community Association, Inc. However, the letter also states that Advanced Debt Collection, Inc. is now the creditor. These statements cannot both be true.

The FDCPA requires that the initial collection letter to a consumer state “the name of the creditor to whom the debt is owed.” The FDCPA also states that a debt collector cannot use a false or misleading representation in connection with the collection of any debt. We believe, and have alleged in the above-referenced lawsuit, that this letter therefore violates the FDCPA.

The vast majority of judgments obtained by debt collectors are by default. That means the alleged debtor didn’t show up to court to contest the case. Unfortunately, I believe that debtors often don’t show up to contest a case because they feel that there is no use since the debt was once a legitimate debt. This is a mistake and results, no doubt, in many judgments (and for amounts) that never should have been. But that’s an issue for another day.

Sometimes a default judgment is obtained because the alleged debtor never actually became aware of the lawsuit. The Indiana Rules of Trial Procedure outline how an individual defendant is to be served with the Summons and Complaint. Rule 4.1 states that service may be made on a person by:

1. certified mail to their residence, place of business or employment;

The Telephone Consumer Protection Act, or TCPA for short, is a great consumer protection statute for Indiana consumers. Its application is pretty specific, however. The primary goal of the TCPA is to prevent unauthorized telephone calls to your cell phone made by an autodialer. So, to prevail in a TCPA lawsuit, the consumer must show:

(1) phone calls to a cell phone;

(2) by means of an autodialer;

The Fair Debt Collection Practices Act, or FDCPA for short, provides very broad protections for consumers. It is a great statute, and today I want to go over some of the most common violations.

1. ATTEMPTING TO COLLECT A DEBT, OR AN AMOUNT, THAT YOU DO NOT OWE If a debt collector attempts to collect a debt from you that you don’t owe, the debt collector has violated the FDCPA. Even if the debt collector attempts to collect the wrong amount from you, like charging you a fee that you don’t owe or too high an interest rate, it is a violation of the FDCPA.

2. HARASSMENT A debt collector may not harass or abuse a person in connection with the collection of a debt. This can include threats of violence, yelling, cursing and repeated or continuous phone calls to a particular number. It can also include making phone calls without disclosing the caller’s identity.

This post is primarily aimed at assisting consumers who are dealing with debt collectors, but it can also be of benefit to consumers dealing with other issues such as automobile dealership fraud or the lemon law. The minute you sense something might be wrong with a consumer transaction or interaction (and it probably won’t take long when certain debt collectors call you), immediately go out and equip yourself with the means to record telephone and/or in-person communications. Then surreptitiously record all future communications. In Indiana (note that other states’ laws are different, if you are not recording in Indiana please check the law of the state where you intend to record), this is legal as long as one party to the conversation is aware that the communication is being recorded. Do not, and I repeat DO NOT, let the other party know they are being recorded. If you do, they’ll be on their best behavior and won’t show their true colors.

Recordings like this can be INVALUABLE if you end up having to go to court to protect your rights. They are a great way to hold companies and people accountable for what they say and what they have done. With debt collectors, you just never know when they are going to say something that violates the FDCPA (Fair Debt Collection Practices Act) and you want to be ready when they do.

If you’ve been sued by a debt collector or creditor in Indiana, the first thing you probably wondered while reviewing the summons and complaint is: “what am I going to do?” I can’t emphasize how important it is at this stage to be proactive and take immediate action. You may give up some of your rights if you don’t take action in as little as a week or ten days. For instance, in most small claims courts around the State of Indiana, you lose your right to move the case to a real court if you don’t request it within ten days of receiving the small claims notice of claim. (Note: Small claims courts are essentially collection courts since a huge part of their docket is collection cases. They are generally favorable for debt collectors and unfavorable for consumers. I never, ever, ever, ever want to be in a small claims court if I can help it.) And, you have to respond to a summons and complaint within 20 days or risk a default judgment.

Hiring an attorney to defend you in one of these cases unfortunately costs money. But you might be surprised at how affordable you can obtain representation. Our office handles most of these cases on a flat-fee basis. Depending on the size of the debt, our evaluation of the complexity of the issues of the case, the location of the court where the case is pending, and other factors, the flat fee is generally one to five thousand dollars. Our clients like the flat-fee arrangement because they know just how much the representation will cost. When paying by the hour, you never know just how much the representation will cost until is over.

Personally, these are some of my favorite cases to handle. All too often, debt collectors sue the wrong person or sue on a debt that is past the statute of limitations. They don’t deserve to win, and I enjoy making sure they don’t. Even when they do have the right person and the debt isn’t stale, they very seldom have the documentation they should have in order to file a lawsuit against someone. This is because debt collection is all about volume and minimizing expenses. I understand that debt collection is a business, but that doesn’t mean you can cut whatever corners you like in search of the almighty dollar. I’ve seen too many people’s lives and well-being injured by greedy debt collectors. I don’t think there is much of a difference between a debt collector who sues the wrong person because their practice is to attempt to collect debts without the appropriate documentation and a bus company who injures a customer because they neglected maintenance on their bus.

You just received a telephone call from a debt collector. The debt collector was mean and nasty and threatening and you don’t know what to do. First, relax.

Then wait. The debt collector has five days (from the initial communication) to send you a letter with this information:

(1) the amount of the debt;

Q: I live in Indianapolis, Indiana. I recently received a phone call from a debt collector about an old credit card debt that my former spouse and I had a long time ago. We have been divorced for over seven years, and this delinquent credit card debt was his per the divorce decree. Can I be held responsible for this debt?

A: First, it’s important to note that if you were a joint owner of the account (which means you both signed for the credit card and were jointly responsible for it) as opposed to simply an authorized user, then the fact that your husband was ordered to pay the debt by the divorce court unfortunately does not release you from legal responsibility for the debt. If your husband doesn’t pay, the credit card company can come after you to collect the debt and can report any delinquency or non-payment to the credit reporting agencies to be placed on your record. If you were to pay the debt to avoid this derogatory information on your credit report, your husband would be liable to you in the amount you paid and you could enforce this obligation in the court which ordered the divorce. But as between you and the credit card company, your divorce decree means nothing. However…

In Indiana, the statute of limitations on the collection of credit card debt is six years. The statute of limitations is an affirmative defense to a lawsuit, so what that means is that if the credit card account was delinquent for more than six years at the time the lawsuit against you was filed, your attorney can have the lawsuit dismissed. IT DOES NOT MEAN A DEBT COLLECTOR IS NOT ALLOWED TO TRY TO COLLECT THE DEBT FROM YOU. A debt collector can attempt to collect the debt forever. But since you know any lawsuit they brought against you could be dismissed, the bottom line is that you don’t have to pay the debt. And since derogatory information like this can only stay on your credit report for seven years (from the date the account was first delinquent), the debt collector has nothing whatsoever to hold over your head. But as long as the debt collector follows the Fair Debt Collection Practices Act, it can write you and call you and try to convince you to pay the debt.

In the world of debt collection, as in the world of sports, sometimes the best defense is a good offense. The Fair Debt Collection Practices Act is a powerful consumer protection tool that can be used to stop a debt collector from trying to collect a debt that you don’t owe or an amount that you don’t owe. Debt collectors usually attempt to collect a debt by putting it on your credit report, calling you, writing you and/or filing a lawsuit against you. The Fair Debt Collection Practices Act says that it is a violation of the Act for a debt collector to attempt to collect a supposed debt that is not owed or an amount that is not owed.

When a debt collector violates the Fair Debt Collection Practices Act, they can be sued in Federal court. The resolution of such a lawsuit often may include an agreement to stop collecting on the supposed debt, zero it out and/or delete any credit reporting of the supposed debt.

If a debt collector is trying to collect a debt from you that you don’t owe, or is trying to collect an amount that you don’t owe, the Fair Debt Collection Practices Act and our office may be able to help you take care of the debt and remove it from your credit report. Please contact our office for a consultation.