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Back to the Basics: What not do do when it comes to Debt Collection!

Posted by attorney Seth Rosenberg

Ever contemplate, what's the worst way I could go about collecting on debts if I were a debt collector? No? Me neither. But if I did, I mean, there are the givens - like trying to collect from someone not the debtor, violating blatant anti-auto call legislation, or sending objectively confusing collection letters. But let's get down to the meaty stuff, the stuff that really confounds today's debt collection agencies. Well, according to recent news, these "gimmes" are actual lawsuits confronting collection agencies today.

A consumer just scored a smooth $62k in damages from robo-caller Data Alliance Systems (DAS), acting on behalf of World Financial Network National Bank (WFNNB), after it sent 56 harassing auto-calls to the cell phone of one, Dan Harris -- who, by the way, was not the intended debtor. However, this doesn't even seem to be the laughable portion of the story. It's understandable that some data-bot is likely to get its wires crossed and call the wrong person. But, from the get-go, auto-calling systems are already in violation of the Telephone Consumer Protection Act and the Michigan Collections Practices Act, requiring individuals to give consent before banks are allowed to use automated dialing methods or prerecorded messages to contact debtors. And still the gaffes continue. After Harris informed WFNNB and DAS that he did not have any business with them, nor was he the debtor, the bank still continued to repeatedly and automatically call his cell phone, totaling 56 calls.

In other news, United Collection Bureau (UCB) is being slammed with a lawsuit because it didn't clearly identify the creditor in its collection letters. In actuality, UCB went to extensive lengths to identify each party in the transaction, naming Resurgent Capital Services as “the client," LVNV Funding as “the current owner," and Credit One Bank as the “original creditor." The judge denied UCB’s motion to dismiss, finding the letter was confusing and did not plainly identify the creditor in violation of the Fair Debt Collection Practices Act, allowing the case to proceed forward.

Okay, okay…I’ll give some credence to the latter case. Seems like UCB was trying, to its detriment, to meticulously identify all parties involved. Yet, according to the court, an unsophisticated debtor still may not be able to understand to whom his debt is owed. Regardless, these cases just go to show that the cut-n-dry may actually be the stumbling block issues which modern collection agencies will need to address.

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