A resident of West Philadelphia is alleging that a debt collector has engaged in unlawful practices.
Kimmel & Silverman, P.C. has filed a complaint against national debt collection company Virtuoso Sourcing, Inc., on behalf of Crystal Monroe. The lawsuit was filed on May 21 in United States District Court, Eastern District of Pennsylvania.
“The FDCPA is really written towards explaining the rules of the game for debt collectors — what they can do, what they can’t do and what they must never do,” said Monroe’s attorney Craig T. Kimmel.
“Some of the things that must never do is to be abusive, harassing, deceptive and misleading or raise their voice.”
Beginning in February and continuing through May, representatives of Virtuoso Sourcing continuously contacted Monroe in an attempt to collect a debt. Monroe, who is legally blind, said the debt collection stemmed from a Sprint phone bill that ballooned to more than $2,000. She disputes the charges.
Virtuoso’s representatives attempted to collect the debt by calling Monroe’s cell phone on average one to two times a day, causing her to receive more than 10 collection calls a week. Monroe asked Virtuoso to stop calling her, however the calls continued.
The complaint alleges that the debt collectors would speak to Monroe with raised voices when demanding payment, causing her to feel degraded and humiliated.
According to the complaint, Virtuoso collectors claimed they could “make a deal” with Monroe to settle but only if payments were made immediately. Monroe was told that if she did not make payment on the debt, her credit report would be adversely affected and she wouldn’t be able to buy on credit anymore.
Kimmel said if Virtuoso is found to be in violation that the company may be required to pay Monroe as much as $1,000, forgive the debt and report to credit reporting agencies that there is no debt and pay his attorney fees.
Monroe said she turned to Kimmel for assistance after she learned about the free assistance provided by the firm when she attended a community meeting at West Philadelphia High School.
“I was looking for someone who understood that every mistake is not the client’s, businesses make mistakes too,” Monroe said.
Kimmel’s firm has been conducting community outreach to let consumers know that free legal services are available to handle these types of cases.
“This is a free legal service provided for by private attorneys because the law encourages pursuit of unlawful debt collection,” Kimmel said.
Virtuoso could not be reached for comment as of the Tribune’s deadline.
The FDCPA penalizes debt collectors up to $1,000 per violation, gives the consumer the right to stop the calls and requires them to pay any and all attorney fees and costs incurred on behalf of the consumer.
The Consumer Financial Protection Bureau on Tuesday unveiled new rules for supervising large debt-collection firms, marking the first time that industry will be subject to federal oversight.
Starting Jan. 2, the government watchdog will regulate 175 debt-collection firms that each bring in more than $10 million in annual receipts — accounting for 63 percent of the market.
Examiners at the bureau will begin assessing whether debt collectors are complying with requirements of federal consumer financial law, including providing consumers with disclosures and accurate information. They will also investigate whether debt collectors have harassed or deceived consumers in the pursuit of payment.
The bureau estimates that about 30 million Americans have an average of $1,500 in debt subject to collection. Debt collectors typically report consumers’ collection status to credit bureaus, meaning any inaccuracy could affect the ability to get a mortgage, car loan or credit card.
“Larger companies tend to be the ones routinely filing mass cookie-cutter lawsuits, having huge databases of information that might be inaccurate, which is part of what causes all of these problems,” said Suzanne Martindale, a lawyer with Consumers Union. “The CFPB did cast a pretty wide net and should be capturing those companies.”
Have you been abused or harassed by a debt collector? You don’t deserve to be treated like a doormat nor should you tolerate as much. If your legal rights are being violated you might qualify for free legal help through the Fair Debt Collection Practices Act.
Consumer Attorney Craig Thor Kimmel was interviewed by MoneyTalksNews.com about what to do when debt collectors violate your rights. The Fair Debt Collection Practices Act governs what collectors are and are not permitted to do when attempting to collect debt. And yet some collectors still employ phone operators who use profane or abusive language and harass debtors over the phone. Not only is that not right, it’s also illegal.
So what do you do if a debt collector is pushing you around and violating the rules of the Fair Debt Collection Practices Act? Start with this simple three-step process:
-Validate the debt. You have 30-days after being contacted by a debt collector to write a letter requesting verification of the debt.
-Write a cease and desist letter and telling the collector not to call or write you, to leave you completely alone.
-Ask a consumer lawyer. Become predator instead of prey. Ask for free legal help and let the attorney charge the collector for fees.
If a collector violated the law, they can be held liable to pay you a cash award and pay all legal fees. If you’re being abused by a debt collector, it’s time to fight back.
Hackensack law firm Forster, Garbus & Garbus has agreed to pay $35,000 to settle claims that it filed hundreds of debt collection suits against consumers without individual attorney review.
The firm allegedly violated the federal Fair Debt Collection Practices Act, 15 U.S.C. 1692e(3), by giving a false impression that an attorney was involved in the filing of those complaints, when in fact they were mass-produced.
The suit, Krug v. Forster, Garbus & Garbus, 10-cv-1844, touches on an inchoate area of law — namely, how much investigation an attorney must perform to determine the validity of an alleged debt before filing a collection suit.
“It’s a new area and the case law hasn’t developed yet,” says the named plaintiff’s lawyer, Philip Stern, head of a Maplewood firm.
A joint motion filed Monday in District Court in Newark seeks approval of the settlement, which calls for Forster Garbus to pay $7,500 to class members and $27,500 in legal fees.
The plaintiffs are debtors who were served with complaints filed by Forster Garbus on behalf of Arrow Financial Services in Special Civil Part in Cumberland County for a one-year period starting in April 2009.
Named plaintiff Karl Krug, of Millville, was alleged to have defaulted on a $4,947 credit card bill to Washington Mutual Bank. The bank sold the debt to Arrow Financial Services of Nile, Ill., which, in turn, retained Forster Garbus in an attempt to collect from Krug.
In April 2009, Forster Garbus sent Krug a dunning letter which stated, in part, that “at this time, no attorney with this firm has personally reviewed the particular circumstances of your account.” In June of that year, a nonattorney at the firm left two phone messages on Krug’s answering machine. On June 5, the firm sued Krug on behalf of Arrow. Partner Glen Garbus signed the complaint.
Krug retained Stern, who won dismissal of the collection case in April 2010 after Arrow was unable to present business records to show the debt was valid. The current suit was filed that month.
Stern says a ruling in the Eastern District of New York, a few months before Krug’s suit was filed, was the first to hold that an attorney violated the FDCPA by filing a collections suit without anything more than a cursory inquiry into whether the debt is valid. In Miller v. Upton, Cohen & Slamowitz , 687 F. Supp. 2d 86 (E.D.N.Y. 2009), which stemmed from an alleged default on a Lord & Taylor charge account, the court rejected the lawyer’s assertions that his general knowledge of credit practices at the retailer and its national collections counsel were a substitute for specific knowledge of an individual file.
Krug’s complaint cited New Jersey Court Rule 1:4-8, which requires a lawyer signing a complaint to have read it and to have conducted a reasonable inquiry that the allegations of the case have factual support.
The suit also claimed that Forster Garbus placed telephone calls to class members that falsely conveyed the impression that the person calling was an attorney, and those calls failed to provide meaningful disclosure of the law firm’s identity as caller or to disclose that the firm is attempting to collect a debt and that any information obtained will be used for that purpose — all in violation of the FDCPA.
Of the $7,500 payable to class members under the settlement, $2,500 is to go to Krug and the rest will be distributed among the roughly 200 class members, who stand to receive around $25 each. Stern says that although the recovery may seem modest, it’s more than the class members would get as damages under the FDCPA if the case were tried.
The pool of $5,000 distributed to class members is greater than would be available if the case was tried, says Stern. The FDCPA limits recovery in such cases to the 1 percent of the defendant firm’s net worth, but Forster Garbus agreed in the settlement to go over the 1 percent limit, says Stern. He is bound to keep the firm’s net worth confidential.
Forster Garbus was represented in the case by Gregg Kahn of Wilson Elser in Newark, who did not return a call. Garbus, a named defendant, also did not return a call.
In most cases, people who receive collection calls accrued the debt themselves and have fallen behind on their payments. In some instances, however, these charges are a result of identity theft. Because people rely on technology to pay bills and make banking transactions, it is important to stay protected against hackers and Internet fraud. The best way to avoid collection agency harassment is to reduce the risk of having your identity stolen in the first place.
Consumers who use debit cards should check their account activity frequently. Every major bank has an online banking option which makes it quick, convenient, and free to monitor checking accounts. Anyone who comes across questionable or suspicious transactions on their statement should contact the bank as soon as possible.
Credit cards are better protected against fraud. Therefore, they should be used for online shopping and other Internet transactions instead of debit cards. Information shared online runs the risk of being stolen by hackers and used without your knowledge or consent. Again, people who suspect their accounts have been used fraudulently should contact the credit card company immediately.
Collection calls only begin once payments have not been made for a significant amount of time. Regular credit checks are a surefire way to stop theft in its tracks. Some criminals can open new cards in the victim’s name; in some cases, the only way a person knows that this new account exists is by seeing it on their credit report. Credit scores are very sensitive to missed payments, and even a fraudulent card can have a negative impact on your score for a while.
It is important to understand why collection calls feel like harassment in order to deal with the stress they create.
Many Americans have fallen behind on their credit card, mortgage, and/or car payments because they have experienced some form of financial difficulty. This causes stress on the individual, as well as family and friends that are affected. To make matters worse, collection agencies are making harassing collection calls about past-due accounts on a daily basis. These agencies use fear tactics on vulnerable people for one purpose: to make money.
When a consumer falls behind on their payments, creditors often retain debt collectors or sell the debt to them for a fraction of the total debt. Now, it is up to the collection company to turn a profit for themselves by collecting as much money as possible. It is typical for these agencies to pitch a “deal” to settle for less than the original debt; in fact, they are still making a profit because they bought the debt for far less. This is when the debt harassment starts.
Debt collectors will often use threats and lie to the consumer to try to force a payment out of them. They will up the ante even further to squeeze as much money out of the person as they can. This causes added stress and anxiety on the consumer who is already overwhelmed by their finances in the first place. Even though some of the tactics they use are unethical, collections companies continue to use them for financial gain.
It is important for people in this situation to remember to stay calm. Many of the intimidation practices used by debt collectors calling the home or office are empty promises. If the threats feel like harassment then an experienced debt collection lawyer can help you learn your rights and stop the deception once and for all. Otherwise, taking positive steps to get out of debt is the best way to stop collection calls.
According to the “Top 10 List of Complaints” by Illinois consumers last year, phone calls regarding consumer debt harassment topped the list at number one. This statistic proves two things: that the state is still suffering from high unemployment rates and other financial troubles as a result of the failed economy, and people are as annoyed as ever by debt collection calls. This problem is not limited to the residents of Illinois; in fact, this is a nationwide dilemma.
Many of these complaints were made by people who experienced collection agency harassment. Abusive tactics were reported, including illegal practices used to scare people into making a payment. These scare tactics can be very convincing at times, but as the old saying goes “you can’t get blood from a stone.” In most cases, the consumer does not have enough money to pay off their debts otherwise their accounts would not be in collections in the first place. Until consumers are able to come up with enough money to make a payment, how can they stop debt collectors from abusing their power?
Consumers have two options: turn them in and/or sue them. There are laws in place that regulate debt collection practices, and agencies should be held accountable when they break the rules. First, go to the Fair Trade Commission to complain then do the same with your state’s attorney general. A last resort to make the harassment stop is to take legal action against the offending agency. Some debt collectors are so ruthless that it seems as though they want your happiness and peace of mind along with your money. Don’t let them control your life – find an attorney that will fight for your health and your wealth against illegal and unfair debt harassment practices.
Our law firm Kimmel & Silverman, P.C. -CreditLaw.com- 800-NOT-FAIR, pledges to stand against unfair debt collection acts and practices. We promise to ensure our clients are treated fairly and with respect by debt collectors and their collection lawyers. We will not stand for abuse or collection harassment towards our clients, nor allow them to be contacted at unusual times and places. We will not stand for our clients to be contacted regarding another person’s debts, or for debts they have paid or don’t owe. We pledge to put a stop to these violations of law, in a quick and efficient manner.
We further pledge to make fair debt collection acts and practices the rule and not the exception; we will never cease in vindicating the rights of our clients. We pledge to uphold the Fair Debt Collection Practices Act, its provisions and rules so that debt collectors feel compelled to act with civility and appropriate conduct towards others. We will defend the standards of fair debt collection laws.
We pledge to battle any collectors who put payment above fairness or civility, and will stop abusive practices that are inconsistent with that ideal. We will fight to ensure that consumers no longer feel the collector has the upper hand.
We pledge to stop abuse by collectors who cannot govern themselves appropriately. We will fight those who violate your rights. We pledge to stop unfair practices that result in money being taken by deception, tricks or taken unfairly.
We will make the collector prove that they are entitled to what they seek, and have proof that the consumer actually agreed to be charged those amounts. We will not permit debt collection based solely upon what a collector says.
We will review letters our clients receive and we will pursue collectors whose letters violate the mandates of the fair debt collection practice act. We have no tolerance for deception, threats or half-truths. If a collector cannot prove its claim to payment of the amounts sought, we will work tirelessly to have it removed in full and stop collection calls.
Our attorneys pledge to do all of this and will litigate all claims where the fair debt collection practice act has been violated. We will put the pressure on the debt collectors and remove it from our clients. We will not allow calls before 8:00 a.m. and after 9:00 p.m. There will be no excusing telephone calls filled with false information, threats or intimidation.