Adam Krohn sues debt collectors for unfair practices, but he found himself in a role reversal last year when calling a fellow California lawyer who owed him money on a judgment.“He told me, ‘Come get it. I want you to know what it’s like to try to collect a debt,’ ” recalls Krohn. So he had a writ of execution served on Scott Carruthers, who Krohn says picked up another $90 in costs for the pleasure of teasing his adversary before paying up on a consumer’s Fair Debt Collection Practices Act claim.Carruthers did not respond to interview requests.Their tangle, ongoing with new cases in which Krohn says Carruthers is avoiding service altogether, offers a humorous glimpse into a decidedly unfunny area of the law: debt collection.With the nation so awash in debt—the Federal Reserve pegs “consumer credit outstanding” at more than $2.4 trillion—getting payment from those who owe money has become a huge business. And a big mess, with … [Read more...] about Payback: Lawyers on Both Sides of Collection are Feeling Debt’s Sting
Debt collector calling wrong number
On July 28, 2016, after an extended gestation period, the Consumer Financial Protection Bureau (CFPB) at long-last published its outline of proposals (the Outline) for the first ever federal regulations that would implement the Fair Debt Collection Practices Act of 1977, 15 U.S.C. §§ 1692-1692p (the FDCPA).1Prior to the advent of the Dodd-Frank Act in 2010 and the establishment of the CFPB, no federal agency had statutory authority to promulgate regulations to implement the FDCPA. Without such regulations, decades of voluminous enforcement actions by the Federal Trade Commission as well as private lawsuits have produced inconsistent interpretations of the FDCPA and raised vexing questions about the statute’s applicability in light of new communications technologies. To provide much needed clarity, Section 1089 of the Dodd-Frank Act amended the FDCPA to expressly authorize the CFPB to “prescribe rules with respect to the collection of debts by debt … [Read more...] about The CFPB Outlines Its Proposals for the First-Ever Rules that would Implement the Fair Debt Collection Practices Act
His pro bono client’s life had been seized up in such fear that she pawned her wedding ring to feed the maw of a default judgment against her in Los Angeles County Superior Court, obtained by one of the nation’s biggest debt buyers.It was too late to undo the judgment, but Benshoof sued the debt buyer, alleging that its repeated phone calls to the woman were harassing and illegal. The company turned over phone recordings in discovery that showed the calls weren’t as heated as the woman thought.“I still think they crossed a line,” says Benshoof, a partner and big-firm commercial litigator in the Los Angeles office of Alston & Bird.The debt buyer settled, discharging the debt of $5,000, which included interest on the original $3,500 loan, and gave back $2,600 the woman had managed to pay on the judgment.But Benshoof remained curious. His client still insisted she’d never taken out a loan, though she once might have co-signed one. The bank that … [Read more...] about Debt-buying industry and lax court review are burying defendants in defaults
Business is booming for plaintiffs’ attorneys wielding the Telephone Consumer Protection Act (TCPA). The TCPA restricts unsolicited telemarketing by fax, voice calls and text messages. Violations can trigger liability of at least $500 for each fax, text or call. The prospect of lucrative recoveries has proven to be attractive, with the volume of TCPA class actions steadily rising for almost a decade. Settlements often run in the millions or multi-millions of dollars. In fact, plaintiffs’ attorneys have broken records for TCPA settlements the past two years in a row (securing settlements of $32 million from Bank of America in 2013, and a staggering $75.5 million from Capital One and three debt collectors in 2014).TCPA class action lawsuits pose a substantial risk to just about any business with a marketing budget. Many businesses have sought insurance coverage for TCPA claims under their commercial general liability (CGL) policies, but have met with only mixed … [Read more...] about D&O Policies: A Possibility for TCPA Coverage?
About two-thirds of the adult population of the United States has a presence on a social networking platform. Over 900 million people worldwide are users of Facebook, and over half visit the site at least once a day. In any given month, over 30 billion separate pieces of content (wall posts, photos, etc.) are uploaded to Facebook, while Twitter processes a staggering 340 million tweets daily from its more than 140 million active users. Corporate America, too, has jumped on the bandwagon, with companies now constantly touting their social media presence and exhorting consumers to like them on Facebook and follow them on Twitter. In fact, 2012 will mark the first year that corporate spending for online advertising exceeds spending for print advertising.Claims professionals and risk managers are increasingly seeing the significance of social media in claims investigations and the defense of litigation. As more and more people live their lives online, sites like Facebook, Twitter, … [Read more...] about “Like” It or Not: How Social Media Can Lead to Litigation