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Is this FDCPA Violation?


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I have been looking through all the documents I have received from midland since they started contacting me. I'm trying to find out if there is any FDCPA Violations I can include in my formal complaints for JAMS. Pls help me see if there is any violation on the following:

August 13, 2015  - First letter I received from Midland through it's Law Firm. In the letter it stated the following in bold letters;

                                          "Unless the consumer notifies this debt collector within 30 days after the consumer's receipt of this notice that the consumer disputes the validity of the debt or any portion thereof, the debt will be assumed to be valid by this debtor. If the consumer notifies this debt collector in writing within 30 days after receipt of this notice, that the debt or any portion thereof is disputed, this debt collector will obtain verification of the debt or  copy of a judgment against a consumer and a copy of such verification or judgment will be made to the consumer by this debt collector........

                                          " We have no determination that a law suit may be initiated to collect this account. At this time, no attorney with this firm has personally reviewed the particular circumstances of your account. This firm only sues in states where an attorney of this firm is licensed. For a list of these states please visit http//mjfirm.com/attorneys. Moreover, because we have made no determination that a law suit may be initiated to collect this account, this letter should not be construed as a threat of suit by the current creditor, as no such decision has been made by the current creditor."

August 23, 2015  - I sent my VD via CMRRR.

October 27, 2015 - The law firm representing Midland filed a law suit against me. I was served a summons. I answered.

November 30, 2015 - Law firm sent me a response to my requested VD. is this FDCPA Violation? They sued me first before I received a response to my requested VD?

January 2015  - They sent me a settlement stipulation in which if I agreed they will file it to court but I ignored it and did not answer or made any response.

February  2015 I received another letter from the law firm giving more additional information about the alleged debt,as usual they put the same information about the name of the OC, the Current owner -Midland but this time they added a Post charge-off fees accrued in the amount of $160.xx so instead of $3,6xx.xx the current balance became $3,7xx.xx. Is this  FDCPA violation?

Thank you for spending time to read, any advice will be appreciated.

 

 

 

 

                                      

 

 

                                       

                                        

                                         

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McDaniel v. South & Associates, PC, 325 F. Supp. 2d 1210 - Dist. Court, D. Kansas 2004

The court holds that Defendant's actions in filing a judicial foreclosure proceeding against Mr. McDaniel amounted to debt collection activity under the FDCPA. After Mr. McDaniel properly disputed his debt, he was entitled to the grace period provided by the FDCPA. Instead, Defendant tried to collect on the underlying obligation by filing a judicial foreclosure proceeding against him. The court does not believe that the broad purpose of the FDCPA would be served if debt collectors could avoid liability based on the character of their debt collection activities.

Heintz v. Jenkins, 514 US 291 - Supreme Court 1995
There are two rather strong reasons for believing that the Act applies to the litigating activities of lawyers. First, the Act defines the "debt collector" to whom it applies as including those who "regularly collec[t] or attemp[t] to collect, directly or indirectly, [consumer] debts owed or due or asserted to be owed or due another." § 1692a(6). In ordinary English, a lawyer who regularly tries to obtain payment of consumer debts through legal proceedings is a lawyer who regularly "attempts" to "collect" those consumer debts. See, e. g., Black's Law Dictionary 263 (6th ed. 1990) ("To collect a debt or claim is to obtain payment or liquidation of it, either by personal solicitation or legal proceedings").

I'd say that filing a lawsuit after you DV'd is a violation, and is continued collection activity.

 

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I'm no attorney, but I would say that this is a violation, because per FDCPA, they are required to cease all collection activity once they receive a timely written DV notice.  Yours was timely, and it was in writing, so you satisfied all the requirements of the statute.  Once they signed for it, they were on the hook to stop everything until they responded to it.  However, there are a couple of things that need clarifying.  Please tell me if I have this correct....

 

1--you got a letter from the attorney for midland.

2--you sent your DV request to that attorney, certified mail.

3--they sued.

Did you send it to the lawyer?  Or to Midland?  Also, is the attorney for the plaintiff the same attorney that you requested DV from?  If you DV'ed Midland, then your course of action would be against Midland.  But if you DV'ed the attorney, then it would go against the attorney.  This all only applies, though, if it's the same attorney this whole time.  IF you DV'ed an attorney, for example, and not Midland, then Midland is not bound by that DV request, and could simply choose a different attorney to avoid your DV attempt.  A DV is only binding on the party you actually send it to.  Fur future reference, in a situation like this, I would DV both the debt collector and its attorney....remember that you only have 30 days after first contact to do that in each case.  Often, you will hear from the JDB directly, and later on, you might get a letter from their attorney.

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3 hours ago, Harry Seaward said:

@BV80 have any courts ruled that it's NOT a violation? 

I haven't researched that possibility.  There's actually not much case law on the issue at all which surprises me.  In fact, very few courts have even ruled that a lawsuit is a debt collection activity.  I would consider it to be common sense, but I think we all know that what WE consider to be common sense may differ from the opinions of courts.  Therefore, absent specificity in a statute or binding precedent, we can't take something for granted.

I recently read something that said anything that is not specified by law as illegal, is legal (loosely quoted).  Absent specificity in a statute or binding precedent, the fact that a lawsuit is  considered a collection attempt would be sort of a "work-around".  If I were filing an FDCPA complaint or counterclaim and the statute did not specify my claim and I had no binding precedent to support it, I would "build" my case.

The FDCPA does not specify that a lawsuit is or is not an attempt to collect a debt.  HOWEVER:

1.  It does specify that a summons and complaint is not an initial communication requiring a "miranda" outlined in 1692g(a).  See 1692e(11).

The specification that a lawsuit is not an initial communication implies that it's still an attempt to collect a debt.

2.  In Heintz v. Jenkins, the SCOTUS ruled that the FDCPA "applies to the litigating activities of lawyers".  Heintz at 294.

Again, absent precedent, combining the above would show that a lawsuit is an attempt to collect a debt.  Then, of course, one would claim a violation of 1692g(b) and show that a timely DV was sent.

Another HOWEVER:  I'd like to see the letter sent to the OP on November 30, 2015.  I'm just curious as to whether or not it contains language that shows it's a response to his DV.  If it does, I believe he's got them.

Note:   It's possible the debt collector could claim that it's initial communication validated the debt.  In fact, a few months ago, a poster made that very claim.  That's garbage.

 

 

 

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1 hour ago, kraftykrab said:

But if you DV'ed the attorney, then it would go against the attorney.  This all only applies, though, if it's the same attorney this whole time.  IF you DV'ed an attorney, for example, and not Midland, then Midland is not bound by that DV request, and could simply choose a different attorney to avoid your DV attempt.  A DV is only binding on the party you actually send it to. 

Courts have ruled that a principal can be held liable for the actions of its agent.   In regard to the FDCPA, courts have ruled that a principal who is a debt collector can be held liable for violations of the FDCPA committed by an agent (another debt collector) acting on its behalf.

While the attorney (agent for Midland) was responsible for validating the debt before filing suit, Midland (the principal debt collector) could possibly be held liable for his failure IF, as you pointed out, the attorney who filed suit is the same attorney who sent the original letter.

When a timely DV is sent to a collection agency, that agency doesn't have to respond if it chooses to stop collection attempts.   If the CA is acting for a JDB, I agree that the JDB can hire another CA to send another initial communication.   As long as inothing but collection letters are sent to a consumer, wash, rinse, repeat.   The CAs who choose not to continue collection are not violating the FDCPA.  Therefore, the principal debt collector (JDB) is not in violation.

In the OP's case, there was no repeat.  The agent did not discontinue collection efforts.    That could be a different story.

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3 minutes ago, debtzapper said:

 Since the OP said he wants to claim this as an FDCPA violation in  JAMS arbitration,  I am not entirely sure  if JAMS would strictly follow fed precedent or if they would rule as they saw fit.

I agree with you.  For that reason, it can't hurt to claim that the plaintiff is vicariously liable for the attorney's failure.  

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7 hours ago, BV80 said:

I haven't researched that possibility.  There's actually not much case law on the issue at all which surprises me.  In fact, very few courts have even ruled that a lawsuit is a debt collection activity.  I would consider it to be common sense, but I think we all know that what WE consider to be common sense may differ from the opinions of courts.  Therefore, absent specificity in a statute or binding precedent, we can't take something for granted.

Strange thing on this.....I've learned when looking into mortgage fraud and foreclosure fraud issues that it never hurts to look into different angles.  For example, the Alaska Supreme Court, the Sixth Circuit, the Eleventh Circuit, USDC Southern District of Florida, and many other courts have ruled that a foreclosure action is debt collection for FDCPA purposes, because the action seeks to collect on a consumer debt.  I've been taking my state's debt collection law and applying it to mortgage issues in this same manner.  Since many courts have said that attempts to collect on a mortgage using foreclosure fall into the category of debt collection, I would see if that applies to the OP's state, and then I would apply that to this case.  Since they state in these cases that an action to collect on a consumer debt IS debt collection activity, I would use that in my favor.  If Colorado courts have said that a foreclosure action is debt collection activity, then how could a credit card lawsuit not be?

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I think the message here is:  Filing a lawsuit after a DV letter is sent, without first validating before filing said lawsuit, is a good basis for an FDCPA violation.  Moreover, I'd find it difficult to imagine a judge finding it "frivolous", in which you'd potentially be on the hook for legal fees.  

The McDaniel v. South & Associates (10th cir. same as OP) case (cited above), the court concludes that there is a difference between a non-judicial & judicial foreclosure, and that using the Courts in a judicial foreclosure proceeding (aka lawsuit) is indeed "collection activity", and is a violation of the FDCPA.   @kraftykrab is correct, a judicial foreclosure & CC collection suit is essentially the same thing.  It's using the courts, via a lawsuit and/or legal proceeding to obtain a money judgment against the debtor.  

In Heinz v. Jenkins (cited above), SCOTUS laid out in plain English, that an attorney that regularly files lawsuits to collect a debt, is indeed a debt collector.  It goes onto define "Collect", in which it includes "Legal proceedings" as part of it's definition.  

The FDCPA states that a debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt..    A collection lawsuit is in fact, a collection activity by it's very definition.

 

 

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On ‎6‎/‎18‎/‎2016 at 0:31 PM, kraftykrab said:

I'm no attorney, but I would say that this is a violation, because per FDCPA, they are required to cease all collection activity once they receive a timely written DV notice.  Yours was timely, and it was in writing, so you satisfied all the requirements of the statute.  Once they signed for it, they were on the hook to stop everything until they responded to it.  However, there are a couple of things that need clarifying.  Please tell me if I have this correct....

 

1--you got a letter from the attorney for midland.

2--you sent your DV request to that attorney, certified mail.

3--they sued.

Did you send it to the lawyer?  Or to Midland?  Also, is the attorney for the plaintiff the same attorney that you requested DV from?  If you DV'ed Midland, then your course of action would be against Midland.  But if you DV'ed the attorney, then it would go against the attorney.  This all only applies, though, if it's the same attorney this whole time.  IF you DV'ed an attorney, for example, and not Midland, then Midland is not bound by that DV request, and could simply choose a different attorney to avoid your DV attempt.  A DV is only binding on the party you actually send it to.  Fur future reference, in a situation like this, I would DV both the debt collector and its attorney....remember that you only have 30 days after first contact to do that in each case.  Often, you will hear from the JDB directly, and later on, you might get a letter from their attorney.

Yes I sent it to the lawyer/law firm (Machol & Johannes LLC) representing Midland. Every communication I got since the beginning they contacted me came  from "Machol". The same law firm the whole time. I sent all my responses to the law firm since they are representing Midland.

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23 hours ago, CCRP626 said:

@laradee23 you may want to check Colorado consumer protection laws as well. Is this arbitration based on a cardmember agreement with FAA in it and a state choice of law? You'll be able to use that state's laws and decisions.

This is an arbitration based on a cardmember agreement. Original creditor was Citibank N.A/Sears. Midland claims they own it now.

 

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On ‎6‎/‎18‎/‎2016 at 2:02 PM, BV80 said:

I haven't researched that possibility.  There's actually not much case law on the issue at all which surprises me.  In fact, very few courts have even ruled that a lawsuit is a debt collection activity.  I would consider it to be common sense, but I think we all know that what WE consider to be common sense may differ from the opinions of courts.  Therefore, absent specificity in a statute or binding precedent, we can't take something for granted.

I recently read something that said anything that is not specified by law as illegal, is legal (loosely quoted).  Absent specificity in a statute or binding precedent, the fact that a lawsuit is  considered a collection attempt would be sort of a "work-around".  If I were filing an FDCPA complaint or counterclaim and the statute did not specify my claim and I had no binding precedent to support it, I would "build" my case.

The FDCPA does not specify that a lawsuit is or is not an attempt to collect a debt.  HOWEVER:

1.  It does specify that a summons and complaint is not an initial communication requiring a "miranda" outlined in 1692g(a).  See 1692e(11).

The specification that a lawsuit is not an initial communication implies that it's still an attempt to collect a debt.

2.  In Heintz v. Jenkins, the SCOTUS ruled that the FDCPA "applies to the litigating activities of lawyers".  Heintz at 294.

Again, absent precedent, combining the above would show that a lawsuit is an attempt to collect a debt.  Then, of course, one would claim a violation of 1692g(b) and show that a timely DV was sent.

Another HOWEVER:  I'd like to see the letter sent to the OP on November 30, 2015.  I'm just curious as to whether or not it contains language that shows it's a response to his DV.  If it does, I believe he's got them.

Note:   It's possible the debt collector could claim that it's initial communication validated the debt.  In fact, a few months ago, a poster made that very claim.  That's garbage.

 

 

 

@BV80 

I am quoting what the November 30, 2015  letter said;

"Dear xxxxxx xxxx,

Pursuant to your request for verification of the above-reference debt, we provide the following information from our client:

Original Creditor: Citibank, N.A./Sears

Original Account #: xxxxxxxxxxx123

Contract Date: March , 2009

Charge-off Date:  Aug 2013

Last Pay Date: xxxx, 2013

Enclose Documents: Application and Charge Off Statement

The current balance as of Nov. 2015 is $ 3,000.00

 

Signed

Machol & Johannes LLC

                                       

                                       This communication is from a debt collector and is an attempt to collect a debt. Any information obtained will be used for that purpose.

 

-----------------------------------

The documents they enclosed are copies of my credit card application with Sears and account statement from Sears.

 

 

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On ‎6‎/‎18‎/‎2016 at 3:12 PM, CCRP626 said:

@laradee23

10 hours ago, BV80 said:

@laradee23

That letter is proof that they validated after filing suit.   If you're going to arbitrate, @fisthardcheese can tell you how to file a claim against both the law firm and Midland (vicariously liable for the law firm's failure to validate before filing suit for its client).

Thank you so much for your replies. Is it an FDCPA Violation if Midland added a post charge off fees? When they sued me they claim that I owe $3,600. I answered their summons/complaints in January but on February  2015 I received another letter from the law firm giving additional information about the alleged debt,as usual they put the same information about the name of the OC, the Current owner -Midland but this time they added a Post charge-off fees accrued in the amount of $160.xx and stated in the letter that the current balance was $3,7xx.xx. But in my credit report Midland is reporting that I owe $3,600.

 

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@laradee23  It depends on what post-charge-off-fees are being sought.  Is it interest?  Collection fees?  Some state laws will allow for basic collection fees.

However, if it's post charge-off interest, then most likely the OC waived their right to collect interest when they charged off your account and stopped sending you statements as required by the TILA.  The other question is what kind of interest they are seeking (state statutory interest or contractual interest).  In CO, if you have a contract/agreement that specifies an interest rate, then statutory interest cannot be applied.  If there is no agreement, then the statutory rate is 8%.

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8 hours ago, Coffee_before_tea said:

@laradee23  It depends on what post-charge-off-fees are being sought.  Is it interest?  Collection fees?  Some state laws will allow for basic collection fees.

However, if it's post charge-off interest, then most likely the OC waived their right to collect interest when they charged off your account and stopped sending you statements as required by the TILA.  The other question is what kind of interest they are seeking (state statutory interest or contractual interest).  In CO, if you have a contract/agreement that specifies an interest rate, then statutory interest cannot be applied.  If there is no agreement, then the statutory rate is 8%.

This is true, however the easier angle here is that the credit report does not match the collection letter. One must be incorrect as 2 different amounts can't possibly be correct.

What I would do is dispute the amount owed to the CRAs. If midland verifies the $3600 amount after sending a collection letter asking for $3700, then I would hit them with both FCRA and FDCPA claims.

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2 hours ago, fisthardcheese said:

This is true, however the easier angle here is that the credit report does not match the collection letter. One must be incorrect as 2 different amounts can't possibly be correct.

What I would do is dispute the amount owed to the CRAs. If midland verifies the $3600 amount after sending a collection letter asking for $3700, then I would hit them with both FCRA and FDCPA claims.

The lawsuit is for the same amount as the credit report.   The letter with the increased amount was sent after the lawsuit was filed.   The 2nd letter is the issue.

I'd like to know the charge-off amount and the date the JDB bought the account.

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11 hours ago, Coffee_before_tea said:

@laradee23  It depends on what post-charge-off-fees are being sought.  Is it interest?  Collection fees?  Some state laws will allow for basic collection fees.

However, if it's post charge-off interest, then most likely the OC waived their right to collect interest when they charged off your account and stopped sending you statements as required by the TILA.  The other question is what kind of interest they are seeking (state statutory interest or contractual interest).  In CO, if you have a contract/agreement that specifies an interest rate, then statutory interest cannot be applied.  If there is no agreement, then the statutory rate is 8%.

@Coffee_before_tea

This is what the content of the letter I received from Machol the law firm that represents Midland

 

February xx, 2015

Original Creditor: Citibank

Original Account No. xxxxxxxxxx

Current Owner : Midland Funding

Account No. xxxxxx

Balance: $3,700.00

Dear xxxx  xxxx,

As you are aware, your Citibank, NA/Sears account is being serviced by Machol & Johannes. Midland Funding LLC is the current owner of this account. We are required to provide some additional information pertaining to this account. Please keep this information for your records.

Account Number at Charge-Off ; xxxxxxxxxxx

Name of creditor at Charge-Off: Citibank NA/Sears

Additional Account Information:

Charge-Off Balance :                                 $3,600.00

Post Charge-Off Interest Accrued:   $ .00

Post Charge-Off Fees Accrued  :        $ 160.00

Post Charge-Off Payments & Credits : $ .00

Current Balance :                                           $3,700.00

 

Sincerely,

xxxxxxxx

Please understand this communication is from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose.

----------------------------

It didn't specifically say what the post charge-off fees accrued. But this letter is the only one that say the current balance is $3,700.00. The rest of the letters I got from them always refer to $3,600 as the current balance.

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18 minutes ago, BV80 said:

The lawsuit is for the same amount as the credit report.   The letter with the increased amount was sent after the lawsuit was filed.   The 2nd letter is the issue.

I'd like to know the charge-off amount and the date the JDB bought the account.

@BV80

I'm looking at the Bill of Sale and Assignment they sent me and the date was March 2014.

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6 minutes ago, BV80 said:

@laradee23

The charge-off was $3600, and they're suing for $3600.   In the complaint, did they request fees and/or interest?

@BV80

In one of the complaints it said " The amounts the plaintiff claims from the defendant are $3,600.00, represent the liquidated balance of the defendant's credit card account owned by plaintiff, plus court costs".

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