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  1. #1
    Join Date
    Oct 2010
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    Default Re: Steps to Sue a Collection Agency - I'm in Texas, Agency is in Michigan

    UNITED STATES OF AMERICA
    FEDERAL TRADE COMMISSION
    WASHINGTON, D.C. 20580

    Division of Credit Practices
    Bureau of Consumer Protection


    March 10, 1993

    Jeffrey S. Wollman
    Vice President and Controller
    Retrieval Masters Creditors Bureau, Inc.
    1261 Broadway
    New York, New York 10001

    Dear Mr. Wollman:

    This is in response to your letter of February 9, 1993 to David Medine regarding the type of verification required by Section 809(b) of the Fair Debt Collection Practices Act. You ask whether a collection agency for a medical provider will fulfill the requirements of that Section if it produces "an itemized statement of services rendered to a patient on its own computer from information provided by the medical institution . . .” in response to a request for verification of the debt. You also ask who is responsible for mailing the verification to the consumer.

    The statute requires that the debt collector obtain verification of the debt and mail it to the consumer (emphasis mine). Because one of the principal purposes of this Section is to help consumers who have been misidentified by the debt collector or who dispute the amount of the debt, it is important that the verification of the identity of the consumer and the amount of the debt be obtained directly from the creditor. Mere itemization of what the debt collector already has does not accomplish this purpose. As stated above, the statute requires the debt collector, not the creditor, to mail the verification to the consumer.

    Your interest in writing is appreciated. Please be aware that since this is only the opinion of Commission staff, the Commission itself is not bound by it.

    Sincerely,

    John F. LeFevre
    Attorney
    Division of Credit Practices

    Fields v Wilber

    B. 15 U.S.C. § 1692e and 15 U.S.C. § 1692f

     Even if attorneys' fees are authorized by contract, as in this case, and even if the fees are reasonable, debt collectors must still clearly and fairly communicate information about the amount of the debt to debtors.   This includes how the total amount due was determined if the demand for payment includes add-on expenses like attorneys' fees or collection costs.

    “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.”  15 U.S.C. § 1692e.   As an example of such conduct, § 1692e(2)(A) states that it is a violation to falsely represent “the character, amount, or legal status of any debt[.]”  Section 1692f states that “[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.”

     We conclude that Fields has made allegations sufficient to state a claim under § 1692e and § 1692f and a dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) was inappropriate because the letters could conceivably mislead an unsophisticated consumer.

    In the original dunning letter, Wilber listed an account balance that exceeded the principal obligation by $266.48.   Wilber's fees were more than double the original obligation, $122.06.   Nowhere did Wilber explain that it was seeking attorneys' fees of $250.   Fields received the initial dunning letter almost eight months after she incurred the charges at the veterinary hospital.

    An unsophisticated consumer could reasonably wonder why her bill was now $388.54, even assuming she had saved the original contract that specified she could be charged for attorneys' fees.   It would be difficult for such a consumer to understand how a relatively modest fee for services rendered had tripled in size.   Cf. Johnson v. Revenue Mgmt. Corp., 169 F.3d 1057, 1060 (7th Cir.1999) (“Unsophisticated readers may require more explanation than do federal judges;  what seems pellucid to a judge, a legally sophisticated reader, may be opaque to someone whose formal education ended after sixth grade.”).

     Or, an unsophisticated consumer may have lost the bill and forgotten the amount of the debt completely.   In this circumstance, the debtor (or the debtor's spouse, or someone else paying bills for the debtor) might logically assume that she simply incurred nearly $400 in charges.   By leaving the door open for this assumption to be made, Wilber's letter was misleading because it gave a false impression of the character of the debt.   It is unfair to consumers under the FDCPA to hide the true character of the debt, thereby impairing their ability to knowledgeably assess the validity of the debt.   One simple way to comply with § 1692e and § 1692f in this regard would be to itemize the various charges that comprise the total amount of the debt.

    The district court agreed that the dunning letter in this case was facially misleading.   But we are forced to disagree with the district court's determination that the letters' misleading nature was irrelevant as a matter of law because Fields could reference the contract from Kruger Animal Hospital or because she could telephone Wilber and ask for an explanation.

  2. #2
    Join Date
    Jan 2006
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    38,867

    Default Re: Steps to Sue a Collection Agency - I'm in Texas, Agency is in Michigan

    your highlighted portion does not mean what you think it does. What is required is the debt collector, upon receipt of a letter demanding verification, actually contact the creditor and verify the information the collector already has is in fact correct. It does not mean all the items you posted previously are required.

    Chaudhry is still the defining case.

    Oh, and take note that Chaudhry took place 6 years after the letter you posted and take note that the opinions of the FTC are not enforceable as law. A courts opinion far outweighs such letters of opinion.


    the rest of the post deals with improperly including legal fees within the debt.

  3. #3
    Join Date
    Oct 2010
    Posts
    2

    Default Re: Steps to Sue a Collection Agency - I'm in Texas, Agency is in Michigan

    ^------- Signature
    I am not an attorney and any advice is not to be construed as legal advice. You might even want to ignore my advice. Actually, there are plenty of real attorneys that you might want to ignore as well.

    ???

  4. #4
    Join Date
    Mar 2009
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    LA LA Land
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    9,170

    Default Re: Steps to Sue a Collection Agency - I'm in Texas, Agency is in Michigan

    Quote Quoting jisaacs1207
    View Post
    ^------- Signature
    I am not an attorney and any advice is not to be construed as legal advice. You might even want to ignore my advice. Actually, there are plenty of real attorneys that you might want to ignore as well.

    ???
    Same thing that you see at the bottom of every page on this forum (scroll down to the bottom and you'll see):

    Notice: Information provided in the forum is not intended to substitute for professional advice, including but not limited to professional legal advice. If you submit a question or comment it is assumed that you are interested in soliciting, receiving or giving general information and not legal advice. Laws vary by state, and the laws described in this forum may be different in your state or may have been changed since the information was posted. The legal help offered in this forum comes from volunteers who may not have any formal legal training or knowledge, and all information should be confirmed with a qualified legal professional. All information is made available on an "as is" basis. You should accept legal advice only from a licensed legal professional with whom you have an attorney-client relationship. Use of this forum is subject to the ExpertLaw terms of use.


    You still got the correct answers!

  5. #5
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Steps to Sue a Collection Agency - I'm in Texas, Agency is in Michigan

    Quote Quoting jisaacs1207
    View Post
    ^------- Signature
    I am not an attorney and any advice is not to be construed as legal advice. You might even want to ignore my advice. Actually, there are plenty of real attorneys that you might want to ignore as well.

    ???
    Um, ya. It is illegal to represent yourself as an attorney when you aren't so I simply state that fact. The rest is my sense of humor taking over but there is a truth to it even though it is presented in jest.

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