Citibank denies the allegations but an active police investigation is on-going and Mr. Ocra’s widow is suing Citibank for damages.  Citibank offered Mr. Ocra’s widow a monthly stipend, life insurance for his widow and a promise to cover his two daughters’ education, but Ms. Ocra rejected this offer.

Apparently debt collectors in Indonesia are not subject to legal restrictions like the FDCPA.   According to the Post article, Ms. Ocra said she first discovered that her husband had money problems when five men showed up uninvited at their Tangerang home one night in October and said they had come to get money. Unable to collect, they slept on a terrace outside the front door.

It goes without saying that this type of outrageous debt collection activity would be a clear violation of the FDCPA and would give rise to punitive damages, although a debt collector does not have to threaten or initiate violence to give you a cause of action for damages.

The FDCPA prohibits a threat by a collection agent to take any action that “cannot legally be taken or that is not intended to be taken” in debt collection efforts.   Hanna & Associates does not employ lawyers licensed to practice in New York state.  The plaintiff alleged an FDCPA violation because attorneys not licensed in New York cannot routinely file suit in New York courts.

The district court judge agreed with Hanna that the language of the collection letter did not suggest “authorized, likely and imminent” legal action.   Because the collection letter did not mention terms such as “litigation,” “lawsuit,” “court” or similar terms it did not imply that legal action had been or was about to be taken.

As a large and experienced collection law firm, Hanna & Associates has obviously spent time crafting the collection letters it uses.  Other collection agencies and/or law firms might not be quite so careful.

If an out of state law firm sends you a collection letter that specifically threatens litigation and that law firm is not authorized to practice in your state, you may have a claim.  Further, telephone collection calls that threaten legal action by a company or law firm not authorized to practice in your state are actionable as well.  Not sure what to do?  Contact our office and we’ll review the collection letter for you.

Apparently, however, CreditKarma has done a decent job in identifying credit scoring factors so that its credit score will give you some insight as what FICO or the other credit scoring models will produce.

CreditKarma also contains a number of helpful tools, including a home affordability calculator, a debt repayment calculator and a loan amortization calculator.

I signed up for a free CreditKarma account to see how the service works.   It asks you to create a user name and password, and then asks for your address and social security number.  You then receive an email asking you to verify your request.  Next, the system asks you to authorize it to access your Trans Union credit profile.  The Trans Union system then generates questions to verify your identity (i.e., “your credit profile suggests that you have lived or live on one of the following streets” – and you get 4 choices.  There are three of these questions.

If you answer the ID questions correctly, CreditKarma then generates a score, which is obviously based on your Trans Union report.

Many of the plaintiffs in these cases are debt buyers who purchase old debt for pennies on the dollar and hope to recover 40 or 50 cents.  In many cases, the defendant (consumer) does not respond and the debt buyer gets a default judgment.

Claim information is bought and sold electronically and the data necessary to prepare a lawsuit is generated by a computer program.   By streamlining the lawsuit process, a single lawyer can “prepare” thousands of cases a year.

Often these claims are so poorly documented that an astute defendant could challenge the lawsuit and get the case dismissed, and perhaps pursue a claim for frivolous litigation against the plaintiff and its law firm.

If you have been sued by a debt buyer, do not ignore the claim – seek legal counsel and do not hesitate to demand that the plaintiff show proof that it owns the debt and that you owe the money claimed.

The FDCPA specifically prohibits repeated calls made for the purpose of harassment, calls before 8AM or after 9PM and calls in which violence is threatened.

While the FDCPA remains a viable tool to combat aggressive debt collectors, its artificial limit on damages ($1,000 per claim + actual damages + attorney’s fee) does little to truly discourage bill collectors who are willing to accept a few FDCPA payments as the cost of doing business.   And the courts have not been willing to make offending bill collector defendant’s really pay.  My colleague, Boston consumer protection lawyer Bill McLeod recently blogged about a 1st Circuit case in which the First Circuit Court of Appeals reduced a $20,000 trial court award of attorney’s fees down to $2,500.  Bill notes that:

For Congress, the message should also be a clear: the statutory damages amount of $1,000 may not be enough to deter collection companies from abusive debt collection practices. While I cannot credibly advocate that consumers should hit a jackpot if targeted by an abusive debt collector, the statutory damage amount cannot be so low that it could easily be viewed as a cost of doing business by a ruthless debt collector.

Off the record, owners of collection agencies will admit that paying a few thousand dollars to the one or two consumers who take the time to pursue an FDCPA claim does not deter them from using effective, but illegal collection tactics.

Note that this provision in the law only applies to third party bill collectors.  It does not apply to the original creditor.

A good way to assert your rights under this provision is to send the bill collector a “drop dead letter.”  My Bankruptcy Law Network colleague Carmen Dellutri has posted a sample drop dead letter on his blog that meets the requirements of the statute.  I use a different version of the “drop dead” letter that asserts additional rights – you are free to use it.

You should send this letter using return receipt.  Keep the proof of receipt and if the bill collector calls you again, you have a claim for money damages.  Note that under the law, the bill collector can call you to acknowledge receipt of the drop dead letter but cannot use that call to collect on the account.

In states where telephone recording is permitted, an FDCPA lawsuit supported by a drop dead letter, a return receipt and proof of a collection call after receipt leaves little room for argument that your rights have been violated.

A good first step to take is to contact an attorney if a creditor (or debt collector) is trying to collect on an old discharged debt. You or your attorney should then send a letter demanding that all collection attempts stop at once and providing the details of your bankruptcy discharge. The letter should be worded strongly and should be sent by certified mail, return receipt requested, to ensure you can prove delivery confirmation of the letter, if need be. This letter will usually take care of any continuing attempts to collect on the discharged debt.

Now, if this initial tactic does not work to rid yourself of the collector, then you may have just cause to pursue a FDCPA lawsuit. If this becomes the case, it is definitely advisable that you hire a lawyer who handles FDCPA claims.

Getting started with a FDCPA claim

You are wanting to move forward with your FDCPA claim but don’t know where to start, other than by contacting an attorney of course. Well, I will give you a brief rundown of things you should know and how things are handled in my office.

Under the Fair Debt collection Practices Act, you can collect statutory damages of up to $1,000 + actual damages + reasonable attorney’s fees. I handle this type of case under a 1/3 contingency contract – which means that I get one-third of what we win and nothing if we do not win at all. This is a good setup for the consumer since if we don’t win the case it’s no money out of your pocket. But if there is a clear violation of the FDCPA, we are ususally successful!

Most of the time, I am able to settle for anywhere from $2,000 to $5,000 – more if we can demonstrate that you did not qualify for a loan because of this error. I would also get the improper information removed from your credit reports. Because as you know, having an error on your credit report can be a huge hassle, and that is definitely something an attorney can help you fix.

If you find yourself in a situation dealing with the hassle from an old creditor, then by all means, contact me by filling out the Free Case Review form found on this website.  Once we get started, I will likely need whatever correspondence you have, plus copies of all 3 credit reports, which you can get at Annual Credit Report.com

This is just a brief rundown on how to get started with a FDCPA claim, and I hope you find this information helpful. Just remember, the FDCPA protects you from the kind of hassle you are experiencing; you just might need a little help navigating the FDCPA claims process. This is where your attorney comes into play.

I suspect that many consumer debt defendants do not respond because they know that they have not paid their bill and they figure that there is no point in coming to court to defend a hopeless position.  Still others may be concerned about what might happen to them in court – clients regularly ask me if they are at risk of imprisonment if they do not pay their debts (the answer, of course is “no” – there are no debtor’s prisons in the United States.

As Sergei points out, however, ignoring a lawsuit is rarely the best course of action.  First, the amount in the lawsuit could be wrong – I recently spoke to a client who was sued for over $20,000 for a $7,000 debt.  My client did not contest the lawsuit and now it is a judgment.  Our only recourse in this situation is a bankruptcy, which can strip the lien and make the debt unsecured and dischargeable in bankruptcy.

Second, the FDCPA provides useful leverage in debt settlement negotiations.  If the debt collector has violated the FDCPA, you may be able to negotiate better terms and a more favorable settlement, or even a cancellation of the debt.

At the very least, you should always ask an FDCPA lawyer to review any lawsuit that has been filed against you along with any associated documentation.

• If the debt collector wants to garnish your paycheck or bank account, they must take every one of these following steps: file a lawsuit, get a judgment, and then present a writ of garnishment to your employer or bank. Sometimes debt collectors will tell you that they will garnish your paycheck or bank account the next day, but now you would know this is a lie, as there is no judgment against you.
• You cannot be arrested if you do not pay your debt. A debt collector may threaten that they will have you arrested if you do not pay, which is not only impossible, but threatening arrest is illegal under the FDCPA.
• Once you tell a debt collector to not contact you at work, they must abide. This is outlined in detail in the FDCPA.
• It is illegal for a debt collector to contact your employer and tell them about your personal debt. A debt collector is never allowed to talk to a third-party about your debt.
• It is illegal for a debt collector to attempt to force, or successfully make your domestic partner pay your personal debt.

If a debt collector has ever attempted any of these illegal methods of debt collection mentioned above on you, get in touch with an experienced attorney right away to make sure you put an end to their criminal actions.

1) No Transparency: If you are ever unclear of terms of your loan or it is filled with confusing legal jargon, be weary.

2) Secret Interest: Costs related to the loan called “fees” or “charges” are many times just interest pretending to be something else. This includes overdraft charges from your bank or service charges on your credit card.

3) Secret Additional Services: Occurs when a lender adds extra services into your loan’s term without notifying you that similar services may be available elsewhere for a lower cost.

4) Lies: Double check to make sure your loan documents contain all accurate (and consistent) information.

5) Redlining: This term means when lenders aim their loans at specific groups of people, which is an illegal practice. According to studies, subprime loans disproportionately affected women, racial minorities, people with less education, and senior citizens.

6) Excessive Interest: Lenders sometimes hide how much interest they are charging by only letting you know about the short-term interest rates, or not telling you at all. For example, payday loans can have a yearly interest rate of over an absurd 300%.

When borrowing money, it is incredibly important to be educated in what a reasonable loan are so that you are not tricked and taken advantage of by predatory lenders. The government has passed multiple laws to try and protect consumers from predatory lenders, including the Fair Debt Collection Practices Act (FDCPA), Fair Housing Act, HOEPA, TILA, and RESPA. Learn more about these laws and what you’re entitled to as a borrower to avoid getting scammed.