If you are being hounded by a debt collector, it is your right to demand proof of the debt.  In the collection world, they call that “verification of the debt.”  The Fair Debt Collection Practices Act (“FDCPA”) is a very pro consumer law that works in your favor, but only if you invoke your rights.  Doing so is really easy.  After you demand verification of the debt, the debt collector must cease all collection activity until he or she provides verification of the debt to you.  There just two rules you need to know to stop a debt collector, at least temporarily:  You must make your demand for verification of the debt in writing.  Calling the collection agency will not stop them from calling you; You must send that demand for verification within 30 days of the date that you receive the first demand letter from the collection agency. Tip 1:  Don’t wait to receive the demand letter to demand verification. Many debt collectors will note in their files on consumers that they sent a demand letter.  However, for various reasons this many not be true.  Courts tend to side with those who have written records.  How do you prove that you never received a first demand letter?  You don’t.  Its impossible to prove a negative.  So…when you first learn that a debt collector is coming after you, send it a letter demanding verification of the debt.  You don’t have to say it in any fancy or legal way.  Just ask them to send you proof of the debt.  That’s all.   Tip 2:  SEND THE LETTER…THERE ARE LOTS OF GOOD REASONS TO DO SO. Many times, debt collectors and debt buyers will NOT have [...]

Hey, Consumer Financial Protection Bureau (“CFPB”), how is that self policing policy working for you?

Jenna Greene, a reporter for the National Law Journal, recently reported on the CFPB’ s policy of self reporting.  CFPB has taken the place of the Federal Trade Commission in overseeing the activities of debt collectors and others.  The CFPB oversees not only debt collectors but consumer lenders.  It has established a policy of requiring those under its supervision of  “self policing.”  This means that if a bank or collection agency violates the law, it is supposed to turn itself in.  In exchange, the offending party would receive a lighter fine or penalty. Does this make sense?  The CFPB enforces statutes like the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. So who is supposed to call the CFPB when a major bank screws up?  Doesn’t happen you say?  Actually, it does.  Indeed, GE Capital Retail Bank (now known as Synchrony Bank) got into hot water with the CFPB for deceptive marketing and discrimination practices.  It paid $225 million to the consumers that it had harmed, compliments of the CFPB.  In house attorneys are between a rock and a hard place.  They have client confidences to keep, but are they compelled to honor the self policing policies of the CFPB?  Tough call. Moreover, many lenders are questioning whether the self policing policy is truly yielding benefit to those who turn themselves in.  Ms. Greene, in her article, notes that many lenders not that there is not enough of a track record to tell.  Still, others in the industry who have turned themselves in for violation of banking laws, have not received punishments any lesser than they might have otherwise received.  Is this self policing policy going to lead to better enforcement of [...]

How the Proposed Fair Credit Reporting Improvement Act of 2014 would affect your credit score.

Rep. Maxine Waters (D-CA) has introduced a bill in the House called the Fair Credit Reporting Improvement Act of 2014.  The bill appears to be aimed at helping consumers achieve higher credit scores in a shorter time frames.  Her bill includes these proposed changes:   Bankruptcies currently are reported for up to 10 years.  The bill will reduce this to seven years. Derogatory information such as delinquent accounts and tax liens are currently reported for up seven years from the date of the first delinquency.  The bill would require the credit reporting agencies to remove these after 4 years. Entirely new – the credit reporting agencies would be required to delete any adverse item within 45 days of it being paid or settled.  Hence, if you have a charged off debt on your credit report, you can settle it and have all negative reporting of that trade line removed in 45 days.  Currently, we have to negotiate the removal of these trade lines with creditors.  This amendment to the law would make the removal mandatory. Remove adverse information related to any lender that was accused of any illegal lending practice by the Consumer Financial Protection Bureau or by a court.  This is huge.  Many big banks including Bank of America and JPMorganChase have been accused of engaging in some sort of mortgage fraud.  If your lender is one that has paid a fine to the government, you can have the negative reporting removed from your credit report. Give the Consumer Financial Protection Bureau, the authority to modify these time periods.  That is a just a whole lot of power to delegate to any single governmental agency.  Time tables for retaining negative information on people’s credit [...]

Next on 60 Minutes ….What you don’t know about your credit report will hurt you.

I have no axeto grind with Experian, Equifax or Trans Union.  As a credit attorney, I make my living by suing these companies for repeatedly failing to do their jobs under the Fair Credit Reporting Act.  However, I do get upset when I think about the fact that 1 out of 5 people have a derogatory item on  eir credit report that does not belong to them.  Moreover, 1 out of 10 people have something on their credit report that not only does NOT belong to them, but depress their credit score.  Don’t take my word for it.  Check out the 60 Minutes video segment 40 Million Mistakes: Is your credit report accurate?  Highlights include: Steve Kroft interviewing Ohio Attorney General Mike Dewine.  Mr. Dewine opined that the credit reporting agencies repeatedly break the law by failing to investigate consumer disputes regarding credit reports.  Under the Fair Credit Reporting Act, when you discover something wrong on your credit report, its your job to bring it to the credit reporting agency’s attention.  The agency then has to notify the lender that is reporting that information and then each of them has to conduct an investigation.  Mr. Dewine believes that none of this is actually happening. Experian’s former Dispute Agents stated on camera that they are required to “investigate” 90 disputes per day.  However, they don’t do any investigation.  They simply look at the information that consumer provide them, check with the lender and then side with the lender.  There is zero investigation being conducted by the credit reporting agencies. Judy Thomas had her credit information mismerged with Judy Kendall’s, the latter living in Utah.  Ms. Thomas was denied credit and could not refinance her home, buy a [...]

Why you should only trust a Credit Lawyer to fix your Credit Report

In November of 2013, Mr. Pavone and Mr. Samaan were sentenced to jail and fined $554,000 for defrauding consumers in a credit repair scheme.  They had claimed to have proprietary software that they called “the magic disk” that could allegedly erase negative credit from people’s credit reports.  More than 180,000 consumers paid them for this pipe dream. If you are serious about improving your credit, you should know that only legitimate mistakes and errors on your credit report can be removed.  As credit lawyers, the most common mistakes and errors on credit reports that we get removed for our clients are:  Identity theft.  When someone applies for credit in your name, they typically take the goods but don’t pay the bill.  This can and usually does damage to people’s credit reports  Mismerged Information  This happens when credit information belonging to someone with a name very similar to yours, ends up on your credit report. Delinquent information remaining on your report longer than 7 years.  Derogatory information can only remain on your credit report for a period of 7 years from the date of the first delinquency.  Many creditors try to “re-age” the debt by reporting that date as far more recent as it really is.  By keeping it on your credit report, they have a better chance of getting it collected.  Bankruptcies reported longer than 10 years.  A bankruptcy can only remain on your credit report for up to 10 years.  Related to this issue are creditors that don’t report that their debt has been discharged in  your bankruptcy, making your credit report appear as though you still owe a debt to them. Remember, only items that don’t belong on your credit report and mistakes [...]

Debt collector fined $4 million by FTC for fraudulent tactics. Here is what you need to know…

The FTC sued RTB Enterprises doing business as Allied Data Corporation and its owner Raymond T. Blair.  Blair owed Allied which is a debt collection agency.  According to the FTC complaint, Allied did a lot of sleazy things including:  threatening to refer claims to its pre-litigation department or legal department when in fact RTB had no such departments; bullying Spanish-speaking consumers by misrepresenting themselves as lawyers; lied to consumers by telling them that they work for the Harris County District Attorney’s Office; charging consumers “convenience fees” and telling them that there was no way for the consumers to pay their debts without paying these fees. using legal sounding terms such as “breach of contract” or “affidavit signed against you” in order to mislead the consumer into believing that they were lawyers; lying to consumers by misrepresenting that there were legal proceedings pending against them when in fact no such proceedings had been filed. If you read through the complaint, you will see many examples of debt collector harassment that is systemic in RTB’s operation. Collector abuse is rampant in their telephone scripts with consumers.  Unfortunately, this is not an isolated incident.  Debt Collectors violate the Fair Debt Collection Practices Act, far more than  you may think. RTB and Blair agreed to a rather onerous permanent injunction against them. The injunction prohibits the defendants for making false and misleading representations to consumers. It also requires the defendants to disclose the convenience fees and how consumers can avoid paying them in the future. Here is what this case shows what you need to know: Debt collectors such as these defendants abound everywhere. If you are contacted by a debt collector it’s your job to protect yourself. Knowledge [...]

Consumer Financial Protection Bureau pursues Debt Collection Law Firm that “Robo-signed” 350,000 lawsuits.

The Georgia debt collection law firm of Frederick J. Hanna and Associates is in trouble for violating the Fair Debt Collection Practices Act (“FDCPA”).  The Consumer financial protection Bureau has accused Hannah of filing lawsuits without actually looking at them. The FDCPA requires that when a collection attorney communicates with the consumer that he has to have meaningful involvement in the case. In Hannah’s case, the CFPB thinks that one attorney could not possibly have review 350,000 collection lawsuits from 2009 through 2013. According to its investigation, Hanna alleges that believe that over a two-year period, only one single attorney purportedly signed about 1300 collection suits a week.  This is an egregious case of collector harassment.  It happens more often than you. Sadly, the CFPB thinks many these lawsuits are bogus. In many cases, the consumers don’t owe these debts. These lawsuits were filed on behalf of J.P. Morgan Chase, Bank of America, Capital One Financial, and Discover Financial. What is also quite bothersome is that these creditors are large venerable financial institutions .  These huge banks have placed the collection of their receivables in the hands of a law firm that is apparently not nearly as venerable.  If this is true, then many of the judgments that this firm obtained are equally bogus. Interestingly, the CFPB noted that when consumers challenged many of these lawsuits, Hannah dismissed them.  In fact, roughly 40,000 of the 350,000 lawsuits that were filed by Hannah were dismissed in court when the consumers stood up to them.  Unfortunately, most consumers failed to challenge these lawsuits and have had judgments entered against them for debts that they may not even owe.   How is a consumer to know whether the [...]

Can Debt Collectors steal your identity? You betcha’!

Identity Theft is not only perpetrated by dumpster divers, but by people that you trust with your personal information every day.  Take mother and son, Deatrice Williams and Quentin Collick.  They each used their positions to steal peoples’ identities, file bogus tax returns in their name and take the bogus tax refunds. Ms. Williams work for a debt collection company in Georgia and had access to a lot of personal information including names, address and social security numbers.  Her son worked for a cable company installing internet access.  He high jacked customers’ internet information.  After you are done smiling and thinking up of a cute story name such as “Are they going to have a family reunion in San Quentin?” or “The family that steals together, stays together”, you need to realize that these people were in positions of great trust.  So how does that affect you and what can (and should you do about it). You should look at your credit report at least once a year to see if any credit lines were opened in your name with which you are not familiar.  You can pull your credit report once a year at  This is the government sanctioned website that is sponsored by the three major credit reporting agencies. You should also look at the bottom of your credit report to see if anyone has obtained your credit report without having a legitimate reason for doing so.  If someone is looking at your credit report, they have a lot of your personal information right in front of them.  Bad people work for legitimate companies sometimes and may pull  your credit report to make you their next victim. Did you get a dunning [...]

This is why you should use a free credit lawyer when attempting to repair credit.

In addition to the three major credit reporting agencies (Experian, Equifax and Trans Union), there are a lot of specialty credit reporting agencies as well.  Mr. Epps, for example, was denied the right to rent an apartment due to a credit report that the landlord pulled from one of these specialty agencies.  In this article from, Mr. Epps is a veteran of the United States Navy with excellent credit who was looking for a place to live. He applied for an apartment and was declined because the credit reporting agency had reported him as a felon. Mr. Epps is no felon. Unfortunately, he decided to handle this matter on his own by calling the credit reporting agency that reported the bogus information. According to the story, the credit reporting agency acknowledged the mistake but refused to do anything about it. Mr. Epps has rights under the Fair Credit Reporting Act.  Here’s what he could have done:   sent a written dispute to the credit reporting agency providing all of his personal information and disputing the allegation that he’s a felon. In that dispute, he should put the credit reporting agency on notice that he was declined for an apartment lease because of its inappropriate credit report. When the credit reporting agency failed to update or correct information, he could a filed a lawsuit. Unfortunately, he took none of the steps. As a practical matter if he would have  filed that lawsuit  on his own against the credit reporting agency, their attorneys would have trounced on him. If you think that just because you’re in the right that you will win in court, then you’re living in a fantasy world. There’s a million ways to [...]

11th Circuit Takes a Swipe at creditors filing Proofs of Claim in Bankruptcy Court on Time Barred Debts

The 11th Circuit in Crawford v LVNV Funding is the first appellate court to rule that the Fair Debt Collection Practices Act (“FDCPA”) applies to debt collectors even when they file proofs of claim in a consumer’s bankruptcy proceeding. Mr. Crawford’s account with Heilig-Meyers Furniture Company was written off in 1999.  The Statute of Limitations expired on the enforcement of this debt in 2004.  The debt was purchased by LVNV Funding, a large buyer of consumer debt. In 2008, Mr. Crawford filed for bankruptcy and LVNV filed a proof of claim in Mr. Crawford’s bankruptcy, even though the statute had run several years earlier.  Crawford stood up to LVNV Funding and sued it under the FDCPA claiming that it was attempting to enforce a time barred debt.   The trial court sided with LVNV, but the 11th Circuit reversed it and found for Mr. Crawford. The Court of Appeals found that by filing a proof of claim on a time barred debt, that LVNV was violating 15 U.S.C. 1692e by using false, deceptive and misleading means in connection with the collection of a debt.  The court believed that LVNV knew that in order to have its claim challenged, that either the trustee or the debtor must challenge the claim.  However, in this case, no one challenged the claim.  Hence, by default LVNV would have its time barred debt paid by Mr. Crawford through his bankruptcy case.   Lessons learned:   Debt collectors, no matter how large or seemingly reputable, violate the FDCPA frequently. If you have filed bankruptcy or if you are being pursued by a debt collector, CHALLENGE THE DEBT.  Make sure that the debt is valid and is not time barred.  Mr. Crawford did [...]