Tennessee Debt Collection Defense

The Fair Debt Collection Practices Act (FDCPA) is a federal law that governs what actions a debt collector can take while trying to collect a debt. Collection attorneys are also governed by the FDCPA. As such, collection attorneys should take note of several recent rulings in 2005 from federal courts around the country regarding the FDCPA.

Oral Disputes of Debts Count, Too
The Ninth Circuit has held that debt collectors cannot tell consumers that they will assume a debt is valid unless they receive written notification of a dispute. A consumer can dispute the validity of a debt in writing or orally. Although there are some sections of the FDCPA that require written notice, the Court declined to impose the written notice provision on other sections. The Court reasoned that it would not make sense to read a written notice requirement into §1692g(a)(3) because other sections of the FDCPA require debt collectors to take note of consumers' oral disputes.

The Ninth Circuit followed Supreme Court rulings that have held that courts should not insert language into a statute unless the failure to do so would result in absurd or unreasonable results.

Collectors Must Notify Credit Bureaus of Orally-Disputed Debts
The FDCPA requires a collector to notify the credit bureaus that a debt is disputed if the collector has reason to know the debt is disputed and reports about the debt on a consumer's credit report. This requirement applies even if the consumer disputes the debt orally.

This requirement has been extended by recent court rulings. First, the debt collector does not have the authority to decide unilaterally if a consumer's dispute has any merit. As long as a consumer has disputed the debt, the collector is required to inform the credit bureaus of the dispute.

Second, a simple inquiry by a consumer about the validity of additional charges is an oral dispute of the debt and requires reporting to the credit bureaus that the debt is disputed.

Lastly, a collector has to report that the debt is disputed in a timely manner. Summary judgment was denied for a collector in a recent case in Pennsylvania where the collector took seven months to report that the debt was disputed. The court believed that a jury could find that seven months was an unreasonable delay and a violation of the FDCPA.

Affidavits for Garnishments are Covered by the FDCPA
In an important ruling, the Sixth Circuit has recently held that debt collectors and collection attorneys who sign and file affidavits to obtain garnishments in state courts are fair game for FDCPA lawsuits.

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Collection lawyers will now have to be more careful about what they and their clients say in these affidavits. In the Sixth Circuit case, the collector's attorney filed an affidavit stating that he had a reasonable basis to believe that the debtor's property was nonexempt and garnishable. The debtor's property, however, was Social Security benefits, which are exempt.

The court also stated that the FDCPA violation was an independent federal claim from the state court action and therefore the Supreme Court's Rooker-Feldman doctrine, which bars federal courts from reviewing state court decisions, did not apply.

Repeated or Continuous Telephone Calls Can Mean Trouble
Recent court decisions reaffirm that repeated or continuous calls to a consumer by a debt collector can bring about FDCPA violations.

In one case, six voice-mail messages left on a consumer's home answering machine over a 10-day period was sufficient to defeat summary judgment and could be viewed as harassment, false threats or unfair practices.

In another case, the debt collector was denied summary judgment where it called a consumer multiple times without leaving any messages. The court determined that the possible FDCPA violation turned on the volume of calls made and on the pattern of the calls.

In yet another case, a debt collector was found to have violated the FDCPA by repeatedly calling a consumer after the consumer had hung up the telephone.

The Financial Pain of FDCPA Violations
Consumers have the right to file a lawsuit against any debt collector or collection attorney who violates the FDCPA. The consumer can recover actual damages, statutory damages of up to $1,000 and attorney's fees and costs.

Some of the secondary costs to debt collectors and collection attorneys include decreased collection rates, increased insurance rates and the costs of defending a lawsuit, just to name a few. As the recent rulings point out, avoiding FDCPA violations is the best road to travel.

Tennessee Debt Buyer’s Must Have A License

White v. Sherman Financial Group, LLC, No. 3:12-cv-404, 2013 WL 5936679, *1 (E.D. Tenn. Nov. 4, 2013), the U.S. District Court for the Eastern District of Tennessee recently denied the plaintiff’s partial motion for summary judgment and granted summary judgment in favor of the defendants on all but one the plaintiff’s Fair Debt Collection Practices Act (“FDCPA”) claims and, in the process, rendered a significant decision regarding the interplay between the FDCPA and filing state collection actions in Tennessee.

In White, the plaintiff alleged the defendants, Sherman Financial Group, LLC (“Sherman”), LVNV Funding, LLC (“LVNV”), Resurgent Capital Services, L.P. (“Resurgent”), Tobie Griffin (“Griffin”), and Buffaloe & Associates, PLC (“Buffaloe”), of violating a number of FDCPA provisions when Buffaloe filed a civil warrant and sworn affidavit on behalf of LVNV. The civil warrant sought to collect the principal amount due on the debt “plus pre and post judgment interest accruing at the statutory rate of 10% and court costs.” Griffin signed the sworn affidavit, which stated the principal amount due “plus any additional accrued interest.” The plaintiff denied the existence of the debt and the state collection suit was eventually dismissed. The plaintiff then brought the federal suit asserting that the defendants violated the FDCPA by filing the state collection action and, thus, allegedly making false, misleading representations, taking an action which could not legally be taken by failing to obtain a proper license, failing to make requisite disclosures in the civil warrant and sworn affidavit, and filing the suit in an improper venue. The specific FDCPA provisions the plaintiff alleged were violated were as follows: 1692e(2)(A), 1692e(2)(B), 1692e(8), 1692e(10), 1692e, 1692e(5), 1692f, 1692f(1), 1692e(11), 1692g(1)(3)-(5), and g(1)(3)-(5), and 1692i(a)(2). At the outset of the opinion, the Court granted summary judgment in favor of Sherman as to all of the plaintiff’s claims because the plaintiff did not discuss Sherman’s liability and only briefly even mentioned Sherman. The court then addressed the plaintiff’s claims against the remaining defendants.

First, the plaintiff claimed that the defendants filed the collection suit without possessing competent evidence to establish the debt was owed to LVNV and while knowing that they did not intend to ever prosecute the case or validate the evidence. The court found that the plaintiff provided no evidence of any intent not to pursue the action or of a pattern of practice of doing so. Furthermore, the court found that, despite taking issue with the affiant’s level of personal knowledge, the plaintiff provided no evidence to counter the information in the affidavit. The court also found that “the mere fact defendants dismissed their collection action against plaintiff is insufficient to create a genuine issue of material fact.” Plaintiff also argued that the defendants violated a number of FDCPA provisions because the amount sought in the civil warrant was the principal plus pre and post judgment interest and court costs, while the affidavit only stated “[the principal amount] plus any additional accrued interest.” The court found this argument “meritless” because “the affidavit clearly states the amount due, including the possibility of interest, and was used to validate the debt on which the civil warrant is seeking to collect.” Furthermore, the court stated that “[t]he failure to include the court cost amount would not be misleading, nor would it be an attempt to collect on an amount not authorized by law, given that court costs are authorized by statute.” Therefore, the court found the statements were not inconsistent with each other and would not deceive the least sophisticated consumer. The court granted summary judgment for the defendants as to the 1692e, 1692e(2)(A), 1692e(2)(B), 1692e(5), 1692e(8), 1692e(10), 1692f, and 1692f(1) claims.

Second, the plaintiff claimed LVNV’s failure to obtain a license to be a debt collector under Tennessee law was a violation of the FDCPA. LVNV claimed it was exempt from Tenn. Code Ann. § 62-20-105 licensing requirement because it hired the law firm to carry out its collection efforts. The court recognized that Smith v. LVNV Funding, LLC, 809 F. Supp. 2d 1045, 1049 (E.D. Tenn. 2012), held that the failure to obtain the necessary licensing could give rise to a FDCPA violation for threatening and or taking legal action which it was not authorized to do. However, in this case, the court held that LVNV was not required to obtain a collection service license from the Tennessee Collection Service Board (“TCSB”). The court fully relied on a “clarification statement” issued by the TCSB, which states as follows:

It is currently the opinion of the Tennessee Collection Service Board that entities who purchase judgments or other forms of indebtedness will be deemed a ‘collection service’ if they collect or attempt to collect the debt or judgment subsequent to their purchase of the debt or judgment. However, entities who purchase debt or judgments in the manner described above but who do not collect or attempt to collect the purchased debt or judgment, but rather assign collection activity relative to the purchased debt to a licensed collection agency or a licensed attorney or law firm shall not be deemed to be a ‘collection service.’

The Court noted that the TCSB had reaffirmed the statement as recently as May 2012. Thus, because the only evidence on the record showed that the law firm conducted all collection activity related to the plaintiff’s account, then LVNV would not be a collection service according to the clarification statement and did not need a license. The court also recognized its own contrary finding in Lilly v. RAB Performance Recoveries, LLC, No. 2:12-CV-364, 2013 WL 38344008 (E.D. Tenn. Aug. 2013), this summer and stated simply that “the Court was not made aware of the existence or import of the Clarification Statement”. The court found LVNV was entitled to summary judgment on 1692e(5), 1692f, and 1692f(1) claims.

Third, the plaintiff argued that the civil warrant and affidavit were initial communications and that the defendants violated 1692e(11) and 1692g by failing to include the required disclosures. The court first granted summary judgment for the defendants on the plaintiff’s 1692g claim. The defendants submitted an affidavit testifying that the law firm had sent a letter prior to the filing of the civil warrant and affidavit. Despite having no copy of the letter, the court found that the affidavit testifying that the records indicated a letter was sent and that the same disclosures are included in all correspondence was sufficient to prove the civil warrant and affidavit were not the initial communications because the plaintiff offered no evidence to dispute that fact. Next, the court looked at the plaintiff’s 1692e(11) claims and found that both the civil warrant and the sworn affidavit are formal pleadings. The court even went on to analyze a contrary finding in Collins v. Portfolio Recovery Associates, LLC, No. 2:12-CV-138 (E.D. Tenn. June 7, 2013), and it picked apart its analysis there and found Collins is both non-binding and not persuasive. The court granted summary judgment in favor of defendants for the 1692e(11) and 1692g claims.

Fourth, the plaintiff claimed LVNV was responsible for the acts and omissions of the law firm it hired. The court found that the nature of the attorney-client relationship gives the client the power to control its agent. Thus, the court found simply that “LVNV may be held liable for any of [the law firm's] FDCPA violations, making summary judgment improper.”

Finally, the court ruled on the plaintiff’s Motion for Partial Summary Judgment. The plaintiff moved for summary judgment on the licensing, disclosure, and wrong venue claims. The court had already dealt with the licensing and disclosures issues, finding in favor of the defendants, and only had the venue issue to address. Section 1692i(a)(2) of the FDCPA requires a debt collector to bring an action in the judicial district where the consumer signed the contract or where the debtor resides. The plaintiff argued that the civil warrant was issued in Knox County, but listed the residence as Sevier County. The defendants acknowledged that the civil warrant may have been filed in the wrong county, but that they had a good faith belief as to the plaintiff’s address based on credit reports. The court made no determination as to whether the defendants could carry the burden of proving the bona fide defense at trial, but found that they had created a genuine issue of material fact. The court denied plaintiff’s motion in its entirety.

In conclusion, the only one of the plaintiff’s claims that survived was the 1692i(a)(2) claim.

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Sued By A Debt Collector in Tennessee?

Have you been sued in General Sessions Court in Tennessee by a debt collector or debt purchaser?  They go by many names such as CACH, LLC, Cavalry SPV I, Midland Funding, LLC, Unifund CCR, Portfolio Recovery Associates, LLC, and the list goes on and on.  Think that there is nothing you can do?  You’re mistaken to believe that.

First, debt collectors and debt purchaser must comply with the Tennessee Collection Services Act in order to have standing to sue you.  Secondly, the must comport to the new provisions within Tennessee Rule of Evidence 803.  They do not.

Jason Barnette, Esq. routinely gets lawsuits filed in General Sessions Court, Circuit Court, and Chancery Court dismissed with prejudice.  If you’ve been sued by Buffaloe and Associates, Morgan & Pottinger, McLemore & Edington, Thompson & Booth, Hosto and Buchan, or any debt collection law firm either through a Civil Warrant in Debt, Summons, or even a simple letter, contact the Tennessee Debt Collection Defense Lawyers at Barnette Law Offices today.

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Sued By A Debt Collector in General Sessions?

Have you been sued in General Sessions Court in Tennessee by a debt collector or debt purchaser?  They go by many names such as CACH, LLC, Cavalry SPV I, Midland Funding, LLC, Unifund CCR, Portfolio Recovery Associates, LLC, and the list goes on and on.  Think that there is nothing you can do?  You’re mistaken to believe that.

First, debt collectors and debt purchaser must comply with the Tennessee Collection Services Act in order to have standing to sue you.  Secondly, the must comport to the new provisions within Tennessee Rule of Evidence 803.  They do not.

Jason Barnette, Esq. routinely gets lawsuits filed in General Sessions Court, Circuit Court, and Chancery Court dismissed with prejudice.  If you’ve been sued by Buffaloe and Associates, Morgan & Pottinger, McLemore & Edington, Thompson & Booth, Hosto and Buchan, or any debt collection law firm either through a Civil Warrant in Debt, Summons, or even a simple letter, contact the Tennessee Debt Collection Defense Lawyers at Barnette Law Offices today.

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Credit Reports Contains Errors? Do Something About it - Call The Tennessee Fair Credit Reporting Act Lawyers!

According to a study conducted by the United States Public Interest Research Group, more than 79 percent of credit reports from the national credit bureaus (Experian®, TransUnion®, and Equifax®) contain either serious errors or mistakes. These errors have serious consequences on people, as credit reports are used for everything from granting credit and setting interest rates to obtaining insurance and employment.

The Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) is the federal legislation that regulates the credit reporting industry, including the national credit bureaus Equifax®, Experian®, and TransUnion®. The Fair Credit Reporting Act, or “FCRA,” was enacted to protect Tennessee consumers from the damage that errors in their credit reports cause. While the FCRA established a very flawed mechanism used to “dispute” inaccuracies appearing on consumers' credit reports, this mechanism doesn’t often work. Once an inaccuracy (i.e. an account that is not the person's, but is showing up on his or her credit report, or an account that is reported as derogatory but was never past due, etc.) is disputed to the credit bureau that is reporting the inaccuracy, the credit bureau has 30 days to perform a reasonable investigation of the disputed item. They usually don’t and thus, the item remains. The FCRA also requires that the credit bureau relay the consumer's dispute to the company that furnished the disputed information (called the “furnisher of information”) who then must also reasonably investigate the dispute. Again, this seldom occurs. Once the "investigation" is complete, the credit bureau must send an updated copy of the credit report to the consumer, showing the results of the investigation which usually convey that the item and/or items remain.

The credit bureaus often fail to perform the reasonable investigation required by the FCRA. When that happens, the consumer has a claim under 15 U.S.C. § 1681i. If the furnisher fails to perform a reasonable investigation, which also happens quite often, the consumer has a claim under 15 U.S.C. § 1681s-2(b). We at the Tennessee Fair Credit Reporting Act firm of Barnette Law Offices sue both the credit reporting agencies and furnishers of information for these claims.  Our consultations are free and most cases are accepted on contingency plans.

The FCRA also requires credit bureaus to follow reasonable procedures to assure maximum possible accuracy of the credit reports they generate under 15 U.S.C. § 1681e(b). Despite this requirement, the credit bureaus often publish credit reports that contain obvious errors, such as when the credit bureaus combine the credit information of one consumer with that of another consumer who has a similar name and/or social security number.

If the credit bureau and/or furnisher negligently violate the FCRA, the consumer can recover his or her actual damages, plus attorneys' fees and expenses under 15 U.S.C. § 1681o. If the violation is willful, i.e. if it was done either intentionally or with reckless disregard, consumers can also recover punitive damages under 15 U.S.C. § 1681n.

The typical lawsuits fall under three categories:

One is the identity theft victim, who has his or her identity stolen when the imposter opens credit cards, etc. using a fraudulent name and social security number. Of course, the identity thief doesn't pay the bill, resulting in the credit card being charged off and reported onto the identity theft victim's credit report as a bad credit item. The victim learns of the fraud account(s) when he or she is denied credit and requests a credit report to learn why. The victim then disputes the fraud account(s) but because the credit bureaus and furnishers almost never go beyond simply comparing the name and social security number of the victim to the name and social security number on the account (which in identity theft cases almost always match, hence the identity theft), the fraud accounts do not get removed, thus ruining the person's credit.

Another common case is the mixed file case where the credit bureau mixes the credit files of two people with similar names and/or social security numbers. If one of these people has bad credit, it lands on the other person's credit report, ruining his or her credit. The same dispute process is used and sometimes works, but often just for a short while because, when the report is regenerated in the future, the same loose matching logic is used and the two credit files become mixed again.

The last common case is when something is just misreported by the furnisher - i.e. a credit card company reports an account as late that, in fact, was never late. If the credit bureau and/or credit card company fails to correct the error after it is disputed to the credit reporting agency, the consumer has a claim under 15 U.S.C. § 1681i.

Barnette Law Offices is one of the few law firms in Tennessee that routinely represents consumers in Fair Credit Reporting Act litigation and one of the few such firms in the nation.

In addition to Tennessee, Barnette Law Offices has represented consumers in FCRA cases all over the nation, including cases in Texas, D.C. and Michigan.

The recent amendments to the FCRA require the credit bureaus to each give you one free credit report per year. A website called www.annualcreditreport.com was set up to facilitate requesting your free credit reports. However, DO NOT USE THIS WEBSITE as the credit bureaus insert arbitration clauses into your online requests for your credit report, which could potentially waive your right to a damages trial. To request your free credit report from each of the three national credit bureaus, use the written form (which does not contain an arbitration clause) which you can download from https://www.annualcreditreport.com/cra/requestformfinal.pdf and then mail to the address on the form.

If you need to dispute errors on your credit report, write letters (sent certified mail, return receipt requested, if possible) disputing the errors to the following addresses:

Experian Information Solutions
701 Experian Pkwy
Allen, TX 75013

Equifax Information Services
P.O. Box 740241
Atlanta, GA 30374

Trans Union
P.O. Box 2000
Chester, PA 19022

In your dispute letter to the credit bureau, be sure to include your full name, Social Security number, date of birth, address and phone number in your dispute letter and itemize each error/account that you are disputing.

To schedule a case consultation with our attorneys, contact Barnette Law Offices today at 615-585-2245 or info@barnettelawoffices.com

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Midland Credit Management Calling? Call Us!

If Midland Credit Management or Midland Funding is calling you on your cell phone or sending you letters for collection, call us at Barnette Law Offices at 615-585-2245.  First, it is usually unlawful for them to call you under the Telephone Consumer Protection Act with each violation being worth $500.00 to $1,500.00.  Secondly, it is just annoying.  Third, if they are sending you letters or calling, that is a violation of the Fair Debt Collection Practices Act because they – Midland Funding – do not have a Tennessee Collection Services License necessary to collect from Tennessee consumers.

If you’ve been contacted by Midland Funding, LLC, CACH, LLC, Asset Acceptance, Cavalry Portfolio or any other debt collector, call us today before they sue you in your local General Sessions Court.

Our consultations are free and most cases are accepted on contingencies.

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SUED BY CAVALRY SPV I, CACH, LLC, MIDLAND FUNDING, ASSET ACCEPTANCE IN TENNESSEE?

Have you been sued by CACH, LLC, Midland Funding, LLC, Cavalry Portfolio Services (Cavalry SPV I), or another debt purchaser in Tennessee? Think there is nothing you can do as a Tennessee consumer to defend yourself? Well, there is something you can do to defend yourself and counter-claim Tennessee debt purchasers.

Under the Tennessee Collection Services Act, debt purchasers such as LVNV Funding, Portfolio Recovery Associates, Calvary Portfolio Services, Asset Acceptance and all others must have a collection license and meet other certain requirements in order to lawfully be able to sue you. Most, if not all, debt purchasers are in violation of the Tennessee Collection Services Act because they do not meet even half of the requirements. Indeed, CACH, LLC, Midland Funding, and many other debt purchasers in Tennessee do not even have licenses.

What does this mean, 1) Tennessee consumer lawyer Jason Barnette can get the case filed against you dismissed; and, 2) in some cases, Tennessee FDCPA and FCRA lawyer Jason Barnette can recoup damages for you against the debt purchaser that has unlawfully sued you.

If you’ve been sued in Tennessee by any of the above, particularly Cavalry SPV I, call us at 615-585-2245 or visit us at Tennessee FDCPA and FCRA Lawyers.

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