Thursday, December 15th, 2011 at
Texas Attorney General Greg Abbott filed suit against third-party debt collector First Integral Recovery for alleged violations of the state’s Finance Code. According to a press release issued by Abbott’s office, “First Integral Recovery’s representatives unlawfully claimed that the firm is associated with law enforcement agencies. After falsely citing their purported law enforcement ties, the defendant’s staff told debtors they faced arrest, prosecution and imprisonment because of their delinquent debt.” The press release went on to say that the enforcement action also cites the payday loan collector for “attempting to intimidate debtors and using profanity during debt collection calls,” as well as for failing to validate the debts. Furthermore, collectors allegedly refused to identify the name of the creditor during calls, which is a violation of state law.
Monday, July 11th, 2011 at
Our June 24 post noted that the Federal Trade Commission and 38 state Attorneys General have opposed a proposed settlement in Vasalle v. Midland Funding LLC, its parent company Encore Capital Group, and Midland Credit Management. The judge in the case is scheduled to rule on the proposed settlement today (July 11), but Texas Attorney General Greg Abbott is leaving no stone unturned. On Friday, his office filed suit against Encore Capital Group, Midland Funding, and Midland Credit Management, charging the company with “falsifying and robo-signing affidavits, attempting to collect debts based upon inaccurate or incomplete account information, and employing unlawful and deceptive debt collection tactics.”
Why are these robo-signing practices so problematic? Debt collection agencies use sworn affidavits as a means of affirming to a judge that a consumer owes the debt in question. The vast majority of consumers don’t appear in court to defend themselves (often because they’re either not aware of a pending lawsuit against them), leaving the judge no option but to consider the affidavit proof and award the debt collection agency a judgment against the consumer. With a judgment in hand, the debt collector can go about enforcing the judgment, which in many cases involves seizing money from the consumer’s bank account.
If the foundation of an affidavit is faulty – if it’s based on erroneous information that a debt collection agency employee never checked into – a judgment has serious consequences for the consumer. A press release issued by the Texas Attorney General noted that Encore and Midland filed more than 60,000 lawsuits in Texas since 2002, and that:
“Court documents filed by the State indicate the defendants sometimes even used incomplete or inaccurate account information, targeted the wrong individuals for collection and attempted to collect debts that had been fully or partially paid. As a result, some Texans unnecessarily suffered financial hardships, such as improperly decreased credit ratings, loss of job opportunities or the ability to refinance their home.”
Thursday, November 11th, 2010 at
Texas Attorney General Greg Abbott successfully obtained a temporary restraining order against Patrick D. “Dylan” White and his businesses – CASHMAX, Fed Cash, TOPCASH, and Cash Service Center. According to a press release issued by the Attorney General’s office, Oklahoma-based White allegedly sent Texans deceptive collection letters that “were delivered in envelopes that contained the Dallas County Clerk’s forged signature and improperly bore the official seals of both the State of Texas and Dallas County….The notice letters illegally threatened criminal prosecution, referenced a phone ‘case number’ and cited fictitious criminal penalties up to five years in prison and heavy fines.”
The Attorney General is seeking up to $20,000 per violation of the Deceptive Trade Practices Act and the Finance Code.
Thursday, September 2nd, 2010 at
Most states’ debt collection laws either mirror the federal Fair Debt Collection Practices Act, or largely consist of licensing laws. Texas is one notable exception. The state has fair debt collection laws that are tough on debt collectors, and the Texas Attorney General, Greg Abbott, is putting those laws to work.
Attorney General Abbott recently announced that he has charged American Home Mortgaging Service (AHMS) with violations of the Texas Debt Collection Act and the Texas Deceptive Trade Practices Act for allegedly using “aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations.” The case also alleges that AHMS didn’t credit some who made payments on time, and falsely claimed that others didn’t make payments in order to charge late fees. This sometimes led to foreclosure proceedings.
Thursday, December 24th, 2009 at
A Texas attorney obtained a $150,000 Judgment on behalf of his client, an individual who had been contacted numerous times by a debt collector. A unanimous jury found that the defendant, First National Collection Bureau, Inc., a debt collector, had knowingly and willfully violated provisions of the Federal Telephone Consumer Protection Act (the ”FTCPA”). The FTCPA generally prohibits calls to cellular phones or using a prerecorded voice and/or an automatic telephone dialing system, without obtaining the prior express consent of the person called.
The Judgment will likely be appealed by First National, but this verdict could represent a potential step forward for consumers who have been harassed by debt collectors.