Huge numbers of lawsuits are filed by debt collectors and debt buyers in Michigan’s district courts every day. Some of the larger debt buyers may file hundreds of lawsuits per year in a single district court. These are relatively small-dollar cases, seeking anywhere from $100 up to $5,000 or more, typically on past due credit card accounts that have been written off and sold by the original creditor (in the case of a legitimate debt), to a debt buyer, and then possibly re-sold to a string of other debt buyers.
Many people who have been sued by debt collectors do not know what to do. The debt may seem legitimate, or may even be legitimate. Frequently these defendants simply do not contest the lawsuit, a default judgment is entered against them, and ultimately their bank accounts or wages are garnished to pay the debt collector. The problem is that the plaintiff–the debt collector who filed the lawsuit–might have broken the law when it filed the lawsuit, or might not even have had the right to any payment at all.
The Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., prohibits debt collectors from making false or misleading statements or using unfair methods to collect consumer debts. This includes statements made and methods used in lawsuits to collect debts. If the plaintiff claims amounts are owed that are not actually owed, that is unlawful under 15 U.S.C. § 1692e. If the plaintiff has filed a time-barred claim–which is typically the case if no payments have been made on the debt in six or more years–that is also a violation. Debt collectors’ legal complaints frequently contain deceptive and misleading statements that could give rise to defenses to the debt, as well as counterclaims for monetary damages.
The following common practices among debt buyers are all grounds for relief under the FDCPA:
- Misrepresenting the original creditor to whom the debt was owed;
- Seeking more money than what is actually owed;
- Including non-recoverable fees and costs in the amount sought in the lawsuit;
- Improperly including certain fees and costs in garnishments;
- Misrepresenting that the complaint was prepared by an attorney of law firm, when in fact it was prepared by a non-lawyer;
- Providing false or misleading contact information;
- Including false, misleading or fabricated documentary evidence as support for the complaint.
Many consumers sued by buyers of old defaulted debt feel they cannot afford an attorney to defend their case. This is not necessarily true, particularly when a consumer lawyer finds that there is a viable counterclaim against the debt collector under the FDCPA. This is because, as a remedial consumer protection statute, the FDCPA provides for the payment of attorney fees by the debt collector if a violation is proven.
If you have been sued by a debt collector, contact us for a consultation free of charge.