Recently, the owner of a collection agency reached out to me and shared a letter he had written to his local Congressman. The letter, which you can read excerpts of below, talks about the pains of dealing with frivolous lawsuits and the impact that defending against them, in terms of hirings that the company can not make because it is too busy spending money on lawyers. With permission of the owner, AccountsRecovery.net has been granted permission to re-print portions of the letter, with the hope that it will spur other agency owners and executives to follow suit.
Over the last several years we have been inundated with frivolous lawsuits by professional litigators who are picking apart our letters (debt validation notices) word-for-word while we work diligently to strictly follow the regulations set forth by the FDCPA (Fair Debt Collection Practices Act). The same attorney-approved letters we have used for well over 15 years are being unduly scrutinized by these professional litigators and labeled as “confusing” or “misleading” to these very same consumers. We take incredible pride in doing right by consumers. In fact, we take pride in helping those who care to pay the bills they owe – to doctors, to small business owners, to the numerous people who extend credit to consumers and who sometimes are left holding out an empty hand when it comes time to be paid for the products or services they provided. We are not the bad guys. In fact, we are one of the good agencies that constantly strives to do the right thing. Not only do we extend as much help to consumers as we lawfully can, but we also support our community with sponsorships and volunteerism.
So, when we get sued again and again … and pay out $10,000 settlements each time, of which 90% or more goes to the attorney, who do you think ends up paying? The consumer does. For every three or four of these lawsuits we are prevented from hiring one more full-time person. And we are getting hit with dozens of these each year and paying hundreds of thousands of dollars – for what? A letter that has been successfully used since the turn of the century! So, add that up and we’re growing more slowly than we have intended with costs being passed back to the consumer from our clients – all of which costs money – in revenue that provides property taxes, payroll taxes and employment in an area that could really use more available jobs and money to fix crumbling infrastructure, increase educational opportunities, fight crime, and more.
Do you know that we get sued for using dialing technology? The same technology that elections use to call voters or to drop a voicemail on my colleague’s phone to tell him about upcoming town hall meetings. Did you know that campaign surrogates sent the same person unsolicited text messages to vote leading up to election day? And do you know that no one ever opted-in to receive any of these notices? Did you know that he could actually sue because of this? Now, he hasn’t, and he won’t – he’s a reasonable person who employs logical thinking and doesn’t pretend these messages have hurt him in any manner. In the end it’s not really an inconvenience. It’s not unreasonable for him to simply ask not to receive these calls and text messages. How is it that we are treated any differently? How is it that when we follow the letter of the law as outlined in the FDCPA, we are still found liable even though there is no clear guidance provided outside of this for our letters and the TCPA (Telephone Consumer Protection Act) for all forms of communication, even though this act became a federal statute in 1991! That certainly makes it hard to understand how email and text-messaging is currently regulated in this industry, let alone any other.
In fact, ACA International submitted a proposal to the CFPB (Consumer Financial Protection Bureau) outlining some of these things, including an approved debt validation notice, leaving voice messages, using text and email, and even perhaps replacing the debt validation with a digital form that would provide the industry with a clear roadmap in avoiding frivolous litigation based on unclear standards. You can see more about this on the ACA International website (https://www.acainternational.org/news/aca-requests-quick-fixes-to-parts-of-the-fdcpa) – it’s currently under consideration on a wing and a prayer. A call from you to the newly confirmed director of the CFPB, Kathy Kraninger, to consider the suggestions presented in this proposal would be greatly appreciated and might just go a long way in determining the appropriate regulations and standards for the future.
We have spent hundreds and hundreds (if not thousands) of man hours working with a team of our best and brightest minds to craft a letter that informs the consumer of the amount they owe all the while tip-toeing around imaginary lines that we can’t even see in avoiding words and phrases that may be confusing to the “least sophisticated consumer” but also including a vast amount of clunky language required by this outdated legislation. Meanwhile, we do this work proudly but have zero guidance from the Federal Government on what would constitute proper language. The only guidance we have is that we must send a notification by mail before we can even make a phone call and we must make sure we tell the consumer how to dispute the bill and we must read the FDCPA Mini-Miranda each and every time we speak to a consumer no matter what. This is surely an antiquated way of doing things in this century and we’re getting sued on it left and right – perhaps the only bi-partisan effort we’ll ever see again in America! And we are doing this even after successfully using the same letter since 2001 – a letter that is now somehow confusing to consumers? Does this mean that American consumers are somehow growing less intelligent? Is that what we should conclude from this? I certainly hope not, and I certainly do not believe that Americans are any less intelligent today than they were twenty years ago.
For nearly ten years, we have gone through this process of changing our letters – we are consumed by this effort instead of exalting our success and growing our business … Not to mention we are too scared and paranoid to even try texting or emailing consumers – instead of mailing a statement or calling. And through this all, we just want to do the right thing.
So we decided enough is enough and we decided to fight a case … for another alleged ambiguous set of words in a debt validation letter we sent to a consumer who owed a medical debt (again this is a letter completely compliant with the FDCPA).
The judge agreed with our position and thought the attorney fees were egregious and the lawsuit itself was a farce, but he could only “go on current caselaw,” and then said, “So, call your Congressman if you want this to change.” Do you know what current case law he cited? The fact that this lawyer could charge $650/hour to essentially argue how one word was enough to confuse his client about a bill he owed. We were then presented with these choices: Take the case to trial at a cost approaching $100,000 or settle right then and there for $10,000. So, what do you think we did? Yes, sir. Another $10,000 – not to the consumer who supposedly is the aggrieved party here, but $9,000 to the lawyer and $1,000 to the consumer – and, here’s the kicker, the consumer still owes the bill! The plaintiff is able to recoup their lawyer’s fee through this process, but if we were to win or settle in our favor, we cannot do the same thing. There is literally nothing preventing these attorneys from fleecing companies that support thousands upon thousands of jobs in the US. It is not a level playing field and these attorneys are acting just like the worst collection agencies. How is this helping anyone? Do you know what would immediately slow down this silly trend? Allowing the defendants to recoup their attorney fees. How many professional litigators do you think would take that risk? How many collection agencies would have the courage to then fight these frivolous and unjust lawsuits?
Congressman, you are the only one who can help us. And we don’t need much. … We’re not asking for tax breaks. We’re not asking for influence. We’re asking for common sense to start guiding the principles of collecting legitimate debt in this great country of ours. Can someone definitively tell us what to do? The CFPB gives absolutely no guidance on this. The FDCPA and TCPA provide some, but it’s outdated and doesn’t even address email, cell phones or text messaging – all modes of communications that a majority of consumers prefer. Can someone level the playing field so we can use the same technology you and many other business and organizations use to make our clients whole? Can defendants recoup their attorney fees from plaintiffs when the defendants are proven correct? If not, you’re going to put the majority of debt collectors out of business and when no one is left to collect the debts, businesses, hospitals, and even the government itself will go out of business. It is well worth your time and effort write the CFPB to consider the suggestions presented in the ACA’s proposals.
Please help us, Congressman. After all, it’s just common sense.