If you ever need proof that Congress is bought by business interests, such as credit-card companies and debt collectors, check out the Fair Debt Collection Practices Act (FDCPA). It's got about as much teeth as a chihuahua on Valium.
But every now and then a consumer, in spite of the pathetic law, makes an abusive debt collector pay--big time. Such a case happened a few weeks back in Montana.
Timothy McCollough, of Laurel, Montana, had been sued by a North Dakota law firm even though the time limit for collecting the debt had passed, and one similar lawsuit already had been dismissed. When the debt-collection firm kept hounding him, McCollough got mad--and he got even.
A federal jury in April found in McCollough's favor and awarded $311,000 in damages. The Billings Gazette reported:
Billings attorney John Heenan, who represented McCollough, said the verdict sends a message: "Debt collector lawyers need to follow the rules in Montana." McCollough stood up for the thousands of people getting sued by debt collection lawyers and who don't know how to defend themselves, he said.
The FDCPA provides for statutory damages up to $1,000. That's really going to scare a debt-collection outfit, isn't it? They've got that much in change floating around under their couches.
But the law does allow for attorney fees, monetary damages (payment for bogus debts), actual damages for stress-related harm, and damages for emotional distress. When a debt-collector has acted egregiously, and many of them do, the damages can start to add up. Reports the Billings Gazette:
The jury awarded McCollough $250,000 for emotional distress, the statutory maximum of $1,000 for violating the Fair Debt Collection Practices Act and $60,000 in punitive damages.
McCollough is disabled, and that might have made him a particularly sympathetic plaintiff. Hopefully, the jury acted mainly on the law firm's unlawful and nasty behavior.
Debt collection does not have to be a sleazy industry. Some practitioners, particularly those who represent original creditors, are quite reputable. But McCollough became entangled with a third-party debt buyer. And his lawsuit shines light on how those bottom feeders operate:
McCollough's lawsuit stemmed from a credit card debt he owed to Chase Manhattan Bank from the 1990s.
McCollough suffered a head injury in 1990 when he was hit with an iron bar. The injury left him disabled and eventually he began receiving Social Security benefits, which are exempt from collections.
Nevertheless, McCollough testified, he worked with other credit card companies to pay his debts. Chase was the only company that wouldn't work with him, he said.
The debt was sold to a collection company, CACV of Colorado, which sued him in Yellowstone County in 2005. McCollough responded himself, saying the five-year statute of limitations had expired, he had no money and had been harassed by Chase. The case was dismissed.
Two years later, the North Dakota firm, on behalf of CACV, sued McCollough for $9,800, which included about $6,000 in interest and attorney fees.
Getting served a second time angered and frustrated McCollough.
"I was being shoved around," he said. "I don't like bullies. I never have. I got mad. I'm still mad."
I can empathize with what McCollough went through. Mrs. Schnauzer and I know what it's like to be targeted by unethical debt collectors and the slimy lawyers they hire.
We are particularly familiar with an outfit called NCO, which is based in Horsham, Pennsylvania, and is notorious for abusing consumers. And we are familiar with a Birmingham lawyer named Angie Ingram, who makes a habit of suing people on behalf of something called the NCO Attorney Network.
We have clear evidence that NCO and Angie Ingram violated the FDCPA in our case. And based on a recent check of court records, it appears they have sued a number of folks in the Birmingham area on alleged debts involving American Express, the original creditor in our case.
If you live in Alabama and have been sued or threatened with a lawsuit by NCO and Angie Ingram--and the alleged debt involves American Express--it's possible that NCO and Ingram have followed the law in your case. But based on our experience, I would say that's doubtful.
We will be showing you exactly how these slippery outfits operate outside the law. If you use a credit card, and most people do, you will want to stay tuned.