San Jose Bankruptcy & Fair Debt Collection Practices Act Lawyer Blog

A federal judge held Ocwen must comply with the Fair Debt Collection Practices Act ("FDCPA"). Zervos v. Ocwen Loan Servicing, LLC, 2012 U.S. Dist. LEXIS 44869 (D. MD 2012).

A husband and wife brought a lawsuit against Ocwen Loan Servicing falsely stating their home had been foreclosed on when it had not. Ocwen is a debt buyer that had bought the couple's mortgage loan from the original mortgage creditor. The couple claimed, in part, that Ocwen violated the Fair Debt Collection Practices Act- a federal law that governs how collection agencies are allowed to collect debts (and also covers those collection agencies attempting to collect debts here in California). The FDCPA provide consumers powerful rights to fight back against abusive debt collectors, without having to file bankruptcy.

Ocwen tried to get the case thrown out, arguing that the company is not a debt collector under federal law, and that they don't need to abide by the FDCPA. The federal court disagreed with Ocwen and refused to throw the case out.

Many consumers have complained about Ocwen's mortgage loan modification procedures. See video.

Background

The consumers were in the process of modifying their mortgage with their original mortgage creditor. During this time Ocwen acquired the defaulted mortgage loan. The consumers tried to modify their loan with Ocwen but Ocwen refused. Indeed, the consumers attempted to continue negotiations with Ocwen by sending it their loan modification package, but Ocwen denied the modification and allegedly attempted to foreclose on the the Property.

On September 21, 2011, the consumers received a letter from Ocwen that said the home would not be foreclosed if the husband and wife contacted Ocwen in the next 30 days. However, when the consumers attempted to contact Ocwen they were unable to do so because the automated phone system informed them there were over 200 callers ahead of them. Also, although the consumers were told they had 30 days to contact Ocwen, a representative showed up at the consumer's residence to change the locks, saying that the property had already been foreclosed on.

Additionally, on September 22, 2011, Ocwen sent another letter, this time saying that there was a foreclosure sale set within the next 60 days. The consumer's lawsuit alleged that Ocwen's statements were false, and that no foreclosure proceedings had ever occurred and no sale was ever scheduled.

Court Holds Ocwen May Be a Debt Collector

Ocwen asked the court to throw out the lawsuit, arguing that the company could not be sued under the FDCPA because it is not a debt collector. However, the court disagreed with Ocwen.

Ocwen argued that the consumers could not state a valid claim against the company under the Fair Debt Collection Practices Act because loan servicers are not considered "debt collectors" under that law. But, the court ruled that exemption, does not apply where a loan servicer acquires a loan after it has already gone into default. Allen v. Bank of America Corp., Civil No. CCB-11-33, 2011 WL 3654451 at *7 n.9 (D. Md. Aug. 18, 2011)(citing Schlosser v. Fairbanks Capital Corp., 323 F.3d 534, 536-39 (7th Cir. 2003);
Shugart v. Ocwen Loan Servicing, LLC, 747 F.Supp.2d 938, 942-43 (S.D. Ohio
2010)).

Ocwen also argue the consumer's lawsuit complaint did not allege that the mortgage was in default when Ocwen acquired it, but the Court found that default can be easily inferred from the alleged fact that Ocwen sent the consumers letters threatening foreclosure only days after acquiring the mortgage. The court held that Ocwen could be a debt collector under the FDCPA since the company acquires debts in default for the purposes of attempting to collect on those debts.

The court also determined that Ocwen can be in violation of the FDCPA (15 U.S.C. section 1692d) by engaging in conduct the natural consequence which is to harass, oppress, or abuse, in connection with the collection of the defaulted mortgage loan. The lawsuit claimed Ocwen informed the consumers that their home had been foreclosed and that a sale date was scheduled, when in fact there was no such foreclosure.

Additionally, Ocwen's attempt to foreclosure and evict the consumers by changing the locks without allowing consumers the 30 day response time promised in its first letter could be construed as abuse and or harassment. Similarly, Defendant's alleged attempt to effect foreclosure and eviction of Plaintiffs from their home by changing the locks without allowing Plaintiffs the thirty days response time allegedly promised in the first letter could be construed as abuse and or harassment, in violation of 15 U.S. 1692d of the FDCPA.

The court also found that the consumers properly stated claims that Ocwen used deceptive practices in an attempt to collect a debt, in violation of 15 U.S.C. 1692e of the FDCPA; falsely represented the legal status of a debt, in violation of 15 U.S.C. 1692e(2) of the FDCPA; threatened action it did not intent to take, in violation of the 15 U.S.C. 1692e(5).

Wells Fargo Home Mortgage, Inc. (d.b.a. America's Servicing Company) failed in its attempt to have a consumer's Fair Credit Reporting Act ("FCRA") claims thrown out of court. The federal judge ruled the consumer's complaint was clear enough to put Wells Fargo on notice as to why it was being sued for violating the Fair Credit Reporting Act. Jones v. U.S. Bank N.A., Wells Fargo Home Mortgage, Inc., et al., 2012 U.S. Dist. LEXIS 34873 (N.D. IL 2012).

Background

On August 6, 2004, Selena Jones entered into two "consumer mortgage refinance loans with AHL Acquisition, LLC, a.k.a. Aames Home Loan ("Aames"). The first loan was in the amount of $155,200 ("First Loan"), and the second loan was in the amount of $38,800 ("Second Loan"). The loans were packaged together with other loans, and sold off to investors. However, no assignment of either mortgage had been recorded in the county property records. Also, Aames sold Jones' loans to U.S. Bank, despite the fact that Aames had "already been paid in full" for these same documents.

On April 12, 2005, U.S. Bank brought a foreclosure suit against Jones in the Circuit Court of Cook County, Illinois, ("the Foreclosure Case") based on an alleged default on the First Loan. However, U.S. Bank was not an assignee of the mortgage for the First Loan, nor was U.S. Bank the owner or holder of the associated note. Additionally, Jones was never served with a notice of default, and no notice of default was filed in the county property records.

On June 9, 2008, U.S. Bank obtained a judgment of foreclosure against Jones' home in Illinois ("the Property") which had been mortgaged in support of both loans.

Between July 21, 2008 and October 21, 2008 Jones entered into a forbearance agreement with U.S. Bank. The forbearance agreement was successfully completed, but U.S. Bank and Wells Fargo (who at some point in time was servicing one of the mortgage loans, and sending negative information to credit reporting agencies about Jones) refused to negotiate a payment plan thereafter.

As a result of the foreclosure judgment, the property was sold on January 6, 2010. (Jones was never served with a notice of sale prior to the January 6, 2010 sale, and no notice of sale was ever recorded in the county property records).

Fair Credit Reporting Act Claims

Jones claimed that she filed disputes with credit reporting agencies who in turn provided notice to Wells Fargo that she was disputing the debts. 15 U.S.C. 1681s2(b).

Jones further alleged that Wells Fargo "made false statements to credit bureaus and neglected to make true statements to credit bureaus, including but not limited to an excessive amount of debt for which she was tricked and deceived into signing, resulting in having negative information on [her] credit." (Of course, negatively reporting a debt is just another form of debt collection, since the creditor's goal is to have the consumer make payment to clear up the negative credit reporting).

The Court stated that under § 1681s-2(b):

When a consumer reporting agency notifies a furnisher of a dispute with regard to an account, the furnisher of information must:

1. conduct an investigation with respect to the disputed information;
2. review all relevant information provided to it by the consumer reporting agency;
3. report the results of the investigation to the agency; and
4. if the information is found to be inaccurate or incomplete, report the results to all consumer reporting agencies to which it originally provided the erroneous information.

Citing Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir. 2005).

Under federal law, the complaint must "give the defendant fair notice of what the . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)

So, Wells Fargo argued that from Jones' allegations, "it is unclear whether she is alleging that [Wells Fargo] never conducted an investigation at all . . .conducted an investigation but never reported the results to the credit reporting agencies . . . or [is alleging that Wells Fargo] committed some other wrongdoing." However, Jones responded that she was alleging that Wells Fargo committed at least one of these wrongs, but she needed further discovery to determine which one.

The court refused to throw out the FCRA claim, and stated:

"Although this count is somewhat thinly pleaded, the court finds it sufficient at this stage of the case. Twombly does not require fact pleading, and Jones' allegations that she disputed the debt and that [Wells Fargo] had notice of that debt but failed to take the proper actions are enough to put [Wells Fargo] on notice of the claims against it and raise a plausible right to relief."

A Federal District Court in San Jose, California, refused to dismiss a consumer's lawsuit against LVNV Funding, LLC and the Brachfeld Law Group. Santos v. LVNV Funding, LLC and Brachfeld Law Group, P.C., 2012 U.S. Dist. LEXIS 8090 (N.D. Cal. San Jose, January 24, 2012).

Apparently, a California consumer, Blanca Santos, became delinquent on a consumer credit card account that had been assigned to the collection agency LVNV. LVNV had its law firm, Brachfeld Law Group, P.C. file a lawsuit against Santos in Santa Clara County Superior Court. Santos called Brachfeld Law Group and worked out a payment planto resolve the debt. Brachfeld Law Group informed Santos that if she made the agreed upon payments, she would not need to go to court and could disregard the summons she had been served with. Santos completed the payments on or about February 28, 2009, which Defendants obviously knew.

However, despite the completed settlement, LVNV and Brachfeld told the court Santos never answered the lawsuit, and thus they were entitled to win by default. The Court entered a default judgment in favor of LVNV and against Santos in the amount of $4,210.75. LVNV and Brachfeld then levied Santos's bank account to get the money. Santos then had to take action to get this wrongful default judgment set aside.

After that Santos, brought a lawsuit against LVNV and Brachfeld alleging that they:

1) violated the Federal Fair Debt Collection Practice Act ("FDCPA", 15 U.S.C. § 1692, by representing that Santos owed a debt that Defendants knew was not owed, by engaging in conduct that had the natural consequences of harassing, oppressing, and abusing Santos, and by attempting to collect additional fees and interest in contravention to the settlement agreement, and

(2) violated the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), Cal. Civ. Code § 1788, by violating the Federal Fair Debt Collection Practice Act as set forth above, by communicating with Santos in the name of an attorney without the approval or authorization of any attorney, and by attempting to collect charges not permitted by law.

On July 29, 2011, LVNV and Brachfeld filed a motion asking the court to throw out the consumer's lawsuit. Defendants made several arguments in their effort to have the case dismissed, all of which were rejected by the San Jose federal judge.

The defendants argued that California's "litigation privilege" somehow made them immune for their wrongful collection practices. In essence they argued that their wrongful acts all arose from filing legal documents, seeking a default, and attempting to levy bank accounts and garnish wages. They claimed such acts were protected statements made as part of a judicial proceeding. Cal. Civ. Code § 47(b).

In very well reasoned analysis the Court rejected these arguments, stating:

"The California litigation privilege, however, does not apply to FDCPA claims. See Welker v. Law Office of Horwitz, 626 F. Supp. 2d 1068, 1072 (S.D. Cal. 2009); Oei v. N. Star Capital Acquisitions, LLC, 486 F. Supp. 2d 1089, 1098 (C.D. Cal. 2006). This rule is especially clear in light of the Supreme Court's decision in Heintz v. Jenkins, 514 U.S. 291, 115 S. Ct. 1489, 131 L. Ed. 2d 395 (1995) that the Supreme Court held that the FDCPA "applies to attorneys who 'regularly' engage in consumer-debt-collection activity, even when that activity consists of litigation." Although the Heintz decision does not expressly address litigation privilege, the decision "leaves little room for the proposition that an attorney's litigation activities are immune and thus not subject to the FDCPA." Reyes v. Kenosian & Miele, LLP, 619 F. Supp. 2d 796, 803 (N.D. Cal. 2008).

The California litigation privilege also does not apply to RFDCPA violations. See Komarova v. National Credit Acceptance, Inc., 175 Cal. App. 4th 324, 337, 95 Cal. Rptr. 3d 880 (App. Ct. 2009) (finding that the litigation privilege "cannot be used to shield violations of the [RFDCPA])."

In Komarova, the California Court of Appeals held that an exception to the litigation privilege existed because (1) the RFDCPA is more specific the California litigation privilege and (2) the RFDCPA would be "significantly inoperable if it did not prevail over the privilege where, as here, the two conflict." Id. at 339-40. Here, as in Komarova, if the court were to apply the litigation privilege to protect Defendants' filings, which allegedly sought to improperly collect the debt, that decision would in effect render the RFDCPA inoperable. See also, Welker v. Law Office of Daniel J. Horwitz, 699 F. Supp. 2d 1164, 1174 (S.D. Cal. 2010)."

A Fair Debt Collection Practices Act (FDCPA) case against debt collector Bakalar & Associates will to go to a jury, despite the collection agencies attempts to have the federal case thrown out. Rios v. Bakalar, 795 F. Supp. 2d 1368; (S.D. FL 2011). Back in June, Plaintiff Maria Rios filed a lawsuit in Florida against debt collector Bakalar & Associates for alleged violations of the FDCPA after the firm attempted to collect a consumer debt which was discharged in her bankruptcy. Bakalar & Associates argued Rios' case should be thrown out because bankruptcy laws do not allow consumers to file a FDCPA lawsuit when a debt collector tries to collect a debt that was discharged in bankruptcy. The firm also claimed the Ninth Circuit Court of Appeals, which includes California, supported their position in the case of Walls v. Wells Fargo Bank, N.A., 276 F. 3d 502 (9th Cir. 2002).

Rios argued her case should not be dismissed, relying on a case from the Seventh Circuit Court of Appeals which allowed claims for violations of the FDCPA even though the consumer's debt had been discharged in bankruptcy Randolph v. IMBS, Inc., 368 F. 3d 726 (7th Cir. 2004).

In the Walls v. Wells Fargo case the Ninth Circuit Court of Appeals said if the consumer wanted to sue they had to do it in bankruptcy court, under bankruptcy law. However, the Seventh Circuit Court of Appeals, disagreed, reasoning that the consumer could bring the claim in either bankruptcy court or federal court.

The federal court in Florida disagreed, or distinguished the Rios v. Bakalar case from Walls v. Wells Fargo, and refused to throw out the case against Bakalar & Associates, reasoning:

[T]he FDCPA and the Bankruptcy Code do not exist in irreconcilable conflict; in fact, the FDCPA and the Bankruptcy Code have different elements, require different levels of scienter, offer different defenses, and allow different damages where someone attempts to collect on discharged debt....Nor can anyone seriously argue that the Bankruptcy Code covers the whole subject of the FDCPA or vice versa. Bakalar & Associates, moreover, do not argue that Congress clearly intended the Bankruptcy Code as a substitute for the FDCPA. Hence, to the extent that Walls suggests that a discharge injunction under the Bankruptcy Code prevents consumers from bringing any FDCPA claim, I disagree.

Simply put, the Florida court found no conflict existed between the bankruptcy code and the FDCPA, and refused Bakalar & Associates' request to throw out the consumer's lawsuit.

A jury will now have the opportunity to decide whether Bakalar & Associates violated the FDCPA when the firm attempted to collect on a consumer debt which was already discharged during bankruptcy.

Background

Bakalar & Associates is a Florida based collection law firm which attempt to collect consumer debts arising from homeowners association's and other entities. The firm's debt collection efforts are primarily focused on the collection of HOA fees and assessments.

Last month, the a federal court in the Eastern District of Pennsylvania refused to dismiss a Fair Debt Collection Practices Act (FDCPA) complaint against NCO Financial Systems, Inc. In the lawsuit, plaintiff Anne Carr claimed NCO Financial Systems placed repeated and continuous calls to her over a period of roughly 30 days in violation of the FDCPA. Carr specifically identified nine telephone calls by both time and date and alleged she believed other calls were also made to her home telephone. She claims NCO Financial Systems violated the FDCPA's prohibition against abusive and harassing behavior when it placed the automatic telephone calls.

NCO Financial Systems filed a motion to dismiss Carr's complaint and argued nine telephone calls do not, as a matter of law, constitute harassing conduct under the FDCPA. The company also stated the number and frequency of the calls were not sufficient for the court to infer intent to harass or annoy Carr. The Eastern District of Pennsylvania disagreed with NCO Financial Systems, however, and denied the company's motion to dismiss. The court stated Carr was only required to plead her case with enough specificity to demonstrate the volume and frequency of telephone calls made by NCO Financial Services may have resulted from intent to annoy or harass her.

The court also disagreed with NCO Financial Systems' argument that the number and frequency of telephone calls alleged in the complaint failed to meet the definitions of continuously and repeatedly described in the FTC Staff Commentary on the Fair Debt Collection Practices Act. According to the court:

The Commentary defines "continuously" as "making a series of telephone calls, one right after the other," and defines "repeatedly" as "calling with excessive frequency under the circumstances." Id. The Court fails to see how these general definitions would dictate that nine calls does not constitute repeated or continuous telephone calls. Indeed, nine calls in thirty days could possibly constitute excessive frequency under these circumstances.

The federal court also distinguished McVey v. Bay Area Credit Serv., (N.D. Tex. Jul. 26, 2010) from the case at hand by stating the plaintiffs in McVey failed to allege specific facts and instead "merely regurgitated the statute's language in its complaint." In contrast, Carr identified specific telephone call dates and times in her complaint.

Because no controlling case law states the precise number and frequency of telephone calls that would be a violation of the FDCPA, the court refused to dismiss Carr's lawsuit. Simply put, this means a jury gets to decide whether NCO Financial Services engaged in harassing or annoying behavior in violation of the Act when the company called Carr nine times in a 30 day period.

Background

NCO Financial Systems is a collection agency and debt buyer. Creditors use the services of NCO Financial System in order to collect on unpaid debts. The company also purchases unpaid debts from an original creditor and then makes repeated automated telephone calls in an attempt to collect the debt.

California consumers brought a class action lawsuit claims against CashCall, Inc., consumer finance company, alleging CashCall secretly monitored their telephone conversations with CashCall employees without the consumer's knowledge or consent. The consumers alleged violations of California Penal Codes 631 and 632 of the Invasion of Privacy Act. In essence, Cashcall was monitoring telephone calls during their attempts to collect debts.

The California Appellate Court said a lower court judge was wrong in denying two of consumer's claims against Cashcall. So, Cashcall will now be forced to litigate further and defend against those claims.

The Court's Holding

First, the California Appellate Court said that:

"In Flanagan v. Flanagan, (2002) 27 Cal.4th 766 [117 Cal. Rptr. 2d 574, 41 P.3d 575], our Supreme Court held [Penal Code] section 632 protects an individual's right to know who is listening to a telephone conversation. Consistent with this holding, we conclude the statute applies even if the unannounced listener is employed by the same corporate entity as the known participant in the conversation."

Simply, put, the Appellate Court held that for purposes of determining who must give consent, the corporation is not a single unit and all participants to the telephone conversation must give consent before the conversation may be monitored.

Second, the California Appellate Court said:

"triable factual issues exist on whether the alleged telephone conversations were "confidential communication[s]" within the meaning of [Penal Code] section 632 and whether plaintiffs had objectively reasonable expectations that their conversations would not be secretly monitored."

Simply put, that means a jury will get to decide if Cashcall violated California law by secretly monitoring "confidential communications."

Third, the California Appellate Court said:

"we cannot accept CashCall's argument that it provided adequate notice as a matter of law. First, even assuming CashCall's argument is correct that each plaintiff heard [*39] the warning message "at the outset" of his or her "borrower/lender relationship" with CashCall, this fact does not establish as a matter of law plaintiffs were adequately warned that subsequent calls would be monitored...The evidence further raises factual issues as to whether all inbound callers received the message."

Simply put, that means a jury will get to decide if Cashcall provided adequate notice that the telephone calls may be monitored.

The California Appellate Court rejected Cashcall's arguments based on an unpublished Ninth Circuit decision in another Fair Debt Collection Practices Act case. Thomasson v. G.C. Services, 321 Fed. Appx. 557 (9th Cir. 2008).

Background

CashCall is a finance company that provides unsecured loans to consumers. Plaintiffs' complaint alleged that each of the plaintiffs borrowed money from CashCall, and, in making the loans and collecting delinquent payments on those loans, CashCall "secretly" monitored and eavesdropped on telephone conversations between CashCall employees and plaintiffs, including conversations pertaining to "sensitive financial information." Plaintiffs alleged CashCall conducted the "illegal monitoring ... for the purpose of assisting [CashCall] in its collection efforts" without the "knowledge or consent" of plaintiffs or the class members. Plaintiffs further alleged CashCall's "corporate representative has admitted under oath that as a regular part of its ongoing daily business practices, [CashCall] monitors, eavesdrops on, or otherwise makes unauthorized connections to a number of collection calls with alleged debtors."

During the relevant times, consumers applied for loans from CashCall by applying online or by calling one of CashCall's advertised toll-free numbers and speaking to a CashCall representative. All borrowers, including online applicants, must call CashCall and speak to a CashCall representative to complete their loan application. All members of the class are or were CashCall borrowers.

In essence, the consumers allege Cashcall supervisors monitored these telephone calls without informing consumers the calls may be monitored. If Cashcall is found to have violated the law, the lawsuit seeks to have the company pay California consumers $5,000 for each violation. See California Penal Code § 637.2.

An appellate court upheld a judge's ruling, throwing out a lawsuit brought by Arrow Financial Services, LLC against a consumer, since the debt collector could not prove its right and ownership to collect the debt. Arrow Financial Services, LLC v. Wright, 715 S.E.2d 715 (2011).

Arrow Financial Services, LLC is a debt buyer and collection agency that sues to collect debts nationwide, including in California. Arrow Financial is owned by Sallie Mae, a company whose stock is traded on the New York Stock Exchange (ticker symbol SLM). For a link to its website click here.

According to San Jose (Santa Clara County) Court records, Arrow Financial has filed hundreds, or even thousands of lawsuits against San Jose consumers. Arrow Financial has brought these lawsuits in Santa Clara County Superior Court, alleging they were assigned debts by creditors such as:

Bank One
Bank First
Chase
Walmart
Neiman Marcus
First Premiere Bank
GE Money Bank
Washington Mutual

* For a more complete list of creditors who allegedly assigned debts to Arrow click here. (Santa Clara List of Arrow suits):

Arrow Financial Could Not Prove Ownership of or Right to Collect the Debt

In Arrow Financial Services, LLC v. Wright, 715 S.E.2d 715 (2011), the three judge appellate court in Georgia ruled that Arrow Financial Service's business records were insufficient to prove the consumer owed the debt collector a debt.

Arrow Financial Services claimed that it had been assigned the debt by a previous entity. Arrow Financial presented an employee as a witness. She provided a series of statements sent by GE Money Bank and its predecessors as evidence of the debt's origins. The consumer objected and the court then allowed the consumer to examine the witness about her knowledge of the documents before rendering a decision on their admissibility. The witness then testified that she had no personal knowledge of the means by which the documents were created. She also testified that Arrow Financial had not obtained the documents at the time it began its efforts to collect the debt.

Based on this testimony, the trial court sustained the consumer's objection to the documents' admission on the ground that Arrow Financial did not have the personal knowledge necessary to authorize admission of the documents under the business records exception to the hearsay rule. Simply put, the court found that the records were not Arrow's and any Arrow testimony about them were hearsay.

Court Directs a Verdict in Favor of the Consumer

At the close of this testimony, the consumer asked the court for a "directed verdict" (meaning the court can issue a verdict since the matter need not even go to a jury). The court granted the directed verdict in favor of the consumer on the grounds that Arrow Financial had failed to prove either the original contract or a valid chain of assignments from the original creditor to Arrow.

The court went on to order Arrow Financial to pay the consumer for her emotional distress as a result of Arrow Financial's actions that were in violation of the Fair Debt Collection Practices Act.

Arrow Lost Previous Verdicts for Violations of the Fair Debt Collection Practices Act

Arrow Financial is no stranger to Fair Debt Collection Practices Act (FDCPA) violations. Back in 2007 a federal jury in Los Angeles, California, returned a $100,000 verdict against Arrow Financial for its violations of the FDCPA. Laura Nelson v. Arrow Financial Services, LLC, Case# CV06-1568 RGK (PLAx), U.S. District Court, Central District of California, May 9, 2007. For the court's decision denying a motion for a new trial click here. For a link to the press release click here.

Debt collectors LVNV Funding, LLC and Resurgent Capital Services, L.P. have been ordered to cease collecting debts in Maryland. The cease & desist order issued by Maryland's Commissioner of Financial Regulation, Mark Kaufman, also applies to the debt collectors' related entities, including Sherman Financial Group, LLC. The order was signed on October 25, 2011, and was effective immediately. Click here for a link to the press release.

The Maryland State Collection Agency Licensing Board began an investigation in July 2011. The investigation revealed that all of the companies above (and some others) are ultimately owned, controlled and operated by Sherman Financial Group. A number of individuals (Benjamin W. Navarro, Leslie G. Gutierrez, Scott E. Silver, Kevin P. Branigan, and Robert A. Roderick) serve as the directors, managers and officers of subsidiary business entities in varying capacities.

According to the documents that were filed, Resurgent Capital Services, L.P. acts as the master servicer for charged off consumer debt owned by LVNV Funding. Which means that Resurgent attempts to collect debts owned by LVNV.

LVNV and Resurgent Cannot Prove Ownership of the Debts
One of the problems is the Agency found that LVNV cannot prove ownership of the debts it claims to have bought for pennies on the dollar. Yet, the company filed thousands of lawsuits in Maryland and obtained judgment, by filing false affidavits with the Courts.

LVNV and Resurgent Were Collecting Without a License
The filings say that LVNV filed approximately 25,811 lawsuits in Maryland district courts seeking judgments against consumers. Of those LVNV filed 17,160 lawsuits before it was ever licensed to collect debts in Maryland!

LVNV and Resurgent Did Not Have Valid Title to the Debts
Another problem is that in most cases LVNV is that the company did not have valid title to the debts it says it purchased. LVNV only purchased a computer database from a previous creditor or other debt buyer, and the only document it filed with its lawsuit complaints was a one-page printout from a database that had been allegedly created y the original creditor. LVNV did not acquire the original contracts applicable to each consumer, and they did not acquire credit card statements or any other documents about the actual use of the credit cards by the consumers. Simply put, the documents were insufficient to obtain a judgment against the consumers. The filing goes even further to say that the documents allegedly transferring the debts (the Bill of Sale and Assignment) were faulty.

LVNV and Resurgent Deceived the Court
The cease and desist order continued its harsh criticism saying LVNV and Resurgent knowing violated state law by, "knowingly submitting false or misleading affidavits that were intended to deceive the courts and consumer defendants. In another section the Agency wrote, "the various form affidavits submitted by [LVNV and Resurgent] contained artfully crafted language intended to deceive the courts and consumer defendants."

Creditors hiring LVNV Funding and Resurgent should be careful collecting debts in states such as California, where the California Fair Debt Collection Practices Act incorporates much of the federal Fair Debt Collection Practices Act. These laws protect consumers from unlawful collection practices like those above. In California LVNV Funding and Resurgent sometimes hire the Brachfeld Law Group, P.C. to try to collect their debts.

Opal V. Bate filed a debt collection harassment lawsuit against Wells Fargo. His lawsuit alleged that Wells Fargo violated debt collection laws by:

• continuing to communicate with him despite that fact the bank knew he was being represented by legal counsel,
• making collection phone calls to him before 8.a.m. and after 9 p.m., and
• by repeatedly contacting him in a harassing manner

A federal judge refused to dismiss the lawsuit against Wells Fargo. Bate v. Wells Fargo, 2011 Bankr. LEXIS 2293 (M.D. FL 2011).

Wells Fargo argued that Florida collection laws were trumped by federal law; the National Banking Act, to be more specific. The judge ruled that the National Banking Act did not trump, or pre-empt, the State of Florida's collection laws.

The Federal Court Judge explained the history of debt collection laws in the United States, stating:

"Following World War II there was an explosion of consumer credit in the United States. With an increase in debts, consumers were faced with the problem of how to pay their debts, and creditors were faced with the problem of how to collect their money. This led to a corresponding problem of an increase in third-party debt collectors representing numerous types of creditors: "hospitals, general retailers, credit unions, colleges, department stores, utilities, banks, commercial or wholesale accounts, medical
clinics, and newspapers." The techniques used by creditors and third-party debt collectors
ranged from friendly coercion to blatant harassment"...Debtors who were abused by outrageous debt collection practices were left to common-law tort remedies."

However, the common law tort remedies most states had were often not adequate to address such a unique problem. Thus, the federal court said, "Due to the increase in debt collection abuses and the inadequacy of the common-law tort remedies, in the late 60's and early 70's, the states recognized the need for consumer protection legislation in the area of debt collection. Most states enacted consumer protection laws aimed at debt collection practices. In Florida the FCCPA was enacted in 1972 to address these very concerns."

But, even the collections laws enacted by the states were not always effective, especially when collectors made contact with consumers over state lines. So, the U.S. Congress also saw the need to pass a federal law that regulated debt collectors. In 1978 Congress passed the Fair Debt Collection Practices Act ("FDCPA") in 1978."

While the federal Fair Debt Collection Practices Act regulated collection agencies, and not original creditors like Wells Fargo, several states, like Florida, California, Texas, Illiniois, Massachusetts and West Virginia, have state laws very similar to the federal FDCPA. Thus, creditors collecting in those states must abide by collection laws or risk being sued if they abuse, harass or deceive a consumer.

Certain states, like California have state laws that regulate creditors and debt collectors, and incorporate the federal law above. See California Civil Code 1788 et seq., California Civil Code 1788.17, Alkan v. Citimortgage, 336 F. Supp. 2d 1061 (N.D. Cal. 2004), and Gonzales v. Arrow, (9th Cir., September 23, 2011).

Thus, creditors, like Wells Fargo, attempting to collect debts here in California must abide by these laws (the California Fair Debt Collection Practices Act) and cease communicating with consumers once they know the consumers are represented by a lawyer. These laws also say a creditor cannot make repeated and continuous calls in an attempt to collect a debt, or call a consumer at a time known to be inconvenient.

Numerous Consumers Have Alleged They Were Abused or Mislead by Wells Fargo

This is not the first time Wells Fargo has been sued for unlawful collection practices. Wells Fargo has been sued multiple times for unlawful collection practices: For a list of some of the California cases see below:

• Marseglia v. Wells Fargo, Case #7-2010-00051655-CU-PO-NC, April 12, 2010 (San Diego Superior Court, California),
• Vanags v. Wells Fargo, May 7, 2009 (San Diego Superior Court, California),
• Ibarra v. Wells Fargo, Case #08-cv-01966-WQH-RBB, October 24, 2008 (S.D. Cal), Serrano v. v. Wells Fargo Auto Finance, Case # 09-00118008, January 12, 2009 (Orange County Superior Court, California),
• Sokolik v. Wells Fargo, Case #63710, June 11, 2010 (Tehama Superior Court, California),
• Rathbun v. Wells Fargo, Case #CLJ 494554, April 29, 2010, (San Mateo Superior Court, California),
• Adams v. Wells Fargo, 08-CECL-08302, August 4, 2008 (Fresno Superior Court, California),
• Baker v. Wells Fargo, Case# 37-2010- 00066030, February 10, 2011 (San Diego Superior Court, California),
• Ballard v. Wells Fargo, Case #149451, February 8, 2010 (Butte County Superior Court, California),
• Barnett v. Wells Fargo, Case# 166285, May 28, 2009 (Shasta County Superior Court, California),
• Cole v. Wells Fargo, August 5, 2010 (San Francisco Superior Court, California),
• Devlin v. Wells Fargo Bank, (Contra Costa County Superior Court, California),
• Gil v. Wells Fargo, Case# L10-01074, February 2, 2010 (Los Angeles Superior Court, Califonria),
• Gwaltney v. Wells Fargo, 09-cv-6272, September 14, 2009 (Amador Superior Court, California),
• Mage v. Wells Fargo, Case# 09-00860, February 26, 2009 (Los Angeles County Superior Court, California),
• Masterton v. Wells Fargo Auto, Case# BC 422200, September 29, 2009 (Los Angeles Superior Court, California),
• Meeks v. Wells Fargo, 09K-11048, June 3, 2009 (Los Angeles Superior Court, California),
• Rathbun v. Wells Fargo, CLJ 494554, April 29, 2010 (San Mateo Superior Court, California),
• Babida v. Wells Fargo, 110-cv-184728 (Santa Clara Superior Court, California).

It has been widely publicized that Citibank debt collectors caused the death of a man in Indonesia. The man killed, Irzen Octa, who had racked up a $5,700 debt on his platinum credit card to Citibank, was found dead on the bank's premises after being interrogated by third party debt collectors hired by Citibank to deal with long overdue debts.

Octa's widow said she first discovered that her husband had money problems when five men showed up uninvited at their Tangerang home one night in October and said they had come to get money. Unable to collect, they slept on a terrace outside the front door.

In the following months, debt collectors kept calling him. At the same time his debts kept rising because of hefty interest. In the end, his debt to Citibank was more than $11,000, including finance charges, but the bank said it was willing to settle for much less. He owed others money, too, and told his family members that they might have to sell their house.

Apparently, Octa left home at 6 a.m. to drop his daughter off at school and then headed over to Citibank to settle the debt. He told his wife, "Wish me luck." In the afternoon, a friend of Octa's went looking for him at Citibank and found him sprawled out on the floor with his nose bleeding and bruises on his head and abdomen.

There are conflicting reports on the circumstances of his death, as multiple autopsy reports have shown different results. The Washington Post has reported Citibank claims its "conducted its own private investigation and found no signs of physical violence."

Despite this uncertainty, the nation's government banned Citibank from adding any new credit card clients for two years, and banning Citibank from adding any new customers to its premium wealth service for one year. Due to the torture, false imprisonment and abusive collection tactics in relation to Mr. Irzen's death, 5 people, including 2 Citigroup employees have been charged. Apparently, someone posted a Youtube video showing the debt collectors being arrested!

Additionally, Citibank will not be allowed to use external debt collectors for three years in Indonesia. Apparently, the problem stems from collection agents that were outsourced as opposed to in-house. This is a huge setback for Citibank in what is Southeast Asia's biggest economy. Thus, Citi said last week it is hiring 1,400 debt collection staff in Indonesia, who were previously outsourced.

The nation's central bank is taking these measures as an effort to protect customers and the credibility of the banking industry, and went as far as telling Citibank to suspend executives involved. It has also said that if any crimes are found it will revoke Citibank's operating license.

Citi has said it is cooperating fully with police to determine if the collection agency staff had followed its code of conduct on debt collection and that it did not believe physical harm was done to the client.

Citibank, having been a big loser in the collapse of the U.S. housing market, has pushed hard since the 2008 financial meltdown to boost profits overseas, particularly in booming Asia.

California Law Prohibits Debt Collectors From Harassing Consumers

Certain states, like California have state laws that regulate creditors and debt collectors, and incorporate the federal law above. See California Civil Code 1788 et seq., California Civil Code 1788.17, Alkan v. Citimortgage, 336 F. Supp. 2d 1061 (N.D. Cal. 2004), and Gonzales v. Arrow (9th Cir., September, 2011).

Thus, creditors, like Citibank, attempting to collect debts here in California must abide by these laws (the California Fair Debt Collection Practices Act) and cease communicating with consumers once they know the consumers are represented by a lawyer.

Capital One is being sued again for failing to cease and desist making telephone calls. Yet another consumer claims that Capital One continued to place telephone calls to the consumer even after the bank was informed the consumer was being represented by legal counsel.

In Hamilton v. Capital One Auto Finance, Inc., 11-cv-00584 (W.D. WV 2011), a consumer alleged Capital One has continued to place telephone calls despite knowing she was represented by a lawyer.

This is just yet another lawsuit against Capital One for what appears to be a business plan and practice of unlawfully attempting to collect debts by calling consumers directly, despite the fact the bank knew the consumer as represented by an attorney.

Under certain state's laws a creditor or debt collector cannot communicate with a consumer when it knows the consumer is being represented by a lawyer. Capital One has been sued for this very same thing several times in the last two years:

• McNamara v. Capital One Bank (USA), N.A., Case# 10-cv-00353-H (S.D. Cal. 2010)(unlawfully contacting someone represented a lawyer, engaging in conduct the natural consequence is to harass and abuse, making more than 150 calls, and multiple calls per day)


• Bowling v. Capital One Bank (USA), N.A., Case # 10-cv-01294 (W.D. WV 2010)(unlawfully contacting someone represented a lawyer, engaging in conduct the natural consequence is to harass and abuse, making repeated and continuous calls in an attempt to collect a debt- 106 calls in less than 1 month)


• Blankenship v. Capital One Bank (U.S.A.), N.A., Case # 10-cv-01153 (D. WY 2010)(unlawfully contacting someone represented by a lawyer)


• Hamilton v. Capital One Auto Finance, Inc., Case # 11-cv-00584 (W.D. WV 2011)(unlawfully contacting someone represented by a lawyer)


• Rakes v. Capital One Bank (U.S.A.), N.A., Case# 10-cv-01367 (W.D. WV 2010)(unlawfully contacting someone represented by a lawyer)


• Vest v. Capital One Bank (U.S.A.), N.A., Case # 10-cv-01095 (W.D. WV 2010)(unlawfully contacting someone represented by a lawyer)


• Wiseman v. Capital One Bank (U.S.A.) N.A., Case # 10-cv-01131 (W.D. WV 2010)(unlawfully contacting someone represented by a lawyer)

The federal Fair Debt Collection Practice act strictly regulates how debt collectors can collect debts. In part the FDCPA says:

Communication in connection with debt collection [15 U.S.C. 1692c]

(a) COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt -

(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock antimeridian and before 9 o'clock postmeridian, local time at the consumer's location;

(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond
within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or

(3) at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication.

Certain states, like California have state laws that regulate creditors and debt collectors, and incorporate the federal law above. See California Civil Code 1788 et seq., California Civil Code 1788.17, Alkan v. Citimortgage, 336 F. Supp. 2d 1061 (N.D. Cal. 2004), and Gonzales v. Arrow (9th Cir., September 23, 2011).

Thus, creditors, like Capital One, attempting to collect debts here in California must abide by these laws (the California Fair Debt Collection Practices Act) and cease communicating with consumers once they know the consumers are represented by a lawyer.

A San Jose, CA federal judge will allow a California identity theft victim to proceed with his lawsuit against the Bank of America. Guillen v. Bank of America, et al., (N.D. Cal. August 31, 2011). The Bank of America asked the federal court to throw out several claims of a Santa Cruz man who was the victim of identity theft.

Narcizo Zavala Guillen alleged that someone stole his identity and used his personal information to obtain two mortgage loans from Bank of America. Mr. Guillen was surprised when he received a letter from Bank of America stating the available credit limit on his credit card had been reduced to $1,000.00. In response to the letter, Mr. Guillen went to a Bank of America branch on or about January 21, 2009. There he learned that two mortgage loans had been taken out in his name. Mr. Guillen also filed an identity theft report with the Watsonville Police Department identifying the loans as fraudulent. Mr. Guillen also disputed the debt with all four major credit bureaus (Experian, Equifax, Transunion, and CREDCO).

In response, Bank of America sent Mr. Guillen a letter on June 29, 2009, wherein it acknowledged that he was indeed a victim of identity theft as to delinquent mortgages and indicated it had requested removal of the loans from Plaintiff's credit report.

Despite this acknowledgment, however, Bank of America continued to report the inaccurate information, and ultimately referred one of the delinquent mortgages to debt collector SRA to attempt to collect $145,816.20. Bank of America eventually commenced a foreclosure proceeding against the home securing the mortgages, and thereby caused the Santa Cruz County Recorder's Office to publish defamatory statements concerning Plaintiff in the foreclosure documents.

The federal court rejected the Bank of America's argument that Mr. Guillen could not bring a suit under the California identity theft statute because the bank earlier admitted he did not owe the debt. The judge noted that the Bank of America continued to try to collect from Mr. Guillen, and foreclosed on the home, even after they admitted he was a victim of identity theft. Relying on another Northern District of California decision, the court also held that federal law did not block the California Identity theft claims. California Civil Code §1798.92 et seq. Pasternak v. Transunion, 2008 U.S. Dist. LEXIS 115442, at *10-11 (N.D. Cal. 2008).

Similarly the federal court also held that federal law did not block Mr. Guillen's claims under the California Fair Debt Collection Practices Act (California Civil Code §1788 et seq.)

The federal judge also allowed Mr. Guillen to proceed with his claims under California's Credit Reporting Agency Act (California Civil Code §1785.25), alleging Bank of America reported false information to the credit bureaus.

The decision was also significant in that Mr. Guillen was able to avoid filing bankruptcy to try to stop the Bank of America from attempting to collect the alleged $145,816.20 due. So, those in California can use California's identity theft law, and related laws, to protect them when creditors and debt collectors are trying to collect money that is not actually owed.

On July 29, 2011, a federal jury in Santa Fe, New Mexico, reached a verdict of $1.26 million against a debt collection law firm for pursuing a woman for a debt she did not owe.

The debt collection law firm of Farrell & Seldin spent three years chasing Lucinda Yazzie. Ms. Yazzie had the identical name of another Navajo woman. Despite protests that they had the wrong person, the collection law firm persisted and ignored numerous opportunities to correct the situation and pursued the wrong Ms. Yazie mercilessly. The debt collection law firm made two attempted wage garnishments, and placed a lien on the wrong Ms. Yazzie's her property (which wasn't released even after the jury returned its verdict!)

The verdict was $161,000 in actuals damages (or emotional distress) under the Fair Debt Collection Practices Act (FDCPA), New Mexicos' Unfair Deceptive Acts and Practices statute, and common law. The jury found that it was appropriate to levy punitive damages against the collection law firm in the amount of $1.1 million for its unlawful debt collection.

The consumer, and her employer, made repeated attempts to tell the debt collection law firm it was attempting to collect the debt from the wrong person. The debt collection law firm withdrew its first attempt to garnish Ms. Yazzie's wages, but then inexplicably made a later attempt to garnish her wages. It seems the debt collection law firm did not stop its wrongful pursuit of Ms. Yazzie until she hired an attorney to sue the debt collection law firm.

Ms. Yazzie's attorneys argued that the debt collection law firm took a factory approach to litigation, employing abbreviated procedures for filing lawsuits, citing other court cases condemning the practice of suing on scant, often unverified information. McCollough v. Johnson, Rodenberg & Lauinger, 645 F.Supp.2d 917 (D. Mont. 2009).

Ms. Yazzie also pointed the Court to two other recent jury verdicts against debt collectors for pursuing someone for a debt they did not owe. Fausto v. Credigy, where a San Jose, California jury reached a verdict of $500,000 against the debt collector, and McCollogh v. Johnson Rodenberg & Lauinger, where the jury reached a $311,000 verdict.

Ms. Yazzie's attorneys also argued that the Court should reject the debt collection law firm's position- that the FDCPA should not protect people who do not owe the debt- citing to other courts that have found the FDCPA also protects consumer that are being harassed for debts they do not owe; indeed one federal judge held:

Indeed, to read the FDCPA in this manner would allow unscrupulous debt collectors, and particularly buyers of junk debt who cannot verify the accuracy of the debts or the identities of the debtors, to simply file debt collection actions with impunity against all persons having a similar name as the debtor, on the chance that one of the named defendants is the true debtor, or that one of the named defendants will simply pay the debt allegedly owed under the threat of having a judgment obtained against them, with a resulting levy against their property.

In reaching the $1.2 million verdict it is obvious the jury disagreed with the debt collection law firm's tactics.

A federal judge in Florida has ruled that a jury will get to decide whether a debt collector's collection telephone calls were harassing in violation of the Fair Debt Collection Practices Act ("FDCPA").

In Holland v. Bureau of Collection Recovery, a consumer alleged that a debt collector violated the FDCPA by:

• Engaging in conduct of which the natural result is abuse and harassment
  
• Causing a telephone to ring repeatedly and continuously to harass
  
• Placing telephone calls without meaningful disclosure of the caller's identity
  
• Using deceptive means in an attempt to collect a debt by failing to leave voice mail messages when calls were not answered

The consumer alleged the debt collector called her over 30 times in a span of less than 2 months, with the debt collector calling multiple times per day. During some of these calls the debt collector failed to identify who they were, and that they worked for a debt collection company. The consumer asked that they stop calling and send her proof of the debt. The debt collection agency did not send proof of the debt, and continued calling the consumer. In subsequent communications, the debt collection agency did not disclose to the consumer that it was a debt collection company that was placing the calls to her.

The debt collectors tried to get the judge to decide before trial that:

• The consumer failed to demonstrate the type of harassing, abusive, or oppressive language or conduct necessary to establish that Defendant violated the FDCPA
  
• That Defendant's representatives did in fact disclose their identity and that choosing not to leave voicemail messages did not violate the FDCPA
  
• And that on May 4, 2010, the debt collector sent a written notice containing all of the language necessary to comply with the FDCPA

The judge refused to throw out the lawsuit and held that it would be up to a jury to decide whether the debt collector violated the FDCPA. The Court noted that the Eleventh Circuit Court of Appeals has held that a debt collector's intent to annoy, abuse, or harass a consumer may be inferred by examining the nature and frequency of debt collection calls. Meadows v. Franklin Collection Services, Inc., 2011 WL 479997 (11th Cir. February 11, 2011) .

Furthermore the Court said that numerous courts have held that the intent to harass is a question of fact for the jury jury to decide, and it couldn't be decided by the judge before trial. Akalwadi v. Risk Mgmt. Alternatives, Inc., 336 F.Supp.2d 492, 505 (D. Md. 2004); Kavalin v. Global Credit & Collection Corp., 2011 WL 1260210, at *4 (W.D.N.Y. 2011); Rucker v. Nationwide Credit, Inc.,, 2011 WL 25300, at *2 (E.D. California, Jan. 5, 2011); Clark v. Quick Collect, Inc., 2005 WL 1586862, at *4 (D. Or. 2005).

The Judge went on to say that in the Meadows case the Court specifically rejected the debt collector's argument that its calls were not harassing because the consumer did not answer the phone. The Judge also said that the plain language of the FDCPA makes it clear that the debt collector must make a meaningful disclosure (i.e. the name of the collection agency and that they are a debt collector) when placing telephone calls. Finally, the Judge said that whether failing to leave voice mail messages violated the FDCPA was also a question for the jury.

Often times debt collectors attempt to collect debts from people who do not actually owe the debt, or repeatedly telephone these people in an effort to get them to reveal where the true debtor is.

CBS just aired a television interview in the San Francisco Bay Area about a couple who have been hounded for 10-years about a debt they do not owe. In the CBS interview, "Call Kurtis: It's Not My Debt", consumer protection attorney Ronald Wilcox mentions that the debt collection industry was the most complained of industry 9 years in a row, according to the Federal Trade Commission. Hopefully, stories like the one shown on CBS will help educate the public about how some of these unscrupulous debt collectors operate.

Recently, a federal Court of Appeals has ruled that a jury was be allowed to determine whether a debt collector violated a woman's rights by repeatedly telephoning her regarding a debt she did not owe.

In Meadows v. Franklin Collection Service, Inc., the 11th Circuit Court of Appeals had to decide whether a lower court was correct in ruling that the debt collector could not be liable for the 300 telephone calls it placed over a 2.5 year period.

Elizabeth Meadows brought a lawsuit against Franklin Collection Services, after it placed 300 telephone call to her home over a 2.5 year period, causing her emotional distress. Ms. Meadows did not owe any debt to this debt collector. She also said that she told the debt collector, back in 2006, that it was making a mistake in calling her. But the calls continued.

The Appellate Court held that it was for the jury to decide whether the collection agency caused plaintiff's telephone to ring with the intent to annoy or harass her. In reaching this conclusion the Appellate Court said that, "In enacting the Fair Debt Collection Practices Act, Congress meant to ensure that every individual, whether or not he owes the debt, has a right to be treated in a reasonable or civil manner."

The Appellate Court rejected the findings of the lower trial court that originally held it was not unreasonable for the debt collector to place 300 telephone calls since they were spread out over 2.5 years, from October 2006 to March 2009.

The Appellate Court also rejected the findings of the lower trial court that originally held that the debt collector's collection practices were not unreasonable because many of its calls to Meadows went unanswered, as Meadows had caller identification and knew the calls were not for her.

Of course, juries are also not sympathetic to debt collectors who continue to telephone someone who says they do not owe the debt. A federal jury in San Jose, California reached $500,000 verdict for a husband and wife who were called by a debt collector 94 times, with 91 times being after they sent a cease and desist letter.

We can only hope the collection industry will note these rulings, and the negative press in the media, and take steps to insure they do not violate the Fair Debt Collection Practices Act.