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Debtors in court, suing collectors By Chris Serres
http://www.JewishWorldReview.com | (MCT)
On the screen, a debt collector with spiky hair is squirming, his eyes darting back and forth as Barry barrages him with questions. "You see!" Barry yells triumphantly. "He's lying. Collectors often lie. If it's between me and him in front of a jury, I'll win every day." Hounded by collection firms that buy unpaid debts and relentlessly pursue debtors through court judgments, many of Barry's clients have turned to him for relief from what they contend is nothing short of harassment. Yet the legal movement Barry helped create — by training hundreds of lawyers at grueling, 30-hour boot camps that cost Federal lawsuits by debtors against collectors have soared sevenfold over the past decade, in a mirror image of the huge jump in collections judgments that Barry and others accuse debt collectors of churning out mill-style without regard to accuracy. And while collectors usually win judgments when they go to court, debtors are finding success when they fight back. Debtors win so easily, in fact, that about one-third of those who sue do it again, according to WebRecon, a High-volume consumer law firms are churning out lawsuits as efficiently as the collectors they battle. Many of these suits are cookie-cutter complaints that are skimpy on details — just like many collection actions clogging the nation's court systems. Some debtors, armed with scripts and recorders given to them by attorneys, have goaded collectors into making abusive comments that violate the federal Fair Debt Collection Practices Act, or FDCPA. At least 80 people have sued creditors more than 10 times under the law. On message boards and blogs, debtors brag of gaming a system that is otherwise stacked in favor of lenders.
The industry considers many of the lawsuits frivolous. "We have a growing culture of evasion in this country," said The clear winners are the growing ranks of consumer attorneys who have turned FDCPA litigation, once an ignored area of law, into big business. Collection firms often settle rather than risk trial. Even when debtors win, their attorneys often walk away with most of the money and the debts remain. "Are consumers better off than they were two or three years ago because of all this litigation?" asked ——— Barry, 45, became an anti-collections crusader almost by chance. He worked for years in various jobs, including door-to-door newspaper sales and security investigations for Target, before going back to college and, eventually, A month after he became a lawyer in 1997, a young woman came to Barry concerned over "She was terrified," he said. Barry sent the collector a letter accusing him of extortion. The calls stopped. He quickly came to appreciate the FDCPA as a little-understood protection for consumers. The 1977 law bars collectors from using obscenities or making threats, such as telling someone they will be thrown in jail. It sets fines of up to Barry became one of the first attorneys in the nation to make a living exclusively suing debt collectors. He did so just as consumer debt levels began to mushroom. Between 1997 and 2009, outstanding credit-card debt soared from One day in 2001, Barry got a call from two Soon, Barry began getting calls from attorneys everywhere. Would he do a tutorial for them, too? His boot camp was born, helping create an army of FDCPA attorneys. Just two lawyers made a living filing suits under the federal law 20 years ago. Now, there are more than 400. In his boot camps, Barry plays recordings from tense question-and-answer sessions known as depositions. This includes one from a 2005 case that Barry won by prodding a collector into admitting that he swore over the phone. "Why did you call my client a low-life piece of s--t?" Barry asked the collector, according to the transcript. "In about 10 seconds you're going to have that answer, Mr. Barry," the man replied. "I'd like the answer now, please," Barry said. "Well, you have to get it when I give it," the collector said. "I'm asking you, and I'm going to ask you again, the question is, why did you call my client a low-life piece of s--t?" Barry said. "Because in my opinion, a person who doesn't pay his bills … is a person who in my opinion is a low-life piece of s--t," the man replied. The collector lost. Barry and his client were awarded Barry once weighed 345 pounds but shed 140 of them over an 18-month period, embracing a diet with the same unrelenting intensity he brings to litigation. Shedding the weight helped Barry endure his own boot camps, where he stands from Barry sees the boot camps as playing a vital role in keeping the collections industry in check. At a recent camp in "The bear goes to the dump and nothing happens," he says, staggering around the room like a bear. "Suddenly, boom, he takes one right in the heart. One bear drops his corn cob and the other one drops his half-sandwich and they're saying, 'Something is wrong here.' It takes awhile for the bears to figure out that they may get shot if they go to the dump." ——— For all his success, Barry may no longer be the attorney most hated by the collections industry. That distinction has passed to a handful of high-volume law firms that generate thousands of FDCPA cases a year. The most prolific is a He sent notices to many of his 40,000 past clients, announcing that his firm had begun suing debt collectors. Today, his firm files 15 percent of all FDCPA lawsuits in U.S. courts, according to WebRecon. "I wish I could tell you a great story about how my mother was driven to madness by a debt collector," Krohn said with a laugh. "But I can't. I love what I do, and I don't mind calling it a business." Ten law firms accounted for 40 percent of the 9,290 cases filed nationwide in federal courts against collection firms in 2009, according to WebRecon. The suits often allege that a collector has called repeatedly, and let the phone ring, to harass a debtor. Many collectors complain that this is unfair, that debtors often don't pick up, leaving them little choice but to call again. Other lawsuits allege that collectors used obscene or abusive language. Telephone answering machines have become a rich source of lawsuits. In 2006, a federal court ruled that collectors must identify themselves when leaving messages on machines. However, by doing so, collectors can be sued under the FDCPA, which bars them from communicating debts to a third party. But if collectors call repeatedly, and don't leave messages, they can be sued for harassment. "It's a huge Catch-22," said In May, a judge in Consumer advocates have long accused the collection industry of employing the same tactics, mass-producing lawsuits without verifying that debts even exist. Last month, the When debtors sue, collectors often settle quickly. In
"You've got a black Southern woman without any money suing some Yankee collector," he said. "Who do you think an ———
In 2005, Katz founded an Internet message board called Debtboards.com that contains thousands of postings on how to sue and hide from debt collectors. The message board's "Wall of Shame" keeps a running tally of how much Debtboards.com members have won in legal victories. At latest count, it is nearly Asked why he started the message board, Katz answers simply, "Revenge." In the 1990s, he incurred "This is my way of getting back at the people who made my life a living hell," he said. Katz caters to a new breed of embittered debtors who, not satisfied with just filing lawsuits, actively seek to deceive the collections industry. They include people like "On occasion, I sobbed as the collector thought I was completely vulnerable and an easy target for such threats and abuse," he wrote. Swanberg also described stringing collectors along and inciting them to anger. Swanberg once claimed to have made about One of Swanberg's attorneys was Lyons said he withheld information about the death to get a better deal for his client's widow and two children. "I let my heart get in the way of my ethics," he said. Rosso, the "Their anger is misguided," he said. "The collector is just the messenger. … We're minnows. The whales are in the financial services industry." In the face of debtor lawsuits, some large collection firms have decided it's safer to skip the risky phone calls and immediately seek judgments in state courts for an unpaid debt. In "There is a rush to the courts on both sides," said Olson, the Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
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