Rex Anderson, PC

The Federal Trade Commission announced today, Beginning September 1, 2009, prerecorded commercial telemarketing calls to consumers – commonly known as robocalls – will be prohibited, unless the telemarketer has obtained permission in writing from consumers who want to receive such calls.

“American consumers have made it crystal clear that few things annoy them more than the billions of commercial telemarketing robocalls they receive every year,” said Jon Leibowitz, Chairman of the FTC. “Starting September 1, this bombardment of prerecorded pitches, senseless solicitations, and malicious marketing will be illegal. If consumers think they’re being harassed by robocallers, they need to let us know, and we will go after them.”

The new requirement is part of amendments to the agency’s Telemarketing Sales Rule (TSR) that were announced a year ago. After September 1, sellers and telemarketers who transmit prerecorded messages to consumers who have not agreed in writing to accept such messages will face penalties of up to $16,000 per call.

http://www.ftc.gov/opa/2009/08/robocalls.shtm

The American Collection Association (ACA) commented:

Notably, although not specifically exempted by the recent amendments to the TSR, debt collection calls are not subject to the changes, as such calls do not meet the definition of “telemarketing” used in the TSR.

Third Party Communications and the Fair Debt Collection Practices Act.

The Fair Debt Collection Practices Act was passed in 1977 to protect consumers from abusive debt collectors. One such protection is prohibited third party communications. The FDCPA requires a third-party debt collector to follow the following rules when collecting a debt. 

Communicating with a debtor. 
 A debt collector may communicate with you in person, by mail, telephone, telegram, email or fax. But the FDCPA prohibits a debt collector from contacting you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you give permission. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts or you have advised the debt collector that it is inconvenient for you to receive calls at work. 

 Contacting a third party about your debt.
If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people to find out where you live, where you work and what your phone number is ONLY. Collectors are prohibited from contacting such third parties more than once. The collector may not tell anyone other than you, your spouse and your attorney that you owe money. If a collector discusses your debt or private financial information with a third party – it is an automatic violation entitling you up to $1000.00 in statutory damages and perhaps more if you can show actual damages. 

Giving written notice.
Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe, the name of the creditor to whom you owe the money and what action to take if you believe you do not owe the money. 

When a consumer doesn't owe the money.
A collector may not contact you if within 30 days after you receive the written notice you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

 No harassment.


Debt collectors may not harass, oppress or abuse you or any third party they contact. Debt collectors may not:

·         Falsely imply that they are attorneys or government representatives.

·         Falsely imply that you have committed a crime.

·         Falsely represent that they operate or work for a credit bureau.

·         Misrepresent the amount of your debt.

·         Give false credit information about you to anyone, including a credit bureau.

·         Send you anything that looks like an official document from a court or government agency when it is not.

 Debt collectors may not state that:

·         You will be arrested if you do not pay your debt.

·         They will seize, garnish, attach or sell your property or wages unless the collection agency or creditor intends to do so and it is legal to do so.

·         Actions, such as a lawsuit, will be taken against you when such action legally may not be taken or when they do not intend to take such action.

·         No unfair practices
A debt collector may not engage in unfair practices when they try to collect a debt from you. Debt collectors may not:

·         Collect any amount greater than your debt, unless your state law permits such a charge.

·         Deposit a postdated check prematurely.

·         Use deception to make you accept collect calls or pay for telegrams.

·         Take or threaten to take your property unless this can be done legally.  

Two of our firm’s clients were recently featured in a Detroit Free Press Article detailing the continued pressures faced by consumers whose debts have been referred to collections. See http://www.freep.com/article/20090828/NEWS06/908280382/1001/rss01

As the article points out, the Fair Debt Collections Practice Act is a federal consumer statute which protects you, me, and any other person who owes debts from abusive and harassing collection attempts by third party debt collectors.

Let me start off by saying people should pay their debts. But just because they don’t pay --- is no excuse for debt collectors and debt buyers to shamelessly abuse and harass a consumer and her family, friends and neighbors.

Congress saw fit to pass a federal consumer protection statute back in 1977 after conducting and listening to extensive investigation, studies, and testimony, congress found (and I quote):.  

“There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors.  Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy…                         

Have you ever witnessed a pit bull attack? They go for the jugular vein. It’s just like some debt collectors – they don’t stop. They are relentless, savage.

The banking industry is to blame as well. It is a joke. It’s a grab ass industry with the debt collector acting as the hit man. The collector is playing the bad guy for the creditor who doesn’t want to be the bad guy. The collector is the reason that banks charge all the extraordinary credit card fees.  The typical credit card has 17 different fees, penalties, and interests rates for just about every contingency under the sun, written by a team of Harvard MBAs. The lawyers, the judges and even the judge’s law clerks can’t figure out how these credit card companies (banks) calculate their fees, penalties, and interest to arrive at the final amounts due and owing, The only way to understand this voodoo accounting is with the help of a forensic accountant in a full blown lawsuit which most consumers can’t afford.  The banks know they will get all these phantom fees with the debt collector pit bulls working for the financial industry. Tack on interest, over the limit fees, usurious interest rates and this is all phantom money but for the debt collector. Bottom line here is Big Business profit and for the banks its not a matter of tolerance – rather the banks encourage it.

Rex Anderson PC

Consumer Attorney

www.rexandersonpc.com

The Federal Trade Commission has recently issued an alert to consumers that debt collectors who contact the family members of deceased debtors attempting to collect on the respective debts of the deceased may be breaking the law. [1]

The Fair Debt Collection Practices Act defines a “debt” as:

Any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.[2]

Further, the FDCPA defines a consumer as, “Any natural person obligated or allegedly obligated to pay any debt.”[3] The combined usage of these definitions by the FDCPA leaves very little room for debt collectors to legally attempt to collect on a debt incurred by someone other than the actual debtor (consumer) themselves. In fact, there are serious limitations on even the mere contact of third parties by debt collectors attempting to collect on a debt. The FDCPA allows contact of a third party to confirm a debtor’s location information, but not much else.[4] Thus, contacting a family member (third party) to confirm a debtor has passed away certainly seems reasonable under the act; however, pressuring a family member to make a payment on the debt of a deceased relative is almost certainly a violation.   

As listed in the FTC alert, it is the estate of the deceased that is liable for any debts owed by the deceased; moreover, if the decedent’s estate runs out of resources prior to the payment of all the debts owed by the deceased family member then these debts most often simply go unpaid.

With debt collection activities on the rise, the Legislature of the State of New Jersey is acting to protect and support consumers facing debt related challenges. There are new Assembly proposals on the table in New Jersey that increase the regulation of debt collectors at the state level in New Jersey.

In Assembly No. 3839 of the 213^th Legislature of the State of New Jersey provisions were introduced requiring debt collectors to provide certain information to debtors over and above the federal requirements set forth by the Fair Debt Collection Practices Act. In Assembly No. 3839 it is proposed that debt collectors must provide the amount of debt owed, separately from fees or other charges. In addition, they must show verification of the debt, the name of the creditor, and they must provide a copy of the Fair Debt Collection Practices Act to the debtor. The proposal includes the provision that these related items of information be provided in writing no smaller than ten-point font. 

Violators of the proposed regulations will find themselves subjected to monetary penalties of up to $10,000 for the first offense and up to $20,000 for any subsequent offenses under the consumer fraud act.

Source: http://www.njleg.state.nj.us/2008/Bills/A4000/3839_I1.PDF
See also: http://www.njleg.state.nj.us/2008/Bills/A4000/3708_I1.PDF

It has now been 14 years since Michigan Governor John Engler spearheaded Tort Reform in the State of Michigan. This was touted by the Neo – Cons as necessary for the economic survival and flourishing of Michigan’s economy. A national smear campaign had been simmering against the “cry baby” plaintiffs and their greedy “trial lawyers,” since the 1980s. I remember as a teenager seeing this headlining on the front page of “TIME” magazine. The chamber of commerce funded much of this propaganda. Corporate America did not like being held responsible for the manufacture of dangerous products and insurance companies hated paying out on claims whether they were legitimate of not. All blame for the socio and economic ills of our society was dropped at the feet of the “trial lawyers.”

Well after 14 years of Tort Reform, we can now truly appreciate how utterly full of baloney those crooked public officials were. They were bought and paid for by big moneyed interests and stripped the rights of the little man away to pocket even greater profits. Consumer rights were stripped away by a corrupt Supreme Court majority. The rights of the injured were stripped away to the benefit of insurance companies who lost their profits in the recent stock market crash. Laws regulating the Mortgage industry became non-existent while brokers built mansions on Lake Charlevoix at the expense of a banking crisis.

George W Bush, like John Engler used his position of influence to deride the trial lawyers in every State of the Union address he made. It is safe to say Tort Reform was a boogey man and the proof is in the pudding. Hog-tying trial lawyers from representing consumers and injured people had no effect on the economy. To the contrary, creating laws to put more money in the pockets of a chosen few has been the downfall of this State and nation in large part.

Admittedly, Lawyers are an easy target. The profession is full of dispute and controversy and it is not difficult to find someone or another who has had a bad experience with a lawyer. There is no mistaking that many legal cases are a war of attrition and justice prevails to the deepest pocket.

Certainly there were cases of plaintiffs and their lawyers abusing the system. However, this was not as wide spread as the insurance industry, their lobbyists, and even some in congress would have you believe. Consider the source. Those complaining about the Plaintiff’s bar and the need for Tort Reform were those who also stood the most to lose. This is akin to the fox guarding the hen house. King Henry VIII said “first let’s get rid of all the lawyers.” So did Stalin. So did Hitler.

Lawyers have the knowledge to prevent tyranny or at least slow it down by using the legal system. Trial Lawyers are the last line of defense before the powerful steamroll over the weak.

It is sad that those with the most resources can so convincingly frame reality for the rest of us to the point where we actually start to believe those funny cute commercials, which portray the insurance industry as the victims when in reality some of their CEOs are making hundreds of Millions of Dollars – denying legitimate claims.

For more than 20 years, big business lobbyists have promised that if we give them just one more special immunity or additional get-out-of-jail-free card, they will make so much money we will all be better off. Sadly, our lawmakers have listened and believed. And we let them.

This is especially apparent if you realize that Michigan is one of the most "tort reformed" states in America.

• Forbes.com ranks Michigan's tort system third best out of 50 in American in their Best for Business ratings. Last year we were second.
• Crain's Detroit Business noted that the rabidly pro-business American Justice Partnership has declared "Michigan's liability climate is conducive to growth and jobs creation." AJP ranks us seventh out of 50 states in the category of "litigation climate." Since Michigan's tort reform godfather, former Gov. John Engler, is the head of AJP, that ranking is especially noteworthy. AJP says we have lots of tort reform. Yet we don't have any job growth.
• Since the creation of our unique absolute "drug industry immunity law," Michigan's once booming pharmaceutical industry has all but fled the state. Pfizer took 2,700 jobs out of Michigan and moved them to states without our liability immunity law.

Tort reform was sold to us circus-style as a magic elixir, with promises of huge savings, jobs thick on the ground, and hyperactive economic growth. Instead, we have a hobbled justice system that functions as a puppet for special interests resulting in tens of thousands of injured, wronged, cheated people who have no way to hold wrongdoers accountable. Hundreds of millions of dollars in costs have been dumped on our taxpayers instead of being paid by those who are responsible for screwing up, and the economy is behaving exactly as if the snake oil of tort reform were poison.

It is time to stop listening to the Chamber of Commerce's recycled ads for the patent medicine that got us into this mess. It is time to listen to some smarter, saner, less self-interested voices:

"I consider (trial by jury) as the only anchor ever yet imagined by man by which a government can be held to the principles of its constitution."-- Thomas Jefferson

"Representative government and trial by jury are the heart and lungs of liberty. Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle, and fed and clothed like swine and hounds."-- John Adams

It is time to be honest about the failed doctrine of tort reform. Fortunately, there is a silver lining in Michigan’s stormy future. In November 1998, Diane Hathaway sprung a stunning upset of Clifford Taylor (the sleeping judge), the conservative chief justice of the Michigan Supreme Court. Clifford Taylor as chief justice led the way for the Michigan Supreme Court as being one of the worst in the history of our state. The University of Chicago Law school study placed Michigan at the bottom of the barrel:

“as [far as] judicial independence from political or outside influences, its numbers of published opinions, and how often the court's decisions are referenced in rulings by other courts.” See the full text of this study at: http://www.publicnewsservice.org/index.php?/content/article/5394-1

Rex Anderson

Credit for portions of this article is given to:
ROBERT M. RAITT, of the Southfield law firm Gursten, Koltonow, Gursten, Christensen & Raitt, PC, former president of the Michigan Association for Justice, formerly the Michigan Trial Lawyers Association.