Increasing amounts of Florida credit card lawsuits and debt collection lawsuits are filed by debt buyers rather than original creditors. Often, the lawsuits brought by debt buyers rely on incomplete and unreliable data and cause significant abuse of consumers. This post will describe the difference between debt buyers and original creditors. Other posts will describe some of the documented abuses of the legal system by debt buyers and will present recommendations on how Florida law can be modified to reduce those abuses.

An original creditor is typically a bank or finance company that has extended credit to a person or business. For example, credit card companies such as Capital One, Bank of America, Chase / WaMu, Citibank or Citibank (South Dakota) N.A., Target, Discover and American Express are usually original creditors. A debt buyer is simply a company or person who buys the debt from someone else. Examples of debt buyers we have encountered here in Central Florida (including Orlando, Sanford, Oviedo, Deland, Deltona, Orange City, Port Orange, Daytona Beach, Melbourne / Cocoa, Mt. Dora, Tavares, Leesburg, Palm Coast, Bunnell and surrounding areas) include Arrow Financial, Asset Acceptance, CACH, Cavalry Portfolio Services, LVNV, Equable Ascent Financial, LLC, Mainstreet Acquisitions Corp., Portfolio Recovery Associates and Financial Independence Services.

Debt buyers usually pay pennies on the dollar to buy the debt. For example, a large debt buyer’s report indicates that it paid an average of only 3 cents on the dollar for the debt they purchased. This means that if you had a debt of $3,000 purchased by such a debt buyer, it would have paid only about $90 for your debt. However, if they sue you for this debt, they would sue for the entire $3,000, not for the $90 they actually paid for it. So, even if they collect only 10% of your debt ($300), their profit margin could be as high as 333%. No wonder there are so many debt buyers out there trying to squeeze money from consumers.

And, even if the debt buyer does not collect any money on the debt, it can (and often does) resell the debt to another company who can also try to collect the debt. This is one reason some consumers are contacted by multiple companies who try to collect on the same debt. This cycle of debt buying, attempted collection, and reselling can be repeated several times. Each time, the “quality” of the debt is worse: each subsequent debt buyer has less information about the legitimacy and amount of the debt, and the consumer may have additional defenses. These secondary debt buyers are often referred to as “junk debt buyers“, “bottom feeders” or “scavengers”.

If you have been sued by either an original creditor or debt buyer, please don’t ignore the lawsuit. If you do, chances are you will have a default judgment entered against you. That means that you will likely lose the case automatically, without any trial. This is true even if you have potential defenses – and we normally see several potential defenses in most cases we review. So don’t delay, contact us right away for a free, no obligation consultation to learn about your rights and potential defenses.

Despite many promises by the credit card companies that they are willing to work with people in difficult financial circumstances, this is not always the case.  Many consumers have reported a variety of abusive debt collection practices used by the credit card companies and other creditors trying to get their money.  Some of the debt collectors engage in various abusive debt collection tactics, including:

• Making threats, including threats of arrest or jail
• Impersonating police officers or other law enforcement personnel
• Demanding payment for amounts that are not due
• Trying to collect a debt that is too old, and which is no longer legally enforceable because the statute of limitations has expired
• Trying to add surcharges that may not be allowed, including certain interest, penalties, attorney fees or costs of court
• Calling too early in the morning or too late at night
• Improperly labeling correspondence demanding payment or listing “past due” amounts, called “dunning letters”
• Refusing to stop contacting you after you tell them to stop
• Other abusive conduct and harassment

There are important laws, including the federal Fair Debt Collection Practices Act (FDCPA), that regulate how and when debt collectors can contact consumers.  It does not matter whether you owe the debt, because debt collectors still have to follow this law and other similar state laws.

As a Fair Debt Collection Practices Act (FDCPA) lawyer, I know there are many steps that you can take to assert your rights under this law and other debt collection laws.  Some of those steps need to be taken promptly (with a 30 day deadline), or you may lose important rights.  Contact us now to learn about your rights if you’ve been sued on a debt or are being harassed by debt collectors.

Welcome to my new blog.  I am in the process of setting up this new blog in order to help Florida consumers, particularly those in Central Florida (Seminole County, Volusia County, Orange County, Brevard County, Lake County).  This includes the cities of Altamonte Springs, Altoona, Apopka, Cassadaga, Casselberry, Chuluota, Daytona Beach, DeBary, DeLand, Deltona, Eustis, Fern Park, Geneva, Heathrow, Lake Helen, Lake Mary, Longwood, Maitland, Mount Dora, Mt. Plymouth, Orange City, Orlando, Osteen, Oviedo, Pine Hills, Port Orange, Sanford, South Daytona, Tavares, Umatilla, Winter Park, Winter Springs, and Winter Park, among others.

My goal is to share information with Florida consumers about their legal rights to help them pursue justice in the areas of auto fraud (rebuilt wrecks, odometer rollbacks, deceptive sales and financing, etc.), credit card (including defense of credit card collection cases), debt collection (Fair Debt Collection Practices Act/FDCPA, abusive debt collectors, collection of old or non-existent debts), lemon laws and other similar areas.

Although I have over ten years of experience as a consumer justice attorney, this blog is brand new, becoming operational for the first time on August 21, 2009.  We appreciate your patience as we begin providing you information by posting in the next several days.