J.R. Andrews
A growing number of Arkansas consumers, with the encouragement of plaintiffs’ lawyers, are suing debt collection firms alleging the way the debt was collected violated the Fair Debt Collection Practices Act.
In federal courts in Arkansas, the filing of lawsuits involving consumer debt issues has ballooned in the first six months of this year to 41, compared with just 12 in the same period a year ago.
Attorney J.R. Andrews of Little Rock has filed 19 of the lawsuits this year. “I’m just trying to level the playing field for the consumers,” Andrews said. “And the FDCPA is my tool to do it.”
Andrews said the issue isn’t whether the consumer actually owes the debt, but how the collection companies attempt to collect the debt. “Under the FDCPA, even if there’s a judgment rendered against you, it doesn’t matter,” he said. “The FDCPA strictly focuses on the collection activity of the debt collector.”
Across the country, lawsuits against debt collection companies are rising even though consumer debt and bankruptcies have dropped, according to a news release last month from the collection firm Credit Protection Association of Dallas, which won a rare jury verdict involving allegations it violated the FDCPA. “Many blame the rise of an aggressive breed of consumer attorneys who are cashing in on the fact that it is often cheaper for collectors to settle cases than to go to trial.”
But Andrews isn’t the only lawyer who is going after collection agencies.
Last month, a Malvern woman sued the Law Office of Stephen P. Lamb of Beebe, alleging it violated the FDCPA.
The plaintiff, Tina D. Gentry, is seeking class-action certification in her case, according to the lawsuit, filed in U.S. District Court in Arkansas’ Western District.
Gentry took issue with the letter she received in March from the law office.
The letter, which was attached as an exhibit to the lawsuit, said that the law firm was hired by Capital One Bank to collect a $1,256 debt. “Unless you dispute the validity of this debt in whole or in part, the debt will be assumed valid,” the letter said.
But the letter misstated Gentry’s rights under the FDCPA, said the lawsuit, filed by attorney Michael Greenwald of Boca Raton, Florida.
The lawsuit said it was unclear how many people received the standardized debt collection letter from the law firm, but Greenwald said he is seeking $1,000 for each class member.
Mac Golden, an attorney for the Lamb law office, told Arkansas Business shortly after the lawsuit was filed last month that he wasn’t aware of the case and declined to comment. The firm has since hired attorney Robert Henry III of Little Rock, but as of last week he hasn’t filed an answer. He also couldn’t immediately be reached for comment.
Strict Liability Statute
Andrews said he expects the number of lawsuits against collection companies to continue to remain high.
He said he reviews court files in Arkansas district courts where the collection agencies have sued a debtor.
In many cases, however, the agency that bought the debt from a credit card company doesn’t have the supporting documents for the amount allegedly owed. “They never have any details about the purchases, the interest rates, the terms and condition of the account,” Andrews said. “They’re basically filing a mortgage foreclosure without having a copy of the mortgage.”
The FDCPA is a strict liability statute, meaning that if can be proven that someone violated a provision of the FDCPA, the intent of the party is irrelevant.
Andrews said most of the cases are settled before they make it to trial.
“If legally you have a claim, there’s virtually no defense because it’s a strict liability statute,” he said.
Andrews said he sends a letter to the debtor and offers his services on a “kind of hybrid contingency. If I lose, they don’t pay.” But if he wins, the debt collector will pay his legal fees, not the consumer.
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