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Archive | Collection Agencies

Sued by LVNV Funding – Who Are They?

The Sheriff knocks at your door or you receive a certified letter and find that a lawsuit has been filed against you by LVNV Funding.  Your first thought should be… who is LVNV, I’ve never heard of them?

LVNV Funding is a junk debt buyer.  They are a subsidiary of a very large debt collection/buyer called Sherman Originators.  This is a company that buys delinquent credit card accounts, often 5,000 to 10,000 accounts, for pennies on the dollar.  Yes, that’s right, they purchase credit card accounts that are in default.  This is perfectly legal in any state in the U.S.  The statistics change, but it appears that these companies pay between 1.5 and 3.5 cents on the dollar to purchase these accounts… that’s pretty cheap if you ask me.  I’d like to purchase almost anything for 2 cents on the dollar.

Why do they purchase delinquent credit card accounts like yours?  Well, to make a profit, of course.  When they buy an account, they get to “step into the shoes” of the original creditor.  That is, they are allowed to try to collect the entire amount from you.  If you pay them, they make a HUGE profit on their expenditure.   Let’s say that you have a $5000 credit card debt with Chase.  You default, likely because you have a health problem, divorce, or job loss.  Chase doesn’t want to sue you so they sell the debt to LVNV.  LVNV then sues you.  You now happen to be back on your feet so you think about paying the debt.  If you do pay the $5000, remember, LVNV has only paid about $100 to acquire that claim. That is a very large profit, wouldn’t you agree?

The truth of the matter is that its a numbers game for LVNV.  They know that about 8o% of the people whom they sue will either roll over and pay the bill, OR, will put their head in the sand and do nothing.  Right off the bat, LVNV wins 80% of the time.  Of the remaining 20%, LVNV knows that a little more than half will try to defend themselves (this is a big mistake).  So now LVNV has won 90% of the time that it files a claim.  Less than 10% of the people who are sued by LVNV actually hire an attorney.  (Make sure that don’t just hire any old attorney, hire a Consumer Attorney).

LVNV Funding uses a few large collection firms to handle their cases in Pennsylvania.  Currently, they are using Apothaker and Associates and Hayt, Hayt and Landau.  These are two fine collection firms, they know how to handle credit card cases.  These are not firms that you want to go up against without legal representation.

So the big question is, what happens when you hire a consumer attorney?  Well, it depends upon which court you are in.  If the lawsuit is in the local District Justice court, then you will let the attorney go to the hearing and argue the case.  This most often can result in a judgment in your favor.  LVNV is often unprepared at Magistrate hearings.  If the lawsuit is filed in the Court of Common Pleas of your county, then a different approach is necessary.  A written response needs to be filed and for LVNV cases, the most appropriate response is often to file Preliminary Objections.  These objections are a statement to the court that the lawsuit is defective.  (All LVNV lawsuits are defective when initially filed).  The court will rule on the objections and likely force LVNV to come up with more evidence.  When they cannot come up with more evidence, the case is often tossed.

If you are sued by LVNV, please do not contact them without speaking to a consumer attorney, whether its someone from my firm or another.  These cases are best handled by an attorney, not by you.

Posted in Lawsuits, LVNV

Why we don’t often settle with Debt Buyers like Portfolio Recovery and LVNV.

This is the headline in the news today…”Consumer debt collectors Portfolio Recovery Associates LLC and Sherman Financial Group LLC (parent company of LVNV Funding) have agreed to vacate thousands of judgments totaling $16 million, and pay a total of $475,000 in penalties and costs, for making untimely claims against New Yorkers, the attorney general said Thursday.”

Read that again, please. They have agreed to vacate thousands of judgments in New York totaling $16,000,000.00.  Why would they do that?  Because they basically committed fraud in filing those lawsuits. No debt collector or debt buyer may file a lawsuit on a claim where the statute of limitations has expired. To do so would be a violation of the Fair Debt Collection Practices Act (FDCPA).

Portfolio Recovery Associates and Sherman Financial Group (again, LVNV) are both debt buyers that purchase unpaid consumer debts, mostly from credit cards, from the original creditors or other debt-holders at substantial discounts and then try to collect. In these instances, they filed lawsuits on debt that was expired or “beyond the statute of limitations”. This sort of thing happens on a daily basis. When a debt buyer purchases a group of accounts, they are buying the accounts AS IS.  This means that there are no warranties or assertions that the data or documentation contained therein is accurate.  Think about that… these companies have no idea if the amounts are correct, if the debt has already been paid, if the customer names are correct, if the interest and fees that were applied are correct… on and on.  This also means that they often have no idea if/when the statute of limitations has expired.  Do you see where I’m going with this?  How can we recommend to our clients to pay one of these claims?

Why would these debt buyers file these lawsuits if they might be time barred?  Because the problem often isn’t noticed.  We have seen different statistics showing that between 85% and 92% of people who are sued on a collection case do not contact an attorney.  They either get scared and pay the debt, or, put their head in the sand and do nothing, and the debt buyers know this.  Apparently, filing these out of statute claims is part of the business model and its apparently, its a risk worth taking.  If you knew that you were going to win the lottery 85% to 92% off the time that you played, would you play every day???  Of course you would.

The AS IS portion of this article is why we rarely recommend to our clients to settle these claims.  These debt buyers like Portfolio and LVNV and others buy these debts AS IS.  They have no idea if the information/data is accurate.  We, and most other knowledgeable consumer attorneys, win these cases with great frequency.


Posted in LVNV, Portfolio Recovery

Settle with Midland Funding?

You’ve just received a letter from Midland Funding (or its subsidiary Midland Credit Management) or worse yet, a deputy delivered a lawsuit to your door.  Your first question is, “Who is Midland Funding?”  Midland Funding is a debt buyer, a very large one.  They buy delinquent credit card accounts for a few pennies on the dollar and then they try to collect from consumers like you.  It often starts with a letter from Midland Credit Management.  The letter alleges that you owe a debt and then states that they would be happy to settle with you.  There is often a “discount” settlement offer included in this letter.  It may go something along the lines of “Pay us 50% right now, that is a tremendous savings for you” or “Pay us 60% in three easy installments”.  Typically, if you do not pay, you will receive a second and/or a third letter.

So the question is, should you settle?  Most times, the answer is NO NO NO.  I find that for the most part, the people who call my office are good people.  They had a credit card that they could not pay, usually due to a divorce, a job loss/income reduction, or a health issue for themselves or a family member.  They want to pay the debt, but they simply could not pay it at that time, or, they still cannot pay it now.  I understand that, and it makes sense.  Please keep reading though and you’ll see why we think that you should not pay them.

Let’s assume that you had a credit card account with JCPenney.  For whatever reason, you default (be it job loss, divorce, health, doesn’t matter).  When you default, JCPenney has a decision to make.  They can sue you, OR, they can sell the debt to a debt buyer like Midland.  In many cases, they sell the debt.  When they sell the debt, they SELL it.  What I mean is, they retain no ownership rights whatsoever in that account.  If you settle a claim with Midland, the original creditor is not going to see an additional dollar.  So, are you really paying your debt if the original creditor isn’t getting any money? We say no, you are not.

To compound the issue, let’s look a little further into what Midland is acquiring.  They are buying allegedly defaulted credit card accounts, in bulk.  These sales can range from 500 accounts up to 25,000 or more.  That’s alot of credit card accounts… and they make these purchases several times per year.  When they buy these accounts, they are bought on an AS IS basis.  Maybe you have heard that term before with a used vehicle… it means that the accounts (and the limited paperwork or information contained therein) are not authenticated to be accurate.  Think about that for a minute… they are buying accounts that may or may not contain  accurate information, amounts, documentation, contracts, or contact information.  Why would you pay on something that might not be accurate.

To make matters worse, often times these accounts are sold several times.  We have seen many scenarios where a person settles a debt, or rather, believes that they did, and then they are sued by another company alleging to own that same debt.  This is a nightmare scenario for the consumer and its one of the main reasons that we generally advise against settling with debt buyers.

If you have been sued by Midland Funding or if you have received a letter from Midland Credit Management, please contact my office for a free consult.

Posted in Midland Funding

Can a Collection Agency Garnish Wages?

We often have clients calling us who are scared out of their minds… “the collection agency said that they were going to garnish my wages if I don’t pay them $1000 right now”.  Please don’t fall for this scare tactic.  Despite their threats to do so, a collection agency cannot garnish wages in Pennsylvania.  Wages can be garnished in PA only under very limited circumstances, such as for taxes, some student loans, family/support issues, restitution on certain criminal matters, certain landlord tenant scenarios and for some out of state judgments that are transferred into PA.

Because most people do not understand the legal process, I will explain how it works.  In Pennsylvania, a Plaintiff (the party doing the suing) must first file a lawsuit against the defendant (the person who allegedly owes the money).  The plaintiff must win, obtain a judgment, and then hope that there is no appeal.  At that point, they have a final judgment.  After final judgment, the Plaintiff can commence execution proceedings (possibly garnish a bank account, levy, depositions in aid of execution).  Even in this instance, they CANNOT garnish wages while those funds are in the hands of the employer.

Posted in Collection Agencies, Garnishment, Illegal Threats

Equable Ascent

We’ve come across a new debt buyer by the name of Equable Ascent.  They have been buying a large amount of defaulted accounts recently as we have noticed their name on the court docket many times recently.  We’ve had several cases with them over the last few months and we’ve noticed that they have been able to come up with some of the necessary documentation on the cases.  They haven’t yet come up with enough to beat us at trial, but, it does appear that they are making a strong effort to be a “higher class” debt buyer than some of the other companies.  Our guess is that they are paying slightly higher for the debt that they buy, thereby allowing them to procure some of the necessary documentation.

We’ve noticed that they have been using at least two law firms to handle their claims, Sklar Markind and Nudelman, Klemm and Golub.  Both of these firms are very reputable with fine attorneys at each firm, yet another piece of evidence to show that Equable wants to make its mark.  If you receive a notice or a lawsuit from Equable, please contact our firm at 412-823-8003 for a free case review.  We are very confident that we can beat them in a court of law any day of the week.

Posted in Collection Agencies

Brachfeld Law Group

Have you received a letter from Brachfeld Law Group?  We have come across a few of these recently, and we have discovered that some of their letters violate the Fair Debt Collection Practices Act. We have discovered that their initial letter to alleged debtors fails to include language that is required under 1692(g) of the FDCPA , informing the debtor that any disputes regarding the validity of the debt must be in writing. The failure to include this language is a clear violation of debt collection laws.

If you have such a letter, you must act quickly.  Fax a copy of the letter, front and back and the envelope that it came in to 412-386-3184.  Please be sure to include your contact information (email address, phone number) so that we may get in touch with you.

We never charge upfront fees on FDCPA claims because we simply don’t have to.  The FDCPA has a fee shifting provision that requires the debt collector to pay our reasonable attorney fees when we are prosecuting an FDCPA claim.

Posted in Collection Agencies, Illegal Threats

Portfolio Recovery Associates – Who are they?

We have seen a surge in recent lawsuits being filed by Portfolio Recovery Associates.  Portfolio Recovery is a large company whose sole business is to purchase allegedly delinquent credit card accounts for pennies on the dollar and then try to collect on the full amount. The most recent data that we have seen shows that Portfolio is now purchasing bad debt for 1.75 cents on the dollar.  A great price for them, don’t you think?  Generally, after purchase, Portfolio  will send a letter to you (they are required to do this by law, but they do not always do it) and/or they will call you.  They do not want  to sue you, they want to collect money from you, and they hope that you will voluntarily pay them.  A lawsuit will occur if you do not.  I have not seen many instances where Portfolio sells its accounts to other purchasers, so if they obtain your account, you either pay them or they will sue you.

That may scare most people, but it shouldn’t scare you.  If you are here reading this, then you are smarter than most of the general public.  It means that you are doing research, and that is a good thing.  It also means that you are doing research in the right place, which is even better.  The truth of it is that a lawsuit filed by Portfolio Recovery Associates in Pennsylvania should not scare you.  It should concern you, sure, but it should not scare you.

When Portfolio purchases these accounts, in most instances they do not obtain the documentary evidence that they need to prevail against you in a court of law.  Their business model is based on 3 things:  1) they acquire the accounts cheaply; 2) they assume that many people will be frightened and will pay them voluntarily; 3) they assume that you are not smart enough to contact and/or hire an attorney.

Posted in Collection Agencies, Lawsuits, Portfolio Recovery

District Justice Lawsuits

There has been a growing trend with the collection agencies towards filing their credit card lawsuits at the local magistrate or district justice.  My belief is that this is a cost savings measure on their part.  Statistics show that approximately 85% of the people who are sued by collection agencies on credit card debt do not defend themselves.  The cost savings for the collection agencies works like this:  At the DJ level, there is no hearing unless the defendant notifies the court that they intend to defend the case and would like a hearing.  In other words, if the plaintiff (collection agency) files a lawsuit at the local DJ, and the defendant fails to respond, then the DJ automatically enters judgment against the Defendant, without even having a hearing.  The plaintiff company does not need to send a representative/attorney to court in this instance.

Our best advise, obviously, is to have a consumer attorney representing your interests even at the district justice level, whether its our firm or another firm.  As we have mentioned in previous posts, collection agencies are rarely prepared to do battle at the district justice level and our chances of success are extremely high.  If you are facing a collection agency or credit card lawsuit, please contact our office at 412-823-8003 or 1-888-536-6644 for a free case review.

Posted in Collection Agencies, Lawsuits, Other

LVNV Goes Down!

Justice has finally been found for one Washington County, PA client of ours.  LVNV sued our client, Mr. G, on an old WalMart account.  LVNV was asking for approximately $4500 in damages in the lawsuit.  At the arbitration hearing, LVNV presented approximately 1 years worth of old statements.  They did not produce a signed agreement, or any agreement for that matter, and they didnt provide any real evidence that they had purchased Mr. G’s alleged account.  Despite this lack of evidence, the Arbitrators ruled that Mr. G owed $2250 to LVNV.  Our educated guess is that the Arbitrators simply were not familiar with basic contract law…  To that end, we filed an Appeal for Mr. G because we knew that LVNV didnt have any other evidence.  At the bench trial, LVNV again came in with the same lack of evidence, but this time, they included a few “Affidavits”, wink, wink, that alleged to support the sale of the accounts.  These “Affidavits” didnt support anything, they were vague and incomplete, and they referenced other documents that were not presented at trial.  I felt bad for the attorney who was representing LVNV, he is a very nice man who is forced to handle cases where he only has about 30% of the evidence that he needs to prevail.  Anyways, long story made short, we won on appeal, complete judgment for Defendant.

Posted in Lawsuits, LVNV

Schuylkill County Credit Card Case

We received some pretty fantastic news today.  We are representing an individual in a collection agency case in Schuylkill County, Pennsylvania. This individual was sued by LVNV, which is one of the larger junk debt buyers that we deal with. The lawsuit was typical, typical in that it was severely lacking in information and details. As a matter of course, we filed objections to the case to raise the issue of legal sufficiency.

While we always expect a judge to agree with our reasoning, this judge went one step further.  He took action that would have a permanent effect on credit card cases in Schuylkill County, he issued a written opinion on the case.  A written opinion doesnt happen on every case.  To the contrary, written opinions are rarely issued.  A common pleas judge typically only writes an opinion where the case at hand has important issues that are recurring and can affect a number of people.  With the rise of credit card lawsuits in Pennsylvania, and in Schuylkill County in particular, this judge felt that it was important to set the law for the county.

The opinion focused on the defective nature of the lawsuit, namely, that the junk debt buyer (LVNV) didnt comply with the pleading requirements on credit card cases in Pennsylvania. The judge issued a ruling and opinion that the lawsuit was defective, and that if it was not corrected in a timely manner, it was subject to dismissal. We are hopeful that LVNV will not meet its burden on this case.  We have not only helped our client on this particular case, we have helped the wonderful consumers of Schuylkill County who are facing similar legal issues.

Posted in Collection Agencies, LVNV

Credit Card Lawsuits

If you are faced with a credit card lawsuit, whether its an original creditor or a junk debt buyer, contact my office at 412-823-8003 right away. We offer a free, no obligation review of any credit card based lawsuit that is filed in PA.

FDCPA Attorneys

Many Debt Collectors threaten people, that's a fact. Threats of wage garnishment, jail, fraud charges and contacting employers, friends and relatives happens every day to people just like you. The truth is that most of these threats are illegal. If a debt collector is threatening you, contact our office at 412-823-8003 for a free initial consultation.