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Archive | LVNV

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

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.