Debt Collection Lawyers Fire Back at Consumer Lawyers

Leaders of the largest association of debt collection lawyers said that they are being unfairly targeted by consumer lawyers.

Robert Markoff, president of the National Association of Retail Collection Attorneys, said debt collection attorneys are being barraged with lawsuits for alleged

Markoff was in Boston for a three-day meeting of 750 debt collection attorneys from throughout the country.

"We are being extorted with a golden glove," he said Thursday morning in an interview with Lawyers USA.

The crushing debt faced by consumers is spawning a growing practice niche for consumer lawyers: suing debt collectors for illegal collection practices.

The Fair Debt Collection Practices Act prohibits a wide range of conduct, including making harassing phone calls to a debtor; calling a third party, such as a family member (other than to obtain the debtor's address); and making false threats such as criminal prosecution or a lawsuit that the collector has no intention of filing.

But Markoff, a partner at Markoff & Krasny in Chicago, said that many of the suits being filed against debt collection attorneys allege minor technical violations of the statute.

"What we're finding is we are being sued over nuances: Your letter 'didn't cross a 'T' or dot an 'I,'" he said. "We are being nuanced to death."

Adam Olshan, an attorney at Howard Lee Schiff in East Hartford, Conn. and past NARCA president, said there are increasing instances of cases "where consumer counsels have brought suit under the FDCPA inappropriately."

For example, he said, a U.S. District Court in March dismissed a complaint against a debt collection law firm because of typographical errors in the summons issued in the underlying collection case.

The court held that the two issues the plaintiff's lawyer complained about are "really poster children for the proclivity of some lawyers to seize on nonmaterial minutiae in an effort to grasp the brass ring of attorney fees that are awardable to successful plaintiffs under the Act." (Rodriguez v. Blatt Hasenmiller Leibsker and Moore, 08 CV 6198 (N.D. Ill.)

"In most cases, the first time we know of a claim is when we get sued. Then we are politely told we can settle the claim by paying $1,000 to the consumer, plus $3,000 to $5,000 to the attorney who filed the cookie-cutter lawsuit," Markoff said.

In a telephone interview, Neal Moore, an attorney at Ferguson, Frost & Dodson in Birmingham, Ala., who represents collection agencies, agreed that many of the consumer suits filed under the FDCPA are "of a technical nature."

"Many more suits are being filed in the FDCPA arena, but [there are] a lot of lawsuits where it's hard to imagine there's been any real damage caused to the debtor at all," he said.

But Michael Lindsey of The Lindsey Law Firm in Birmingham, Ala., said that consumers have a right to file suits against debt collection agencies for technical violations.

"The law is the law," said Lindsey, who represents debtors. "That's like somebody running a red light and then complaining when they get a ticket."

Dale Pittman of Pittman Law Office in Richmond, Va., agreed.

"I don't take it lightly when I sue lawyers, but the idea that a consumer lawyer would sue a misbehaving collection lawyer because of a typo or technical claim is simply ridiculous," he said.

NARCA officers said they are working on several fronts to improve communications with consumer lawyers, including:

Identifying antiquated state statutes that drive up debt-collection costs.

Eliminating garnishment of exempt funds, such as Social Security direct deposits in bank accounts.

Developing stricter controls on scam debt-relief companies that charge consumers hefty fees but fail to actually negotiate debt reduction agreements.

Credit: Nora Tooher