California Debt Liability when Spouses Separate

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The Rosenthal Fair Debt Collection Act (RFDCPA) and other consumer acts in California treat debt of separated spouses the same as when they were together but the practical differences are extensive. California civil code takes the earnings of both the husband and wife into account while disbursing with the legal points.

The Fair Debt Collection Practices Act (FDCPA) is a federal act constituted in 1977 to establish fair debt collection practices. The RFDCPA is the California state statute, also adopted in 1977 to regulate the conduct of debt collectors and to prohibit California debt collector harassment.

“The California statute prohibits numerous deceptive, dishonest, unfair and unreasonable debt collection practices by debt collectors, and it also regulates the form and content communications by collectors to debtors and others.” (The California Statute)

According to the RFDCPA, creditors also are covered under the term “debt collectors” whereas according to the federal statutes an original creditor is not covered under the FDCPA. The RFDCPA along with other California family law statutes governs the debts in divorced and separated marriages. It is expected that the separating parties settle the division of property and debts on their own. In the absence of this mutual agreement, California family law and the RFDCPA interfere in helping the grieving parties to come to a decision.

According to the California laws, the debts incurred during the married period which is before separation, are liable on the community. Whether the husband or the wife incurs the debt for their personal use or for family, the community is liable for the repayment. The name on the bill or credit card statements also is not a concern, but if it is incurred during the time of their married life, both the spouses are equally liable.

While the concerned parties are consulting for a settlement, all debts should be divided equally. The grieving parties can work out different options like one person takes a major share in the property in exchange to paying off the joint debts. Since both spouses are responsible for debts owed jointly, it would be required of the spouse paying off the debts to be regular in payments.

California debt collector harassment after the separation is distressful when you are already dealing with the trauma of a separated marriage. While the family courts may resolve your separation issue and your property division, it would require a lot of patience and resilience for the husband and wife to work out a debt payment plan amongst themselves.

California debt collector harassment can be at its worst when you have separated and have debts to repay. Though it is inevitable to go on an emotional roller coaster to cope with both separation and debts, thinking clearly and logically would help both parties.

Helping Consumers, Helping Debt Collectors

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In 1977, the Consumer Affairs Subcommittee added a new title to the Consumer Credit Protection Act entitled the Fair Debt Collection Practices Act. The purpose of this bill was to protect consumers from a host of unfair, harassing, and deceptive debt collection practices. However, this purpose was to be accomplished without imposing unnecessary restrictions on ethical debt collectors. As such, this bill was not only supported by consumer groups, labor unions, and State and Federal law enforcement officials, it was also supported by the American Collectors Associations and Associated Credit Bureaus.

The FDCPA’s main objective is to protect consumer against unscrupulous debt collectors. However, what many people don’t realize is that the FDCPA is also designed to protect honest, ethical debt collectors from being competitively disadvantaged by the unlawful debt collectors. The FDCPA aims to even the playing field so that debt collectors, who engage in lawful collection methods, by showing common courtesy and respect to the consumers, are not competitively disadvantaged by the unscrupulous debt collectors.

When a consumer sues a debt collector for their harassment and unlawful debt collection, the consumer partakes in fulfilling the objectives of the FDCPA, by not only protecting the general public, but also protecting the honest and ethical debt collectors who refrain from using these unlawful debt collection practices.

Debt Collector Name Change Does not Change Their Reputation

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The Colorado Attorney General John Suthers recently announced that his office has filed a lawsuit against Regent Asset Management Solutions, Inc., a Denver-based debt collection agency, and its CEO, Michael A Scata, on suspicion that they engaged in the unlicensed collection of debt in Colorado and violated Colorado consumer protection statutes.

“The Legislature enacted Colorado’s debt collection laws and licensing requirements so consumers can be sure the companies that contact them are playing by the rules,” Suthers said. “We are committed to vigorously investigating and prosecuting companies operating in Colorado that attempt to fly under the radar or flout the Colorado Fair Debt Collection Practices Act (“FDCPA”) and our other consumer protection laws.”

The company, according to the complaint, also is suspected of taking shortcuts during the course of its business, including not sending out required notices to consumers the date it had marked the notifications. The notices should have included the amount due, the creditor’s name, and the consumer’s right to dispute the debt and obtain the name of and address of the original creditor.

In addition, the Better Business Bureau reports that Regent Asset Management Solutions, otherwise known as ‘Imperial Recovery Partners‘ is the focus of 220 BBB complaints across the U.S., including more than two dozen from the St. Louis area.

The BBB warns consumers to be extremely cautious when dealing with representatives of Regent Asset Management Solutions or Imperial Recovery Partners. Both have operated debt collection call centers in recent months out of the same address: 119th Street in Overland Park, Kan. Regent also had offices in Denver, Colo.

In December, a judge in Denver ruled that Regent Asset Management Solutions and its president, Michael A. Scata, were collecting debts from consumers illegally, in violation of the Colorado Fair Debt Collection Practices Act and the Colorado Consumer Protection Act. At that time, the Colorado attorney general’s office accused Scata and his firm of misleading and deceiving consumers nationwide. Two months later, the attorney general’s office returned to court, claiming that the company had ignored an order restraining its collection activities.

Regent and Imperial Recovery Partners are considered the same business by the Kansas City BBB, which has been handling complaints and working with the St. Louis BBB to investigate company operations. Regent has an “F” grade with the BBB, the lowest grade possible.

Michelle Corey, BBB president and CEO, said Regent ignored the law repeatedly and used threats and harassment to collect debts. “Time and time again, this company has thumbed its nose at state and federal law,” Corey said. “In many cases, its collectors are refusing to supply even the most basic information about the debts to consumers. In other cases, it appears they are targeting people who already had settled their debts or who never owed the debts at all.”

In the past 15 months, consumers from 42 states have filed complaints against Regent. Most complaints came from California (36), Missouri and Ohio (29 each), Washington (14) and Kentucky and Oregon (13 each).

Of the 220 complaints filed against Regent and Imperial Recovery Partners, 215 have gone unanswered.

Global Credit & Collection, Inc

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Global Credit & Collection, Inc., was established in 1999 and is an accounts receivable management company. Global has call centers in Markham Ontario, Montreal Quebec,and in Panama City Panama. According to its Web site, Global represents clients in the Financial Services and Telecommunications sectors.

Global appears to be based out of Canada, which may be the reason why Global has a difficult time complying with the Fair Debt Collection Practices Act (FDCPA). According to PACER (Public Access to Court Electronic Records), Global has been sued approximately 70 times in 2011 alone and it is only June! In fact, Global has been sued almost 200 times in the last 1.5 years based on the FDCPA. Therefore, if Global has harassed you over a debt, whether they called you excessively, threatened you, called you at work despite knowing you cannot receive these type of calls at work, left you messages without proper identification or stating the call was from a debt collector, or disclosed your debt to third parties, contact Krohn & Moss, Ltd., Consumer Law Center, for a free case review.

Complaints About California Debt Collector Harassment

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There has been a tremendous increase in California debt collector harassment complaints. Since 2006 to 2010, California debt collector harassment complaints have risen by 194%. In 2010, 10,914 lawsuits seeking relief under the FDCPA were filed by or for consumers.

The Rosenthal Fair Debt Collection Practices Act (RFDCPA) is equipped with additional protections for consumers when they are dealing with debt collectors. Problem of abusive collectors has been on the increase with the Federal Trade Commission (FTC). Common complaints include harassment by debt collectors who call consumers repeatedly, use threatening or profane language and threaten consumers with illegal actions if they do not pay them the money they demand.

In addiction to all the protections that the federal FDCPA provides, the RFDCPA imposes additional stipulations on debt collectors communicating about your debt to your employer or other outsiders. There is also an additional provision for protection when a collector is attempting to collect on an already cleared debt through bankruptcy. California debt collectors are quite often very aggressive in attempting to collect on wiped out debts.

If you are illegally served with a summons and complaints related to a debt, the RFDCPA protects you. The California debt collector harassment laws demand that a debt collector cannot file a lawsuit against you in another state, county or location that is far from where you live, unless the concerned debt was incurred in that location.

The Federal Trade Commission (FTC) and private attorneys impose the RFDCPA to protect you from debt collection harassment. While it is necessary for you to take calls from debt collectors, the RFDCPA strictly prohibits harassment of any form. The Act restricts debt collectors' calls to prior agreed time. Calling during night or any other inconvenient times is considered a violation of the RFDCPA. Debt collectors are required to send all communication to you in sealed envelopes and not by postcards. The collector must disclose his name and reason for calling as also notifications with information about the amount you owe, the name of the creditor and process to follow if you dispute the bill.

If you have been a victim of the above violations and/or more, you may consult a private attorney. An attorney would directly represent your interests. You may contact attorneys at Krohn & Moss, Consumer Law Center

Notifications from Debt Collectors According to the RFDCPA

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The Rosenthal Fair Debt Collection Practices Act (RFDCPA) is California state fair debt collection act. It is largely based on the federal Fair Debt Collection Practices Act (FDCPA). California debt collector harassment is governed by both the federal and the state Acts. The RFDCPA was adopted in 1977 to deal with unfair debt collection practices in the state.

According to the RFDCPA, A creditor need not inform you about referring your account to a debt collection agency. A health spa account requires to send notification before the debt is assigned for collection.

California debt collection has taken an ugly turn which is evident in the increasing number of California debt collector harassment cases registered at the Federal Trade Commission (FTC). One of the violations in California debt collector harassment is not sending valid notices when they call you in an attempt to collect debts.

According to RFDCPA, a debt collector is required to send you notification, in his first contact with you regarding an unpaid bill or within five days of his initial contact, the amount you owe, name of the creditor and information regarding your rights about disputing the bill. Whether a California debt collector contacts you by a telephone or in writing, the five-day notification period stands. Many California debt collection agencies post this information on their initial notice itself.

It is mandatory in the RFDCPA for debt collectors to include in each notice the following information:

  • Name of the Creditor
  • Name and contact details of the collection agency
  • Mailing date of the notice
  • Total amount due

Under the RFDCPA it is considered legal to contact your employer to find about your employment, location, your medical insurance details or to garnish your wages if court has given a judgment to that effect. If an agency has permission to contact your employer for details about you, debt collection agency should make its inquiry in writing. Should the agency not receive a response in writing, the agency may contact your employer by other means.

A California debt collection agency can contact you at your work place unless it knows that your employer does not appreciate of it. Under the RFDCPA there is a provision to stop being contacted at work if you wish not to be contacted. You should send a notice to the debt collectors requesting them not to contact you at work and if they must, then it should be through a written notice marked Personal and Confidential. All telephonic or other ways of contact by debt collectors can be stopped if you wish to, by sending a written request by certified mail with return receipt request. After this the agency may contact you once more to explain their next course of action.

NCO Can be Sued for Harassing You

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The NCO Financial Systems popularly known as the NCO does not have any qualms whatsoever when it comes to collecting on debts form debtors or more frequently innocent people who do not even own a debt. NCO has been on the top of list of complaints in debt collection. Violations of the Fair Debt Collection Practices Act (FDCPA) by the NCO are very common and can be found on Internet.

The FDCPA was passed by Congress in 1978 and is enforced by the Federal Trade Commission (FTC) and private litigants to ensure fair debt collection methods. The FDCPA has strict guidelines to be followed by the third party debt collectors while attempting to collect on debts.

Third party collection agencies often do not follow the FDCPA and end up violating the Act. The NCO is one such third party collection agency that violates the FDCPA frequently and has many cases piled up against it. One of the most intimidating features about the NCO is that the debt collectors employed by it are trained to scare innocent victims and pay money that they do not even owe. These NCO debt collectors violate the FDCPA by calling victims repeatedly and harassing them over the phone.

Lawsuit against the collection agency for violation of the FDCPA

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A few months ago, the Tenth Circuit Court of Appeals was confronted with an interesting case involving a person who received approximately 300 calls over two and a half years from a collection agency. What made this case interesting is that the collection agency was collecting on two debts that did not even belong to the plaintiff (the collection agency made a mistake). While the plaintiff informed the collection agency that it had the wrong number, the agency continued to place calls to the plaintiff. Sick of the calls, the plaintiff eventually filed a lawsuit against the collection agency for violation of the Fair Debt Collection Practices Act (or FDCPA for short). Despite the number of calls, the trial court found that the collection agencies conduct, while unfortunate for the plaintiff, did not rise to a violation of the FDCPA. However, the appellate court viewed the collection agency’s conduct in a different light. While not ultimately concluding that the collection agency was a violation, the appellate court found that a jury could find that it was. The appellate court, in its ruling, stated that “a ringing telephone, even if unanswered, can be harassing…”

Under the FDCPA, it is against the law for a collection agency to place an excessive number of calls to anybody (not just the debtor) with the intent to annoy abuse or harass the person. I often hear attorneys representing collection agencies claim that that the collectors did not intend to harass, but were just trying to get in contact a debtor. This makes for a convenient argument for defendants to make, because in their eyes, it justifies calling somebody eight time per day. “Why did you call so much?” “Because we wanted to just speak with somebody about this debt.” However, the Tenth Circuit has made it clear that juries can find that a collector’s calls were harassing and, more importantly, were done with the intent to harass. Interestingly, an angle that the Tenth Circuit took that often hasn’t been look at is the actual ringing of the telephone. While many parties and courts focus on the number of calls, it seems apparent the Tenth Circuit though we should all focus on the ringing telephone itself. Even more importantly, the Tenth Circuit acknowledged that people these days often screen their calls, but that doesn’t make a collectors contestant calls, and continuously ringing telephone, any less harassing.

I am reminded of a trial I had back in February. One of our allegations was that the collection agency was calling excessively, having documented up to four calls in a single day. During closing arguments, the defendant’s attorney made that often-heard argument that the calls were not made with the intent to harass my clients, put only to speak with them on the phone. The judge, however, saw right through this argument. The judge stated that there is only one reason to call a person multiple times in a day; to get them so annoyed with the calls that they answer just to find out what needs to be done to get the calls to stop. The judge, like the Tenth Circuit, did not state that because many of the calls were unanswered that there was no violation. Much like the Tenth Circuit, I believe that the judge understood that even if a person knows who is calling, and the person is trying to avoid those calls, they can still be harassing and clearly they are unwanted (or else they would be answered). Further, I believe that the courts are seeing that when a collector’s calls go unanswered, the only reason for a collector to keep calling is to make the person so annoyed that they’ll answer and pay just to get the calls to stop. When that occurs, that is when a debt collector violates the FDCPA.

Creditors Interchange Receivables Management, LLC

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Creditors Interchange Receivables Management, LLC (commonly known as simply “Creditors Interchange”), is a full service collection agency primarily located in the Buffalo, NY area. Creditors Interchange (“CI”), has been in business since 1960 and has grown into a national collection agency that employs over 600 people. CI actively collects on thousands of accounts for banks, credit card companies, debt buyers, auto lenders and others. According to CI’s own website, “CI offers national account coverage, providing full service collections, including skip tracing, letter series, and telephone demands, in accordance with all state and federal regulations regarding third party collections, dunning, privacy and credit reporting. We pride ourselves on our robust and pro-active compliance group, as we continually strive to meet and exceed our clients' expectations and all government regulatory requirements.”

However, what CI doesn’t want you to know is that since 1998, there have been nearly 400 federal lawsuits filed against them for various violations of consumer rights, including violations of the Fair Debt Collection Practices Act. Some of the most common consumer complaints against CI are:

1) constant and continuous telephone calls;
2) threats to sue or garnish a consumer’s wages without possessing the intent or legal ability to actually do so;
3) improperly disclosing information about the alleged debt to third parties; and
4) failing to provide consumers with all proper disclosure regarding CI’s identity and the purpose for the calls/letters.

Should you find yourself dealing with CI and their deceptive practices, please contact a consumer protection advocate like the Consumer Law Center. Our office has represented nearly 100 consumers who have had to deal with CI’s harassment and abusive tactics and have successfully been able to put a quick and permanent stop to the harassment in addition to obtaining favorable settlements, often without even having to file a claim in court.

Arguing that fewer collection calls still warrants a violation of the FDCPA

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Anyone with an unpaid debt and a phone is already aware – debt collectors call people. Further, everyone with a computer and internet connection knows – debt collectors are prohibited from calling “repeatedly or continuously”. According to Section 1692d(5) of The FDCPA, a violation occurs by “Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number”. The problem is that there is no bright line definition of what “repeatedly” or “continuously” actually is. The Courts are simply not aligned with what is or is not too many calls. The answer you would receive from a collection defense lawyer and that you would receive from a consumer rights attorney are going to be markedly different.

Without researching any empirical data or performing any in depth review of any kind, it seems initiative that historically debt collectors have relied on the telephone because it is simply a cost effective way to reach large masses of people, fast. Indeed some of the largest collection companies such as NCO; Allied Interstate, Creditors Interchange, NES, etc., seem to focus the majority of their collection efforts via telephone. It makes sense that these companies, in attempting to comply with the FDCPA laws (aka debt collector harassment laws) would put forth procedures and measures to avoid calling individuals in amounts that exceed the laws. Of course, as stated earlier, as there is no bright line definition of what constitutes a violation so it is difficult to make that determination. However, courts appear to be trending towards reviewing the collection activity as a whole and in context with other activity and then determining if a violation occurred. This approach is very initiative and uses a common sense approach for determining violations. For example, if a debt collector called you thirty times total during thirty months it would be hard to argue that you were harassed. If however you were contacted thirty times in seven hours – your argument starts to look very legitimate. But what about the individual who is not experiencing a high volume of harassing and stressful collection calls but nonetheless fees that they have a case? I believe there might be an argument based on financial circumstances and putting the collector on notice of those circumstances.

It seems that the majority of consumers are not trying to avoid paying a bill, they have simply run into hard times and need a little time to get on their feet. Usually this means some type of injury or layoff has affected their ability to pay pre existing debt obligations. But what happens when this is explained to a collection company? Well, as you probably guessed – the calls keep on coming. Clients repeatedly tell us that they constantly informed the collection representatives that they were disabled or unemployed, and then they called back the next morning seeking payment; or everyday; or twice a day. I would argue to any California collection defense lawyer, if my client tells you she can’t pay, and provides verifiable information indicating same, then it is a potential violation to continue to contact him/her on a daily basis. Even if he/she found a job, it is not likely that work would be performed, pay check would arrive, paycheck would be cashed, etc., and funds would be available within a week (or even a month for that matter). Thus I would argue that calling an individual once a week goes too far. Many debt collection companies are now using predictive dialers or automatic phone messages to contact debtors in distress. If you thought exporting jobs overseas was an issue – what about importing them to robots? That nonsense aside, the point I am trying to make is that calling someone on a daily basis, who has demonstrated that they are permanently disabled or chronically unemployed, in a dead end employment market that does not seem to be improving for the vast majority of people out there is not going to get you any results. At best you are inviting a Federal lawsuit under the Fair Debt Collection Practices Act.

Rather then sending a cease and desist letter I would document the discussions by providing proof of unemployment and/or inability to pay each and every time that the company called. After three or four phone conversations inside of a two week period concerning the same thing, and after having faxed or sent other proof via return receipt, I would think a decent argument exists that based on the circumstances the only plausible explanation is that the debt collector was attempting to “harass” “oppress” or “abuse”. This allows you to argue that a small number of calls over a few weeks time and is still a violation based on the circumstance. Besides, who needs to be reminded on a daily basis that they owe a debt and that they are still unemployed and have no ability to repay it? Call me once to find out I am unemployed and then check in once a month to see if I am back on my feet. Call me everyday to remind me that I am unemployed and it is abuse.