I need your help. I hope my hard reasearch pays off I've spent countless nights investigating my collectors and found something VERY strange: Is it legal for a LawFirm who practices debt collection to establish themselves as another entitity who sells and buys debt ? In otherwords, a lawfirm to collect debts for themselves under a different business name? The law says this: § 807. False or misleading representations [15 USC 1962e] (14) The use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization. Here is the real world scenario: Acme Law firm are debt collectors but they send out notices that they __REPRESENT__ a client called FruitCup solutions who buys debt (still classified as debt collector). Allegedly, FruitCup Solutions bought my debt from American express. FruitCup Colutions has forwarded my account to Acme LawFirm for collection by legal means if necessary. Well I just ordered all the corporate records for FruitCup solutions and it turns out the president and VicePresident of FruitCup solutions are the same people who operate Acme Lawfirm!@. Is this legal ? It's screaming FDCRA violation but I'm not sure. Remember these are the same people. I have proof from Governmental Agencies that would stand up in court proving this. As soon as I get the word, I'm on the phone with everyone. I just don't want to jump the gun if this is legal. Please read the above law again and tell me if I'm on to something.
Honestly edoggie, I keep reading and reading this and can't figure out what your problem is. Why don't you just send them a validation letter and be done with it? Lots of people have more than one business or an interrelated business or dba's. Sassy
Sassy I tried to make that clear as possible. I'll try to rephrase it. Is it legal for me to be a debt collecting lawfirm that collects debt under a different business name. The way I read the FDCRA it seems like a violation that's all I'm trying to clarify. Again: § 807. False or misleading representations [15 USC 1962e] (14) The use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization. It's like you are a lawfirm posing to collect for another business but you ARE that "other" business. You are just using a different name.
I'm not a legal wizard, I'm far from it. I am however, a person who operates two separate businesses that sometime intertwine. On the face of this, it seems if Fruitcup and Acme do have two different businesses and whatever are the necessary licenses to operate those two businesses, they are not operating under a false name and thus aren't violating the FDCPA. I don't think FDCPA addresses the ownership of the collecting business, just the name they use to identify it. Not sure if this helps, but this is my take. DemPooches
DemPooches is right, that's how I read it, it's about misrepresenting the name of the business; they aren't doing that. Did you check to see how they are licensed? Does your state require licensing or bonding? Heinz v Jenkins addresses attorneys subject to the FDCPA, but these aren't trying to get out of those provisions. I asked above why you don't just send a validation letter. You've spent a lot of time digging up corporate information but the validation letter itself would address the sale and whether you were contractually obligated to them instead of the OC, that's one of the points. You're making this too hard on yourself trying to catch them in a technical screw-up. Sassy EDIT: Sorry, was thinking, do both businesses share the same employees, edoggie?
Read this: http://www.edcombs.com/CM/News/news7.asp I didn't have the time to find out exactly where your situation fits, but I think you'll find your answer here.
Sassy yes! That's what I'm trying to say. These are the __same__ people and yes I can prove it. The lawfirm is owned and operated by the same people who are president and vice president of the "client" they are representing. That article that's posted above (the edcombs.com one addresses this) I thought maybe you all had an experience like this with NCO / MEDCLR and could elaborate a bit more on the issue I'm experiencing. Everytime I try to get the "clients" phone number from the attorney's they won't give it out. They ask why do I need the number then said they will relay the message to the client. Thanks for that edcombs article too. Might be just what I need.
One thing I'm not sure on is this...Equifax Credit Solutions is a different entity from Equifax Collections (okay...can't remember the legal names here, but you get the picture). Even though it may be run by the same board of directors, or whatever, if it is a different legal entity, this may (or may not) put a damper on your case. I dunno...just thought I'd toss that out. L
edoggie, I just don't see the problem. They are doing what service companies do all over the country. Buy product {in this case defaulted debt} at wholesale and then, pass it over to there retail operation {in this case, actually collecting} with I'm sure, some sort of markup. If there interlocking relationship could be found by surfing the net, they can't be too deceptive.
edoggie, I don't have anything I can add about your situation, but I read your post twice before I realized that FruitCup Solutions was not the real name! I kept thinking to myself, Who would call a collection agency FruitCup--how would they ever be taken seriously! ROTFL!
EDoggie, I have exactly the same situation going on. Lawyers are representing themselves under a collection co name. I have requested validation from this company/attorneys with no response. I am now faced with hiring an attorney as I just received interrogotories (sp) and don't want to just get a judgement. Keep us posted if you find out anything...I am curious if they are in violation.
I'm waiting for three return calls still. I'll let you know as soon as someone gets back to me about this.
In my opinion, the only time they MIGHT be operating illegally would be if they filed a lawsuit as "law firm name" representing "debt collection name" and your State hd a prohibition in it's civil procedures against someone filing who misrepresented their interests. The FDCPA rules are designed to prevent someone from claiming to be something or someone they are not as a means of fraudulent deception,a collection agency incorporating it's legal branch may or may not be legal if your State requires bonding and/or licensing and both entities are not licensed and bonded.
edoggie, Your question: â??Is it legal for a Law Firm who practices debt collection to establish themselves as another entitity who sells and buys debt ?â? Answer: YES. Just because a corporation that buys and sells debts is owned by an attorney does not mean that the collections company is misrepresenting itself. Just as if a corporation that buys and sells debts is not misrepresenting itself if it is owned by doctors, accountants, another corporation, or the original creditor. In the same context, just because a law firm is run by a lawyer who owns an interest or the only interest in a corporation that buys and sells debts, does not mean the law firm is violating the law. Remember there is a difference between the law FIRM and the lawYERâ?¦one is a professional practice, the other is a human being. In regards to the corporation, a corporation is an entity unto itself. In other words, A corporation is an organization no matter who owns it. Depending on what state it is incorporated in, as long as it is operating legally it can be owned by almost anyone, even another corporation. Now even though the principal owner of a corporation is also principal owner of the law firm (or the principals of the law firm) representing it. There is no violation if the law firm is acting on behalf of the corporation its principals own. Why (a) because the corporation is a separate LEGAL and legitimate entity, and (b) the law firm is acting as an agent of the company.
ughhh... I always have these type issues. I've tried to digest each and everyone of your points but something just doesn't seem right. I know a corporation is a legal entity in itself but doesn't something seem funny about this: I own two corporations: John Doe Bank and John Doe Debt Collections. I actively run both of these companies. You take out a loan with John Doe Bank and default and I pursue you with John Doe collections to recover debt owed to John Doe Bank. Although these are separate legal corporations they are the same person in reality. Something seems wrong to me about this. But if it's legal then this is a whole new worlkd of tactics one can use.
Maybe I can ask the FTC and they will create a "Edoggie" letter to add to Wolmann and the rest of them.
Sometimes you have to look to the intent of the law, rather than the language. The intent here was to prevent CA's from using false names intended to scare consumers into paying debts. For example, using the name "Federal Bureu of Investigation's Collections Deprtment" or "We will break your legs Maffia Collectors if You Don't Pay Up", might intimidate a consumer into paying a debt he might otherwise not pay. There are no laws concerning how many legitimate businesses a person or legal entity may diversify into. (I sometimes wish there were, because it can become quite confusing from an audit standpoint) Many businesses use different names in new business ventures because they do not want the new venture associated with their historical names. That way if the new venture fails, it does not impact the goodwill associated with thier principle name. The law firm probably does not want to be associated directly with the collection company, so they created a second legal entity to operate the collection arm. Legitimate clients might not want to be represented by a law firm that operates as a collection agency. Perfectly legal.
