DuPage County Bankruptcy Attorney

The debt collection firm of Luebke Baker & Associates, Inc. has entered into a settlement with the Federal Trade Commission as a result of its abusive debt collection pratices. The company was accused of attempting to collect uncollectable debts related to magazine subscriptions. If that wasn't bad enough, the debt collectors at Luebke racked up a plethora of other FDCPA violations. 

The Fair Debt Collection Practices Act (FDCPA) is intended to protect consumers from the abusive practices of debt collectors. It prohibits a wide range of conduct. It would appear that Luebke and its collectors violated many of the FDCPA's prohibitions. 

According to the FTC, Luebke's violations included: 

• debt collectors illegally masking their identity and sending false information over caller ID, falsely posing as Ed McMahon, attorneys from a law firm, and other entities;
• falsely telling consumers that magazine subscription debts are exempt from the statute of limitations; and
• illegally threatening to garnish wages and take other unintended legal actions.

Each of these activities is a separate FDCPA violation, which means that a consumer who expereinced all of the above would be able to claim higher damages -- each violation includes statutory and actual damages. When you look at the kinds of conduct that the FDCPA prohibits, it is almost impossible to believe that some of it would ever happen. However, there's a reason why the conduct is prohibited -- it happened frequently. 

The reality is that debt collectors still pretend to be other people, threaten to have consumers arrested, and make other claims that are simply untrue. Many debt collectors get paid more if they collect more money -- the financial incentive can push people towards making bad choices. 

What makes matters worse is that many consumers don't know their rights, so bad behavior goes unreported and unpunished. The FTC can only do so much. This is why the FDCPA gives consumers their own private cause of action when debt collectors break the law. Being in debt does not mean that you must lose your dignity. Nobody deserves to be abused, threatened, harassed, or lied to by debt collectors. 

If you're interested in learning more about your rights, our tactical guide to consumer defense is a good place to start. 

Sometimes when people have debt problems and fail to make payments on an account, a collection agency may go after them. Failing to pay can dog a consumer's credit. The Fair Credit Reporting Act says that collection accounts are to be removed from credit reports seven years and 180 days after a consumer stopped paying on an account which was then turned over to collections. Whether the debt was later paid or not doesn't matter.

However, the same is not necessarily true for unpaid judgments. For example, a collection agency can take someone to court. If the person doesn't respond and still fails to pay on an account, then a deficiency judgment can be obtained against them.

The financial crisis has taken an emotional toll on countless Americans. New research shows that children are not immune.

A report from a bipartisan advocacy group called First Focus concludes that an estimated 2.3 million children have lived in homes that have been lost to foreclosure. The Washington, D.C.-based group also found that one in 10 U.S. children will also be affected by the country's rise in foreclosures. Another 3 million children currently live in homes at risk of foreclosure because home loans are in the foreclosure process or are seriously delinquent, according to the Sun Times.

Yesterday, I wrote about debt collectors that conduct their collection activities in hospitals. I briefly mentioned that these collection activities may violate the automatic stay or the bankruptcy discharge. I wanted to expand on this idea, so here is a hypothetical situation. Again, this is entirely hypothetical and all names are used for illustrative purposes only. 

In 2005, Steve Johnson underwent spine surgery at a hospital in Downers Grove, Illinois. As a result of the surgery, his L4 and L5 vertebrae were fused with an orthopedic appliance. Although Steve had insurance at the time, it did not cover all of his medical bills.

In 2010, Steve filed a Chapter 13 bankruptcy to strip an underwater second mortgage and to discharge his credit card debt and the remaining debt from his 2005 surgery. He began making his plan payments, which included payments towards the hospital bills. 

In April 2012, Steve was rear-ended bby a careless driver. The accident damaged the fused vertebrae. Steve was taken to the hospital from the scene of the accident. Steve's wife, Alice, met Steve at the emergency room. Before Steve was taken in to the triage center, a person who appeared to be a hospital employee demanded that Steve make a payment towards his outstanding balance before receiving treatment. 

Fearing that her husband would not be treated, Alice wrote the largest check that she could afford and gave it to the hospital employee. Alice later asked a nurse about the incident and was informed that the individual was not a hospital employee, but an employee of a debt collection agency retained by the hospital. After being released from the hospital, Steve contacted his attorney and told him about what happened. 

Steve's attorney identified several violations of federal and state law. First, the debt collector's actions violated the automatic stay which went into effect when Steve filed his Chapter 13 bankruptcy. The automatic stay prohibits creditors from attempting to collect debts during the lifetime of a bankruptcy case.

Second, since Steve's hospital bills were part of his Chapter 13 plan (which had been confirmed two years prior), the debt collector's activities could be described as a violation of a court order. Because Steve's Chapter 13 plan provides for payments towards the hospital bill, the only way that the hospital or its debt collector can obtain a higher payment is with the bankruptcy court's permission. 

Third, because the debt collector did not identify himself as a debt collector and instead appeared to be a hospital employee, his conduct violates the Fair Debt Collection Practices Act. On top of that violation, his attempt to collect a debt in violation of the automatic stay and the court's order means that another Fair Debt Collection Practices Act has occurred. 

Fourth, because this conduct took place in Illinois, the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) is triggered. ICFA prohibits unfair and deceptive conduct in the stream of commerce. Providing medical services and collecting debts are both activities that fall within ICFA's definition of commerce. Because the debt collector tried to pass himself off as a hospital employee, his conduct was deceptive and violates ICFA. 

Steve's attorney sent a demand letter to both the hospital and the debt collection company. When he received no response, he filed an adversary proceeding against the company in the U.S. Bankruptcy Court. Although the case is still pending, Steve hopes to see it settle -- it would be one less pain in his back. 

This hypothetical is by no means far-fetched. Debt collectors engage in bad conduct on a regular basis, and the FTC has the uptick in consumer complaints to prove it.