Legal Question in Credit and Debt Law in New York
Unethical collection of completely paid debt
One of my credit cards went to a collection agency and then thier lawyers contacted me to make arraingments for payment. I had made payments faithfully to them until I received a letter from another attorney's office about the same debt. They indicated that they worked for theother law firm. My husband paid the debt off. Six months later I receieved a call from the first law firm from a debt collector indicating that we hadn't made a payment to them in over five months and the debt collector threatened me with multiple things. 1)my husband must have lied to me and used the money, 2) he was notifying the Sherrif to arrest me, I had to prove to them that I had paid the debt since it was a large amount and they had no record of it. Then he hung up on me. My husband called him back and tried to speak with him he indicated that he had no supervisor. My husband went over events of what happened to pay off the debt and the debt collector realized that he did not check with the company that my husband made the payment to before persuing us. In the morning my husband contacted the second law firm and they indicated that the debt WAS paid and they would contact the first law firm. Is there anything that I should do about this matter?
2 Answers from Attorneys
Re: Unethical collection of completely paid debt
Unfortunately I disagree with my colleague. First, there is nothing in writing from the offending agency that you can rely upon and don't expect the collection agent to admit he threatened you. Second, you have to have damages to sue...if you were applying for a loan and the alleged error caused to you lose the loan or pay a higher rate then you'd have actual money damages and a cause of action. Here, basically, you were only inconvenienced somewhat...how much is that worth? Nitsberg says $5000? No way. The Federal Fair Debt Collection Practices Act is the Federal law that is supposed to keep collection agencies (and attorneys) in line...and you only get $1000 statutory damages for a proven breach...MY ADVISE is to get it in writing from both firms that the debt is paid off and make sure you clear your credit history by contacting the three major reporting companies with copies of the letters the firms provide. If they don't remove negative credit info within 60 days of your demand THEY can be sued for improper reporting under the Federal Fair Debt Reporting Act. You may have to write them several times because they are really only concerned with reporting bad credit, not removing bad credit entries. Consider yourself lucky and be wary of anyone who dangles $$$$ wihtout knowing your situation...false hopes...
Re: Unethical collection of completely paid debt
It appears that you have acted well and honorably. You should be proud of yourself and your husband.
It is well-known that debt collectors are not nice or courteous people. That is why congress and the NY legislature passed laws to regulate the behavior of these people.
The behavior you have described violates the code of conduct mandated by law and you may sue them for damages. However, the damages will be less than 5,000 dollars. you can press your claim in small claims court. Whether you want to or not is your decision.
You are welcome to a consultation for no fee at my offices at 42 west 44th street, NY,NY. Please call for an appointment first (646) 591-5786.
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