How to answer a collection lawsuit in Minnesota

Before I explain how to answer a collection lawsuit, it’s important to understand that Minnesota is a unique state because a lawsuit is started by serving the defendant. It is not required to be filed with a court at the beginning of the case. Because of this quirk, a lawsuit in Minnesota will almost never have a court filing number. And the courts will not have a record of the lawsuit until the creditor files the lawsuit and pays the filing fee. But this doesn’t mean the lawsuit isn’t legitimate. If you’re served with a lawsuit in Minnesota, you must answer within 20 days. If you don’t answer the lawsuit, it’s likely that a default judgment will be entered against you without a court hearing.

So the first step to respond to a collection lawsuit is to answer it. An answer is a formal legal document that responds to each of the allegations in the lawsuit. A phone call or letter isn’t sufficient. Here’s how to answer a collection lawsuit in Minnesota:

Fill out the caption

Overall, your answer should be formatted much like the collection lawsuit itself. Start by filling out the caption at the top of the lawsuit. This is where the name of the county and judicial district are listed. It’s also where the plaintiff and defendant’s names appear. You can basically copy this directly from the lawsuit. Just change the title of the document from “complaint” to “answer.”

Respond to all of the allegations in the lawsuit

The body of your answer is where you respond to the allegations in the complaint. It’s best to number each paragraph of your answer to correspond with each numbered paragraph of the complaint. There’s basically three responses to an allegation: (1) admit; (2) deny; and (3) deny based on a lack of information.

Your responses must be truthful, so if you know that the allegation is true, you have to admit for. For example, if the collection lawsuit alleges that you live in Hennepin County and you live in Hennepin County, you have to admit it. On the other hand, if the lawsuit alleges that you live in Hennepin County and you live in Ramsey County, then you would deny the allegation.

Many times, you won’t know the answer to an allegation. For example, many debt buyer lawsuits allege that the debt buyer purchased the account from the original creditor. Since you weren’t a party to this transaction, you have no way to know if this allegation is true or not. So it’s usually best to deny the allegation based on a lack of information. You only have to admit something that you know for a fact is true.

You should also watch out for multiple allegations in a paragraph. It’s possible to admit one part of an allegation and to deny another. Read each allegation carefully and be sure to respond to all of its parts and sub-parts. When you’ve finished responding to every allegation, sign and date the answer.

Serve the answer by mail

Once you’ve completed the answer, make two copies. You serve one copy of the answer by mailing it to the debt collector’s lawyer, or the debt collector itself if they don’t have a lawyer. It’s best fill out a sworn statement, called an affidavit of service, to prove when you served the answer. Here’s a form affidavit from the Minnesota Court website.

Keep  the second copy of your answer for your records. Hang on to the original answer for filing with the court, but you don’t have to file it until the debt collector does if you don’t want to.

Knowing how to answer a collection lawsuit isn’t enough

Now you know how to answer a collection lawsuit in Minnesota. But answering is just the first step. There will likely be discovery to answer and a motion to respond to. When you get these things from the collector, it’s probably best to talk to a consumer lawyer right away. Responding to discovery  or a motion is complicated, there are strict deadlines, and it’s possible to lose your case based on a technicality if you don’t follow the court rules.

Photo: http://www.flickr.com/photos/shinythings/161216658/

Sued by a debt collector? Avoid these defenses.

Sued by a debt collctor


When you’re sued by a debt collector, you must respond to the lawsuit with an answer within 20 days or a default judgment will be entered against you. A default judgment often leads to bank garnishments, wage garnishments, and other involuntary collection efforts. So while it’s critical to respond, there are some defenses that should be avoided.

Lack of a signed contract

Many people believe that debt collectors must produce a copy of the contract that the account-holder signed to prevail in a debt collection lawsuit. But there are alternative theories used by debt collectors, such as account stated, that may allow them to prevail by merely introducing credit card billing statements. Account stated is an equitable theory where the debt collector must show that the consumer “assented” to the account by receiving billing statements and not objecting to them within a reasonable period of time. Although there are defenses to this argument, particularly if the plaintiff is a debt-buyer, the point is that a signed contract doesn’t have to be produced.

Hardship

Unfortunately, the fact that you cannot afford to pay the alleged debt is not a defense when you’re sued by a debt collector. The issue in a debt collection lawsuit is whether you are legally obligated for the debt, not whether you can afford to pay the alleged debt. That fact that you are unemployed, receive public assistance, or are otherwise “judgment proof” may mean that the debt collector will never collect any money from you. But it is not a legal defense to a lawsuit.

Attempted to pay

While frustrating, the fact that the debt collector refused to work out reasonable payment arrangements with you is not a legal defense to a debt collection lawsuit.  Courts do not have the authority to force the debt collector to accept the payment plans or settlements.

Ex-spouse responsible for payment

Just because your divorce decree ruled that your ex-spouse is solely responsible for payment of a joint debt, doesn’t mean you cannot be sued for the account by a debt collector. Divorce courts do not have the power to modify contracts between you and a third-party debt collector. You may, however, be able to sue your ex-spouse to repay you for any money you are ordered to pay the debt collector.

Good defenses when you’re sued by a debt collector

Now that you know how not to defend a debt collection lawsuit, here are some good potential defenses: statute of limitations, unauthorized and/or fraudulent use of the account; identity theft; incompetent or insufficient evidence; and lack of valid assignment of the debt (usually only applicable in debt buyer lawsuits). This is not an exhaustive list and these defenses may or may not apply to your particular case. Consult with a consumer lawyer in your area for specific advice about your case.

(photo: Picture Perfect Pose)


Emergency bankruptcy in Minnesota

1. What is an emergency bankruptcy? An emergency bankruptcy filing is a way to stop impending collection action, like a garnishment, foreclosure sale, lawsuit or tax lien. Once the emergency case is filed, no collectors can take any action against you. And if they do anyway, we can sue them, or undo the action (at the very least). To file an emergency bankruptcy, we don’t need to file as much information as we would in a full bankruptcy. The emergency filing gives us14 days to file all the remaining bankruptcy documents.

2. How long does an emergency bankruptcy take? We can file an emergency case in a day or two, if it’s necessary. We’ve even filed them the same day as the initial client meeting. But keep in mind that the closer we are to the emergency, the better chance we wouldn’t be able to file it in time. Also, rush bankruptcy cases cost more than standard cases.

3. How to get all of your documents ready. Document collection might be the hardest part of bankruptcy. Here is our document collection checklist. The one thing that you need before filing an emergency case is a list of your creditors. As far as the full bankruptcy goes, there are a couple of things here that might be tricky. For example, you’ll need to have filed your most recent taxes before filing bankruptcy (your last four years of tax returns need to be filed for a Chapter 13). Self-employed bankruptcy filers need to provide a profit & loss. The more complicated the case, the harder you’ll have to work to make sure everything is filed in time. You should make sure to have these things before filing bankruptcy.

4. You’ll have to do your online credit counseling before an emergency filing. There’s no room for mistakes on this one. If your online credit counseling is not completed before a bankruptcy, the case will be dismissed. Talk to your attorney about how to get the case completed on a rush basis.

5. What happens if you can’t get all the documents filed after an emergency filing. If you can’t complete the full bankruptcy within 14 days of filing an emergency case, the case will be dismissed automatically by the court. On the one hand, this still achieved the desired effect—the bankruptcy still stopped the collection temporarily, which would have bought you some time. But on the other hand, it also could make it harder to re-file (the court can be a bit stricter with people who file multiple times).

If you need an emergency bankruptcy, get in touch with an attorney right away. But make sure to leave plenty of time!

Debt collection lawsuit in Minnesota? What you need to know.

Dealing with a debt collection lawsuit can be a scary and confusing process. This is especially true in Minnesota where the initial stages of the case often take place outside of court oversight. Hopefully, this post will shed some light on the collection litigation process and allow you to make a more informed decision about how to get your case resolved as quickly and painlessly as possible.

Before we begin…

Debt collection lawsuit

Photo by Chris Potter

This post describes the basic steps of a debt collection lawsuit in District Court in Minnesota. Every state has different laws and procedures. What happens in a Minnesota lawsuit may be very different from what happens in a collection lawsuit in another state. If your collection lawsuit is not in Minnesota, then you shouldn’t rely on anything I’ve written here. And if your case is in Minnesota Conciliation Court, or small claims court, then the steps are different than what I’ve described here.

Step 1 — Service of the Complaint

In Minnesota, a debt collection lawsuit begins when the consumer is served with the Summons and Complaint. The Summons is a notice that a lawsuit has started and contains basic instructions about what to do next. The Complaint details what claims are being made. The Summons and Complaint are not required to be filed with a court and most debt collection lawsuits will not be filed at the time they are served. Accordingly, the Summons and Complaint will not have a court file number on them. There is a lot of information on the internet that suggests that a Complaint without a file number is invalid. This may be true in other states, but it isn’t true in Minnesota.

I’m often asked what it means to be “served.” Served essentially means “notified.” In Minnesota, the most common way to serve a defendant with a Summons and Complaint is to personally hand it to the defendant. Another common method of service is to hand the Summons and Complaint to a person of “suitable age and discretion” that lives with the defendant. This is usually a spouse, older child, or roommate. In Minnesota, it’s possible to serve a Summons and Complaint by mail, but the defendant must sign an acknowledgment that they’ve received the complaint or it’s not effective service. It’s also possible to serve a defendant by publishing notice of the lawsuit in a newspaper or similar publication, but this is very rare in debt collection lawsuits.

Step 2 — Answer the Complaint

Once a debt collection lawsuit is served, the defendant has 20 days to respond with an Answer. An Answer is a formal, written, legal document that specifically responds to each of the allegations in the Complaint and lists any defenses that the defendant has. Phone calls or letters are not considered Answers under the court rules.

If the defendant does not answer a lawsuit within 20 days of being served, then he is in default and a judgment may be entered against him. In a debt collection lawsuit, a default judgment is a final court order that the consumer owes the money. If a default judgment is entered, none of the steps below will take place and the case will be over. A default judgment is granted not because the creditor has better evidence or arguments, but because the consumer didn’t participate. It happens administratively and no judge will ever see the case. If you want to protect your rights and force the creditor to prove its case in front of a judge, then you must answer the lawsuit within 20 days of being served. This is especially important if you’ve been sued by a debt buyer.

Step 3 — Initial disclosures and discovery plan

After the Answer is served, the parties are required to confer about the case and develop a plan for discovery (Step 4, below). This conference, which can be by phone, is required to take place within 30 days of the original due date for the Answer. Most debt collection law firms will send a letter to set up the conference.

The parties are also required  to disclose all known witnesses and supporting documents, as well as to itemize the claimed damages and describe any insurance coverage for the claims, at this stage of the case. These are known as Rule 26 initial disclosures and must be sent to the other side within 60 days of the original due date for the Answer.

Both the initial disclosures and discovery conference and plan were added to the court rules in 2013.

Step 4 — Discovery

Once the discovery conference takes place , the next step in a debt collection lawsuit is discovery. If the case has not been filed with the court, there is no explicit time frame for discovery to happen and the parties are free to serve discovery whenever they wish. Once the case is filed with the court, the court will issue a deadline for discovery to be completed by.

Discovery is simply an opportunity for the parties to exchange information about the claims and defenses involved in a case. Discovery is not compulsory and a party is only required to provide information if they’re properly asked. The most common forms of discovery in a debt collection case are Interrogatories, Request for Production of Documents, and Requests for Admission. Interrogatories are basically just questions that one party asks of the other. Requests for Production of Documents, as the name implies, requires that certain documents related to the case be produced. And Requests for Admission are essentially true or false questions about the claims or defenses in the case.

To request discovery, a party has to properly serve their Interrogatories, Requests for Production of Documents, or Requests for Admission. Written discovery is usually served by mailing the requests to the other side. The other party then has 30 days from the day the discovery was served to respond fully. Simply mailing a letter to the other side asking them to provide information about the case is not sufficient and doesn’t trigger the other side’s duty to respond.

Requests for Admission are probably the most critical part of discovery, because if they are not responded to within 30 days, they are considered admitted. Creditors write their Requests for Admission carefully so that if the consumer doesn’t respond to them, they will end up admitting each element of the creditor’s claims. I’ve seen cases where the only evidence that the creditor put in front of the judge was the consumer’s failure to respond to the Requests for Admission.

The bottom line: if you receive discovery requests, you must truthfully respond to them in writing within 30 days. If you don’t, you risk losing your case on a technicality and being penalized by the court. And if you want to ask questions of the other side and see what documents they have, you must mail them proper discovery requests. If they don’t respond within 30 days, you can ask a court to make them respond and penalize them if they don’t.

Step 5 — Filing the case with the court

In 2013, the court rules were changed to require that cases be filed with the court and brought under court supervision within one year from the date the Complaint was served. If the case isn’t filed within the one-year time limit, it is automatically dismissed with prejudice and can’t be re-started. The rules allow the parties to agree to extend this deadline, but there rarely is a reason for a defendant in a debt collection lawsuit to agree to extend this deadline.

To file the case, each party must file their initial pleading (ie. the Complaint or the Answer) and pay the court filing fee, which is about $325. The parties also have to file their discovery plan from Step 3 above. Once the case is filed, it will typically be assigned to a judge and the court will issue a schedule with deadlines for the case.

Step 6 — Summary Judgment Motion

The next step in the majority of debt collection lawsuits is the creditor’s summary judgment motion. This is a hearing in front of a judge where the creditor will offer all of its evidence and legal arguments and ask the judge to give them a judgment. Defending a summary judgment motion is a complicated and involved process, but essentially it requires the consumer to file a brief with his legal arguments, any written testimony that he wishes the court to consider, and any documents that he wants the court to review. There is a hearing where the judge will have an opportunity to ask questions of both sides. The judge then considers all of the arguments and evidence and decides whether the creditor is entitled to a judgment. If the judge rules in favor of the creditor, a judgment is entered and the case is over. If the judge rules against the creditor, then the case will proceed to trial.

Defending against a creditor’s summary judgment motion is probably the most difficult thing for a consumer to do himself. There are a myriad of rules, procedures, and deadlines that must be strictly followed. Many summary judgment motions are won by the creditor on a technicality rather than on the merits. For this reason, a consumer faced with a summary judgment motion should strongly consider hiring an attorney. If you want to hire an attorney to help you at this point, you should hire one immediately after getting notice of the creditor’s summary judgment motion. There are strict deadlines to file your response and an attorney will need as much time as possible to get up to speed. Don’t wait until the week before the hearing to call an attorney.

Step 7 — Mediation

In most cases, the court requires the parties to engage in mediation. Mediation involves a neutral third-party, sometimes a retired judge, that tries to help the parties resolve their differences and settle the case. The parties usually have to bear the cost of hiring a mediator, although more and more courts are offering low-cost mediation for qualifying cases and parties. The mediator can’t require you to settle the case, but they can help you see the benefits of settlement and propose different settlement options.

Step 8 — Pre-Trial and Trial

If you’re fortunate enough to defeat the creditor’s summary judgment motion and the parties don’t settle at mediation, the next step in a debt collection lawsuit will be a trial. The judge will issue detailed instructions about the time leading up to trial. There are so many variables at this point that it’s difficult to describe all the potential scenarios. If you get to this point, you would benefit greatly from discussing your case with an attorney. You have a great deal of leverage to get the case resolved if you defeat the summary judgment motion and an experienced consumer attorney can help you maximize that leverage to get the best possible outcome.

Settling a debt collection lawsuit

At any point during a debt collection lawsuit, the parties may agree to settle the case. Usually, this means that the consumer will pay an agreed-upon amount of money and, in exchange, the creditor will dismiss the lawsuit. The amount of money that the creditor will agree to settle for depends on many factors, but generally speaking, the better your legal defenses, the better deal you can get. A document financial hardship can also help facilitate a manageable settlement. Here are some tips for getting the best deal possible.

A final word about the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a federal law that regulates what debt collectors can and can’t do when collecting debts. The FDCPA applies even if you owe the debt. If you’re involved in a debt collection lawsuit, you should to educate yourself about the FDCPA. This post is a good place to start. Basically, a debt collector can’t harass you, lie to you, or use any unfair collection tactics. If a debt collector violates the FDCPA, you can sue it for up to $1,000, plus any actual damages. The debt collector also has to pay your attorney fees and costs if you win your FDCPA case. A FDCPA claim can often be brought as a counterclaim in a debt collection lawsuit, which often will give you additional leverage to get the suit resolved.

Fair Credit Reporting Act (FCRA): an overview

The Fair Credit Reporting Act is a federal law that regulates consumer credit reporting agencies, such as Experian, Equifax, and TransUnion. The FCRA also regulates those who provide information to the credit reporting agencies and those who use the information in a consumer credit report.

Studies have shown that nearly 80% of consumer credit reports contain errors of some kind. Examples of the type of errors found include accounts mistakenly listed as delinquent, loans listed twice, and inaccurate personal information. As the credit reporting industry has increased their use of automated procedures, additional problems have arisen. One common such problem is when information for one person is listed on another person’s report (known as a merged or mixed file).

There are a couple of reasons why inaccurate information ends up on a credit report. First, the information provided to the credit reporting agency may itself be inaccurate. Second, the CRA might assigned the reported information to the wrong consumer’s file. Whatever the reason, these mistakes may lead to a person being denied for credit or receiving credit on less favorable terms.And increasingly, many employers are reviewing a job applicant’s credit history when making employment decisions, which creates the possibility of a person being denied a job based on incorrect credit report information.

Unfortunately, the FCRA does not require credit reporting agencies to report accurate information. It merely requires them to use reasonable procedures to ensure the maximum possible accuracy. The Act is a bit toothless in this regard. Where the FCRA does have some teeth, however, is in its investigation requirement. Under the FCRA, if a consumer disputes information in their report to a CRA, the agency must investigate the dispute and, if verified, correct the disputed information. Despite this clear-cut obligation, many consumer disputes do not result in the inaccurate information being removed from their report. One possible reason for this is that the CRA’s customers are lenders, not consumers. For this reason, reporting agencies have an incentive to over-include items at the expense of accuracy.

Fortunately for consumers, the CRA’s failure to conduct a reasonable investigation is a violation of the FCRA and the consumer may bring a lawsuit to hold them liable for their bad conduct. If the consumer proves that the CRA willfully failed to conduct a reasonable investigation of the dispute, the consumer is entitled to $1,000 in statutory damages or the consumer’s actual damages (such as loss of credit or money paid under a higher interest rate). If, however, the credit reporting agency was merely negligent in failing to conduct a reasonable investigation of the dispute, the consumer is only entitled to their actual damages. If no actual damages are suffered, the consumer will lose the suit. In addition, the FCRA requires the credit reporting agency to pay successful consumer litigant’s reasonable attorney fees and costs.

If you learn of a mistake on your credit report, your first step is to dispute it with the credit reporting agency. This post explains how to do it. If the CRA fails to correct the error after receiving your dispute letter, you may consider talking to an attorney who handles FCRA cases. The attorney will be able to recommend next steps to get the mistake fixed and will be able to advise you if a FCRA lawsuit is an option.

 

 

 

Conditional delivery: how car dealers use it to scam buyers

If you’ve ever bought a vehicle from a dealer and financed the purchase, chances are you signed something called a conditional delivery agreement. If you read this agreement carefully, it states that the dealer has the right to cancel the sale if the dealer can’t assign your auto loan to a lender on terms agreeable to the dealer. In other words, if the dealer changes its mind about the deal, it has the right to unwind the transaction. This provision, typically in the fine print of the sales contract, is the source of one of the most widespread auto dealer abuses today and applies to both new and used car sales.

Here’s how the scam works: you agree to buy a vehicle and you fill out a credit application for financing. The dealer tells you that you’ve been approved for the loan and you sign the loan agreement and other typical sales paperwork, which contains the conditional delivery language. You either don’t notice this provision because it’s in the fine print or the dealer tells you it’s nothing to worry about. So you give them a cash down payment and turn over your trade-in. The dealer gives you the keys to your new car and you drive it home thinking you’re all set.

But you’re not. A few days later, the dealer calls you and tells you that your financing “fell through” and that you need to bring the vehicle back and sign a new loan agreement. If you complain, they might threaten to repossess your new vehicle or even to call the police and report it stolen. So you go back to the dealership. And you learn that your trade-in has already been sold and that the new loan that they’re demanding that you sign has a higher interest rate than the one you originally agreed to. Although you don’t want to sign this new agreement, you don’t have a choice because your trade-in is gone and they’ve threatened to repossess your new vehicle and keep your downpayment if you don’t agree to the new, less favorable, loan on the spot. You need the new vehicle to get to work and to drive your kids to their activities, so you reluctantly sign the unfavorable new loan.

Dealers call this practice conditional delivery or spot delivery. Consumer advocates call it a “yo-yo” scam. Either way, it’s a blatantly unfair and one-sided practice. The dealer doesn’t want you to think about the deal overnight, it wants the deal closed on the spot. On the other hand, the dealer wants to keep its options open after you’ve driven the car off the lot. It doesn’t want to be rushed into a hasty deal. The conditional delivery agreement makes the deal final for the buyer, but not for the seller.

Sometimes the yo-yo scam is simply the dealer re-thinking the terms of the sale after the fact. Other times, it’s a deliberate scheme from the beginning to inflate the finance costs. There’s evidence that dealers target customers with poor credit or low income. In other words, dealers use the yo-yo scam to rip off people who can least afford to be ripped off.

Although the conditional delivery provision in the contract gives the dealer some legal cover, there are ways to attack this unfair practice through a lawsuit. If you’ve been a victim of a yo-yo scam, you should discuss the situation with an attorney right away.

Minnesota’s Lemon Law: An Overview

Most people use the term “lemon” to describe any vehicle that has repeated problems. But in Minnesota the “lemon law’ is a statute that protects buyers of new vehicles that have problems that can’t be fixed.

There are five basic elements to a lemon law claim in Minnesota:

  • (1) The defect has to arise and be reported to the manufacturer or authorized dealer within two years of the date of purchase or within the term of the manufacturer’s warranty, whichever date is earlier. Although there are certain circumstances where this time period can be extended, in general, the lemon law doesn’t protect you against problems that crop up after two years.
  • (2) You have to give the manufacturer a reasonable opportunity to fix the defect. If you’ve given the manufacturer four or more opportunities to fix the same problem, or if they’ve had your vehicle for 30 or more days, the law presumes that they have had a reasonable opportunity to fix the issue. On one of these attempts, you have to give the manufacturer written notice of the problems. Also, if the problem affects the steering or braking systems, you may only have to allow one repair attempt.
  • (3) The defect has to still be present after the manufacturer has had a reasonable opportunity to fix it. In Minnesota, at least, the court is going to want to know whether there is still a problem.
  • (4) The problem has to substantially impair the use or value of the vehicle. This is a subjective test that is fact-specific and is usually decided on a case-by-case basis.
  • (5) The defect can’t be caused by your negligence or misuse of the vehicle. You can’t abuse or neglect your vehicle and then blame the manufacturer for not being able to fix it.

Before starting a lawsuit under Minnesota’s lemon law, you have to engage in an Alternative Dispute Resolution process if the manufacturer offers one. The manufacturer of your vehicle will be able to give you information about their informal dispute process. This ADR process is not binding, though, and you can bring a lawsuit in court if you believe the ADR result is unjust.

If you bring a successful lemon law claim, you have the choice of a refund or replacement. The refund has to include the full purchase price of the vehicle, although there may be an offset for the mileage you’ve driven the vehicle. If you elect a replacement vehicle, it has to be one of comparable to the one you’re returning. In addition, the manufacturer has to pay for your attorney fees and costs for bringing the lawsuit. This is important because most lemon law attorneys are able to take the case on a contingency fee, where you pay no attorney fees out of pocket.

Prior accident used vehicles: what you need to know

One of the most serious types of auto fraud is the concealment of a vehicle’s prior accident history. A previous wreck will negatively affect a vehicle in three main ways:

  • Diminished value: A vehicle with a prior accident history will almost always be worth less than a clean vehicle. The reason is simple: most people won’t buy a vehicle with a prior accident, and they definitely won’t pay clean retail price for it. Depending on the circumstances, a prior accident may diminish a vehicle’s value by fifty percent.
  • Safety risks: It’s very difficult and expensive to repair major collision damage, especially if the accident caused frame or structural problems.  Once a car’s structure is compromised, it may not be possible to restore its original integrity. This can pose serious safety risks if the vehicle is ever in another accident. The damaged frame will probably not perform as the manufacturer intended it to, which can expose passengers to significant injuries or even death.
  • Branded title: In many circumstances, a prior accident will result in a branded vehicle title. In Minnesota, for example, if an insurance company appears in the chain of title, the title will have a “salvage” stamp on it. A “salvage” stamp will require additional steps, such as an inspection, before a title can be issued. And a branded title will make the vehicle more difficult to sell and will significantly diminish its value.
Minneapolis auto fraud lawyers

Pamela Carls – flickr.com

Because of these issues, the only way to profitably sell a prior accident vehicle is to conceal its wreck history from the buyer. A dealer can buy a rebuilt wreck for less than wholesale price, conceal the accident history, and charge clean retail price for the vehicle. Or the dealer can pay pennies on the dollar for a still-damaged vehicle at a salvage auction, make cosmetic repairs, and sell the vehicle to an unsuspecting buyer as a clean vehicle at full retail price. As long as the dealer is willing to check its conscience at the door, it can increase its profit margin by selling prior accident vehicles.

If you find out that your used vehicle has previously been in an accident, the first thing you should do is get it inspected by a reputable body shop or collision center. If you’re in the Twin Cities, I recommend Schoonover Bodyworks. Tell the collision center that you suspect that the vehicle has been in an accident and that you want them to examine it to confirm. If the body shop confirms that the vehicle has been in an accident, ask them whether there is any structural damage or safety concerns. Also ask whether the signs of the accident would have been apparent to a knowledgeable car dealer. And be sure to get an estimate for any recommended repairs.

Then, call or go to the dealer who sold you the car. Tell them about what you’ve learned and ask whether they knew about the prior accident. Ask them what they will do to fix the situation, but don’t commit to anything on the spot.

It’s also a good idea to discuss the situation with a lawyer with experience handling auto fraud cases. There’s a good chance that you will have legal claims against the selling dealer and those claims may require the dealer to pay your attorney fees. Once you know what your legal options are, you can decide whether it makes sense to try to negotiate a resolution with the dealer or to assert your claims in court.

And if you’re in the market for a used car, here are some steps you can take to avoid buying a prior accident vehicle in the first place:

  • Do your homework: buy a CarFax or AutoCheck report for the vehicle. Most prior accidents are noted on these reports, although there is a lag time between the date of the accident and when it shows up on the report. So don’t rely exclusively on the CarFax report. You should also ask to see the vehicle’s title to make sure it isn’t branded. But remember: just because it has a clean title, doesn’t mean that there wasn’t a prior accident.
  • Ask the dealer: be sure to ask the sales rep about prior accidents. If he tells you that there aren’t any, ask him how he knows that. It’s also good to have the dealership note the lack of accident history in writing in the purchase papers. Also, be sure to read the paperwork very carefully. Some dealers will slip a disclosure of the prior accident into the fine print.
  • Get an independent inspection: ask to have the vehicle inspected by a mechanic or body shop of your choosing. You will have to pay for this yourself, but it’s worth it. Prior accident damage is easy to spot by a trained professional who knows what to look for. An ounce of prevention is worth a pound of cure.

These steps don’t guarantee that you won’t end up with a rebuilt wreck, but they definitely increase your chances of getting a safe, reliable used vehicle.

 

Stop collection calls for someone else’s debt

Photo by Chris Potter

Photo by Chris Potter

On of the most frequent consumer complaints received by the Consumer Financial Protection Bureau is debt collectors attempting to collect a debt from the wrong person. It’s unclear whether these collectors are intentionally pursuing the wrong person or that they’ve made a mistake. But if you’re getting calls or letters from a collector for someone else’s debt, you probably don’t care why it’s happening, you just want the collection attempts to stop. Here are some suggestions to stop collection attempts for debt that isn’t yours.

Collection calls or letters for someone else’s debt

If a debt collector is calling or writing you about a debt that you don’t owe, the first thing you should do is tell them very clearly that they have the wrong person and that this is someone else’s debt. Be polite but firm. The collector may ask you to confirm the last four digits of your social security number or a similar personal identifier. While it may be unwise to give the collector your full social security number, there probably isn’t too much risk in giving them  the last four digits to confirm that the debt isn’t yours. The collector may ask you if you know the actual account-holder and how to reach them. While you’re under no obligation to do so, you may consider passing along the other person’s information if you know it.

In addition to verbally telling the collector that it is someone else’s debt, you may consider sending a follow-up letter confirming what you told them. Identify yourself in the letter and then write something like: “you called me on this date at this number. I am not the person who owes this debt. Please stop contacting me.” If you know any details about the account in question, include a reference to those in your letter to be sure the collector can properly identify the account. Send this letter certified mail with a return receipt and keep a copy of the letter and receipt for your records.

You should also keep detailed records of any additional collection attempts after you’ve notified the collector that the debt isn’t yours. Keep track of the time, dates, and duration of any additional calls and save any voice messages. If you think the calls are robocalls, make a note of that and why you think so. Also, keep copies of any letters or other documents that they send you.

It’s also a good idea to check your credit reports to make sure the other person’s debt isn’t listed on your reports. Use Annual Credit Report to get free copies of your credit reports from the three major credit reporting agencies. Once you have the reports, make sure that the other person’s account isn’t showing up on your credit report. If it is, you should send a dispute letter to each of the credit bureaus incorrectly reporting that account. Take a look at this post for more information about how to dispute incorrect information on your credit report.

If you’ve told the debt collector that you are not the person who owes the debt and the collection attempts continue, it’s time to talk to a consumer rights attorney to discuss the situation in more detail. In addition to helping you stop the collection attempts, a consumer attorney can advise you whether you have any claims against the debt collector. If the debt doesn’t belong to you, you’ve told the collector that, and the collector still keeps calling, it deserves to get sued and be held accountable for harassing an innocent consumer.

Collection lawsuit for a debt that isn’t yours

If you get served with a collection lawsuit for someone else’s debt, you need to take additional steps. You should do everything suggested above, but you also have to submit an answer to the lawsuit. In Minnesota, the answer must be submitted within 20 days. An answer is a formal legal document that responds to each of the allegations in the complaint. If the debt isn’t yours, you should be able to deny most of the allegations in the lawsuit. You should also note somewhere in your answer that the debt is someone else’s. Even if you don’t owe the debt, you have to answer the lawsuit. Failure to respond to the lawsuit will likely result in a default judgment against you. A default judgment can be difficult (and expensive) to overturn, even if the debt isn’t yours. It may also lead to garnishments and other unpleasantness.

Because the consequences of a collection lawsuit are quite serious, you should strongly consider discussing your situation with a consumer lawyer. A consumer lawyer can help you prepare an answer to the lawsuit and also advise you if you have possible counterclaims against the debt collector for pursuing the wrong person.

 

 

Use the TCPA to stop robocalls for someone else

Unwanted robocalls and texts are one of the most frequent consumer complaints received by the Federal Communications Commission. In 2014 alone, the FCC received about 215,000 complaints about autodialer calls and texts. These calls are particularly annoying when the caller is trying to reach someone else. Often, these wrong-number robocalls are from debt collectors trying to collect a debt from the previous user of a phone number or from telemarketers pushing their products.

In response to the overwhelming number of consumer complaints, the FCC recently strengthened consumer protections against wrong-number robocalls by clarifying the Telephone Consumer Protection Act. The TCPA is a federal law that prohibits auto-dialed calls to your cellular phone without your consent. Until recently, however, there was a loophole of sorts for wrong-number calls. Callers could argue that they had the consent of the person they were trying to reach and that was good enough to satisfy the TCPA’s consent requirement.

Thankfully, the FCC closed this loophole. The FCC has made clear that callers are liable for robocalls to reassigned numbers when the current subscriber of the number has not consented, even if the caller has no notice of the reassignment. This reaffirms the TCPA’s basic premise of giving consumers control over the calls that they receive.

Under the TCPA, you can obtain an order from a court that requires the caller to stop placing wrong-number robocalls to your cell phone. In addition, the TCPA provides for damages of at least $500 per illegal robocall. This $500/call penalty is designed to deter illegal robocalls and to incentivize consumers to help the FCC enforce the TCPA through private lawsuits.

We are Minneapolis consumer protection lawyers. If you are getting wrong-number autodialed calls please get in touch today to discuss your rights.