My neighbor got into a dispute with Detroit Edison (“DTE”). They had sent him a bill that he thought was outrageous ($565 for digging a hole in his yard and repairing some cable). My hard headed neighbor refused to pay the bill. I talked him into offering to pay half of it since if he didn’t, it would necessarily mean that I would have to fight this in court if he got sued.
I sent a letter to DTE’s collection law firm from North Carolina (no, I won’t disclose its name). The law firm, through its collector, called my office. I spoke with the collector on Friday, November 10, 2006.
The first thing that she told me that it was illegal for my neighbor to “so much as dig a hole for a flower in his yard without contacting DTE.” I informed that that was simply untrue because there is no such law in Michigan requiring any property owner to seek another permission to dig flower holes. She sarcastically asked me if Michigan’s laws are different than the laws in the rest of country where its illegal to dig holes without contacting the utilities. I informed her that I am only licensed as a lawyer in Michigan and that I can only comment on Michigan law. I informed her again that she was wrong. HERE IS WHERE SHE GOT INTO TROUBLE….
After she refused my settlement offer of $250, she informed me that she was going to place this debt with local counsel in Michigan and that the debt would easily become a judgment of at least “$1,500 to $2,000.” I asked her how that was possible since I am a collection attorney and I have NEVER been able to transform a $565 claim into a judgment of $1,500 to $2,000. “Attorneys’ fees” she summarily responded. I told her that she just violated the Fair Debt Collection Practices Act (“FDCPA”)as DTE would not be able to get more than $150 in attorneys fees in Michigan without having a signed contract or a statute. Under the FDCPA, a collector cannot threaten to take action that it does not legally have the right to take. A collector cannot mislead or lie to a consumer! But “Gary“, you are thinking, you are a lawyer! You were not misled. You knew that this collector was wrong!” And yes, you would be right…but…Under the FDCPA, the standard for determining whether a collector violated the FDCPA is the “Least Sophisticated Consumer.” This means that my actual knowledge of FDCPA is irrelevant. If what the collector did would have a tendency to mislead a unsophisticated consumer, then the collector’s actions violate the FDCPA.
DAMAGES UNDER FDCPA – a party who violates the FDCPA is liable to a consumer for the greater of $1,000 or actual damages plus reasonable attorneys fees.
LESSONS TO BE LEARNED:
If you are collection agency or in this case, a collection law firm, TRAIN YOUR COLLECTORS IN FDCPA. Spend the time necessary to make them understand how the FDCPA works. In this case, the collection law firm is going to either pay us for violating FDCPA or its going to be embarrassed in front of its client and end up paying even more in attorneys fees. Either way, the North Carolina Law Firm could have easily avoided this mess by simply taking a little time and spending a little money to give their collectors an education.