Compliance Officer FAQ

I have posted exactly what a client receives when they sign up with our firm. In addition, Friday, attorneys from Hess Kennedy Company filed a class action lawsuit against "Frederick J. Hanna & Associates, P.C."

I will post the allegation today. If you wish to join the class action, please contact the help desk.

Here is another copy of the FAQ. The FAQ spells out exactly what we do. There should be no confusion.

Adam.

WHAT TO EXPECT

PHASE I. The Original Creditor.

As soon as the attorneys receive your file, they begin requesting documents from your creditors. When we use the word “creditor,” we are referring to the actual company that issued you a loan check, opened a credit card account in your name, or issued a check to another person or company. This company is also called an “original creditor”.

The “documents” we are requesting are known as “Truth In Lending Act & Regulation Z Disclosures” & “periodic statements”.

 The Truth in Lending Act & Regulation Z are Federal Laws that protect you the consumer from illegal lending practices. These Federal Laws require a lender to disclose in a “clear and conspicuous manner” the cost of lending you money.

 Periodic statements are the monthly or quarterly billing statements that your creditors are required to provide you with each month. They come in the mail each month and they disclose the previous balance, date of any payments posted to your account, new charges, the annual percentage rate, the daily periodic rate, and any finance charges, late fees, and penalties.

Now, depending upon whether you have entered into a “opened loan” or “close ended loan” with a “pre-computed interest rate”, your attorney will challenge certain information.

 If you have entered into a open ended loan, such as a line of credit, credit card account, charge card account, or other loan where you can add charges to the loan, and the interest rate can vary, your attorney will identify whether or not the interest rate that you were offered is the same interest rate you are being charged, whether or not you bank is properly “posting payments to your account”, and whether or not basic math calculations can duplicate the amount of money the creditor claims you owe.

Your attorney will send a “billing dispute notice” in accordance with the “Fair Credit Billing Act”. Once this happens, all of your Federal Rights begin to take effect:

1. A creditor or debt collector cannot contact you in an attempt to collect the amount that is in dispute.
2. A creditor cannot report negative credit information to a third party credit reporting agency.
3. A creditor cannot take any legal action against you in an attempt to collect on a debt that is in dispute.
4. You are allowed to withhold payments.

IF YOU ARE CONTACTED BY A DEBT COLLECTOR YOU ARE RESPONSIBLE TO DO THE FOLLOWING

1. Identify the name of the person calling you, their telephone number, who they represent, the date and time of the call, and what was said on the call.
2. Inform them that you have hired an attorney and that your attorney has instructed you not to communicate with any creditors over the telephone.
3. Inform them that your attorney has sent a billing error notice to customer service and that the Fair Credit Billing Act prohibits collection calls.
4. Tell them you are logging this telephone call and forwarding it to your attorney, and that if they call again, you will give your attorney authorization to immediately file a law suit.
5. Maintain a weekly log of any collection calls and forward this log to your attorney each week.

Remember, a debt collector is a telemarketer that gets paid to collect money from you. They will lie and mislead you in an attempt to convince you to make payments on the account. Do not agree to anything. Follow the instructions of your attorney. Most important, if any debt collector claims that your attorney has not sent them anything contact us immediately with their information.

WE WILL SUE THE INDIVIDUAL CALLING YOU AND THE COMPANY THEY ARE CALLING ON BEHALF OF IF THEY VIOLATE THE LAW

In many instances, when we file a lawsuit, the amount of money we collect is in excess of the amount of money they claim you owe. This is the case because we are entitled to “actual damages”, “statutory damages”, “costs” and “attorneys’ fees”.

 If you have entered into a close ended loan, such as a personal loan, promissory note, financing agreement, etc., your attorney will challenge the original disclosures and the manner in which your creditor is posting payments to your account.

Your attorney will send a notice that demands production and explanation of the calculation of pre-computed interest, and the dates in which payments are posted to your account. We will send them a Truth in Lending Act dispute notice. Once we do this, the same rules apply with respect to debt collection activity. You must maintain a log and forward it to us on a weekly basis.

PHASE II. The Third Party Debt Collector

There are three variations of Third Party debt collectors, and two are regulated by the Fair Debt Collection Practices Act.

The first involves the Third Party Debt Collector purchasing your information (the account number, your name, and the amount allegedly due).

The second involves a company that purchases the account when it was in default.

The third involves a the Third Party Debt Collector purchasing the actual account that is not in default. When a Third Party Debt Collector purchases your actual account that is not in default, they are regulated by the Fair Credit Billing Act, and those rules apply.

The Fair Debt Collection Practice Act prohibits a Third Party Debt Collector who purchased your information and a Third Party Debt Collector who purchase your account that is in default from certain things:

 They cannot contact you once they know or have reason to know you are represented by an attorney.
 They cannot contact you if you refuse to pay the debt.
 They cannot contact you at an unreasonable time or an inconvenient place.
 They must “validate” a debt upon demand within a specific time period and cannot contact you during the validation period.
 They cannot use abusive language or threaten to do something that they cannot legally do.

In the scenario where they purchase your information, they act as the “agent” of the creditor.

An agent is a person or business entity that is really an extension of a “principal”.

For example, a police officer is an agent of the particular city (principal) he or she works for. Everything he does unlawful, he and the city are responsible for, unless he is acting upon a specific written policy developed by the city. In that instance, if the city’s policy is illegal, the police officer is “immune” from a law suit, but the city is “liable”.

The same rules apply with Creditors and their Agent Debt Collectors. If a Debt Collector violates the Fair Credit Billing Act, without having knowledge that he is violating the Fair Credit Billing Act, the creditor is liable, but the debt collector is not. However, if the third party debt collector has knowledge that he is violating the Fair Credit Billing Act, then he and the creditor are liable.

Thus, if an account is in dispute under the Fair Credit Billing Act and the creditor does not resolve the dispute but instead sells your information to a third party debt collector and the third party debt collector violates the Fair Credit Billing Act without knowledge, then the creditor could be sued for violating that act but not the debt collector.

If an account is in dispute under the Fair Credit Billing Act and the creditor does not resolve the dispute but instead sells your information to a third party debt collector and the third party debt collector violates the Fair Credit Billing Act with knowledge, then the creditor and debt collector could be sued for violating that act.

In almost all instances, Third Party Debt Collectors violate both the Fair Credit Billing Act with knowledge, and Fair Debt Collection Practices Act.

When a third party debt collector purchases your information you have no contractual relationship with them nor any financial obligation with them, unless:
YOU ESTABLISH A RELATIONSHIP WITH THEM
BY MAKING A PAYMENT OR AGREEMENT TO PAY


IF YOU ARE CONTACTED BY A DEBT COLLECTOR YOU ARE RESPONSIBLE TO DO THE FOLLOWING

6. Identify the name of the person calling you, their telephone number, who they represent, the date and time of the call, and what was said on the call.
7. Inform them that you are recording the telephone call, and that you have hired an attorney and that your attorney has instructed you not to communicate with any creditors over the telephone.
8. Ask them if they have purchased the account while it was in default or if the original creditor is their “client” and that they have been hired to collect the debt for the creditor.
9. Tell them that the account is in dispute under the Fair Credit Billing Act; that the original creditor has not clarified or corrected the billing dispute; that you refuse to pay the debt; and that they may not contact you at home or at work.
10. Tell them you are logging this telephone call and forwarding it to your attorney, and that if they call again, you will give your attorney authorization to immediately file a law suit. Say goodbye and hang up.
11. Maintain a weekly log of any collection calls and forward this log to your attorney each week.

Remember, a debt collector is a telemarketer that gets paid to collect money from you. They will lie and mislead you in an attempt to convince you to make payments on the account. Do not agree to anything. Follow the instructions of your attorney. Most important, if any debt collector claims that your attorney has not sent them anything contact us immediately with their information.

WE WILL SUE THE INDIVIDUAL CALLING YOU AND THE COMPANY THEY ARE CALLING ON BEHALF OF IF THEY VIOLATE THE LAW


Phase III. Law Breakers

You are going to see that creditors and their collection agencies always violate the law. They will lie, get nasty, and continue to call without caring about the law. They do this because they do not own the company they work for and could care less about the law.
It is vital that you maintain a log of the law breaking. In three weeks time, if the account is not sold multiple times, the law will be broken enough times where we will demand payment of damages and attorneys fees.

In this instance, the accounts will be settled. This can take 5 months, or 2 months depending upon the creditor and/or collection agency.

Phase IV. Credit Bureaus

The Fair Credit Reporting Act requires that credit reporting agencies accurately report the status of accounts. We ensure that creditors and third party debt collectors do not unlawfully report inaccurate data.