Author Topic: Can the tables be turned on a JDB?  (Read 15084 times)

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Flyingifr

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Can the tables be turned on a JDB?
« on: September 15, 2010 04:34:04 AM »
The whole JDB industry is built on the model of letting consumers default with creditor "A" and then buying, for pennies on the dollar, A's rights to sue the consumer for the default. Can that be turned around to our benefit?

Hypothetical example: JDB buy's A's defaulted debt to ABC Company and has the right to sue A as the Assignee of ABC. In the process, JDB violates FDCPA. Does A have the right to sell his FDCPA suit rights against JDB to consumer B? If so, that would get around the $1000 per action FDCPA limitation.

Here's how:

JDB collector commits violations A,B,C,D and E in rapid succession in a telephone call to Joe Consumer. Joe sells his litigation rights to violation A to Bill Consumer, then his litigation rights to violation B to Jane Consumer, violation C to Mike Consumer, D to Sally Consumer. Joe then files suit for Violation E which he kept the litigation rights to, and Bill, Jane, Mike and Sally all file suit for the violations they purchased the litigation rights to. JDB now has five separate suits to defend against, five separate attorneys fees to pay in that defense and 5 potential damage awards.

Needless to say, I have not found any evidence or law  to back this up or refute it.

If it is legal, I would hope DB would be the pioneer and start a Litigation Rights Exchange.....

Now you all know why the bill collectors all hate me so much.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

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KFMAN

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Re: Can the tables be turned on a JDB?
« Reply #1 on: September 15, 2010 09:38:48 AM »
 1215 :vbrofl: :drinking:

Want to buy one? 

KFMAN

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Re: Can the tables be turned on a JDB?
« Reply #2 on: September 15, 2010 03:36:33 PM »
I was told that assigning lawsuits is called choses in action and it's expressly forbidden in most states and most circumstances.  So what is the difference between a alleged Debtor selling their litigation rights to litigate and an Original Creditor selling their rights to a Junk Debt Buyer?


flacorps

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Re: Can the tables be turned on a JDB?
« Reply #3 on: September 15, 2010 05:40:24 PM »
Britain made 'em assignable in 1873. http://en.wikipedia.org/wiki/Chose

AFAIK, they're assignable in most every state these days, subject only to contractual restrictions that insurers may have imposed.

Now here's the fun part. I suppose that if I wanted to spend about $70 (here in Florida) per claim, I could assign each violation to a newly-formed corporate shell and then sue on it.

But flyingifr's idea of trading the causes of action from one person to another is also attractive.

What would the upshot be? Well, the corporate entities can't sue without legal representation, so that's gonna mean that consumer lawyers are going to be the gatekeepers on that one. If they feel like it makes more sense to use collapsible corporations and do that, then they're going to have at it. But keep in mind they're members of their local federal court's bar ... and federal court judges are going to get mighty tired of the gambit mighty quickly, and when one of them says "WTF!?" it may be that an attorney winds up getting bar discipline or even bounced out of his district's federal bar, which would for him.

A lot of FDCPA suits are handled as adversary matters in BK court, and the BK judges are definitely never, ever going to put up with this.

Meanwhile, trading the suits amongst the plaintiffs puts the participants at the mercy of each other in terms of the cooperation (discovery, etc) needed to pursue a case.
"History has taught us that weakness is provocative. To the extent that people see an area of weakness, they will take advantage of it..." - Donald Rumsfeld

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KFMAN

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Re: Can the tables be turned on a JDB?
« Reply #4 on: September 15, 2010 06:40:09 PM »
An Attorney told me it wasn't legal.

flacorps

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Re: Can the tables be turned on a JDB?
« Reply #5 on: September 15, 2010 07:33:05 PM »
An Attorney told me it wasn't legal.

There is a lot of confusion among attorneys about concepts like champerty.

And a lot of attorneys will off-the-cuff say that something is illegal because they don't like it, or because they realize that at some point it's going to get reined in, especially if it becomes prevalent.

My take is that it's going to be seen as an abuse ... if not immediately, then down the road. And that will cause courts and/or legislatures to put a stop to it.

But I don't think there's anything illegal about it at the moment. Choses in action can be sold or otherwise transferred in most cases in most states.
"History has taught us that weakness is provocative. To the extent that people see an area of weakness, they will take advantage of it..." - Donald Rumsfeld

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jezter6

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Re: Can the tables be turned on a JDB?
« Reply #6 on: September 15, 2010 10:06:12 PM »
I've been hammering this idea over and over again for a while.

Starting a Collections Agency to farm out violation "collections" before suing. Just starting sending out Dun letters and calling up companies saying you owe my client $1000 for damages.

Not necessarily buying the "rights" for the lawsuit, but just collecting on the "open account" of alleged damages.

Wonder if, as a CA, you could post those collections on the business CR as an open collection to with their company credit report like they with ours.


Flyingifr

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Re: Can the tables be turned on a JDB?
« Reply #7 on: September 16, 2010 02:25:17 AM »
I've been hammering this idea over and over again for a while.

Starting a Collections Agency to farm out violation "collections" before suing. Just starting sending out Dun letters and calling up companies saying you owe my client $1000 for damages.

Not necessarily buying the "rights" for the lawsuit, but just collecting on the "open account" of alleged damages.

Wonder if, as a CA, you could post those collections on the business CR as an open collection to with their company credit report like they with ours.

Taking this one step further, one could also mimick the JDB's game plan by setting up a Commercial Collection Agency to collect on FDCPA violations and report them to Commercial Credit Bureaus like D&B. If they can with our CRA files, why can't we with theirs? And this CA would not be subject to FCRA or FDCPA because the debtor would not be a "consumer" under the definition in the applicable laws.
« Last Edit: September 16, 2010 07:44:37 AM by Flyingifr »
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Debtors Exams are the perfect place for us Senior Citizens to show off our recently acquired Alzheimers.

Founder of the Credit Terrorist Training Camp (Debtorboards)

ikuomanero

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Re: Can the tables be turned on a JDB?
« Reply #8 on: September 16, 2010 05:52:26 AM »
First off, I like Flyingifr's idea of selling rights to suits to third parties.

But I then though: if we do so, and consumers (through third party FDCPA suit collectors) start fouling up the D&B ratings of JDBs/CAs/OCs, then eventually laws will be passed against consumer's assigns.  In the end, it may lead to where credit reports are nothing more than vendetta scorecards.

Hopefully, if the above does happen, then bankers would be forced to base decisions on the old fashioned traditions of loan product underwriting.  And this is what I am seeing happening amongst most Canadian banks.  New or rebounding consumers would be forced to ante up money to establish a secured line.  Once the secured line has been established and rated, then the banks would convert them to unsecured.  Then such consumers would be able to establish other lines of credits at other institutions by having the new banks contact the old banks for credit references.

As an aside: I think that the credit reporting agencies of today are nothing but jokes.  Good and Bad information regardless of veracity can be reported at the stroke of several keyboard presses.   I hope one day, CRA's go the way of NAF.
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duh

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Re: Can the tables be turned on a JDB?
« Reply #9 on: September 16, 2010 12:13:51 PM »
I agree with the theory...

But this came from an Am. Ex. agreement 2009...

"We may assign this Agreement
We may sell, transfer or assign this Agreement and your Account. We may do so at any time without notifying you.
You may not sell, assign or transfer your Account or any of your obligations under this Agreement."

I have read this in other agreements as well.

It would seem that the CCs , or some of them, are protecting their JDBs.

There was a company who people were able to hire that would take on your debt.
They re-contracted with the CCs and made payments based on the consumer terms and not the CC terms.

The CCs were loosing a lot of money and went to extremes to shut this operation down. And it was legal as well as offered hope to consumers.

It was never touted, by anyone concerned as being illegal.

I can not get into specifics but that statement about us not being able to
sell etc... is a result. (It goes back a lot of years)

I would imagine that by doing what Flyingifr suggests somehow the CCs and JDBs
will soon claim that paragraph applies to them, the JDBs and manage to block things, or we would see additional wording in new CC contracts to stop it.

But it is a great idea to be sure.

I am not an attorney. My posts about my experiences are for entertainment and  possibly educational purposes only.

If you need legal help, you should seek legal counsel.

kevinmanheim

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Re: Can the tables be turned on a JDB?
« Reply #10 on: September 16, 2010 01:00:18 PM »
FWIW: One of my settlement agreements contained a statement indicating that I had not sold or assigned my FDCPA claims against the CA.

It wouldn't be in there if they weren't afraid of it, or it didn't already happen.

flacorps

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Re: Can the tables be turned on a JDB?
« Reply #11 on: September 16, 2010 03:18:18 PM »
@duh

FDCPA liability does not spring from the CC agreement, and touches on it only tangentially. Nonassignability of the consumers obligation to pay under the CC agreement has no bearing on whether the chose in action of an FDCPA violation can be assigned.
"History has taught us that weakness is provocative. To the extent that people see an area of weakness, they will take advantage of it..." - Donald Rumsfeld

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jezter6

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Re: Can the tables be turned on a JDB?
« Reply #12 on: September 16, 2010 03:27:27 PM »
Taking this one step further, one could also mimick the JDB's game plan by setting up a Commercial Collection Agency to collect on FDCPA violations and report them to Commercial Credit Bureaus like D&B. If they can with our CRA files, why can't we with theirs? And this CA would not be subject to FCRA or FDCPA because the debtor would not be a "consumer" under the definition in the applicable laws.

That's exactly what I was saying. Smart minds think alike and all that.

Think of how nasty you can get with them if they can't FDCPA you back?

Even better - with the FDCPA limited to $1k per ACTION, it doesn't limit the creditor's "account" with the CA from being for multiple actions....so you could legitimately list $1k for every violation they "owe" on -- so the past due balance can easily hit $10-20k or more...start adding in the treble TCPA and you can rack that up quite large.

Wonder if that would be best, or considering each "action" a new and different account assigned and put 20 different $1k collection lines on their report?


KFMAN

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Re: Can the tables be turned on a JDB?
« Reply #13 on: September 16, 2010 03:30:44 PM »
A lawyer told me this wether it's true or not.  I was told that assigning lawsuits is called choses in action and it's expressly forbidden in most states and most circumstances.

flacorps

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Re: Can the tables be turned on a JDB?
« Reply #14 on: September 16, 2010 04:40:07 PM »
A lawyer told me this wether it's true or not.  I was told that assigning lawsuits is called choses in action and it's expressly forbidden in most states and most circumstances.

Here's an example of the more modern view:

Quote
Assignments of Choses in Action
    A characteristic of a property right is often said to be its transferability/assignability i.e. the holder of a property right can generally transfer/assign it to another
    Historically, common law courts were not very receptive to the concept of assigning choses in action; today legislation provides far broader scope for assignment of choses in action.
    Courts of equity were much more ready to  recognize such assignments than were common law courts

http://www.realpropertylaw.biz/florida-divorce-law-property-division/

That does not mean that if courts detect that the assignment of certain choses in action amounts to an abusive situation they are incapable of shutting it down without legislative assistance.
"History has taught us that weakness is provocative. To the extent that people see an area of weakness, they will take advantage of it..." - Donald Rumsfeld

http://www.myhopeseries.com