Agency Owner Shares Insights Into Why He Fought — And Won — Instead of Settling

Recently, Action Collection Agency out of Middleboro, Mass., was granted summary judgment in a lawsuit that was filed against it by an individual who alleged the agency violated the Fair Debt Collection Practices Act over perceived issues in a collection letter sent to the individual. reached out to Jay Gonsalves, the owner of the agency, and he graciously agreed to answer some questions about the suit and why he chose to defend rather than settle, which is a difficult choice facing many collection agency owners on a daily basis.  Read on to learn more about why he opted to fight this case instead of settling.


Was this the first time your agency has been sued by an individual? 

No, any agency of any size has experienced suits and demands. Fortunately, we don’t have as many as others even smaller than we are.


What was it about this particular case that made you want to defend it? 

The FDCPA case alleged that, based on the “least sophisticated consumer” standard, the claimant didn’t recognize the name of the client as it was abbreviated and not spelled out. As such, it failed to identify the creditor. This was because the name of the physician practice was exceptionally long and had to be abbreviated. However, it was presented as such on their bills and website.


Were you offered a chance to settle? If so, why did you decide to move forward and try for the summary judgment? 

In matters such as this, there is always an offer to settle and sometimes it makes sense to, especially if proving your innocence would entail spending an inordinate amount of time and money, which is generally the case. In this case, they were looking for $10,000. That, in conjunction with the absurdity of the claim, prompted me to decide to consider fighting it and I contacted my MAP attorney, Jack O’Connor of Peabody Arnold in Boston, and we decided a firm in that jurisdiction and with the necessary experience would be more appropriate, which is why I reached out to Rick Perr of Fineman, Krekstein & Harris.


How did you feel when you found out you were granted the summary judgment? 

Naturally, I was pleased and thought the judge’s opinion and citing of relevant case law was on point. Rick’s strategy of going for summary judgement in this matter was also a good call.


Who else contributed to this victory?

In addition to the professionals, I have to say that our team and practices at Action Collection Agency contributed to this victory because we did everything properly. There was never any attempt to mislead the claimant. As with our other colleagues who operation professionally and ethically, we were only trying to recover the obligation due our client.


Have you made any changes to your processes as a result of this case?

Most of our clients’ names are not abbreviated, but for those who are, we make sure that it clearly corresponds to material that the consumers have received prior to placement. As a rule, when we onboard a new client, we make sure the name we assign is the one they have on their statements for the very purpose of not confusing the consumer.


What advice would you give other agency owners when faced with a lawsuit?

I would encourage them to assess the situation and determine if there is any culpability. If not, then it becomes a cost-benefit issue. In this case, my out-of-pocket turned out to be slightly less than the settlement offer.


Why should agency owners, when faced with a settlement opportunity, choose to defend lawsuits at a greater expense?

In addition to the answer in the last question, it isn’t just about the expense. There is some sense of right and wrong and taking a stand. I do regret not going to ACA International’s Industry Advancement Fund and petitioning for assistance, because I thought the claim was so illogical and without merit it would be dismissed quickly and less expensively. That wasn’t the case, as even getting a summary judgement requires a fair amount of lawyering and that isn’t without cost. And it may also have had the industry significance that ACA might have found compelling. And ironically, I currently serve as chair of the ACA BOD Advocacy Committee, which oversees that IAF, so I have no excuse for not seeking help and I encourage other agency owners to do so.


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One comment

  1. Great story and great win! The only problem we still face is the ability to recoup the costs on stuff like this. Since we are not able to, there will be no slow down of this type of stuff. I would classify your case as frivolous….. nothing more than an extortion attempt, as most of these are. Why couldn’t the debtor simply pick up the phone to call you and simply ask who the creditor was? He was able to pick up the phone and call an attorney! Years ago, a simple call from the debtor or the attorney fixed 99% of these ridiculous claims. We have started to do the same with defending these things. It’s one thing if your intent was to confuse or harass, then I agree on facing penalties….. but if the debtor attorney is now suing because the word ‘The’ could be confusing…Well, that’s a different story.

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