An Open Letter From An Agency Owner to His Congressman

Recently, the owner of a collection agency reached out to me and shared a letter he had written to his local Congressman. The letter, which you can read excerpts of below, talks about the pains of dealing with frivolous lawsuits and the impact that defending against them, in terms of hirings that the company can not make because it is too busy spending money on lawyers. With permission of the owner, has been granted permission to re-print portions of the letter, with the hope that it will spur other agency owners and executives to follow suit.

Dear Congressman,

Over the last several years we have been inundated with frivolous lawsuits by professional litigators who are picking apart our letters (debt validation notices) word-for-word while we work diligently to strictly follow the regulations set forth by the FDCPA (Fair Debt Collection Practices Act). The same attorney-approved letters we have used for well over 15 years are being unduly scrutinized by these professional litigators and labeled as “confusing” or “misleading” to these very same consumers. We take incredible pride in doing right by consumers.  In fact, we take pride in helping those who care to pay the bills they owe – to doctors, to small business owners, to the numerous people who extend credit to consumers and who sometimes are left holding out an empty hand when it comes time to be paid for the products or services they provided. We are not the bad guys. In fact, we are one of the good agencies that constantly strives to do the right thing. Not only do we extend as much help to consumers as we lawfully can, but we also support our community with sponsorships and volunteerism …

So, when we get sued again and again … and pay out $10,000 settlements each time, of which 90% or more goes to the attorney, who do you think ends up paying? The consumer does. For every three or four of these lawsuits we are prevented from hiring one more full-time person. And we are getting hit with dozens of these each year and paying hundreds of thousands of dollars – for what? A letter that has been successfully used since the turn of the century! So, add that up and we’re growing more slowly than we have intended with costs being passed back to the consumer from our clients – all of which costs money – in revenue that provides property taxes, payroll taxes and employment in an area that could really use more available jobs and money to fix crumbling infrastructure, increase educational opportunities, fight crime, and more.

Do you know that we get sued for using dialing technology? The same technology that elections use to call voters or to drop a voicemail on my colleague’s phone to tell him about upcoming town hall meetings. Did you know that campaign surrogates sent the same person unsolicited text messages to vote leading up to election day? And do you know that no one ever opted-in to receive any of these notices? Did you know that he could actually sue because of this? Now, he hasn’t, and he won’t – he’s a reasonable person who employs logical thinking and doesn’t pretend these messages have hurt him in any manner. In the end it’s not really an inconvenience. It’s not unreasonable for him to simply ask not to receive these calls and text messages. How is it that we are treated any differently? How is it that when we follow the letter of the law as outlined in the FDCPA, we are still found liable even though there is no clear guidance provided outside of this for our letters and the TCPA (Telephone Consumer Protection Act) for all forms of communication, even though this act became a federal statute in 1991! That certainly makes it hard to understand how email and text-messaging is currently regulated in this industry, let alone any other.

In fact, ACA International submitted a proposal to the CFPB (Consumer Financial Protection Bureau) outlining some of these things, including an approved debt validation notice, leaving voice messages, using text and email, and even perhaps replacing the debt validation with a digital form that would provide the industry with a clear roadmap in avoiding frivolous litigation based on unclear standards. You can see more about this on the ACA International website ( – it’s currently under consideration on a wing and a prayer. A call from you to the newly confirmed director of the CFPB, Kathy Kraninger, to consider the suggestions presented in this proposal would be greatly appreciated and might just go a long way in determining the appropriate regulations and standards for the future.

We have spent hundreds and hundreds (if not thousands) of man hours working with a team of our best and brightest minds to craft a letter that informs the consumer of the amount they owe all the while tip-toeing around imaginary lines that we can’t even see in avoiding words and phrases that may be confusing to the “least sophisticated consumer” but also including a vast amount of clunky language required by this outdated legislation. Meanwhile, we do this work proudly but have zero guidance from the Federal Government on what would constitute proper language. The only guidance we have is that we must send a notification by mail before we can even make a phone call and we must make sure we tell the consumer how to dispute the bill and we must read the FDCPA Mini-Miranda each and every time we speak to a consumer no matter what. This is surely an antiquated way of doing things in this century and we’re getting sued on it left and right – perhaps the only bi-partisan effort we’ll ever see again in America! And we are doing this even after successfully using the same letter since 2001 – a letter that is now somehow confusing to consumers? Does this mean that American consumers are somehow growing less intelligent?  Is that what we should conclude from this?  I certainly hope not, and I certainly do not believe that Americans are any less intelligent today than they were twenty years ago.

For nearly ten years, we have gone through this process of changing our letters – we are consumed by this effort instead of exalting our success and growing our business … Not to mention we are too scared and paranoid to even try texting or emailing consumers – instead of mailing a statement or calling. And through this all, we just want to do the right thing.

So we decided enough is enough and we decided to fight a case … for another alleged ambiguous set of words in a debt validation letter we sent to a consumer who owed a medical debt (again this is a letter completely compliant with the FDCPA).   

The judge agreed with our position and thought the attorney fees were egregious and the lawsuit itself was a farce, but he could only “go on current caselaw,” and then said, “So, call your Congressman if you want this to change.” Do you know what current case law he cited? The fact that this lawyer could charge $650/hour to essentially argue how one word was enough to confuse his client about a bill he owed. We were then presented with these choices: Take the case to trial at a cost approaching $100,000 or settle right then and there for $10,000. So, what do you think we did? Yes, sir. Another $10,000 – not to the consumer who supposedly is the aggrieved party here, but $9,000 to the lawyer and $1,000 to the consumer – and, here’s the kicker, the consumer still owes the bill! The plaintiff is able to recoup their lawyer’s fee through this process, but if we were to win or settle in our favor, we cannot do the same thing. There is literally nothing preventing these attorneys from fleecing companies that support thousands upon thousands of jobs in the US. It is not a level playing field and these attorneys are acting just like the worst collection agencies. How is this helping anyone? Do you know what would immediately slow down this silly trend? Allowing the defendants to recoup their attorney fees. How many professional litigators do you think would take that risk? How many collection agencies would have the courage to then fight these frivolous and unjust lawsuits?

Congressman, you are the only one who can help us. And we don’t need much. … We’re not asking for tax breaks. We’re not asking for influence. We’re asking for common sense to start guiding the principles of collecting legitimate debt in this great country of ours. Can someone definitively tell us what to do? The CFPB gives absolutely no guidance on this. The FDCPA and TCPA provide some, but it’s outdated and doesn’t even address email, cell phones or text messaging – all modes of communications that a majority of consumers prefer. Can someone level the playing field so we can use the same technology you and many other business and organizations use to make our clients whole? Can defendants recoup their attorney fees from plaintiffs when the defendants are proven correct? If not, you’re going to put the majority of debt collectors out of business and when no one is left to collect the debts, businesses, hospitals, and even the government itself will go out of business. It is well worth your time and effort write the CFPB to consider the suggestions presented in the ACA’s proposals.

Please help us, Congressman.  After all, it’s just common sense.

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One comment

  1. As a victim of several frivolous lawsuits, and as somebody who goes out of my way to operate in a honest and respectable manner only to be sued constantly by professional debtors, this made me very happy to read. Happy to see that someone is writing to congress and it makes me feel more inclined to do so as well.

    My agency has been in business since 2011 and our growth is stuck because every time we gain momentum, we get sued. I can admit to wrongdoings. I have had a lawsuit because a collector was baited into speaking with a debtor’s parent. They were baited but they still violated the law and that was a hard lesson learned about the extent of training.

    1 year ago, I was sued by a pro-se sovereign citizen professional litigant which WebRecon indicates has had dozens of lawsuits over the past decade. Lawsuits dating back to the days of ‘Junk Fax’ lawsuits.

    Here is the kicker, we never called this person. Our relationship with him is that we were on the chain of title for a debt from 2008. We never called him, but the account technically passed through my office. This man was attempting to sue my 7 man agency for $1.1M. I consulted an FDCPA/TCPA expert attorney who said ‘I will get this dropped so quickly that his head will spin’.

    1 year later and $30k in legal fees, $13k in past-due legal fees, a loan to help us to pay the staff and vendors and all the while myself and my partner are operating without pay and barely able to keep our head above water.

    This pro-se litigant has effectively crippled an 8+ year established business over 3 imaginary telephone calls that never existed, this has been proven through the discovery process.

    I can’t help but feel like this is my fault because I didn’t just settle like everybody else listed in the lawsuit did, but I felt like the fact that his allegations were demonstrably false was enough to allow me to safely fight this lawsuit. I couldn’t have been more wrong. Furthermore, this man has gotten so upset that we didn’t settle, that he wrote to our lawyer saying ‘I’m going to do everything in my power to run up your client’s legal fees until they settle’ and he has made egregious false claims to the state AG’s office against my agency out of spite that we failed to settle.

    So as my agency hangs on by a thread while I hope that karma comes around and fixes the situation, you can’t exactly count positive karma as a valuable asset or write off.

    And a quick note to any of my clients who may stumble upon this… please don’t worry, the clients and the employees will continue to be paid long before we are forced to shut our doors, anybody who knows me knows that I will operate out of pocket to ensure that nobody takes a loss on me.

    But ask yourself, how long would you deal with the stress of running a business in this industry for no pay? I’m on my 5th month and counting.

    So, it’s fair to say that my blood boils when I hear about frivolous lawsuits. The legal system is so broken when it comes to debt collection litigation, in MANY aspects.

    The people who really thrive as a result aren’t just the ‘consumer rights attorneys’, it’s the ‘bad actors’ who operate in the shadows and continue to make a bad name for the industry. People who aren’t licensed, bonded, registered, insured or ethical.

    I do IT work on the side for collection agencies and have for years now. Over the years I’ve seen a lot of agencies operating much more aggressively than my agency ever has or ever will and I see the owners living very well. People who own agencies like that have told me “You need to be untraceable, you’re out of your mind to license and bond, you need to setup shell companies and put distance between yourself and the consumers, you shouldn’t be on the COT, you should buy debt from (Insert Shady ‘Broker’ Name Here)”

    The people who are buying the bottom of the barrel OOS debt and collecting on it extremely aggressively while using false names and operating from the shadows are incentivized to do so and there’s a strong aversion for small agencies to operate within the bounds of the law because they become easy targets for frivolous lawsuits.

    There are so many contradictions in the FDCPA and TCPA as well as nonsensical laws and statutes in regards to debt collections that even the top industry experts don’t always have good answers to simple questions.

    I just watched Collector.Live (It was great again this year for the record) and there is so much nuance to what the attorneys teach about that you can listen to a half hour lecture on how to prevent call baiting and compliance and still be unsure of how to protect yourself. I have to imagine that even the most compliant agencies in the US still violate laws daily as a result of technicalities or severely outdated statutes.

    I’m happy to hear that the ACA and RMA are working on educating the government and modernize as well as clarify laws, but in the decade+ that I’ve been in the industry, I’ve seen little to no actual change that has affected the way that I can operate.

    I see a broken system where the seedy underbelly of the industry is able to thrive and further ruin the integrity of our industry while the people like myself and a small handful of associates are crippled by frivolous lawsuits, while doing everything in our power to operate within the bounds of the law and as ethically as possible.

    1 man who has had no income outside of lawsuit settlements and stolen loan money, who doesn’t believe he’s a US Citizen, but instead a ‘natural person who happens to reside within the borders of the US’, a man who was never contacted by my agency in any way shape or form is able to put my 7+ year established business out of business based on absolutely nothing simply because he wants free money and the law operates in his favor- it is disgusting.

    And then you would think that a Judge would see the situation and put an end to it, but at a quick overview the judge sees ‘big bad collection agency and poor old man who can’t afford an attorney’- who do you think the courts side with?

    I’m convinced that they don’t even review the lawsuits in their entirety but instead skim a summary and make a half informed decision, or maybe assume that we’re bigger and more well off than we actually are- who knows.

    All I know is that the legal system is broken. It incentivises the bad people, hurts the good people and there is no clarification. When this man puts me out of business, you know who gets hit harder than I do? The single mothers that have been loyally working for me and operating within FDCPA and TCPA compliance. As long as I’ve been in business, I’ve always had a large amount of single mothers working a debt collectors and I’m sure I’m not the only one who gets this type of employees drawn to the business. That is a handful of single mothers put out of work over a confusing set of laws where you lose no matter how you handle the situation.

    The laws need to change and we need clarification. Maybe my story could assist the above cause. I probably just have to wait for it to finish playing out first.

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