The real question is "What would CHUCK NORRIS do to debtors?"

Here's not one, but two, or even three, unusual twists on Fair Debt Collection Practices Act litigation: A lawsuit with heavenly implications.

Bullseye Collection Agency sent out a debt collection notice to Mark and Sara Neill, seeking to collect $88 from them. Bullseye's letter had the letters WWJD at the top, which set off the Neills, who filed a class action lawsuit against Bullseye arguing that the WWJD had the effect of "invoking shame or guilt in alleged debtors," and also claimed that WWJD "portray[s] the debtor as a sinner who is going to hell.’”

Bullseye wasn't intimidated and got representation from Liberty Counsel, which first sought to dismiss the case. The Court ruled that WWJD could be enough to shame a debtor, which would violate section 1692f of the Fair Debt Collection Practices Act (FDCPA), that being the section that prohibits unfair or unconscionable means to collect a debt. The Court did dismiss a second claim the Neills brought -- the second claim being that the use of SECOND NOTICE!! on what was actually the third letter was illegal. The Court ruled that the SECOND NOTICE!! was arguably false but not material -- that it didn't make any difference if the statement was false in this case.

Bullseye, having failed to dismiss the case, then filed counterclaims, asserting that (a) it was owed the $88 that started this whole thing, and (b) the Neills were liable for abuse of process, civil conspiracy, and bad faith under the FDCPA. (Remember, I mentioned bad faith under the FDCPA here.)

So where'd all that come from? Well, it turns out that the Neills own their own collection agency, an allegedly smaller one than Bullseye but competing against them in the same market. So Bullseye alleged that the Neills' lawsuit in actuality was

wilfully commenced...for the ulterior purpose of disparaging BCA, and embroiling BCA in protracted and expensive litigation, in order to (a) work an unfair economic hardship or disadvantage upon BCA, to the unfair advantage of BCR; (b)intimidate and deprive BCA of its First Amendment and other constitutional rights; and(c) avoid payment of a debt that Mark Neill and Sara Neill are legally obligated to pay.

That's the second twist: That the debt collector sent a letter to another debt collector, who then claimed that the FDCPA had been violated.

The third twist was that Bullseye claimed that limiting its right to invoke a major religious figure on business letterhead violated the First Amendment and was unconstitutional. (Bullseye, and their counsel, must not be regular readers of my blog (yet), since I discussed here whether the First Amendment protected speech under the FDCPA.Hint: It doesn't.)

After that flurry of filing, the two sides did what most litigants do in most civil cases: They settled, and the case was dismissed. (Liberty Counsel said in a statement that "As a result [of the settlement], Bullseye remains free to use “WWJD” on its stationery, and its constitutional rights remain intact." That may be a bit far-reaching, given that the Court never ruled on any of the claims, and that Bullseyes claims were likewise dismissed ("with prejudice").

So at this point, no court has ever ruled on whether Jesus would, or would not, pay his debts in a timely manner - -or whether raising that question violates federal law.

And, since you were going to ask, here's the (allegedly-but-now-dismissed) offending letter:



Update: Reader follow up and questions about this post are here.

This one's for the judges: Order lenders to talk with borrowers, and you'll reduce litigation.

Here in Wisconsin (as I mentioned a while back) one county has adopted a mandatory mediation program for foreclosing lenders (and all creditors, in fact, suing debt0rs.) That county is Iowa County, and the judge with that kind of foresight is Judge William Dyke, who deserves to be lauded for being out in front of the problem.

Some other judges have embraced efforts on the part of firms like mine to get lenders to mediate foreclosure cases, while a number of them have refused to order foreclosing lenders to sit down and talk.

Mediation, a non-binding session where the two sides of a lawsuit meet with a trained professional to try to resolve the case short of trial, is routinely used in nearly every single civil case; I've had clients ordered to mediate civil cases even where we didn't think there was any chance of settling. Foreclosures, though, have traditionally been treated as a different breed of lawsuit, and judges have not routinely ordered mediation or other alternative dispute resolution, instead letting foreclosing lenders proceed without even attempting to force a settlement.

Now, though, thanks to Judge Dyke and others like him, and firms like ours, mediation is becoming more and more common in foreclosure cases -- and it's helping. Nevada saw two months of consecutive reductions in foreclosure filings, reductions of 26% and 33%, -- so there were 1/4 to 1/3 fewer foreclosures just three months after Nevada instituted a mandatory mediation program.

Not all states have mandatory mediation programs for foreclosures yet, and it makes you wonder, why not? Courts are constantly talking about the backlog of cases and the need to resolve cases short of litigation, and mandatory, up front mediation (with a requirement that the lender attend in person) has been proven to reduce foreclosure filings and therefore reduce litigation -- and the end result of that is that more people are staying in their houses for longer.

So if you're living in Wisconsin and are in foreclosure, take advantage of either the mandatory Iowa County foreclosure mediation; and if you're not in Iowa County, ask your lawyer (you do have a lawyer, right? Why wouldn't you hire a lawyer when your house is at stake?) to demand mediation anyway.

It has nothing to do with the number of Christmas parties you got invited to.

Are you the third-party beneficiary of a contract? Chances are, you don't know what that even means, let alone whether you are one. But it could matter a lot to you if you have a home loan and are in trouble, and live in the United States.

Or it could matter... not at all.

Did I pique your interest? I hope so, because I was trying for a good lead-in to this post, which will give me a chance to toot my own horn, point out an exciting new area of law, and also teach about third party beneficiaries of contracts, an esoteric point of law that is going to take on a new relevance very soon.

First the toot my own horn part. I defend people whose mortgages are in foreclosure, and in a recent case, I was retained for just that: some clients had been foreclosed and wanted me to stop it. In investigating the situation, it appeared to me that the clients' lender (a) was covered by the Home Affordable Modification Program (HAMP), (read more about HAMP here) and (b) the lender hadn't, apparently, complied with HAMP before starting the foreclosure.

My initial strategy was to file a motion to dismiss the case -- to stop the foreclosure short and try to get the lender to comply with HAMP. But then, I had one of my brilliant ideas (I get lots of them) and thought: Why should my clients have to pay me to get the lender to comply with a federal law?

Why should they? They didn't violate the federal law -- the lender did. So instead of simply moving to dismiss the case, I filed a counterclaim, alleging that the lender had breached the contract by failing to comply with HAMP, and that as a result of that, my clients were entitled not just to dismiss the foreclosure, but also to an award of damages, including my attorney's fees. (Although the general rule is that party's do not get attorney's fees for winning, attorney's fees incurred in suing, when no suit should have been necessary, can be awarded as damages.)

So I went ahead and filed that counterclaim, and then I learned that another group, not long after, had done the same thing, on a larger scale: A class action was filed arguing that "Aurora Loan Services, LLC" had breached a contract by not following through on its HAMP obligations. The class action suit (which I'm not crazy about, as I don't like class actions, for a couple of reasons) argues a slightly different tactic, saying that borrowers are "third party beneficiaries" of the contract between the lenders/servicers and the government.

A third-party beneficiary of a contract is created when two people enter into a contract for the direct benefit of a third party, or a group of people identifiable as a third-party. The benefits the third party wants to claim have to be direct, not "incidental." So, for example:

-- Stockholders of a corporation were not "third party beneficiaries" of a contract between the corporation and a company hired to sell corporate assets -- the benefit to the stockholders was too indirect.

-- Injured people are generally not "third party beneficiaries" of insurance contracts between the insurer and the insured.

Homeowners whose loans are held or serviced by lenders might be third-party beneficiaries of those contracts,and they might not be; the Courts will have to decide, and I'm betting it will hinge on whether the laws -- and the contracts they incorporated -- were intended to benefit the homeowners.

(It seems obvious to me that the laws and contracts were to benefit homeowners, but Courts may decide otherwise.)

On the other hand, there may be a third tactic, one that incorporates both my "direct breach of contract," and the class-actions' third party breach of contract. That third tactic is this: The homeowners -- the public -- are the only ones who can enforce the law if its breached, so they have to have the right to sue, even if they aren't contractually bound to the claims.

Sounds crazy, right? But that decision is the exact one that the Supreme Court of Wisconsin made in a different context. In the case of "State ex rel Journal/Sentinel, Inc. v. Pleva," Wisconsin's highest court ruled that when parties to a contract incorporate a statute into that contract, the public can sue to enforce the law.

What happened in Pleva is that the City of Milwaukee and the people who organized Summerfest entered into a contract which required that the Summerfest people adopt bylaws for their organization which would require “that all of the meetings of the Board and its committees will be conducted openly consistent with the dictates of the State of Wisconsin open meeting law.” The company did that, and then excluded a Journal/Sentinel reporter from a meeting. The company sued and claimed a violation of the law, and also claimed that the public was the "third-party beneficiary" of the contract.

The Supreme Court of Wisconsin didn't accept either of those arguments; instead, it held that the incorporation of the law into the contract expressed an intent to let the public enforce the law as regarded the otherwise-private company, and that, in fact, if the public could not enforce the contract, it would be meaningless:

"[I]t is a rare contract that, as here, can be breached by both parties at the same time, leaving no one but the public to enforce it,"

the Court said -- but because this was that "rare" contract, the public had to have the right to sue.

And, to me, the HAMP laws and contracts are that way: They're contracts between the government, and the lenders/servicers. That contract -- created by and arguably incorporating the HAMP laws -- is that "rare contract that... can be breached by both parties at the same time, leaving no one but the public to enforce it." If the lenders don't follow up, and the government doesn't take action, both have breached the contract, and only you -- the homeowning public-- would have the right to sue.

So, are you a third-party beneficiary of the HAMP contracts? The answer is, it may not matter -- just call a lawyer and point him or her to this post.

Is your house worth less than you owe on your mortgage? Don't despair. (Laws You Should Know, Three)

The other day, I mentioned the Home Affordable Modification Program (HAMP), a law that might let you force your lender to reduce your monthly mortgage payment. The companion legislation to that law is "HARP," or the Home Affordable Refinance Program.

HARP is a more limited law than HAMP; it allows homeowners to refinance if:

1. They haven't yet missed a payment, and
2. Their loan is owned or guaranteed by Fannie Mae or Freddie Mac.

Those are two pretty stringent criteria, but if you DO meet both, then you can refinance into a lower rate or fixed rate -- and the program is available to you even if you owe more than your home is worth. You can owe as much as 125% of your home's value and still refinance under HARP -- that means that on a $200,000 home, you can owe $250,000 and take advantage of HARP (if you qualify.) No lenders that I know of would refinance a loan that's greater than what the house is worth, so this is a program to take advantage of if you can.

If you're not sure about whether or not your loan qualifies, click here for a link to the program website and look up your loan.

The First Amendment, False Advertising, and the FDCPA.

Day 28 of 30 Days of Debt Collection, and I'm going to answer some questions.

Reader True Q asked two questions in recent days that raise good, interesting issues. As a lawyer, I love good, interesting issues. (Clients, and potential clients, you should hate good, interesting issues, because "interesting" equals expensive in the law. You don't want your lawyer to say that's interesting because that means the question is a new one, or the outcome is uncertain, or something else that'll cost you money. You want your lawyer to say oh, yeah, I've seen this a million times. I know just how to handle this. It won't be expensive.)

So, True Q's questions:

In response to my post on hot air balloons and deceptive ads, True Q asks:

Can 100.18 apply to representations by debt collectors?

The answer is, I don't see why not. Section 100.18, remember, is the law that prohibits deceptive representations. The key question would be whether the debt collector met the elements of the law.

The elements of a law are the facts that need to be proven to show that the law was violated. Elements are like a checklist for whether there's been a violation.

The elements of a violation of Wisconsin's section 100.18 are these: (1) the defendant made a representation to “the public” with the intent to induce an obligation; (2) the representation was untrue, deceptive, or misleading; and (3) the representation caused the plaintiff a pecuniary loss.

There's details in there that could fill a whole post, like who's the public and what's pecuniary loss, and those are worth discussing, but not today. The big question is: If a debt collector meets those criteria, can he or she be sued under section 100.18? The answer is, probably.

(You knew a lawyer would say that, right?) I have to say probably because there may be limits in the law, placed by public policy (i.e., the courts) that keep debt collectors from being liable for violating that section -- that is, the law may not apply even though it seems it should.


And I say probably because I'm not aware of any debt collector ever having been sued under that law. So I can think of situations where section 100.18 would apply, and a debtor could sue under that law, but I don't know yet whether it would work.

What I do know is that there's little reason to sue a debt collector under section 100.18 -- at least so far as I can imagine. Section 100.18 is actually less powerful than the Fair Debt Collection Practices Act (FDCPA). Section 100.18 lets you get the pecuniary loss -- damages you've suffered, say, money you've paid. And it lets you get attorney's fees.

But the FDCPA lets you get both of those, and "statutory damages," money you can get even if you're not harmed, up to $1,000. And, you can get emotional distress damages under the FDCPA, but probably not under section 100.18.

The one benefit I can think of would be that section 100.18 has a three-year statute of limitations, while the FDCPA's statute is one year. So if you've discovered a violation, and it's more than a year old, section 100.18 might provide some benefits to you, if a debt collector otherwise meets the elements.

True Q's question, though, is a good one, because it's important for lawyers (and clients, and you) to think creatively, especially because each law does provide certain benefits or detriments. The FDCPA provides more benefits, but a shorter time line to sue and gives the Court the right to award fees to your opponent at times. Section 100.18 gives you fewer remedies, but a longer time to sue and doesn't have as easy of a time letting your opponent ask for fees if she wins.

And that is why you hire a lawyer-- because we are in a position to help you make those determinations about which laws to use and when. And, ideally, you hire a lawyer sooner (now!) rather than later.

Next question! True Q says, in response to my post about damages and the FDCPA, that what's really bothering him is lawyers claiming First Amendment rights to say they are a lawyer and/or a law firm in Wisconsin when they're not.

Now, that's not technically a question, but it did raise interesting issues, so I thought I'd tackle it as my final 30 Days of Debt post (actual number of entries: 28; actual length of time covered by 30 Days of Debt: 107.)

I'm not a 1st Amendment lawyer (although I am an avid proponent of speech, especially about law and football.)

I also don't know the exact situation that True Q is talking about. But my lack of knowledge doesn't keep me from opining on this subject, which is this: Would the First Amendment protect from liability under the FDCPA a lawyer who lies about his legal status in the course of collecting a debt?

My gut feeling -- almost never wrong, when it comes to the law -- is no. But I've never looked into it, so let me do what lawyers do, and research that a bit. (Research is one reason why interesting= expensive. When lawyers don't know the answer to a question, we look to see if someone, somewhere, has answered that question. And we bill you for that. So if you're reading this, send me a dollar.)

Wait a bit. I'll be back.

Okay.

Here's what I've found.

In the case of Basile v. Blatt, Hasenmiller, Leibsker & Moore LLC, 632 F.Supp.2d 842, a federal court listened to the arguments of a debt collector claiming a First Amendment right to file state court lawsuits against a debtor. The debtor said that the lawsuits were beyond the statute of limitations (see my post on Zombie Debt, here) and had other problems. The law firm said Wait, we have a First Amendment right to file lawsuits, under the "right to petition" found in the First Amendment.

(No doubt the Founding Fathers envisioned a series of collection lawsuits when drafting that Amendment.)

Because they have a protected First Amendment right to petition their government, the law firm reasoned, the FDCPA couldn't prohibit that; the FDCPA, in that respect, they said, was unconstitutional.

They were wrong; the Court (and other courts that have looked at this) have rejected that argument, mostly because the U.S. Supreme Court has said that lawyers are covered by the FDCPA if they're debt collectors, too.

So the First Amendment doesn't keep a lawyer from being sued for filing a time-barred lawsuit. Does that extend to other claims that FDCPA-violating actions are First-Amendment-Protected rights? Probably (again!)... That is, the First Amendment probably doesn't protect a debt collector who falsely represents his status while collecting a debt, not just because the First Amendment has already been held (in that case, above, and others) to not protect debt collectors who file improper lawsuits, but also because, in general, the First Amendment doesn't provide as many protections to commercial speech.

That's why states can prohibit false advertising, among other things. Commercial speech -- things you're saying for money -- isn't at the heart of the First Amendment, so it can be regulated slightly more easily, than, say, political speech.

To put it another way: If you want to say I hate the president, you generally can do that anytime you want without regulation. If you want to say The president personally hired me to collect this debt, well, that can be regulated because it's commercially, not politically, motivated.

Or, as the U.S. Supreme Court said:

Although commercial speech is protected by the First Amendment, not all regulation of such speech is unconstitutional...[W]e articulated a test for determining whether a particular commercial speech regulation is constitutionally permissible. Under that test we ask as a threshold matter whether the commercial speech concerns unlawful activity or is misleading. If so, then the speech is not protected by the First Amendment.

That's a better way to put it -- but you'd expect the U.S. Supreme Court to say things in a good-soundin', high-falutin' way, but it means the same thing: misleading commercial speech is not protected by the First Amendment.

So, based on that, I'd say debt collectors have no First Amendment right to lie to you about whether they are licensed to practice in a state or not.

And that will wrap up 30 Days of Debt Collection, either two days early, or 77 days late, depending on how you count.

I'm a ramblin' guy. (Sorry, Steve Martin.)

This is a Sponsored Post written by me on behalf of Ramblers Way. All opinions are 100% mine.

I've started dressing like the Babies!, and I'm not afraid to admit it.

The Babies!' outfits on most days need to be layered. Not for comfort, but for delaying purposes. Mr F and Mr Bunches like to strip, and by layering on the clothes, we can slow down the trip from "fully-clothed" to "skin," and hopefully catch them en route to "totally naked" and reverse the process.

That means that the Babies! wear a lot of shirts with other shirts under them. And after a couple of times dressing them that way, I thought to myself, "That looks actually pretty cool and comfortable."

So I began doing that, layering my shirts underneath other shirts like the Babies! do, the only problem being that I had, at the time, only one long-sleeve shirt that could be comfortably layered under other shirts.

Then I found Ramblers Way. Ramblers Way, located in Kennebunk, Maine, sells comfortable, grown-up, wool clothing that's stylish, inexpensive, and can be layered for the look I want.

I stumbled across Rambler's Way while looking for shirts to buy, and I loved it, immediately. They've got the long-sleeve shirts, like the one shown here ("Men's Next-To-Skin Cross Neck Long Sleeve") that I'm looking for, and they're reasonably priced, especially considering they're made from superfine wool that is spun to resist bunching up.

My clothing budget is about $500 per year, so I decided to see just how much I could get for that. As it turns out, I can get quite a lot: That shirt costs $80, so I can get two of them. With the $340 left over, I can get a button-up Henley shirt for $85, one that can be worn on its own or under a t-shirt, too. That leaves me $255, and I'm shopped out. So I checked out the woman's clothes - -Sweetie's more likely to okay the purchase if there's something for her. I checked, and they've got scoop neck wool shirts for her, for $65. Two of those and I've still got $125 in my clothing budget, which would get her two camisoles, $50 each -- and leave me $25 still.

See what I mean about reasonably priced? I got a couple of wardrobes for my budget and had money left over. Plus, now I can say the Babies! dress like me.

That is just one reason to shop at Ramblers Way.

Another reason Ramblers Way is a neat place to shop is because they're not a megastore or chain. They're a small operation that's so friendly and down to earth, they'll even introduce you to the sheep whose wool you're wearing. It's true -- there's a section of their site where you can meet each of the sheep they use to produce the clothes. That's the kind of place I want to shop.

Have a HAMPY holiday. (Sorry about the pun. It's Laws You Should Know About, Two.)

Today's Law You Should Know About: "HAMP," the Home Affordable Modification Program.

I don't know why this is not getting more press -- and why the companies that are part of it are not actually using it, but if you own your home, and are worried about getting in trouble on your mortgage, you need to know about HAMP. "HAMP" is the program the Obama administration put into effect. Any lender or servicer who (a) received government TARP money or (b) signed a contract with the government to abide by HAMP's rules -- and that's a lot of them, almost all of them, in fact -- has to abide by HAMP's rules, and HAMP's rules are these:

RULE ONE: A borrower who is in danger of missing a payment, or has missed a payment, must -- MUST-- be evaluated to determine whether they're eligible for the program. They're eligible if the home loan was taken out before January 1, 2009, they live in the house in question, the house is less than four units, and they owe less than $729,000 or so (for single-unit homes; the amount is higher for duplexes, triplexes, and quads.)

If the person meets those criteria, the lender or servicer must -- MUST -- evaluate to see whether the loan's payment is greater than 31% of their gross income. If it is, then

RULE TWO: The lender must-- MUST-- perform a value analysis and see whether it makes sense to modify the loan. If the house passes the test, then

RULE THREE: The lender must -- MUST-- modify the loan, first by reducing the interest rate to as low as 2%, then by extending the loan to as much as 40 years, then by deferring some principal; in other words, the lender must -- MUST -- lower your payments and offer you a trial modification.

If you get the modification, and make three consecutive payments, it becomes permanent.

AND, this is all FREE to you. There's no charge whatsoever, plus the lender has to forgive unpaid late fees.

AND, the lender can't -- CAN'T -- foreclose until they at least evaluate you.

So you can pay less, avoid foreclosure, and do it for free! You don't even need a lawyer; all you have to do is call your lender or servicer -- use the number on your bill -- and ask them for the "HAMP" program.

Learn more about it here, and if you're not sure your lender or servicer is part of the program, check here.

UPDATE: Read a follow up on NPV testing and a reader question, here.

I'm still a little unclear on this whole gambling thing, but I'm getting better.

Historically, I have never liked poker very much. That's because, historically, I've been really, really bad at poker. Being really, really bad at poker means that when I play poker, I not only lose all my money, but also I irritate GOOD poker players because I forget the rules and don't know what I'm doing and am likely to say things like "What's the ranking of hands again?" or "When should I "go fish?"

But now, thanks to online casino scandinavia, I can change all that. Casino Scandinavia is a site that reviews and rates all the best online gaming sites, sites that will let me learn the rules of gaming while sitting right at my desk at work, not bothering anyone (and not "working", either) and practice my poker skills anonymously. Casino Scandinavia -- which goes by "Best Online Casinos" not only does THAT for me (providing me with links and ready downloads) but also gets me bonus money for going through them to start up -- up to $20,000 in the case of one online casino they rated (and liked.)

They rate and rank the casinos, poker rooms, and other gaming sites on the web, saving me the time and energy of finding them and evaluating them. I won't waste my time in some low-rent crummy gaming site and I can thank Casino Scandinavia for that.

A $20,000 bankroll, and reviews of which sites are worthwhile and which are not? That's all I need. Watch out, world of poker: I'm coming for you.

Now, does anyone have any 3s? Should I go fish again?

Yes, but what's REALLY bothering you?

Day 27 of 30 Days of Debt Collection (now into its 104th calendar day!) finds me thinking about the question of whether your damages are linked to your claims. Or, as the headline says, what's really bothering you? Is it the violation of the, or something else?

The Fair Debt Collection Practices Act (FDCPA) lets debtors sue for emotional distress and other "actual damages" caused by debt collectors who violate the law -- but not every bad thing that happens to a debtor is caused by the bad things that the debt collector did.

That's the lesson of Thomas v. Law Firm of Simpson & Cybak, a 2007 7th Circuit case that considered whether a debtor's claim was moot after the debtor rejected an offer of settlement.

Thomas, the debtor, defaulted on his automobile payments, and got a sued by the law firm of "Simpson & Cybak" representing his creditor, GMAC. Thomas responded to that suit by countersuing GMAC and the law firm, claiming (apparently correctly, but that's not clear) that the law firm had violated the FDCPA by not including the "validation notice" required with initial communications. Thomas was deposed, and was asked about his damages -- the harm the failure to send the validation notice had caused. Thomas responded that his "actual damages" were that he had lost the use of the car that had been repossessed. When questioned further, Thomas candidly admitted that his loss of the Blazer had nothing to do with the alleged FDCPA violation.

That is, the law firm's (alleged) failure to include the validation notice did not, in Thomas' opinion, cause him to lose his Blazer. Thomas admitted that even if he had been given the validation notice (which only requires that he be told he can dispute the debt and obtain verification of that, as well as the name of the original creditor) he could not have gone on making payments.

With that, the defendants opted to short-circuit Thomas' claims (which went on for seven years, total, a staggering length of time for a simple lawsuit) by offering him $5,000 to settle. Thomas rejected the offer, and the defendants moved to dismiss the case as "moot."

A case is moot when there's no reason to go on suing, and in this case, there was no reason to go on suing, the defendants said, because they'd offered Thomas everything he could hope to gain in a lawsuit -- more, in fact. They said that they'd offered him full compensation, and that he could not possibly do better than $5,000 if his case continued.

"You can't go on suing after you've won," is a saying heard in many FDCPA cases like this, and that rule applied to Thomas, too: The Court dismissed his case as moot.

The Seventh Circuit Court of Appeals agreed with that decision, noting that Thomas could provide no link between the FDCPA violation and what he claimed were his damages. Thomas argued on appeal that not only had he lost his Blazer, but he'd also suffered "extreme embarrassment and humiliation," and said he wanted $20,000, not just $5,000, for that. But again, he couldn't tie that in to the FDCPA; he'd said at his deposition that his embarrassment had come from testimony in the lawsuit to get the car back, not from the lack of a validation notice.

Thomas' injuries were real-- he no doubt was embarrassed by the testimony and no doubt missed his Blazer -- but they were not really related to the FDCPA. And that's the real message of his case: you can't just be injured, you have to be injured by the violation. The FDCPA allows for actual damages only where the damages were actually caused by the debt collector.

But if the violation didn't harm you, don't despair: remember that there's still "statutory damages," so you could collect up to $1,000 for a violation even if you weren't harmed.

There's another lesson in Thomas, too, and that lesson is this: Don't be greedy. Thomas was offered $5,000 -- a not insubstantial sum of money for a guy whose claim was that a letter didn't include a notice. He turned it down and tried to get even more, and in the end, went home empty handed.




Still 5 days left in the contest: Comment on this post! You could win a book or magazine subscription (details here) and you'll be making me happy (details on that here.)

"Watch" what I do with this idea... (Did I ever mention Iove puns?)

The Boy is growing up, a fact that's impossible not to notice when one stands next to him; he's larger-than-life, almost six feet tall and built like two NFL linebackers.

Part of growing up is learning to take on adult responsibilities, like "Being on time" and "getting yourself up in the morning." Each morning right now, The Boy is woken up by Sweetie, who rouses him from bed and gets him going on his day. And each day when he goes to school or work, The Boy is kept on target by Sweetie or me telling him "better get going or you'll be late."

So what The Boy needs is a good watch, I've decided -- but a watch that allows him to be more grown-up and encourages him to be more grown-up, too. A watch that says "I'm almost 18 and I actually am kind of excited about being responsible."

A watch like the one shown here, the Casio Stainless Steel Sports -- Digital Analog Watch. This watch is tough-but-classy, grown-up in a sporty, neat kind of way that I think would work well with The Boy's daily life of rough-housing, being surly, not-quite-getting-good-enough-grades, and being NFL linebacker sized. It's grown-up without being boring -- the sporty, orange-steel look makes it seem more tough than dignified, and that's important for guys his age.

Most importantly, the watch has an alarm, so he can set the alarm to remind him when it's time to get up, and when it's time to head to school, and when it's time to get back home so he doesn't blow through his curfew. It lets him be responsible, but in a cool kind of way.

I've put this one onto the list of things to get The Boy for Christmas; and I'll bet you can think of someone in your life who'd love or benefit from a watch, too. Say, maybe a seiko diamond watch for that special someone, combining the beauty of diamond jewelry with the fun of being able to wear it every day?

If you're thinking Yeah, that sounds good, then do what I did: Go to Blue Dial (bluedial.com) and browse around until you find that perfect timepiece.

Laws You Should Know About: Ask Your Lender A Question, Get $500.

While fun and games like "interesting judicial comments" and "laws you didn't know you need" are all well and good, it's also important to point out the laws you should know about, like the very-relevant-right-now Wisconsin law found here:

138.052(7s) (7s) A person who receives loan or escrow payments on behalf of itself or another person shall do all of the following:

(a) Respond to a borrower's inquiry within 15 days after receiving the inquiry.

(b) Consider that a loan payment by check, or other negotiable or transferable instrument, is made on the date on which the check or instrument is physically received, except that the person may charge back an uncollected loan payment.

That law applies to your mortgage lender, and your mortgage servicer. (That's actually two subsections of a larger statute; the whole statute can be found here.) It requires just what it says: If you ask them a question, they have to respond within 15 days; and if you send them a payment, that payment is made the day it's received, not the day it's cashed.

More importantly, companies which violate that law can be penalized up to $500, plus any "actual damages" caused by the violation, plus attorney's fees.

You knew I'd work around to that somehow, right?

The number of people I meet in my practice who have called their mortgage lender or written their mortgage lender and gotten nothing back from them is much, much higher that you might think. And if this law is construed in accordance with federal laws like RESPA, then the inquiries might include things like letters from lawyers, or even subpoenas, which means that a lender (or mortgage servicer) ignores your phone calls and letters at their own peril.

Still 5 days left in the contest: Comment on this post! You could win a book or magazine subscription (details here) and you'll be making me happy (details on that here.)