Laws exist to protect consumers against abusive debt collection practices, and businesses rely on the ethical standards and due diligence of the attorney they hire to collect debt.
The Fair Debt Collections Practices Act (FDCPA) lays the ground rules for whether certain debt collection practices are legal or illegal and prohibits a variety of behaviors when attempting to collect debt. Prohibited actions include collections after the statute of limitations on the debt has expired. The statute of limitations is a legal deadline that bars filing a lawsuit after a certain amount of time has passed.
McCollough v. Johnson, Rodenburg & Lauinger is an example of a case in which a law firm violated the FDCPA. The lower courts ruled against the law firm, and it appealed the case to the U.S. Court of Appeals for the Ninth District (in Montana) in 2011. Johnson, Rodenburg & Lauinger (JRL) filed a second lawsuit on the same debt that a court had earlier dismissed for being past the statute of limitations when filed by a different law firm. When a payment is made after the statute of limitations, the statute begins to run again. Erroneous information that the debtor made a partial payment after the statute of limitations’ date of expiration led to the second lawsuit being filed. JRL failed to perform due diligence and verify the facts. It turned out that McCullough had not made a partial payment. There had been a return of court costs, not a payment on the date listed as a partial payment date. The appeals court upheld all the rulings of the lower courts, including the awards. The law firm ended up owing McCullough $1,000 in statutory damages, $60,000 in punitive damages and $250,000 for emotional distress.
When looking for a New Jersey Collections attorney to handle credit card collections, it pays to find a lawyer who is conscientious and hardworking and devotes the care and attention each case deserves