In this recession, it is no surprise that the Federal Trade Commission — which has primary enforcement responsibility as to the Fair Debt Collection Practices Act — reports an absolute increase in the number of complaints by consumers about third-party debt collectors’ practices. An April 21, 2010 slip opinion by the United States Supreme Court in the matter of Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA holds that attorneys cannot rely on the “bona fide error” exception of the Act to shield them from liability for damages for mistaken interpretations of the law.
The Supreme Court weighs in
A recent Supreme Court ruling tells what can happen when your lawyer slips up. In a 7-2 opinion by Justice Sonia Sotomayor, the Supreme Court ruled against an Ohio law firm, Carlisle, McNellie, Rini, Kramer & Ulrich, accused of making a mistake when bringing foreclosure proceedings on behalf of Countrywide Home Loans Inc. The firm filed a foreclosure suit against a mortgage borrower, and included with the complaint to the borrower a written notice that the mortgage debt would be assumed valid unless the borrower disputed the debt in writing. The borrower did dispute the validity of the debt in writing, and when Countrywide agreed that the debt had been paid and thus was not valid, the law firm withdrew or dismissed the foreclosure suit. The borrower then filed this lawsuit against the law firm, arguing that it violated the FDCPA. Justice Sotomayor said the “bona fide error defense” doesn’t protect debt collectors who make mistakes when interpreting the legal requirements of the federal Fair Debt Collection Practices Act. “We have long recognized the ‘common maxim, familiar to all minds, that ignorance of the law will not excuse any person, either civilly or criminally,’ ” she wrote, quoting from an 1833 opinion.
This makes common sense. If ordinary consumers aren’t allowed to use ignorance as an excuse, then legal professionals, (whose job and education entails knowing these things), should be held to the same standard.
Turning the tables
It’s easy to believe whatever documents the sheriff might serve to you are in good order, but we always recommend to people that they take documents to a trained legal advisor for examination and review before taking action. The courts are not obliged to rule against you if the debt is not valid, or the paperwork is improperly drafted.
Likewise, creditors should seek legal advice from attorneys experienced and well-informed in the various debt collection laws, including the FDCPA.
Our firm works with both debtors and creditors, hence our tagline, “Whether You’re In Debt Or Need To Collect.”