Category Archives: Uncategorized

HAVE YOU BEEN SUED BY A COMPANY YOU NEVER HEARD OF FOR MONEY YOU BORROWED FROM SOMEONE ELSE?

The average consumer does not realize that the delinquent debt industry is a trillion dollar a year business. Everybody has borrowed money to buy a house, buy a car, for school loans or over charged credit cards. A large number of these loans will end up in default. These troubled loans have a market. There are very large debt buyers who purchase millions of dollars of delinquent debt for pennies on the dollar. The debt buyers purchase the delinquent accounts at a substantial discount and then come after consumers for the full balance. The debt buyers purchase large volume of delinquent accounts often purchasing tens of thousands of accounts at a time. The purchases are often made electronically with only the data being stored and transferred. Hard copy documents such as the original loan agreement often are lost or were never transferred from the original creditor to the debt buyer. A problem for the debt buyers arises when the consumer challenges the claim and the debt buyer can not prove that the consumer entered into the original loan agreement.

Debt buyers do not want their right to collect on obligation challenged by consumers. Debt buyers purchase delinquent debt in large volume aware that many of the accounts will be uncollectable. Debt buyers make a business decision to try and collect as high of a percentage of the delinquent debt accounts as possible. Typically, debt buyers hire debt collectors and/or debt collection attorneys to collect the delinquent debt. The debt collectors or debt collection attorneys will be assigned a large number of accounts for consumers in the area where the debt collectors or attorneys practice. They are paid a percentage of each account they are able to collect on, approximately 15% to 20% percent of whatever they manage to collect on each account. Remember, debt buyers have purchased the delinquent debt accounts for pennies on the dollars so any money they recover is usually profit. If the debt buyers average 50% collection of the delinquent debt on 10% to 20% of the accounts they have purchased but fail to collect on 80% to 90% of the delinquent accounts purchased, the debt buyers will still make a profit. It is in the best interest of debt buyers and the debt collectors to get the money from the consumers as quickly and as cheaply as possible. Any challenge to the claim by the consumer wastes time and costs money which ultimately reduces profit.

For this reason, debt buyers do not want to start a law suit unless they are forced to. It is much more cost affective to send a demand letter threatening legal action in attempt to get the consumer to agree to pay back the debt. This creates an opportunity to negotiate with the debt buyers to reduce the amount of the obligation or to pay it back over time. The debt buyers are more than willing to work out a repayment plan because they have purchased these accounts for pennies on the dollar. For some that is a reasonable option. Hard times may have led to the original default and now when the consumer is in a better position they wish repay their loan or credit obligation.

What many consumers don’t realize is that in this computer electronic transfer age, may of these debt buyers never received the original loan documents and can not prove the original debt or that they actual own the right to collect on the debt. Recently, a New York Times article discussed this problem with regards to privately held student loans.  In summary, the article discusses how debt buyers who own at least 5 billion in troubled private student loans could not prove they had a right to collect. As a result, many consumers where seeing thousand of dollars of their student loans wiped out because the loans were uncollectable.

Credit card debt is very difficult to prove for third party buyers of debt in Pennsylvania. In 2011, the Pennsylvania Superior Court decided the case of Commonwealth Financial Sytems, Inc. v. Larry Smith, No 3455 EDA 2009. In that matter, Mr. Smith obtained a Citibank credit card in 1989 and proceeded to use it for the next thirteen years. By July 2004, Mr. Smith’s account was delinquent account and was sold to Commonwealth who filed suit in March 2006 seeking $5,435.93, plus interest at 23.99% per annum, plus attorney fees at a rate of 20%, and costs. Commonwealth failed to attach many of the original documents and those that were attached the Court found were inadmissible hearsay and did not qualify under the business record exception of the hearsay rule. The question of whether computerized files of an original creditor were admissible as the business records of a successor debt buyer was one of first impression in Pennsylvania. Without the original creditor testifying, the debt buyer could not establish the trustworthiness of the documents, the chain of title, and/or whether an original contract existed.

Any consumer who receives a letter from a debt buyer needs to understand that while a debt buyer may claim it has the right to collect the delinquent debt, they still have the burden of proving that right in court.

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2018 Appropriations Bill Still Doesn’t Provide Funding For Federal Firearms Relief Determinations – Contact Your U.S. Representatives!

As our viewers are aware, although 18 U.S.C. § 925(c) provides for federal firearm relief determinations, since 1992, the ATF’s appropriation bill – which has been enacted each year thereafter – has provided a restriction on ATF’s use of any of the appropriate money for federal firearms relief determinations. As I reported in 2015, an amendment to the 2016 appropriations bill – H.R. 2578 – was passed, which provided for funding of federal firearm relief determinations. Thereafter, the bill, as amended, was passed by the entire House of Representatives. Unfortunately, due to the late nature of the House passing the bill, when it was received by the Senate, the Senate gutted all the language and replaced it with the language from an appropriations bill that it was working on in the interim. The Senate’s version was later passed by the House, including the provision precluding ATF’s usage of the appropriated money for federal firearms relief determinations.

The House is now working on an appropriations bill for 2018 and although it has been reported to include pro-Second Amendment provisions (which it does and are discussed below), the one provision which has not been modified, is the restriction on the appropriated money being used for federal firearms relief determination. Specifically, it provides that

Provided, That none of the funds appropriated herein shall be available to investigate or act upon applications for relief from Federal firearms disabilities under section 925(c) of title 18, United States Code

Accordingly, I am respectfully requesting that you contact your U.S Representatives and demand that the language in the Fiscal Year 2018 Commerce, Justice, Science (CJS) Appropriations Bill be amended to remove the restriction on ATF utilizing the appropriated money for federal firearms relief determinations. In the alternative, if your Representatives push back regarding the cost, then I would respectfully suggest that the language be modified to:

Provided, That none of the funds appropriated herein shall be available to investigate or act upon applications for relief from Federal firearms disabilities under section 925(c) of title 18, United States Code; however, nothing shall preclude an individual from funding his/her own application for relief from Federal firearms disabilities under section 925(c); whereby, the cost to the individual shall not exceed $1,000.00

As this strikes a balance between allowing federal firearms relief determinations to be made and the cost being born by the prohibited person, it is hard to fathom what objection anyone would have to this language.

In relation to the pro-Second Amendment provisions included in the current version of the Fiscal Year 2018 Commerce, Justice, Science (CJS) Appropriations Bill,  it would:

  1. Ban the use of funds for the program launched under the Obama administration to require federally licensed firearm dealers in Southwestern Border States to report certain rifle sales to the U.S. government;
  2. Permanently defund any form of unmonitored “gun walking” operations involved in U.S. Border Patrol Agent Brian Terry’s death;
  3. Effectively block the implementation of the U.N. Arms Trade Treaty;
  4. Permanently block any attempt by anti-gun groups within the ATF to implement a highly restrictive framework on the importability of shotguns (i.e. any shotgun that was importable before the release of ATF’s 2011 shotgun importability study could not be reclassified as “non-sporting” and therefore banned from importation); and,
  5. Promote the importation of collectible “curio and relic” firearms and facilitate export of certain firearm parts valued at $500 or less to persons in Canada.

Accordingly, please join us in supporting the Fiscal Year 2018 Commerce, Justice, Science (CJS) Appropriations Bill, while demanding that the language restricting federal firearms relief determinations be removed.

 

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Third Circuit Holds That Recording Police In Public Is Protected By The First Amendment

Today, in Fields v. City of Philadelphia, et al., the Third Circuit Court of Appeals joined five other circuit courts in holding that the 1st Amendment protects the public recording of police officers.

As stated in the decision, the background is somewhat simplistic – Mr. Field and a Mrs. Geraci attempted to record “Philadelphia police officers carrying out officia duties in public and were retaliated against even though the Philadelphia Police Departments official policies recognized that ‘[p]rivate individuals have a First Amendment right to observe and record police officers engage in the public discharge of their duties’.”

In discussing the First Amendment, the court explained that

The First Amendment protects the public’s right of access to information about their officials’ public activities. It “goes beyond protection of the press and the self-expression of individuals to prohibit government from limiting the stock of information from which members of the public may draw.” Access to information regarding public police activity is particularly important because it leads to citizen discourse on public issues, “the highest rung of the hierarchy of First Amendment values, and is entitled to special protection.”

The court therefore went on to hold

Accordingly, recording police activity in public falls squarely within the First Amendment right of access to information.

More interestingly, the court properly noted that

Civilian video also fills the gaps created when police choose not to record video or withhold their footage from the public.

And that

the proliferation of bystander videos has “spurred action at all levels of government to address police misconduct and to protect civil rights.”

However, the court cautioned that it was not holding that all recording is protected or desirable. Specifically, the court declared that

[I]t is subject to reasonable time, place, and manner restrictions.

Unfortunately, because the court found that one’s First Amendment protections in recording the police had not been sufficiently established at the time of the officers conduct, it granted them qualified immunity. However, any officers that violate someone’s right to record the police in public, due to the decision, will no longer be able to claim qualified immunity, because now it has been established.

If you or anyone you know has been subjected to criminal charging, retaliation or harassment as a result of recording the police in public, contact us to discuss YOUR rights.

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The Supreme Court’s decision in Midland Funding, LLC v. Johnson places too much reliance on Bankruptcy Trustees.

In a previous blog, I was asked to write a blog on the recent May 15, 2017 United States Supreme Court decision in Midland Funding, LLC v. Johnson, docket no. 16-348. In a 5-3 vote the Supreme Court reversed a decision by the United States Court of Appeals for the Eleventh Circuit holding that the filing of a time barred proof of claim in a bankruptcy matter was a violation of the Fair Debt Collection Practices Act (“FDCPA”). In a majority opinion written by Justice Breyer, the Supreme Court held that the filing of a proof of claim that is obviously time barred is not a false, deceptive, misleading unfair or unconscionable debt-collection practice within the meaning of the FDCPA.

The Supreme Court stated that “Congress intended [when it adopted the Bankruptcy Code] to adopt the broadest available definition of ‘claim.’” Therefore, while a claim may be unenforceable because it is time barred or stale, it is still a “claim” under the Bankruptcy Code. The Court further stated that the Bankruptcy code does not say that an ‘unenforceable’ claim is not a ‘claim.’”

The Court further wrote that whether a claim is stale or unenforceable due to the expiration of the limitations period is an affirmative defense to be raised by a debtor. The claim while unenforceable still remains a claim which debtor may raise an affirmative defense to.

The Court’s holding I believe minimizes the appearance of debt validation that a filed a proof of claim may have on the least sophisticated consumer. The FDCPA requires any conduct by a creditor be viewed from the perspective of the least sophisticated consumer. In other words, a court’s standard of review is whether an unsophisticated, uninformed, naïve, trusting, possession below average intelligence consumer would find the filing of a time barred proof of claim in bankruptcy matter misleading or deceptive. Blum v. Fisher & Fisher P.C., 961 F. Supp. 1218 (N.D. I.ll. 1997).

The Court addressed this by stating that in “determin[ing] whether a statement is misleading normally requires consideration of the legal sophistication of its audience” and that the “audience in [consumer] bankruptcy cases includes a trustee … likely to understand [the importance of objecting to an untimely claim].”

In other words, because the matter is in bankruptcy and subject to the review of a trustee, the debtor is receiving the benefit of his/her knowledge and therefore can not be mislead as easily.

The problem with that is a trustee will be reviewing claims only within the context of the bankruptcy matter. Unsecured debts are likely to be discharged and the Trustee may pay little attention to the proof of claim. While unlikely, there is a risk that unsophisticated debtor will believe that the acceptance of time barred proof of claim has rendered the claim valid and subject to collection when the debtor is no longer in bankruptcy. The risk is greater should a debtor’s bankruptcy petition be dismissed without debtor receiving a discharge of his debts.

The Supreme Court acknowledge that several lower courts have found it improper to enforce stale claims directly, largely based on the view that “a consumer might unwittingly repay a time-barred debt.” Justice Breyer suggested that because the consumer initiates the bankruptcy proceeding, the consumer is not likely to pay a stale claim just to avoid going to court. Justice Breyer also pointed out again that the “knowledgeable trustee” is a likely source of objections protecting the consumer.

Justice Sonia Sotomayor, joined by Justices Ruth Bader Ginsburg and Elena Kagan, responded with a dissenting opinion. Justice Sotomayor’s dissent was focused on the large market for consumer debt (“trillions of dollars”), and the third party buyers of debt who buy long-stale “debts for pennies on the dollar.”

Having represented many of those same debt buyers, I am all too familiar with their practices. Third party debt buyers purchase debt on a large scale and then forward hundreds of claims to debt collectors and attorneys. The debt collectors/attorneys are looking to collect on the debt with as little effort as possible and hope a debtor will pay the debt after receiving an initial demand. Under the FDCPA, attorneys are considered debt collectors may be prosecuted for violations. Because of this, attorneys usually will normally not take any action on stale claims. However, given the volume of claims, mistakes occur and attorneys may make demands on time barred claims which debtors may assume are valid and pay.

Similarly Justice Sotomayor recognize that the claims have monetary value only because of the possibility the trustee will forget to object to them. As Sotomayor noted in her dissent, the trustees’ trade association filed an amicus brief in support of the debtor, explaining the impractical burden of interposing objections to the flood of stale claims appearing in consumer bankruptcies in recent years.

Third party buyers of debt factor in to their costs the risks of stale claims being acted on by their debt collectors and attorneys. They know they may be sued under the FDCPA but because of the volume of debt they accept the risk.

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House Bill 18 Postponed

by Karl Voigt

“Formulary.”

If House Bill 18 passes and you’re a workers’ compensation recipient, that’s a word you’re going to have to get used to.

And likely another word:

NO“.

This new legislation is intended to reduce costs for insurance companies by limiting the types of drugs that doctors can prescribe for you. Which means that a panel of people who have no idea who you are is going to decide what medications you can and can’t take. House Bill 18 would enlist a private company to create a list – or “formulary” – of medications that are “allowed” to treat Pennsylvania injured workers. Non-formulary drugs would need a doctor’s special authorization that they are “medically necessary”.

While opponents of the Bill have procedurally postponed a vote, it may make its way back out of the House Labor & Industry Committee.

In short, it made its way back to committee pending legislators meeting with municipal and state police unions as well as health care providers. If their concerns are addressed, the bill can be amended and sent to the floor for another vote.

The Pennsylvania Bar Association remains opposed to the Bill.

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Senate Passes SB 383 With Anti-Gun Provisions

Today, on third consideration, the Pennsylvania Senate passed SB 383 with the anti-gun amendments, which I previously wrote about earlier today.

It is now imperative that you contact you State Representative and demand that they vote against SB 383 or completely amend it to address the issues that I have previously written about and remove the anti-gun provisions.

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Filed under Firearms Law, Pennsylvania Firearms Law, Uncategorized

Anti-Gun Amendments Added to Senate Bill 383 Permitting Teachers to Carry Firearms in Pennsylvania

Although Senator White’s Office – the Prime Sponsor of SB 383 – stated on Monday that there was no longer an ability to amend SB 383 in relation to the issues I previously raised, yesterday, Philadelphia Democratic Senator Sharif Street added several anti-gun and anti-right amendments to SB 383, as initially reported by PennLive, which passed, 49-1. You can find a current version of SB 383 with the amendments here and a listing of all the Senators that voted for it here.

The amendment, inter alia, requires disclosure of all school personnel permitted access to local law enforcement and disclosure to parents that there are school personnel who are permitted access to firearms; thereby, once again, violating the confidentiality of 18 Pa.C.S. §§ 6111(g)(3.1) and (i) and failing to address the maintaining, access and disclosing of that information held by the police department.

Moreover, it requires any school personnel wishing to be authorized to carry a firearm to undergo a psychological examination and seemingly provide such to the school district in violation of HIPAA and for which, as I explained previously, there exists no safeguards on the maintaining, access and disclosing of those reports. This would also  constitute a violation of Article 2, Section 1 of the Pennsylvania Constitution, as it constitutes an impermissible delegation of authority to a psychologist to determine fitness.

For all of the above reasons, I am asking you to contact your State Senator and tell him/her to oppose SB 383.

 

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Filed under Firearms Law, Pennsylvania Firearms Law, Uncategorized