Consumer Protection

Turning Debt into Dollars

By June 24, 2018 No Comments

How do you turn a $25 debt into potentially thousands of dollars in damages from a debt collector?

Guardian Alarm Company, a Michigan business, sought to collect $25.16 from one Gary Nitzkin through its in-house counsel, Robert Craig. That may sound well and good, but there was one little problem: instead of holding himself out as Guardian’s in-house counsel, Craig decided to pose as a third-party collecting the debt under the name “Law Offices of Robert M. Craig & Associates.” Oh, and there was one other not-so-little problem for both Guardian and Craig: Nitzkin, the individual they sought to collect from, is a consumer-protection attorney by trade. Nitzkin sued both Guardian and Craig under the Fair Debt Collection Practices Act (FDCPA) in district court, which eventually led to his suit being erroneously dismissed before being brought before the Michigan Court of Appeals.

In a decision handed down last week and scheduled for publication (i.e., set to become binding law), the Court of Appeals overruled a district court ruling which granted summary disposition for Guardian and Craig. See Nitzkin v Craig, Case No. 337744 (Mich. Ct. Appeals, June 21, 2018). On motion to the district court, Guardian maintained that it was not a “debt collector” as defined by the FDCPA while Craig argued that he was shielded from liability by the Act’s “bona fide error” provision. The Oakland County Circuit Court, hearing the matter on appeal, prompting Nitzkin to further appeal his case to the Court of Appeals. There, after reviewing the record and relevant case law, the Court of Appeals was convinced that not only were Guardian and Craig improperly granted summary disposition in their favor, but that Nitzkin was the one actually entitled to summary disposition. The case has been remanded back to the district court in order to determine Nitzkin’s damages.

Speaking of damages, one of the erroneous defenses proffered by Guardian and Craig was that Nitzkin suffered no actual damages from their illegal collection efforts. Even if that’s the case, it doesn’t matter.

[A] consumer filing suit under the FDCPA need not establish that he or she suffered actual damages. As explained in Wise v Zwicker & Assoc, PC, 780 F3d 710, 713 (CA 6, 2015), “[u]nder the FDCPA, a plaintiff does not need to prove knowledge or intent to establish liability, nor must he show actual damages, which places the risk of penalties on the debt collector that engages in activities which are not entirely lawful, rather than exposing consumers to unlawful debt-collector behavior without a possibility for relief.”

See Nitzkin, at pg. 8.

Moreover, as the Court of Appeals explained, the FDCPA also contemplates awarding reasonable attorney fees to a party asserting a successful claim under the Act. This remains good news for consumers who, at the individual level, may have a difficult time proving damages in court for FDCPA violations. When the dust finally settles, Nitzkin—who was initially being pursued for a mere $25.16—could find himself pocketing thousands of dollars in damages and attorney fees under the FDCPA.

Nitzkin is hardly alone in this. Every day debt collectors and the attorneys they employ violate the FDCPA and other consumer-protection laws in pursuit of trivial debts. Unfortunately, most of the victims of these practices aren’t attorneys like Nitzkin. They remain unaware of their rights or, if they know them, believe there are no lawyers out there willing to take their cases. Not so. Consumer-protection attorneys handle cases like Nitzkin’s all the time and many will take them on a contingency basis. If you or someone you know believes they have been the victim of unfair collection practices, including harassment by telephone, text, social media, or electronic and snail mail, get in touch immediately with a consumer lawyer who can evaluate the case. You may be able to turn your old debt into a down payment on a new car.

Author Gabriel Sanchez

More posts by Gabriel Sanchez

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