Better Off Deadbeat: Making a Profit Suing Debt Collectors

Craig Cunningham is one of a small group of people who are actually looking forward to calls from debt collectors. Though he made his mistakes (falling more than $100,000 into debt during the housing boom), he’s now finding ways to profit from the mistakes of others: specifically, debt collection agencies.

Cunningham returned to the online credit board for help. This time, however, he wasn’t looking to add an artificial shine to his credit score, he was looking for a way out of the ashes. Cunningham discovered a whole other world of consumer-generated knowledge. This was a rogue group of disgruntled consumers who were trying to save themselves and their credit by filing lawsuits when the collection industry screwed up the mechanics of debt reporting and collection. What he found was an instrument not of repair or reconciliation, but of vengeance.

There are an awful lot of rules and regulations that debt collection agencies need to follow, and the technical “breaking” of these rules can lead to a small, monetary fine.

When asked if a collection agency could garnish his wages if he didn’t pay, the company responded yes; when asked if the company could put a lien on his house, the company responded yes. These particular practices are illegal where Cunningham lives (Texas). Collection agencies can’t threaten legal action that would violate state law.

As a result of this conversation (and a voice recorder to prove it), Cunningham got $1,000 via a lawsuit he filed. After he learned to file without the help of a lawyer, he began to sue more and began to see more of the industry standard settlement of $3,500.

His current lawsuit has him pushing for $200,000, claiming a collection agency violated his rights (all for a $79.84 bill).

I don’t particularly agree with Cunningham’s position of not paying back debt, and absolutely disagree with the logic that’s presented at the end of the article. That said, there’s a macabre kind of fascination with someone who’s been able to find this kind of a loophole, and has exploited things to such a degree.

Here’s the full article, although I highly recommend the printer-friendly page, that’s way less annoying and isn’t split up into 6 separate pages you have to click through.

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