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Writing a letter

Credit card companies are so huge that they do not give their customer service representatives authority to correct individual problems.  Unless a problem is covered by a company-wide policy, telephoning and writing letters to credit card companies and debt collectors can be frustrating and ineffective.  However, it is essential, prior to litigation, to document your attempts to correct the problem before resorting to litigation.  Because such letters tend to be important exhibits if a case goes to trial, remember Miss Manners when writing.  A fax with proof of receipt is better than a letter send by regular first-class mail.

Federal Trade Commission

Governmental regulators, such as the Federal Trade Commission and bank regulators, can be effective in enforcing laws and regulations when a company has a general practice which affects a large number of consumers.  The FTC has shut down rogue debt collection agencies.  However, governmental agencies rarely work on the cases of individual consumers.

Comptroller of the Currency

Comptroller of the Currency, Customer Assistance Group

1301 McKinney Street, Suite 3450

Houston, TX 77010-9050

This agency regulates many national banks, especially those that put “N.A.” after their name.

Bureau of Consumer Financial Protection

This agency was created in August, 2010.  It is too early to predict how effective this agency will be.  It has just started writing regulations.  We will see whether it will undertake to assist individual consumers in individual cases.

Consumer Class Actions

Class action lawsuits can be effective when the amount of each consumer’s individual claim is small, but a large number of consumers is affected.  Most class action lawsuits settle before trial.  In successful cases, the plaintiffs’ attorneys receive large fees, but very little benefit is received by each of the individual class members.

Contact your politicians

The Legislature enacts laws; it does not enforce laws.  The United States Congress and the California Legislature have enacted many consumer protection laws.  Many of these laws contain provisions by which an individual consumer may recover attorneys’ fees and other costs if he/she successfully sues a debt collector for violation of consumer protection laws.   In addition, the violation of any law, civil or criminal, state or federal,  is an unfair business practice in violation of Business and Professions Code section 17200.  Vacanti v State Comp. Ins. Fund.


An individual may assert a claim against a credit card company by arbitration, by a suit in Small Claims Court or by a regular civil lawsuit in state or in federal court.  Who do you sue?  The collection agency?  The credit card company?  The individual who calls you on the phone?  Everyone?

What can you recover in a lawsuit?  An injunction.  A statutory penalty of an amount between $100.00 and $1,000.00 per violation.  “Actual damages”, including damages for denial of credit, loss of opportunity to obtain credit, damage to reputation, financial loss, damages for mental anguish, anxiety and humiliation.  Court costs.  Attorney’s fees.


Arbitration is available only if the card member agreement contains an arbitration clause.   Many credit card agreement specify that all disputes be resolved through arbitration.  But, beware of arbitration procedures created by credit card companies.  Check out the “National Arbitration Forum,” which was set up by the largest debt collection law firm in the United States.  In 2009 the Minnesota Attorney General shut them down because the National Arbitration Forum was “in cahoots with” the debt collectors and MBNA (now part of Bank of America).  If you want to pursue redress by filing for arbitration, check the fees.  Not just the filing and administrative fees, but the fees of the arbitrator.  Some arbitrators charge $1,500.00 to $5,000.00 for a one day hearing.  This is in addition to administrative fees.

Small Claims Court

In California, a Small Claims suit can be brought only if the defendant (i.e, the credit card company or debt collector) can be legally served with process within California.  See Civil Code section 116.34(e).  Most credit card companies and many national debt collectors operate through subsidiaries.  Unlike most corporations, banks are not subject to the California law which requires out of state businesses which do business in California to have an agent for service of process located within California.  Banks are regulated by the federal government, and their agents for service of process are rarely found in California.

Superior Court or Federal District Court

A civil lawsuit may be brought in the Superior Court of California or, often, in federal court.  Both courts have complicated procedural rules, and most judges enforce these rules.  A “pro per” litigant is held to the same level of knowledge that an attorney should have.  In many instances a party is entitled to have a jury trial decide a debt collection tort case. 

Under California’s Rosenthal Act, a violation of the federal Fair Debt Collection Practices Act (FDCPA) 15 U.S.C. 1692 is also a violation of California law.  Civil Code section 1788.17.  A consumer injured by a violation of the FDCPA may recover “actual damages” from the debt collector and, maybe, from the credit card company.  “Actual damages” for purposes of 15 U.S.C. 1692k(a)(1) includes aggravation, emotional distress and damage to credit.  Actual damages can be awarded in FDCPA cases without having to meet state law requirements for a common law claim for intentional infliction of emotional distress.

In addition, the court may award a statutory damages of between $100.00 and $1,000.00.  Statutory damages are authorized to encourage the private enforcement of consumer protection statutes.  Whether this is per violation or per course of conduct is a matter of dispute in each of these cases.  In addition, if the consumer wins against the debt collector, the consumer may recover reasonable attorney’s fees, as set by the court.  If the consumer loses the lawsuit, the prevailing collection agency may only recover its attorney’s fees if the court finds that the lawsuit was brought in bad faith and for the purpose of harassment.  15 U.S.C. k(a)(3).

Jury Trial

If you decide to sue a debt collector, you have a right to a jury trial.  Please remember that each juror serves our nation and our community by devoting days of his or her life to participating in our judicial system.  Juror pay is minuscule.  Each juror, as well as those waiting in the juror assembly room doing crossword puzzles, contribute to secure our system if equal justice for the people, by the people and of the people.