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Strengthening Collection Litigation

  • Written by Joshua Fluegel

An ideal world would be accompanied by an end to hunger, no traffic and everyone paying their bills. Unfortunately, the world is not ideal. This means consumers and businesses will attempt to evade their responsibility to a creditor or merchant. The fact that the world is not ideal is the reason attorneys and collection law firms must be at the top of their game to restore balance to our economic system.

One such law firm is Messer Strickler, Ltd, this issue’s law firm spotlight. Collection Advisor talked to Messer Strickler shareholder Nicole M. Strickler about today’s legal collection environment and received insight on what regulators are currently focused on and costly pitfalls into which she thinks collection agencies and law firms must stop falling.

strickler nicoleWhy did you become an attorney and what brought you to collections?

As an undergraduate business major in college, I knew I wanted to work in the corporate world. However, I wanted to find a career that fit both my personality and my interests. The law is interesting because it is a constantly evolving creature subject to different interpretations. In my opinion, practice in the law truly gives one the opportunity to change the way people see the world and each other. And, in all honesty, the advocacy and analysis required in litigation has always been a matter of deep interest. I fell into the legal credit and collection industry by chance. As I canvased job opportunities in the corporate world after law school, I came across an opportunity with a law firm that was beginning a growing collection practice. From there, I honed my skills to help develop the firm into a formidable member of the credit and collection industry.

What kinds of collection law do you practice and do you see any trends in the particular branches of collections?

Our major clients include not only first-party originators, creditors and debt buyers but also other law firms, attorneys and collection agencies. They operate in a wide variety of industries, including consumer loans, medical accounts, credit cards, and utility accounts. On the collection end, I see a renewed interest in first-party, as opposed to third-party, work. On the litigation defense and compliance-counseling end, I see an increased focus on statute of limitations issues as well as documentation of chain of title.

messerstriclerWhat was a particularly interesting case and what knowledge did you take away that you think is very important?

Certainly, my most colorful cases are the result of interesting defendants. I had a case not too long ago where the debtor staunchly maintained that he had no recollection of the account and claimed identity theft. Strangely though, he refused to file a police report or complete an affidavit concerning the theft. Instead, he filed an FDCPA claim against my client. In turn, we subpoenaed the original service provider, which showed a woman with the same last name as the patient on the account. After some digging, we located her, deposed her, and discovered the debtor had incurred the debt for his daughter. She even provided evidence she had paid the debtor back for the money loaned. Needless to say, the debtor’s defense did not go as expected.

What are some metrics that should be tracked? What performance issues should an agency or law firm look out for?

It depends. Obviously, if you are in legal collections you can track things like service rates, post-judgment success and type of post-judgment success; what works better in your jurisdiction than say another jurisdiction. What are the most dangerous pitfalls in legal collections and how do you avoid them? One of the most dangerous pitfalls in legal collections is the lack of solid written policies and procedures. Taking the time to consult with outside counsel to develop the right policies, along with pushing staff to implement them in practice is key.

What is a technological update you think collection law firms and collection agencies need to make?

Privacy and security of debtor personal information is on the minds of both regulators and clients. Agencies need to develop processes and procedures designed to safeguard this information from both external and internal threats.

What are some particular processes or areas where agencies are most vulnerable?

Anywhere you have human interaction with information. It depends on your firm or business. At the same time, anytime you have people involved there’s always going to be room for error. That’s why it is important to look at the PCI standards and other laws that regulate information and payment processing to make sure you have processes and procedures in place to safeguard the information.

My personal opinion is it’s not so much about hacks but information should be secure in the transfer from your client to you and back including communication. There are internal issues as well, such as making sure you are hiring the right people so there is no risk of someone taking any information, particularly payment information or consumer information that could cause problems.

What is a recent occurrence in collections you feel will influence the industry? How?

Certainly recent consent orders concerning large collection law firms are in the process of changing the way collection law firms process and litigate their files. Many firms are using these consent orders as a policy road map for the future.

What is something every collection manager should be doing to help enforce compliance?

To ensure compliance, every collection manager must assist in accountability. The use of compliance incentives on the floor helps to drive home the fact that the world of collections is not just a numbers game.

What do you think is the easiest thing a collection agency could do to avoid being sued?

Collection agencies should make sure outside counsel reviews their letters. And, by outside counsel, I mean one with actual industry and preferably defense experience. This is crucial because you want guidance from someone who has been through the trenches and recognizes where the litigation trends are headed.

What are common missteps collection agencies have made in their letters?

I think it is things as simple as identifying the original creditor to things like including language in the letter that would constitute overshadowing of the validation notice. In the legal collections context sometimes I see statements that may give the consumer an impression that the case’s litigation process is a little further along than it actually is which could potentially be misleading.

What is your greatest achievement thus far in your career?

A recent win in the Seventh Circuit Court of Appeals sticks out. Being named one of the most influential women in credit and collections for 2016 comes in as a close second.

Describe your win in the Seventh Circuit Court of Appeals.

That one was an interesting one because it dealt with the intent a collection attorney must have when filing a case. That was something we fought. There was almost what I would call a scourge of cases that argued that collection attorneys couldn’t file lawsuits without the intent to take that lawsuit to trial. It doesn’t recognize the practicalities of any type of litigation. That was a particularly interesting case and I think it was pretty valuable to a lot of collection attorneys in the industry. At least in the seventh circuit it kind of put a stop to that theory. I’ve seen it elsewhere as well.

pisaDo you have any tips for attorneys/collection professionals who find themselves in such a situation?

Do your research. Make sure you are familiar with the procedure because appellate courts are very strict when it comes to the rules. What do you like to do in your free time? When I have free time, I love to travel. I am an explorer, so I love the opportunity to take time with my family and discover new places. One of my favorite trips was Costa Rica, which was interesting. I’ve always been a fan of Italy. I have been there a few times; wonderful food, wonderful people. I’ve been to Amsterdam, which was interesting with all the canals.

What inspired you to travel?

It probably comes from when I grew up. My mom was a flight attendant for a long time at United Airlines and so we traveled as a family often. I’m sure that probably had something to do with it. I really enjoy exploring new cultures and new things and it just fits well with my personality.