Defense of Lending Institutions
Lender malfeasance is a common theme for talk shows and news reports. The economy is a hot topic for politicians and bailout of the big banks has been given much publicity in the political arena. When lenders exercise their right to collect money due them, or recover property pledged as collateral on a defaulted loan, savvy consumer advocates seek to attack the bank’s lending practices. Too often, the consumer cries foul and makes claims of predatory lending, or improper recordkeeping. The legal team at Schlecht, Shevlin & Shoenberger, A Law Corporation has experience representing lenders in many areas of legal need.
Collecting debt is governed by federal and state law. Lenders seeking to collect sums due them, foreclose on real estate or engage in other debt collection activity are required to do so in a legally compliant manner. The cornerstone of this mandate is the requirement to not engage in abusive collection efforts. Both state and federal law governing this area of business litigation requires the following:
- The party attempting to collect the debt be defined as a debt collector: This means a lending institution collecting debt it owns is not acting as a collector by definition, but when a third party such as collection agency seeks to collect debt on behalf of the lender that third party becomes a debt collector.
- The debt collection activity must not be abusive: When collecting debt, the activity must not be with the intent to harass the debtor. Repeated calls are considered harassing, and can be prohibited.
- Notice of collection efforts: The collecting party must advise the debtor that the actions being taken are in connection with an attempt to collect a debt.
The line can become very blurry when claims of unfair debt collection practices are made against a lending institution. When faced with these types of allegations, you need a skilled business litigation attorney. Our attorneys are reputable and possess the knowledge and skills necessary to properly defend claims against lenders. For skilled legal representation in this area, call an experienced Palm Springs business litigation attorney.