Bingham v. Collection Bureau, Inc., A1-79-131.
| Decision Date | 12 January 1981 |
| Docket Number | No. A1-79-131.,A1-79-131. |
| Citation | 505 F. Supp. 864 |
| Parties | Michael BINGHAM and Peggy Bingham, Plaintiffs, v. COLLECTION BUREAU, INC., and Collection Bureau of North Dakota, Ltd., Defendants. |
| Court | U.S. District Court — District of South Dakota |
COPYRIGHT MATERIAL OMITTED
Monte Engel, Staff Atty., Legal Assistance of North Dakota, Devils Lake, N. D., for plaintiffs.
Christine Hogan and Patrick W. Durick, Bismarck, N. D., for defendants.
This is an action by consumers, Michael and Peggy Bingham, against two related collection agencies, Collection Bureau, Inc. (CBInc), and Collection Bureau of North Dakota, Ltd. (CBLtd) for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.
Plaintiffs allege that the defendant CBInc violated the act in the following particulars:
They alleged that the defendant CBLtd violated the act in the following particulars:
The defendants generally deny all allegations of wrongdoing. They deny that CBLtd is a "flat rater," and allege conscientious efforts to obey the spirit and language of 15 U.S.C. § 1692, et seq. (Fair Debt Collection Practices Act), while still performing their economic obligation of liquidating bad debts.
Jarvis Broeckel began working for the Credit Bureau of Bismarck about 1972. His principal activity was as a collector. About 1973, with another employee, he bought the Credit Bureau of Bismarck. He owned 49% and his co-owner owned 51% of the stock. In late 1973 he organized Collection Bureau of North Dakota, Ltd., a North Dakota corporation. In June 1977, the associates separated. Mr. Broeckel bought the collection business, and his associate bought the Credit Bureau. At that time, Mr. Broeckel organized Collection Bureau, Inc. The stock in the corporations is held:
Collection Bureau, Inc. 100% Mr. Broeckel
Collection Bureau of N. D., Ltd. 95% Mr. Broeckel
5% Mrs. Broeckel
Mr. Broeckel is the controlling officer of both corporations. He immediately began plans for automation. He completed his automation, to computer, by June 18, 1979. As is developed later, the collection activities herein complained of occurred during and immediately after completion of the automation.
Mr. Broeckel was active in collector's associations, and so was cognizant of the passage of the Fair Debt Collection Practices Act. As a member of such associations he attended seminars regarding the Act, and prepared his employees for the restrictions imposed by the Act prior to its effective date (March 20, 1978). As the material became available, he required his collector personnel to review the current "Manual on Fair Debt Collection Practices Act" published by the American Collectors Association, Inc. This study, coupled with on-the-job training, and a telephone monitoring system, constitute his program intended to assure that any violation would be unintentional, and would occur despite procedures designed to avoid such violations.
Michael and Peggy Bingham are a young married couple who must rely on the unskilled labor market for their livelihood. They have two children, Rebecca, born in 1977, and Robert, born in 1978. Peggy Bingham, who claims substantial damages to her personality by virtue of the conduct of the collectors, is 22 years old, obese, doll like, described by a psychologist witness as unsophisticated, immature, with limited ability to act without a leader, having an inadequate dependant personality. In 1977 they were living in Brinsmade, North Dakota. Rebecca was born in Mercy Hospital, Devils Lake. The Binghams had made several payments on current services but the 1977 bill and several subsequent accounts had been written off by the creditor hospital, and set over for collection.
March 23, 1979, Mercy Hospital sent to CBLtd a list of accounts for collection. The accounts, due by the Binghams, as transferred showed a balance of $958.65 due, included no loading for interest, and were computed from the hospital records by the hospital finance officer, Mr. Lindell (see exhibits 6 and 47). Since, at that time, the computer operation was not installed, it was set up on a control card (see exhibit 38). Both parties have agreed that the first notice of a five notice system was sent and received sometime between March 23, 1979 and April 24, 1979.
(Why they were sent out the same day was never satisfactorily explained except for the suggestion this occurred during the changeover from manual to computer record keeping.)
These five notices had in common:
CBLtd sent these notices out for a fee of $4.95. They were sent with an understanding between the hospital and the collector that upon completion of the five notice series, the hospital, if it assigned the account for more aggressive collection, would assign it only to CBInc. CBInc took such assignment on a fee schedule which was computed at one-third for collection prior to authorization to sue, and fifty percent if the creditor did in fact authorize suit.
The five notices elicited no response from either plaintiff. Mr. Bingham explained that:
"I had heard from other guys it was hard to talk to the management at Devils Lake so I didn't try."
Mrs. Bingham asserted that she had no recollection of receiving the first notice. She received the second and third cards at the same time. And from the language of the fourth card she perceived a threat to put her in jail. She interpreted the fifth notice as a threat to bring a civil action to collect, carrying it to judgment if necessary. The first payment made in 1979 was made on June 1, 1979. It was received by the hospital and credited to a more recent account which had not been written off as a bad debt and set over for collection.
At the conclusion of the five notice program, CBLtd, then partially automated, ran a printout report on the results of the five notice system (see exhibits 16 and 55). One copy of the printout (exhibit 55) was returned about June 20, 1979 with directions to go forward with the next collection stage, that is, the telephone collector stage.
This stage called for skip tracing the debtor to determine whether telephone contacts were possible, and to gather information which would assist in a recommendation to sue or not to sue out the account, while exerting telephonic pressure to effect collection. This stage and the litigation stage were both handled under the name of CBInc.
Upon the return by Mercy Hospital of the Bingham account, with directions to proceed, a control card was made (see exhibit 38). The manual control system and the computer were jointly used, at least until August 1, 1979, in order to assure everyone that the computer system worked. The card was delivered to Vickie Eichbaum, a skip tracer, who traced the Binghams to Maddock, North Dakota. Michael Bingham answered the call to the Maddock number.
In keeping with well established policy the skip tracer, immediately upon learning that she was talking to the debtor, transferred the call to Jerry Huseby whose telephone alias2 was "Mr. Mattson." The call should normally have gone to Clyde Hardesty whose telephone alias was "Mr. Hager," because Mr. Hardesty was handling the debtors' names from A to F.
Mrs. Bingham testified precisely and consistently as to the time, circumstance, and language of each telephone call. In fact, on cross examination she was unable to discuss the calls except in the order of her recital, thus communicating the suggestion of rote, rather than recollection testimony. Mrs. Bingham testified:
That all calls except the call-back of June 19, made at 10:30 to 11:00 p. m., were made at 10:30 to 11:00 a. m., and she knew this because they all came while she was preparing potatoes for lunch. That the caller always gave his name (alias), the name of his employer (CBInc.), and the name of the account (Mercy Hospital).
She testified to a total of 14 calls as follows:
To continue reading
Request your trial
-
Johnson v. Statewide Collections, Inc., 88-285
...from their effort. Zimmerman; Riveria; Kimber v. Federal Financial Corp., 668 F.Supp. 1480 (M.D.Ala.1987); Bingham v. Collection Bureau, Inc., 505 F.Supp. 864 (D.N.D.1981). Some of the objectionable practices, more blatant and egregious than others, that transgress the FDCPA include obscene......
-
In re Scrimpsher
...determining whether particular language was deceptive or misleading under § 807, 15 U.S.C. § 1692e). But cf. Bingham v. Collection Bureau, Inc., 505 F.Supp. 864, 870 (D.N.D.1981) (court uses standard of "whether it is more likely than not so that debtors on the low side of reasonable capaci......
-
Agosta v. Inovision, Inc., CIVIL ACTION NO. 02-806 (E.D. Pa. 12/__/2003)
...test of the FTCA rather than the "reasonable consumer" test developed under the Truth in Lending Act); Bingham v. Collection Bureau, Inc., 505 F. Supp. 864, 870 (D.N.D. 1981) (least sophisticated reader); Bustamante v. First Fed. Sav. & Loan Ass'n, 619 F.2d 360, 364 (5th Cir. 1980) (applyin......
-
Joseph v. J.J. Mac Intyre Companies, L.L.C.
...harassment or annoyance turns not only on the volume of calls made, but also on the pattern of calls. In Bingham v. Collection Bureau, Inc. 505 F.Supp. 864 (D.N.D.1981), the court held that when a call was terminated and the collection agency called back immediately, that subsequent call al......
-
The Impact of the Fair Debt Collection Practices Act on Foreclosures
...15 U.S.C. § 1692c(a). 33. 15 U.S.C. § 1692c(a)(1). 34. 15 U.S.C. § 1692c(c). 35. 15 U.S.C. § 1692d. 36. Bingham v. Collection Bureau, 505 F.Supp. 864 (D.N.D. 1981). 37. Jeter v. Credit Bureau, 760 F.2d 1168 (11th Cir. 1985). 38. Id. 39. 15 U.S.C. § 1692e. 40. Id. 41. E.g., DR 1-102(A)(4). 4......
-
Fair Debt Collection: What Every Lawyer Should Know
...13. Bingham and Bonenburger, supra, note 1. 14. See, 15 U.S.C.A. § 1692d(1), b(4) and b(2). 15. Bingham v. Collection Bureau, Inc., 505 F.Supp. 864, 876 (D.N.D. 1981). 16. Id. at 870. 17. Jeter v. Credit Bureau, Inc., 754 F.2d 207 (11th Cir. 1985). 18. In Re Scrimpsher, 17 B.R. 999 (Bkrtcy.......