Fake Collection Attorneys

New grads can't catch a break.

So you've gotten the lawsuit threat and you're shaking in your shoes, preparing to write a check for whatever the debt collector asks for because, this isn't just any lawsuit threat. This lawsuit threat is coming from a real, live attorney...or is it?

Fake Collection Attorneys

Its time you knew the truth behind those "Law Offices of So & So" letters that the collection companies love to churn out in batches. More often than not, the "Law Office of So & So" is actually merely another division of the collection agency itself.

And the collection attorney named on the letterhead? He exists, and he's very likely licensed to practice law (but not always). The collection agency hired him right out of school and keeps him on staff. His job is to do nothing more but lend his name and license number to the lawsuit scare letters the company sends to debtors.

Granted, most lawyers wouldn't go for this. It isn't prestigious and is quite possibly an embarrassment. However, with the economy in shambles, graduates in all fields are having difficulty finding work. This leads many young lawyers to seek positions in fields they never would have given a second thought to when they started school. Once upon a time, only the really rotten attorneys who graduated from law school by the skin of their teeth ended up working for collection agencies. That just isn't the case anymore.

What's so Fake About a Real Attorney?

The "fake" part comes in when the collection agency misrepresents the attorney as an outside entity. Technically, we should be getting into some serious FDCPA violations here, given the fact that misrepresentation of any sort is a gigantic federal no-no, but so far I have yet to hear of a consumer lawsuit addressing this particular aspect of the collection process.

When a debtor receives a debt collection lawsuit threat on the attorney's letterhead, his or her first response is, naturally, fear. Many don't take the time to Google the attorney's name. Do that, and you'll probably uncover the fact that the "attorney" is actually some poor schmuck banished to a cubicle and used only for his ability to add an element of authenticity to otherwise disposable collection letters.

The Legal Division Within the Collection Division

Some collection agencies like to take it a step further and set up an entire legal department. This department is usually headed by one attorney and staffed by workers hired off the street to type up nice, neat little threats on the attorney's letterhead. The attorney will then add his or her signature to each letter before it gets whisked off to the mail room and sent out to the unsuspecting debtor.

Real Collection Attorneys vs. Fake Collection Attorneys 

Occasionally, smaller collection agencies will have accounts they feel are worth suing over yet not have enough revenue to have an attorney on staff or a legal department. In cases like these, the collection agency will hire a local attorney in the debtor's state to notify him or her of the impending debt collection lawsuit.

These "real" collection attorneys have an actual office and often do other things rather than merely playing the role of a corporate attack dog. If you're dealing with a real collection attorney rather than a fake collection attorney, take heart: real and experienced lawyers know the law, and that makes them much easier to deal with than fresh graduates.

Prime example: Two years ago I was involved in a case where a woman was being sued by Palisades. Palisades had done her dirty by selling her debt to a junk debt buyer and then handing her account off to an attorney in her state to collect on the debt (in other words, trying to get paid twice). Meanwhile, the junk debt buyer had handed her account over to its in-house legal department. Both had filed suit on the same debt.

I have never, ever, in my entire life had as much fun writing, "We'll see you in court. Get ready" letters. Of course they folded. All of them. There is no way a judge would ever have allowed such a clusterfu*k to fly and the attorneys knew it, even if the collections departments themselves did not.

Don't see an attorney letter as a bad thing. Use the opportunity to communicate to the attorney just why his case is a lost cause. Remember, if its a real attorney rather than a fake collection attorney, he doesn't want to waste his time on a lost cause.