Arthur Miller v. Cohen & Slamowitz: attorney’s failure to conduct meaningful review violates FDCPA

This case has been litigated since 2001.  Originally, notorious collection law firm Wolpoff & Abramson was one of the defendants as they had referred the account to Upton, Cohen & Slamowitz. Wolpoff then merged with Mann Bracken and they went bankrupt when Minnesota put an end to the National Arbitration Forum SCAM. Giant Debt Collector Law Firm Mann, Bracken Out of Business

At some point Upton apparently left and now the only remaining defendant is Cohen & Slamowitz.

On 9/30/09, after EIGHT years of litigation, judge Mauskopf ruled after the bench trial:

MEMORANDUM, DECISION AND ORDER: This Court concludes that Defendant UCS failed to undertake a meaningful review of Plaintiff’s debt-collection matter and is therefore liable for misrepresentations in violation of FDCPA § 1692e.

Cohen & Slamowitz’s defense was that they had relied on the review by the referring law firm Wolpoff & Abramson.

Incredibly, I documented the Cohen and Slamowitz Unfair Collection Litigation Practices AFTER this ruling!

Since my client was working and he did not want his co-workers and boss to know that he has financial problems and was sued, I requested an extension for him to answer the complaint on 11/5/09.

I also requested that Cohen & Slamowitz inform the creditor Citibank that he was defrauded by the FDRS and Mark Cella Debt Elimination SCAM.   While my FDRS fraud documentary put them out of business, I hoped that Citi would pursue FDRS to recover at least some of the loot – allegedly $50 million.

To date, Cohen & Slamowitz has NOT responded to me or to my client.  Its attorney Carol Van Houten submitted some bizarre filings to the court, but has yet to address the fraud issue.

Unfortunately, I can’t write my client’s court filings because I’m NOT an attorney and I don’t know anything about NY court rules. If my client  COULD afford to pay an attorney, he would just pay his bills.

Speaking of attorneys’ fees, the Miller case is currently arguing over about $200,000 for the consumer’s attorney fees.  While it may seem like a LOT of money, it is well deserved.  9 years of litigation, extensive discovery and numerous depositions.

I suspect that Cohen & Slamowitz will either appeal or also file for bankruptcy.

I don’t know how many OTHERS filed lawsuits against Cohen & Slamowitz, but one reason for this post is to let consumers and attorneys know about the Miller ruling and the Cohen & Slamowitz CONTINUING extremely unfair litigation practices against consumers who cannot afford to retain attorneys.

Cohen & Slamowitz needs to be sued out of business.

A few excerpts from the 9/30/09  Memorandum (DCS = Cohen & Slamowitz): Read More »

You do NOT owe income tax after settling collections if you were INSOLVENT

Please check my 3/7/13 posting on 1099-Cs for important updates!

I’m currently working with a client who is considering settling debts and concerned with having to pay income tax as his accounts are still owned by the original creditors.  So I did some research and I just reviewed the current rules.

As always, I’m NOT an attorney or CPA — please read the IRS instructions yourself and/or retain competent professionals if you can locate any and have the resources to pay them.

You may have to pay income tax on “discounts” received when settling debts as the law requires creditors to report to the IRS debt cancellations of $600 or more.


You owe $10,000 and you settle for $3,000.

If the entire balance was for PRINCIPAL, you would have to pay income tax on the $7,000 discount — if you are not “insolvent.”

Due to the depressed housing market, MANY people who would never consider themselves “insolvent” in fact ARE insolvent for tax purposes.

It simply means that your liabilities exceed your assets and it has NOTHING to do with having too much money in the bank or in retirement funds or having a well paying job. 

It just means that you owe more than your property is worth if you tried to sell it.

Keep in mind that the value of your property is NOT what you paid for it, but what you would RECEIVE if you tried to sell it.

I’m NOT trying to encourage anyone to settle debts, but for SOME people it is the right thing to do if settlement will actually increase their FICO scores and/or they need good credit, such as people with security clearances.

Don’t pay more taxes than you legally owe.

Here are some relevant links: Read More »

FICO scores STILL create fictitious late payments on Equifax reports

Over three years ago I documented that Equifax myFICO reports often contain entirely FICTITIOUS and extremely FICO score lowering RECENT late payments.  A FICO scoring software “bug” misinterpreted the charge-off reporting as late payment.

This can NOT be fixed by Equifax as the Equifax direct report does not contain these late payments.

I notified Fair Isaac, but of course they didn’t care.

Recently two clients had these FICTITIOUS late payments on their myFICO Equifax reports.  I’ve been meaning to start a new blog about it at Liars and Cheats EXPOSED, but I’ve been so busy.  I hope to take new screenshots of the reporting and the FICO score factors on a new blog in the next few weeks and in the meantime, here’s my OLD 2007 page:

5/4/07 – FICO scores add FICTITIOUS Equifax late payments long after charge-off

MyFICO changed the report format and some data labels,  but they did NOT fix this known problem.

Experian refusal to investigate factual credit disputes and FALSE accusations of FRAUD

Here is the repost from the new Liars and Cheats EXPOSED blog at FTC complaint about Experian refusal to investigate factual credit disputes and the documentation and correspondence is posted there.

My client actually INCLUDED a copy of his drivers license and utility bill with his factual disputes AND Experian provided him with his credit report prior to receiving the disputes.

Trans Union and Equifax processed the disputes, but on 1/20/10, Experian not only refused to investigate, but also made the most bizarre and FALSE accusation:

We received a suspicious request regarding your personal credit information that we have determined was not sent by you. This could be deemed as deceptive or fraudulent use of your information. We have not taken any action on this request. Any future requests made in this manner will not be processed and will not receive a response. Suspicious requests are taken seriously and reviewed by Experian security personnel who will report deceptive activity, including copies of letters deemed as suspicious, to law enforcement officials and to state or federal regulatory agencies.

The SCAN of the 1/20/10 Experian notice.

We hoped that the law enforcement and regulatory agencies would contact my client after receiving  reports of this fraud from the Experian security personnel.  However, my client was not contacted by anyone.

On 4/19/10, my client submitted his complaint to the Federal Trade Commission.

On 5/3/10, he wrote to Experian with the following requests:

  • Identification of all law enforcement and agencies Experian contacted regarding his disputes.
  • The Experian explanation of how it determined that fraud was committed.
  • Deletion of the incorrectly reported and disputed LVNV accounts (this will be addressed in detail at the new LVNV blog)
  • Correction of the student loans.  This is a known systemic problem as all CRAs report the “high balance” as the INITIAL loan amount and they refuse to include the DEFERRED interest that’s added to the loan amount every month.In 9/08 I explained in detail how this INCORRECT reporting lowers FICO scores:

Credit bureaus and Sallie Mae REFUSE to correct student loan high credit reporting

  • Deletion of several derogatory accounts because Experian does NOT disclose the scheduled deletion date.  Presumably, the accounts are not scheduled for deletion.

I can’t wait for the response from Experian and it sure would be nice if the FTC actually contacted Experian as per their new policy, for details please read How to File Complaints with the FTC and Other Regulators.

Of course we will update with the results of disputes at the Liars and Cheats EXPOSED blog:

FTC complaint about Experian refusal to investigate factual credit disputes

I’d like to hear from others who received this bizarre Experian decline to investigate and you can post comments at Liars and Cheats EXPOSED.

New blogs on credit reports, collections and credit litigation

I haven’t had time to post here because I’ve been very busy setting up new blogs at Liars and Cheats EXPOSED:

Several updates are in the works and some cool recordings of illegal collection calls are almost ready to be posted.  So much going on …

Major upgrade to the CreditFactors Knowledgebase

KBPublisher is the software I’m using to organize CreditFactors subscriber resources and it currently contains 166 articles on credit reporting, disputes, FICO credit scoring, dealing with collectors and lawsuits — all organized by category and searchable.

I have been using the free KBPublisher software since 2007 after trying software costing $500 and more and I was so impressed by the functionality and ease of use, I even wrote to Evgeny (the developer) that it is the kind of software I’d gladly pay for.

Since I maintain several websites and blogs using a variety of blogging software and forums requiring my constant attention and upgrades, I was really happy to have to do NOTHING to KBPublisher.

I love the way I can attach RELATED articles, making it easy for subscribers to see what to read next.

The GLOSSARY is also very helpful since most subscribers are brand new to credit.

Being able to manually order articles is extremely important and the MIRROR feature is also very nice as some articles are relevant in multiple categories.

Occasionally I attach files such as court opinions or filings and I actually set up a second KBPublisher installation to post and organize credit and collection-related LEGAL opinions and attorney court filings.  I don’t want legalese to show up in the search for subscribers who are not interested in litigation and I will continue to keep the legal knowledgebase separate.

Credit reporting continually changes and I’ll (once again) go through all articles to make sure they’re up to date over the next couple of weeks.

One feature I really missed was the ability to edit articles without logging in as admin. I frequently post links to articles about specific credit or FICO scoring concepts and sample disputes for subscribers who post questions in the CreditFactors member forum as well as for my clients with private forums.  And that’s when I see typos or the need for updates, but it was too disruptive to have to go into admin and get sidetracked instead of staying focused on the client’s or subscriber’s problems.   So the new quick editing feature was my primary reason for the upgrade.

Now I’m thrilled with the many new features!

The option to get EMAIL notifications of CHANGES to articles and not just for new articles in a certain category is fantastic. My CreditSuit blog has 338 subscribers and 266 chose email notification over RSS and I have to admit that while I’m capable of subscribing via RSS, I much prefer an email notice for IMPORTANT subscriptions.

I really wish I could take advantage of the feature to have some articles available to the public and some for paying subscribers, but currently the entire installation is only accessible to subscribers so that subscriptions are activated automatically and instantly. And that’s really too bad, I’d love to show off how well organized and easy to use the CreditFactors knowledgebase is.  Maybe I’ll post some screenshots.

I’ve been VERY busy,  but am looking forward to making the best credit, collection and FICO scoring resource even better!

ONE inquiry is the 3rd negative factor for 725 Equifax FICO score

Sorry I haven’t posted here in such a long time, been SO busy.

Below are the Equifax FICO score factors proving that just ONE inquiry can seriously lower the FICO scores.  And it’s an OLD inquiry from 1/29/09 — about to be ignored.  This was not a credit application, but for an AT& T cell phone.

Don’t believe the myFICO (formerly Fair Isaac) lies that the occasional inquiry is insignificant.  As the 3rd most important negative score factor, it’s costing my client at least 20 FICO score points.

HOWEVER, while I’m certain that the inquiry also was the 3rd negative factor last August, they only provided us with TWO negative score factors.  As the scores get higher, they disclose fewer score factors.

Most likely, myFICO limits the number of negative score factors for “high scorers” because they are worried that people with high scores would question the scores and factors AND have the money to DO something about it.

Equifax FICO score 725

[was 733 in 8/09, but score is lower now due to higher revolving balances]

Top Negative Factors

1. You’ve made heavy use of your available revolving credit.

Ratio of your revolving balances to your credit limits 61%
— was 53% and 2nd factor

2. The amount owed on your revolving accounts is too high.

Total owed on revolving accounts $47741
— was $36945 and was 1st factor

3. You’ve recently been looking for credit.

Your applications for credit in the past year 1 inquiry
— new factor because the score is lower

What’s helping your FICO score

You have no missed payments on your credit accounts

Number of your accounts with a missed payment 0 accounts

You have an established credit history.
Your oldest account was opened 26 Years, 2 Months ago
Average age of your accounts 8 years

You’ve shown recent use of credit cards.
Your FICO score evaluates your mix of credit cards [?], installment loans and mortgages. People who demonstrate responsible use of different types of credit are generally less risky to lenders. You helped your FICO score by showing recent use of a credit card.

You can see the impact of the higher revolving balances. And now just ONE almost 1-year old inquiry is a negative factor.

Positive score factors should be taken with a grain of salt.

They are NOT provided to lenders and often make NO sense at all.

However, lenders often get MORE negative score factors and I highly recommend reviewing the MORTGAGE credit report if you apply for a mortgage.  It usually contains FOUR negative score factors and it usually indicates that inquiries impacted on the scores even if inquiries are NOT one of the four most important factors.

KEEP those mortgage credit reports, they’re great if your FICO scores are high enough to not receive 4 negative factors and of course establish DAMAGES if you get anything less than the best rate.

Update: White v. Experian class action settlement

I previously posted White v. Experian et al: CRAs must update SOME discharged accounts after bankruptcy filing with the detailed analysis of the settlement with respect to credit reporting.

Recently they sent notices to the class members and here is my post with more information on the settlement:

White v Experian class action: how to claim your award for incorrectly reported discharged accounts

Collections do NOT have to be disputed “in writing”

Another interesting excerpt from the Midland / Brent opinion:

In addition to clerical mistakes, the Sixth Circuit has also allowed the bona fide error defense for mistakes of law.

Jerman, 538 F.3d at 472-73. The debt collector in Jerman sent a letter that included the statement that a dispute of the debt must be made in writing. Id. at 570.
In actuality, the FDCPA does not require debtors to make their disputes in written form.

See 1692g(a)(3) (requiring a debt collector to send the consumer a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector[.]) The Court concluded that the FDCPA lacks any language that restricts errors to just those clerical in nature, and therefore errors involving mistakes of law qualify, as long as they meet the above test. Jerman, 538 F.3d at 476.  [emphasis added]

I’ve seen MANY collection letters demanding WRITTEN disputes and many collectors REFUSE telephone disputes categorically.

Class action: federal court holds “personal knowledge” in debt buyer Midland affidavit “patently false”

When debt buyer Midland (Encore owned) sued Brent in Ohio state court for an OLD Associates (now CitiFinancial) debt, she retained an attorney who removed the case to federal court.  He filed counter claims for violations of the FDCPA as well as Ohio law and went on to file for class certification.

Judge Katz recently granted a permanent injunction against Midland Credit and Midland Funding, prohibiting the use of the “patently false” affidavits claiming “personal knowledge”:

Midland and MCM are enjoined under the OCSPA [Ohio law] from using form affidavits that falsely claim to be based on the affiant’s personal knowledge.

The court also determined that Midland violated the FDCPA by using the false affidavit.

I got some of the court filings and this will be an EXTREMELY important case to watch because false affidavits are used by MANY debt buyers.

From the 8/11/09 ruling regarding the false affidavit:

Whether through the “You’ve Got Claims” system or otherwise, Midland receives and fulfills about 200 to 400 requests for affidavits per day. Ivan Jimenez, one of Midland’s ten specialists” in the department that supports law firms, personally signs between 200 and 400 of such affidavits per day. (Ivan Jimenez Dep., Doc. 35, Ex. E at 15). He finds the stack on a printer, signs them, and sends them by internal mail to the notary. (Id. at 16-17 (“Q: Where do your affidavits come from? A: As far as what I deal with, they just come from the printer as far as where we get them”)). Mr. Jimenez has the ability to check the accuracy of the information on the affidavit via the computer system and he does, but the percentage of those that are checked for accuracy is “very few and far between.” (Id. at 24).

Then, after receipt of the signed affidavit from Midland, JBR attached it to the complaint filed in Sandusky, Ohio Municipal Court. When the affidavit is compared to the deposition of the affiant, Ivan Jimenez, it is apparent that the affidavit itself contains many falsehoods.

In paragraph 1, the affidavit reads “…I make the statements herein based upon my personal knowledge.” It is apparent from the Jimenez deposition that Mr. Jimenez actually had no personal knowledge of Ms. Brent or her account. For instance, while Mr. Jimenez is assigned to support and work with ten law firms, JBR is not one of them, leading to the logical conclusion that he would not have personal knowledge of any matter they were handling. (Jimenez Dep., Doc. 35, Ex. E at 7-8; Id. at 16). It appears to be an entirely random act that he signed this affidavit: he was the signer based entirely on when it came off the printer rather than based on his personal knowledge of Ms. Brent or her account. (Id. at 16-17). Mr. Jimenez never had any contact with Ms. Brent at all, leading to a logical conclusion that he could not have had the “personal knowledge” claimed in paragraph 1. See Id. at 25-26 (“Q: Did you ever have any contact with Ms. Brent, any business contacts at all? A: I did not personally.”).

In paragraph two of the affidavit, the affiant states:

… I have personal knowledge of all relevant financial information concerning Midland Credit Management Inc.’s account number 8524186453, which includes the following information: that the defendant did fail to make payments on the account and that demand has been made for defendant to make payment of the balance owing on the account described above more than thirty (30) days prior to making this affidavit; that the attorneys representing the plaintiff Midland Funding LLC were retained on Midland Funding LLC (sic) behalf by me or persons reporting to me for the purpose of collecting the delinquent debt owed on the defendant’s account number set out above; and that there was due and owing to Midland Funding LLC the sum of $4,516.57.

(Jimenez Aff. ¶ 2). As is evident in the discussion supra regarding paragraph one of the affidavit, Mr. Jimenez has no personal knowledge about the Brent account. He was not familiar with this account, did not know the last time a payment was made and did not know the outstanding balance. The paragraph also represents that the law firm, JBR, was hired by Mr. Jimenez or one of his employees. However, the following exchange during the deposition makes clear this is not true:

Q: So were you aware when you signed this affidavit that it was going to be used as part of a collection action in a lawsuit?
A: I was not.
Q: Are you aware of any other reasons that affidavits are completed, except for the collection actions that are filed in the courts?
A: I wouldn’t know what the firm uses the affidavits for.
Q: So you simply sign them?
A: Yes.
Q: You work for Midland Credit Management; correct?
A: Yes.
Q This affidavit lists at the top as a plaintiff, Midland Funding, LLC. What’s the relationship between Midland Credit Management and Midland Funding LLC?
A: I wouldn’t be the best person to ask that question. I don’t know.
Q Okay. If you look at paragraph 2, four lines from the bottom of paragraph 2, you’re attesting to the fact, “that the attorneys representing Plaintiff Midland Funding LLC were retained on Midland Funding LLC behalf by me or persons reporting to me for the purpose of collecting the delinquent debt.” Is that what it says? Did I read that correctly?
A Yes
Q When did you retain the attorneys representing Midland Funding LLC?
A I don’t know when the people in my department retained the attorneys.
Q Did you personally retain the attorneys?
A I did not.
Q Which persons in your department did retain the attorneys?
A I wouldn’t know specifically.
Q Are these – how many people do you have reporting to you?
A I have zero.
Q Do you know the names of any persons in your department or any persons in Midland Credit who actually do have the responsibility of retaining attorneys?
A I don’t know who in my department would do that.
Q Would there be someone from another department that would do that?
A I wouldn’t know.

(Jimenez Dep. at 19-21). Thus, there are two patently false claims within paragraph two: first that Mr. Jimenez had any personal knowledge regarding Ms. Brent’s debt, and second, that Mr. Jimenez was involved with the decision or act of hiring JBR to pursue legal action.

Paragraph three describes how Midland acquired the debt from Citibank, and if it is read alone, it only states a fact that is very likely true. However, when read in conjunction with paragraph one (“I make the statements herein based upon my personal knowledge”), it is apparently false. The issue of the affiant’s knowledge was raised in the deposition:

Q Well, it says in this affidavit that, in number 3, “That Plaintiff’s predecessor in interest sold and assigned all right, title, and interest in this account to the plaintiff.” So if it was sold to the plaintiff, my assumption is it was purchased by the plaintiff. And the question I have is, did you have any role or were you involved in any way, shape, or form in the purchase of this account?
A I was not.
Q Do you know anything about the terms of the purchase of this account?
A I do not. (Jimenez Dep. at 21-22).

Thus, the statement in paragraph three, however true or not, cannot be based on personal knowledge.

Paragraph five is also of concern. It asserts that Ms. Brent is neither a minor nor mentally incapacitated, which are facts that are probably true. However, the affiant bases those conclusions upon business dealings with the defendant(s),” which is clearly not possible since he had no contact with Ms. Brent. See supra.

If this is not enough, the affidavit is improperly sworn, as evidenced by the deposition:

Q You mentioned earlier, when I asked you about that, you signed these affidavits and had them notarized. Was the notary present in the room when you were signing all the affidavits, or do you sign them and give them to the notary?
A I sign them and give them to the notary.

(Jimenez Dep. at 15). Minnesota Revised Code requires that “an oath . . . shall be administered . . . [t]o affiants[.]” Minn. Stat. Ann. § 358.07 (West 2004).

In finding assertions in the affidavit to be false and misleading, this Court is not concluding that all the information in the affidavit is incorrect. Brent has provided no evidence that the amount of the debt, the fact that it is unpaid, or other vital account information, is false. As discussed infra, the actual account information is probably either correct or likely thought correct in good faith by Midland and MCM (and likely a bona fide error if so).

Here is the entire opinion:


On 9/23/09, the court made some minor corrections and made the injunction prohibiting the use of false affidavits a bit more specific:


The unprotected opinions, the docket to date and several filings from this and other FDCPA and FCRA cases  are available to CreditFactors subscribers.

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