Debt Collectors I Will No Longer Engage With
Professional disagreement comes with the territory. There are still standards for how people communicate, and I have limits on what I will entertain in representing my clients.
I’m maintaining a list of debt collectors with whom I will no longer engage directly, based on my experience and documented communications.
The Bigger Picture
There is a broader issue here. Collectors who claim to work under an attorney’s supervision should understand that their conduct can expose that attorney to disciplinary scrutiny. Depending on the circumstances, an attorney’s direction, approval, or failure to adequately supervise a collector can implicate the attorney’s own professional obligations. Claiming attorney supervision carries responsibilities.
In addition, going around counsel to threaten represented clients sets a terrible standard for handling disputes. When a lawyer causes a collector to communicate about the matter with a represented party, those communications can also implicate New York’s restrictions on contact with represented parties, subject to the rule’s exceptions.
Some collectors also seem to misunderstand my role. We are in a lawsuit. My obligation is to advocate for my client, evaluate the claims and defenses, and provide candid advice. Settlement is an option for my client to consider—not an outcome a collector is entitled to demand from me.
The decision whether to settle belongs to my client. I communicate offers and explain their benefits and risks, but I will not pressure a client into accepting questionable terms simply because a collector wants to close a file. There is no obligation to settle a case, ever. It certainly makes sense in most cases, but ultimately the decision is for my client alone.
Professional communication remains welcome. Misrepresentations, profanity, and intimidation do not move a case toward resolution. They only get you blacklisted.
1. Michael Green — Ace Recovery Group
Based on my communications with Michael Green, I have decided to discontinue direct dealings with him. My reasons include statements contradicted by the records available to me, communications I consider inappropriate, unlawful threats, and his use of profanity. Future communications concerning my clients’ matters will proceed only through counsel.
2. Mario Ortega and Steven O’Neil – Empire Recovery
Here’s an example of the kind of conduct that gives the debt collection industry a bad name.
In this particular case, a representative of Empire Recovery sent a threatening email concerning my clients, Business Class Tech Inc. and Yeoshua Soriasky, purportedly in connection with collection efforts on behalf of Advance Service Group LLC.
What makes this particularly troubling is that these collection efforts were apparently being conducted under attorney supervision.
The email stated, in part:
“This letter will serve as formal notice that suit preparations against Business Class Tech Inc and Yeoshua Soriasky underway and our Pre-Litigation Investigation will encompass the following areas as we attempt to identify a source of repayment to liquidate the claim referenced above:”
The collector then proceeded to identify an astonishingly broad range of third parties who might be contacted, including:
- Banks and financial institutions: Business and personal banks, lenders, mortgage holders, and leasing companies.
- Government agencies: County, state, and federal authorities responsible for permitting, bidding, and awarding commercial projects.
- Insurance and bonding companies: Entities providing insurance or bonding for past, present, or future projects.
- Tax authorities: City, county, state, and federal taxing agencies.
- Vendors and creditors: Suppliers, vendors, credit grantors, credit card companies, and credit reporting agencies.
The email concluded by demanding that my client contact the collector immediately to resolve the matter.
Why is this so problematic?
First, there is a serious issue concerning attorney supervision and professional responsibility.
Debt collectors who claim to operate under the supervision of an attorney should understand that this relationship carries responsibilities.
Under New York’s Rules of Professional Conduct, attorneys have obligations concerning the supervision of nonlawyers working for or associated with them. Depending on the circumstances, an attorney who directs, approves, ratifies, or fails to appropriately address improper collection practices may expose himself or herself to professional disciplinary scrutiny.
Simply claiming to work under an attorney’s supervision does not give a collector a license to intimidate a debtor or threaten conduct that may be legally improper.
Second, threatening to disrupt someone’s business relationships is not the same thing as pursuing a legitimate debt.
Notice what this collector was threatening to do.
He was not merely demanding payment. He was suggesting that banks, lenders, government agencies, bonding companies, insurers, vendors, and virtually every other institution essential to my client’s business operations could be contacted about the alleged debt.
Think about the implications for a small business.
A contractor depends on bonding relationships, insurance coverage, suppliers, and the ability to bid on projects. A business depends on its banking relationships, credit facilities, and vendors to continue operating.
Threatening to contact these entities concerning an unproven debt raises serious questions about whether the collector is attempting to obtain payment through legitimate means or by creating fear of commercial and reputational harm.
There are important legal distinctions between lawful investigation, permissible collection activities, and improper interference with business relationships. The existence of a disputed claim does not provide a collector with unlimited authority to pressure a business through its customers, lenders, vendors, or other commercial relationships.
Third, the plaintiff had not established that it was entitled to the money it was demanding.
At the time, the underlying lawsuit brought by Advance Service Group LLC had only recently been commenced.
The plaintiff had not obtained a judgment. Its entitlement to the amounts claimed had not been adjudicated. The defendants were entitled to contest the allegations, raise defenses, and require the plaintiff to establish its case.
Yet the collector’s email read as though liability had already been established and the next step was to identify every possible source of repayment.
A lawsuit is not a judgment. An allegation of default is not proof of default. And a demand for payment does not establish a legal entitlement to payment.
Fourth, when a business is represented by counsel, collectors should not attempt to bypass that representation.
One of the most frustrating aspects of these disputes is the tendency of some collectors to contact business owners directly, even after learning that an attorney is representing them.
The legal restrictions governing those communications depend on the type of debt, the collector’s role, and the applicable law. But where an attorney is involved in directing collection activity, professional responsibility rules concerning communications with represented parties can also become relevant.
There is a reason businesses retain counsel. They are entitled to have their legal disputes addressed through appropriate channels, without being subjected to unnecessary pressure or attempts to circumvent their attorney.
A word about opposing counsel
Fortunately, in this particular matter, the attorney involved, Steven Zacharyev, has been professional in my dealings with him.
I do not always agree with his client’s legal position, and I certainly do not agree with the collection tactics described above. But I believe it is equally important to recognize attorneys who respond appropriately when concerns about collection practices are brought to their attention.
Mr. Zacharyev, like many of the attorneys I encounter in this industry (yes— including even Bouskila & Berkovitch), has demonstrated a willingness to address legitimate concerns professionally. It’s important I think to have some healthy respect for your adversary, even if at times they test the limits of my sanity and make me lose my shit.
But that is precisely how these disputes should be handled. Express a concern, and it’s taken seriously. Because the fact is, I’m right and they know it.
My issue is not with creditors pursuing legitimate claims. My issue is with collectors who appear to believe that the mere allegation of a debt gives them the right to threaten a business’s livelihood.
It does not.
Additional entries will be added as warranted by documented experience.
