SUIT ACCUSES DEBT AGENCY OF DECEPTION

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, February 6, 1993                   TAG: 9302060180
SECTION: VIRGINIA                    PAGE: A-4   EDITION: METRO 
SOURCE: BY DOUGLAS PARDUE STAFF WRITER
DATELINE:                                 LENGTH: Medium
SUIT ACCUSES DEBT AGENCY OF DECEPTION
A Christiansburg debt-collection agency was accused Friday in a federal lawsuit of using intimidating, deceptive and illegal collections practices.
But the operator of the collection agency says the lawsuit is an effort by Legal Aid Society attorneys in Roanoke to harass and intimidate her.
Dana Sheppard, president of Credit Bureau Services, said Friday that the legal action is "a nuisance lawsuit." She accused Henry Woodward, director of the Legal Aid Society of Roanoke Valley, of filing the lawsuit to harass her because of her support for a proposed law to give collection agencies more power to collect debts.
Sheppard said Woodward filed the suit the day after he saw her speak at a state Senate subcommittee hearing on the proposed law. Woodward, who was at the subcommittee hearing to speak against the proposed bill, denied any effort to harass or intimidate Sheppard. He said the lawsuit had been in progress for weeks and was filed because Sheppard's company uses collection practices that he said clearly violate the U.S. Fair Debt Collection Practices Act.
"It is not intimidation. . . . The suit is meant to be taken seriously, and I trust she will," Woodward said. He said it was a coincidence that the suit was filed the day after he and Sheppard appeared at the hearing.
The bill, which is to go up for approval or rejection Sunday by the Senate Courts of Justice Committee, would, among other things, allow collection agencies to take legal action against individuals who owe small amounts of money to several businesses.
Under present law, collection agencies can only locate debtors and attempt to persuade them to repay. Any court action has to be taken by the businesses that are owed the money.
Woodward says Sheppard, who spoke to the subcommittee on behalf of the 50-member Virginia Collectors Association, essentially wants to have the power to do what her agency now illegally implies to debtors that it already can do.
Sheppard says the change is needed because many companies don't take legal action to collect small debts. It's not worth the time or expense. As a result, she says, millions of dollars are lost.
Woodward says it would be a mistake to put more power in the hands of agencies that have had a history of abusing people, especially the poor and unsophisticated.
In the lawsuit, filed Friday in federal court in Roanoke, Woodward contends that Credit Bureau Services mailed two illegally deceptive and intimidating letters to Marcella Joyce of Roanoke late last year in an effort to collect a small medical bill that she wasn't certain she owed.
The suit contends that the letters illegally implied that Joyce's credit would be damaged because Sheppard's collection agency also is a credit agency. In addition, the suit says, the letters violate collection laws because they also imply that Credit Bureau Services may obtain a warrant against Joyce or take legal action against her.
As a result of the letters, Woodard said, Joyce "was frightened into payment arrangements despite her uncertainty about owing the bill" of about $45 to Radiology Associates of Roanoke.
The suit asks for $2,000 in damages. Sheppard denied her company's letters are deceptive or violate collection laws.

by Archana Subramaniam by CNB