Avoid the Trap
Go inside the mind of a career plaintiff to learn how a routine call can become a costly nightmare.
By Anne Rosso
July 13, 2005
Go inside the mind of a career plaintiff to learn how a routine call can become a costly nightmare.
Ryan Swanberg has no interest in climbing the corporate ladder, has never worked well with management and has not held a traditional job since 2001. He is, however, interested in making money—lots of money, as fast as possible. And for the last several years, Swanberg has relied on the debt collection and telemarketing industries to keep him in the black. Using baiting and fishing techniques, Swanberg coaxes federal and state law violations from debt collectors and telemarketers, and then sues the companies for profit. He does not spare small businesses, he does not care if the violation was an honest mistake and he will not hesitate to press a debt collector's buttons to get the reaction he desires.
Swanberg calls himself a “career plaintiff,” and he recently published a book, Lawsuit: How I Turned the Tables on Telemarketers & Debt Collectors. His experiences may serve as an important illustration for why comprehensive employee training and total compliance with federal and state laws is so crucial in the credit and collection industry. Though Swanberg's story may be at times unpleasant, it is unfortunately not the only one of its kind. More than one “career plaintiff” exists in the world today, and you never know when he may be on the other end of the phone line.
The Roots
The road that led Swanberg, who lives in suburban Minneapolis, to his current “profession” is not particularly unusual. After a rocky childhood, Swanberg dropped out of high school. He started receiving credit cards at the age of 18 and often used one card to pay off another. After a host of get-rich-quick schemes failed to pan out—he enrolled in modeling school; attempted to start a day spa for pets; created a “finger protector” for uber-hygienic bowlers; doctored his resume with a phony degree and fudged employment history hoping to secure an especially high-paying job, among others—he eventually accepted a position supervising a clothing store. But when the hours at his job changed, he quit. By fall of 2001, Swanberg was unemployed and broke. His car was repossessed, his credit cards were cancelled and he had defaulted on all of his bills. In all, he owed approximately $30,000. Shortly thereafter, he started receiving calls regarding his unpaid debts—first from creditors and then from debt collectors.
In his book, Swanberg wrote that he felt “emotionally raped” after his first call from a debt collector. He said the call turned into “an onslaught of abuse” when he told the collector he couldn't pay his debt. Swanberg had taped the phone call with a microcassette recorder, and at first intended to use the tape to file a harassment claim with the police. However, after a quick Internet search of the phrase “debt collector harassment,” Swanberg realized he could do better: he could file a lawsuit.
With help from a lawyer he found listed in the Yellow Pages, Swanberg sued that company, as well as several others whose collection calls he had recorded, for Fair Debt Collection Practices Act (FDCPA) violations.
Eventually, hoping to make even more money, Swanberg jettisoned his attorney and set about teaching himself the ins and outs of the legal system. He went to libraries and studied various legal texts, learning about appropriate venues, jurisdiction, common law torts and more. He taught himself how to draft complaints, motions, interrogatories and settlement agreements. By 2003, Swanberg was representing himself in all his cases, and he continued to refine his grasp of the legal system through basic trial and error.
“I am constantly trying to educate myself on the judicial process,” he said. “I am by no means an expert or capable of handling cases the way an attorney would, but I do know enough to file a lawsuit.”
From the start, Swanberg was confident that if he could generate enough cases, he could live off the settlements. So, to keep the settlement checks rolling in, Swanberg did his best to make sure his debts stayed in the system. He claims that at one point he had more than 75 cases against collection agencies, all of which stemmed from 12 delinquent accounts.
“As I received phone calls from these agencies in violation of the FDCPA, I sued them,” Swanberg wrote in Lawsuit. “Once they received the complaint and knew I meant business, they wanted nothing to do with my account as this could only bring more exposure upon them. Not only did I settle the lawsuits with these companies, but they immediately sent the portfolio back to the creditor without stating the truth as to why... I was able to sue an agency, have the account recycle back to the creditor and hear from a different collection agency within a few weeks.”
Baiting and Fishing
How was Swanberg able to successfully sue all these companies? Over time, he refined several baiting and fishing techniques designed to lure legal violations from collectors.
“It's all a matter of what I think the collector will violate,” he said. “If the collector seems very patient or calm, there's really nothing I can expect to get except a technical violation, like a Mini-Miranda or debt validation violation. But if the collector is very forceful or gets frustrated—that is the exact collector I want. I'm looking for someone who is looking for my weaknesses.”
However, he continued: “Even when I have a patient and calm collector on the phone, I can easily turn him into an angry collector.”
Swanberg's tactics are simple, yet all-too-often effective. When he receives a collection call, he first notes whether or not the collector stated the Mini-Miranda warning at the beginning of the call. Sometimes, after the collector states that the purpose of the call is to collect a debt, Swanberg asks the collector to call back in an hour, when he has more time to talk or figure out his finances. If the collector calls back an hour later and fails to repeat the Mini-Miranda warning, Swanberg will later argue that the collector violated the FDCPA.
Next, Swanberg adopts a specific persona to suit the particular call. He feigns ignorance of the law or pretends to be deathly afraid of what could happen to him, and baits the collector with leading questions and statements, such as: “What do you mean by 'collection activity'?” “Are you guys on my credit right now?” “Are you going to sue me?” and “Please don't tell my family about my debt.” If the collector misrepresents himself, makes a veiled threat or oversteps his bounds in any way, Swanberg does not hesitate to use the mistakes in his suit against the collection agency.
“It behooves me to try to get as many violations as I can, so they can't use a bona fide error defense and claim it was an honest mistake, so that I can in turn ask for a higher settlement amount,” he said.
Another tactic Swanberg has used to rattle collectors involves offering to pay just a small fraction of the debt owed. For instance, he engages the collector in a lengthy conversation about his debt and pretends to consider the suggested payment options, only to wind up offering to pay $10 on a four-digit debt. According to Swanberg, this technique infuriates collectors, who had been led to believe that he was serious about repaying his debt, and often prompts them to express their frustration and disappointment.
“I'm looking for an emotional reaction,” Swanberg said. “If I say something like, 'I'm not going to pay you because you're being rude,' it levels it on a personal basis and usually the collector will violate the law.”
Collection letters are scrupulously examined for flaws, too. Swanberg evaluates each one for technical violations and will often wait patiently for the collection call to follow.
“If I get a collection letter from an agency that isn't licensed in Minnesota and a follow-up call from an egregious collector from that agency,” he said, “that's an aggravated situation where I can use both the letter and the phone call [in a lawsuit].”
Sometimes Swanberg enlisted his roommate, who also had delinquent accounts, in his “work.” If she was out when collectors called to speak with her, Swanberg assured the collector that he wanted to pay off her debts “as a surprise,” and asked what he had to do to settle her accounts. If the collector revealed any personal information about the roommate's debt, such as her credit history and other past-due accounts, Swanberg would back off and promise to call the collector back later to arrange the details of the transaction, having secured a third-party communication of debt violation. (In Lawsuit, he said his roommate did not approve of this practice.)
“I don't have a duty to not bait and fish,” Swanberg said. “Ultimately, it's the collector's duty not to fall for those tactics.”
Getting Away With It
Though Swanberg's methods are often somewhat underhanded, court records indicate that he is profiting from many of his suits. In fact, Swanberg said he makes as much as $100,000 a year through his collection and telemarketing lawsuit settlements, noting that his collection settlements allowed him to not only ask for statutory damages, but punitive damages via common law torts, as well. He said that 90 percent of his cases end in settlement.
In Lawsuit, Swanberg wrote: “I would like to thank all the collectors I dealt with for their lack of knowledge in the FDCPA. It earned me a handsome salary, so to speak.”
Though attorney Michael Klutho, of Bassford Remele P.A. in Minneapolis, is skeptical of Swanberg's actual “salary,” he does acknowledge that Swanberg has been a definite presence within the Minnesota legal system. Klutho said he has spoken with Swanberg a number of times and has also listened to some of the tape-recorded conversations he uses in his suits. Klutho believes that Swanberg and others like him are symptoms of a larger problem.
“From a political standpoint, I think [Swanberg] demonstrates how perverted the system has become,” he said. “You go back a dozen years and there were hardly any FDCPA cases. Today you have people like Ryan Swanberg and consumer attorneys who have figured out how to make a buck off the FDCPA. In the case of Ryan, he is generating claims that would not exist but for him pushing buttons.”
Interestingly, to some extent Swanberg agrees with Klutho. In Lawsuit, Swanberg observes that some parts of the FDCPA are ambiguous, which makes it easy for plaintiffs to file suit against a company for multiple violations based solely on how the plaintiff interprets the laws. He believes many of the industry-related state and federal laws are flawed and should be amended to make it more difficult for some plaintiffs to file suit.
“In medical malpractice cases,” Swanberg said, “the plaintiff must have a certificate of merit—which means you have to see a physician to validate your complaint—before filing suit. Maybe that should apply in this industry. Maybe instead of filing suit, consumers should have to bring their case to a third, disinterested party who can decide if the debtor was taken advantage of—or if the debtor is someone like me, who wants to be taken advantage of.”
Nevertheless, Swanberg feels no guilt or shame about his lifestyle. Even though he believes the legal system is flawed, he steadfastly maintains that his behavior is for the greater good. He insists that he ultimately helps the companies he sues, as they learn where they are legally vulnerable.
“Do I feel bad that these companies—some of whom are quite reputable—are the subject of a lawsuit?” he asked. “No. The fact is they broke the law. Until the law is changed to prohibit people like me from using baiting and fishing techniques, then it's not my fault.”
Proceed With Caution
Eventually, Swanberg's debts wound up back with the creditors, who elected to collect the accounts in-house. When he had run out of collectors to bait, Swanberg moved on to the telemarketing industry, where he sued companies for violating the Telephone Consumer Protection Act and Federal Communication Commission provisions. Today, Swanberg's debts are still outstanding, though he said that he does intend to pay them off eventually. His credit is, of course, ruined. He cannot get a car loan, a credit card or a mortgage, and even landlords are hesitant to rent to him.
“My goal is to not file bankruptcy,” Swanberg said. “I incurred these debts and my responsibility is to take care of them. I could've paid them off with the settlements I received, but I was so much into gambling and living well.”
Ultimately, Swanberg said he hopes to work as a consultant to the telemarketing and credit and collection industry.
“I have more to offer the industry than just sending out lawsuits,” he said.
In the end, Swanberg's lifestyle and “career choice” have hurt not only members of the credit and collection industry, but the public as well. His cases tie up the legal system and his outstanding debts negatively affect the economy as well as the businesses that are owed money.
“I get frustrated when I read what he writes [in his book],” Klutho said. “He's clearly ginning up a claim—creating claims so that he can profit off them. And somebody has to pay that bill, whether it's an insurance company or a collection agency. Eventually, the costs get passed back onto everyone else. He's a leech on system.”
In spite of this, there are some important lessons to be learned from Swanberg's story. Above all, collection agencies must keep their employees in full compliance with the law. Take the time to thoroughly educate and train each member of your staff to ensure compliance with the FDCPA, the Fair Credit Reporting Act and other crucial federal and state laws and regulations. Be aware that there are people who will try to lure collectors into violating the law. Consider incorporating role-playing exercises into your training program, which can help walk collectors through delicate or emotional collection calls and can better illustrate how to avoid being provoked.
By simply being aware of potential scams and baiting techniques, collection agencies can help strengthen the industry and save their companies unnecessary stress and legal expenses.
Klutho said he intends to use Lawsuit as a tool to promote discussion and awareness amongst industry members.
“[Swanberg is] going to give me a vehicle to demonstrate in very real terms what's out there,” Klutho said. “Personally, I will use [his book] to show that there are people like Ryan Swanberg in the world. When you make a collection call, you should assume that Ryan is out there tape recording your calls. Don't rise to his bait.”
Anne Rosso is associate editor of Collector.
For more information on Ryan Swanberg or Lawsuit: How I Turned the Tables on Telemarketers & Debt Collectors, visit http://www.lawsuitthebook.com.
