To:Associate

From:Partner

Re:Default Judgment/ Fair Debt Collection Practices Act/ Unlawful Practice of Law

Our client, Thomas Carroway, defaulted on payments on his bank credit card account in June, 2015. At the time of his default, the account balance was approximately $21,000.

In August, 2015, the bank turned the account over to Debtor Services, Inc., a collection agency. In September and again in October, Debtor Services sent letters to Mr. Carroway. Each letter proposed an offer of compromise and a payment plan. Mr. Carroway did not respond to either letter.

In December, 2015, Debtor Services sent another letter to Mr. Carroway. In this letter, Debtor Services withdrew its offer of compromise, declared its intent to file a lawsuit to collect the full amount of the debt, and threatened to file a lien against Mr. Carroway's home. Unlike the previous letters, this letter was signed by Andrew Hindenberg, Esq.

On January 5, 2016, Debtor Services filed suit against Mr. Carroway. On the face of the summons was the following warning: "If you do not respond to the attached complaint within the applicable time period, a default judgment will be entered against you for the relief demanded in the complaint without any further notice to you."

Our firm hired an investigator to look into the business practices of Debtor Services, Inc. The investigator interviewed the former office manager of the collection agency. The office manager stated that Andrew Hindenberg does no legal work on behalf of Debtor Services. He allows the agency to use his name, letterhead, and signature without actually reviewing the letters or pleadings that bear his signature.

It seems to me that a series of federal statutes known as the Fair Debt Collection Practices Act (U.S.C. 1692 et seq.) may provide a defense for Mr. Carroway. Specifically, I need to know whether the threat contained in the December letter and the default without further notice warning on the summons violated the FDCPA.

In addition, the business relationship between Debtor Services, Inc., and Mr. Hindenberg raises serious ethical issues. I need to know whether that relationship constitutes the unlawful practice of law on the part of the collection agency and, if so, whether we, as a firm, are obligated to report the nature of this relationship to the grievance committee.

Question: What are the facts and the issues sections of the Memorandum.