Philipps & Philipps, Ltd.


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Pending Consumer Class Actions:
Cummings v. Sallie Mae
Hensley v. Jacob


Our Practice

The law firm of Philipps & Philipps, Ltd., represents consumers who have been abused by illegal debt collection actions or subjected to improper credit reporting practices. Most of our lawsuits are filed pursuant to the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et. seq.

Our practice consists mainly of litigation on behalf of consumers who have been defrauded, subject to illegal collection activity, or improper credit reporting. David Philipps and Mary Philipps have been appointed class counsel in about 160 cases, which have recovered more than $50,000,000 for defrauded or abused consumers.

We represent consumers against collectors who:

  • Use obscene or profane language
  • Attempt to collect debts that have been discharged in bankruptcy or subject to a bankruptcy automatic stay
  • Demand payment on debts that are time-barred, or have already been paid in full
  • Threaten to use violence or other illegal collection actions
  • Call at unreasonable hours
  • Misrepresent a consumer's legal rights
  • Share information about a consumer's debts with neighbors, friends or employers
  • Lie in order to obtain information about a consumer
  • Impersonate public officials or attorneys to collect a debt
  • File lawsuits over debts that have been paid in full, discharged in bankrutpcy, or are beyond their statute of limitations
  • Report incorrect information on a credit report

Are you experiencing something like this? If so, please contact us for a consultation.

Developments in Consumer Law

Urban Institute Study: 1 in 3 Americans Has A Debt in Collections

Posted July 30, 2014

An Urban Institute report, released July 29, 2014, found that 35% of Americans have at least one debt that is in collections. The full report can be viewed via this link: .

David J. Philipps Honoroed by Illinois Northern District For His Pro Bono Service

Posted May 9, 2014

On May 8, 2014, David J. Philipps was proud to be amongst the honorees recognized by the U.S District Court for the Northern District of Illinois for his commitment to public service. Mr. Philipps was nominated by the Honorable Thomas M. Durkin for his role in assisting a young man whose ability to obtain credit had been hampered by a negative entry on his credit report which actually should have been on his father's report. Mr. Philipps helped the young man dispute the debt and clear his own name, giving him the ability to move on with his life. Congratulations to Mr. Philipps and all of the honorees from Philipps & Philipps, Ltd.!

A full list of all of the honorees is available at:

NACA an NCLC Oppose HR 2892, A Bill Which Would Exepmpt Debt
Collection Attorneys from the FDCPA

Posted 4/16/2014

The National Association of Consumer Advocates(NACA) and the National Consumer Law Center (NCLC) oppose HR 2892, the "Fair Debt Collection Practices Technical Clarification Act of 2013", which seeks to amend the Fair Debt Collection Practices Act to exclude from the definition of "debt collector" any law firm or licensed attorney.

All too often, collection attorneys do engage in abusive, deceptive, and illegal collection activities. Some examples include:

  • Sewer Service, or the failure to properly notify consumer defendants of lawsuits filed against them;

  • Making misrepresentations in legal pleadings;

  • Swearing to having personal knowledge of the factual basis for a debt collection lawsuit, where no such personal knowledge exists;

  • Filing lawsuits for debts that are time-barred or which have been discharged in bankruptcy; and,

  • Using false pretenses to induce a consumer to sign a consent judgment.

To learn more about NACA and NCLC's opposition this bill, which would be harmful to consumers, read the letter directed to Congress, available here.

Collectors' Bad Records Could be Hurting Your Credit Score

Posted 4/1/2014

Consumer credit reports frequently contain erroneous, inaccurate, or out-of-date information.   Unfortunately, creditors often rely upon consumer credit reports when deciding whether to extend credit for major life purchases, such as a home, car, or furnishings.  Credit reports are also used to decide one’s credit worthiness for obtaining educational loans, renting an apartment, or even getting a job.  A bad credit score can have dire consequences for a family’s purchasing power.  When the bad score is due to an error, correcting the problem can become a nightmare.  

As technological advances have increased our expectation of accuracy as to our personal records, the debt collection industry has fallen behind.  Specifically, once an unpaid debt is sold from the original creditor to a debt buyer, much of the information from the original account is not maintained, leading to a plethora of inaccuracies.  As National Association of Consumer Attorneys Executive Director Ira Rheingold recently told New Republic on the subject,

“Creditors provide debt buyers with almost no data, no original contract, no backup information,” said Ira Rheingold, executive director of the National Association of Consumer Attorneys. “The records are so poor that sometimes the amount of the debt is wrong too.” In a world of big data, the debt buyer market operates like it’s still the 1970s, where the commodity is merely a spreadsheet full of hints and leads, instead of reliable information about debts. The creditors, frequently big banks, try to indemnify themselves through the purchase agreement, in which they make no warranties about the legitimacy of the account information. 

David Dayden, “Someone Else's Debt Could Ruin Your Credit Rating Debt collectors are pursuing one in seven Americans—and often screwing up” New Republic, April 1, 2014

One in seven U.S. consumers has at least one account that is in collections.  The top complaint to the Consumer Finance Protection Bureau is being sought after by a collection agency for a debt that is not owed.  Consumer statutes such as the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA) were enacted to provide consumers with a remedy for these types of errors. 


If you believe that you have someone else’s debt on your credit report, or that your credit report contains an error, the first step is obtaining copies of your credit reports from each of the major reporting bureaus.  Each consumer is entitled to obtain one free credit report from each of the three major credit reporting bureaus per year, which can be done online at .  Then, seek a consumer attorney in your state.  If you live in Illinois or Indiana, you can contact our office to discuss possible legal assistance. 

David Philipps and Other NCLC Advocates Submit Comments and Recommendations to the CFPB on Abusive Debt Collection Practices

Posted March 17, 2014

Consumer Advocates, including the National Consumer Law Center (link to NCLC) and National Association of Consumer Advocates, have submitted over 200 pages of comments to the Consumer Financial Protection Bureau (CFPB) regarding the current state of abusive debt collection and how the CPFB can help curb this abuse.  David Philipps of Philipps & Philipps, Ltd. contributed to the submission. 

The highlights of NCLC’s recommendations  to the CFPB include recommendations that the CFPB:

-Clarify remedies under the FDCPA to enable consumers to stop ongoing abusive debt collection.

-Require collectors to have substantially better information about debts before collecting and suing – and more information about all previous collection efforts on those debts.

-Stop abuses by payday lenders, credit card companies and other creditors preventing abusive collection practices.

Stop telephone harassment.

-Ensure that consumers know about the right to ask collectors to stop communicating with them.

-Protect consumers when collecting old debts that are beyond the statute of limitations.

-Require meaningful investigation of disputed debts.

-Prohibit forced arbitration.

Full text of the comments and recommendations, including citations, is available via NCLC here:


FTC Shuts Down Debt Collection Scheme For False Represenations

Posted March 17, 2014

False representation that a debt collector is affiliated with a government agency is a violation of the Fair Debt Collection Practices Act, see, Gammon v. G.C. Services.  Nonetheless, criminal debt collection operations make this claim to consumers.  On Thursday March 13, 2014, the FTC successfully shut down one such outfit operating out of Buffalo, New York.  According to the FTC’s complaint, Mark Briandi and William Moses, through 13 related companies, bought loans from pay day lenders and attempted to collect them by representing themselves as being affiliated with the federal government.  Company names used in this scheme include:  Federal Reserve Recoveries, LLC; Federal Check Processing, Inc.; Federal Processing Services, Inc.; Nationwide Check Processing, and State Check Processing, Inc.  The defendants are accused of deceptively threatening to file lawsuits, seize assets, and even arrest consumers unless they immediately make payment arrangements.  

For more information on this case, read the article on Consumerist and the FTC press release

7th Circuit's McMahon Decision Good For Consumers

Posted March 12, 2014

This week, the Seventh Circuit issued a very good opinion for consumers in the consolidated cases of McMahon v. LVNV Funding, LLC, et al., (Appeal No. 12-3504) and Delgado v. Capital Management Services, LP, et al., (Appeal No. 13-2030)(7th Cir. March 11, 2014). The decision can be found on the Seventh Circuit's Website.

The Seventh Circuit held that a collection letter sent to collect on a time-barred debt could, in fact, mislead an unsophisticated consumer about the character, amount or legal status of debt, in violation of 1692e(5) of the FDCPA, regardless of whether litigation is threatened; the Court noted that this is especially true if the letter uses the term “settle” or “settlement”.  

The court expressly rejected the holdings of the Third Circuit, in Huertas v. Galaxy Asset Management, 641 F.3d, 28 (3rd Cir. 2011) and the Freyermuth v. Credit Bureaus Services, 248 F.3d 767 (8th Cir. 2001), both of which required litigation or the threat of litigation on a time-barred debt in order for the letter to be actionable under the FDCPA.  Interestingly, the Court also noted that:

. . . we find it unlikely that debt owners lack knowledge about the age of the debts they are attempting to collect.  If the debt collector is the original creditor, it will know the relevant dates.  If the collector is a third party collecting on behalf of the original creditor, is should easily be able to get that information at the time the file is assigned by the original creditor on whose behalf it is acting.  If the collector has purchased the debt from the original creditor, we know from the FTC that such buyers pay different amounts for debts depending on the age of the debt and the number of previous attempt to collect it, in which case whether the debt is time-barred should be known.  See FTC Report at 21.  The FTC’s study found that “debt buyers paid on average 3.1 cents per dollar of debt for debts that were 3 to 6 years old and 2.2 cents per dollar of debt for debts that were 6 to 15 years old compared to 79 cents per dollar for debts less than 3 years old.  Finally, debt buyers paid effectively nothing for account that were older than fifteen years.”  Finally, if the collector is a third party acting on behalf of a debt buyer, it should be able to get the relevant information from the party on whose behalf it is acting.

See also, Federal Trade Commission,The Structure and Practice of the Debt Buying Industry (2013).

Finally, the case contains a good discussion of attempts to “pick off” proposed class representatives and whether a Rule 68 offer of judgment offers a plaintiff complete relief.  See also, Scott v. Westlake Services, LLC, 740 F.3d 1124 (7th Cir. 2014). 


Philipps & Philipps, Ltd. Present at National Consumer Law Center’s Fair Debt Collection Practices Act Conference March 8-9, 2014, in San Antonio, TX

Posted March 11, 2014

Dave and Mary Philipps presented at the 2014 National Consumer Law Center’s Fair Debt Collection Practices Act Conference on March 8-9, 2014, in San Antonio, Texas.  During the introductory level consumer attorney track, Dave and Mary shared their 20+ years of experience litigating FDCPA cases based on collection letters in a session titled, “Selecting, Developing, Valuing Letter and Overcharge Cases”.  Additionally, Dave presented to experienced consumer attorneys on FDCPA Case Developments along with attorneys Dick Rubin and Cathy Combs, and spoke on a panel with National Consumer Law Center Deputy Director Bob Hobbs and Consumer Financial Protection Bureau Chief of Enforcement Jean Healey on CFPB's Fair Debt Collection Practices Rulemaking.

In addition to presenting at multiple sessions at this year’s conference, Philipps & Philipps also helped raise over $13,000 towards scholarships for the conference, in order that attorneys from legal services would be able to attend the conference.

For more information about future NCLC conferences, including the November 6-9, 2014 Consumer Rights Litigation Conference in Tampa, Florida, visit

The presentation materials for the introductory level consumer attorney track are available online at


Why do debt buyers frequently file suit on bad, unwarranted, and often erroneous information?

Posted March 10, 2014

In his recent article, available on the Federal Reserve Bank of Boston’s Website, Peter Holland, Director and Clinical Instructor at the University of Maryland School of Law Consumer Protection Clinic, answers the question, “ Why do debt buyers frequently file suit on bad, unwarranted, and often erroneous information?”  Holland explains,

“Debt is sold at low prices when banks have little or no documentation to provide the buyer—often just an electronic Excel spreadsheet and a few monthly statements.  The contracts of sale between bank and debt buyer (also known as forward-flow agreements) typically contain broad disclaimers of warranty, including warranty of title, legality, validity, documentation, or accuracy.”

Consumers who believe they have been sued for a debt that was never owed, or is beyond its statute of limitations, or was discharged in bankruptcy, face difficulties obtaining copies of these forward-flow agreements.  This is why it is so important to contact an attorney with experience dealing with consumer debt.  If you live in Illinois or Indiana and you believe you have been sued on a debt you don’t owe, you can contact us to discuss your concerns. 

To read more of Peter Holland’s article on the Federal Reserve Bank of Boston’s Website, follow this link: