Justice: Court Filings Reveal How Consumer Tried to Manufacture TCPA Suit Against Credit One

So now it makes sense.

As I just reported, a couple of consumers got blown up after suing Credit One for purported TCPA violations. I knew there had to be more to the story so I took a look at some of the filings on the docket. The reply filed by the Defendant tells the story (I don’t know if any of this is true BTW, just reporting what was filed):

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[On] July 13, 2017, Mr. Lieberman called Credit One. The Arbitrator included a lengthy excerpt of the call in his decision and stated that the call was “remarkable for what it says about Claimant’s conduct with reference to the collection calls and the credit card debt owed by his spouse.”

In the excerpt, Mr. Lieberman intentionally jammed together a request for calls to his number to stop with another question about “what’s cooking,” in a transparent attempt to confuse the Credit One representative into missing the request that the calls stop. Id. But the agent heard the request and asked Mr. Lieberman to simply verify the number that he wanted Credit One to stop calling. Id. at 13-14. Mr. Lieberman did not want the calls to stop because he was trying to manufacture a TCPA claim. Stopping the calls is bad for manufacturing a TCPA claim, for which liability increases with every additional call. So, instead of verifying the number that he wanted Credit One to stop calling, he clumsily and falsely changed course claiming things were complicated (they were not) and that he needed to talk to his wife (he did not). Id. at 13-14.

It was telling to the Arbitrator that Claimant had every opportunity to stop the calls in this conversation, but intentionally did not do so. Id. at 14. Instead, Mr. Lieberman wrote two identical letters claiming to be written on behalf of Mrs. Lieberman, but she did not know about them. Id. Credit One answered each letter by writing to Mrs. Lieberman asking for a power of attorney from Mrs. Lieberman, so they could discuss Mrs. Lieberman’s account with Mr. Lieberman. Id. at 14-15. Mr. Lieberman received the response letters, but never shared them with Mrs. Lieberman and Credit One never received the requested power of attorney. Id.

The Arbitrator observed, “In the abstract, one might, albeit with great difficulty, conclude that all of the Claimant’s and his spouse’s conduct this this case was innocent and there was a simple misunderstanding” but the “reality, however, is that Claimant decided to bring an arbitration and is seeking compensation in the hundreds of thousands of dollars for what is decidedly a fraud.” Id. at 14.

Another significant basis for the Arbitrator’s decision was his finding that “Claimant along with the attorneys representing him here” have brought highly similar TCPA lawsuits against six other financial institutions. Id. at 15. In each case Mr. Lieberman falsely applied for an account in his wife’s name and provided his (not her) cell phone number on the applications, the accounts went into default, the creditors called the false phone number that he provided on the false account application, and then he sued. Id. at 15-16. Settlements in these other cases during the relevant period generated upwards of 30 percent of Mr. and Mrs. Lieberman’s annual household income. Id. at 15-16. Id. The Arbitrator concluded, “These claims appear to be a clear business model for Claimant . . ..” Id. at 16.

Also important to the Arbitrator’s finding is Mr. Lieberman’s personal history of fraud. In 1997, Mr. Lieberman pled guilty and was convicted of securities fraud and conspiracy to commit securities fraud with a resulting sentence of nine months in jail and an obligation to repay $14.5 million in restitution and penalties. Id. The Arbitrator stated, “[Mr. Lieberman’s] conviction for fraud is … highly relevant on the issue of his credibility and his willingness to deliberately further his self-interest at the expense of society.” Id. The Arbitrator accurately recounted the elements of fraud and stated that those elements were proven. Id. at 17. According to the Arbitrator, “It is clear beyond peradventure that Claimant instituted this arbitration to fraudulently collect damages.” Id. at 17.

The Arbitrator found that Mr. Lieberman could have stopped the calls during the call on July 13, 2017, and otherwise, but he purposefully did not, because doing so would have been counter to his objective to manufacture a TCPA claim against Credit One. Id. This was a pattern he had followed against six other financial institutions. Id. at 15-16. Credit One was damaged by being required to expend attorneys’ fees and costs to defend against Mr. Lieberman’s fraudulent claim and to bring the Counterclaims. Id.
at 17-18.

So now it all makes sense. The arbitrator apparently determined the case arose out of an effort to manufacture TCPA lawsuits–this stuff happens all the time folks–and acted decisively to shut it down. Good on Credit One–and its capable lawyers!–for putting an end to this scheme (if that’s what happened.)

Ever since Stoops, of course, I’ve been the number one advocate for shutting down manufactured lawsuits and I love to see the scammers and abusers of the legal system get shut down. Stories like these should make everyone’s skin crawl.