I thought I would share a story with you about a case I handled. It is about a car accident, but involves debt collectors and their simple tactic of trying to bully people in to paying money that they do not owe.
I have a client who sold a car. (I am not naming her, but she has given me persmission to write about this.) A couple of days after the sale of the car, the new owner was in a car accident. He, of course, had no insurance and she had removed the car from her insurance, just as I recommend. Allstate insured the other party involved in the collision.
Allstate sent her a letter demanding payment after pulling up state DMV records. Because of the short time frame between the sale and the collision, DMV still showed her as the owner. She provided the insurance adjuster with a copy of the DMV Transfer of Title that showed she had sold the car. The adjuster did not care and sent her to collections. A collection agency then called her.
She provided the collection company with another copy of the DMV Transfer of Title. The debt collector did not care either. Allstate retained an attorney from Los Angeles and sued her. I then got involved and sent a letter to the attorney with ANOTHER copy of the Transfer of Title. He told me that it was not evidence that she did not own the car. Of course, by then, the owner as in prison. My client owned a house so Allstate tried to get a settlement out of her. The lawsuit was for about $3,500.
I filed an answer and a cross complaint against the original owner. I served discovery on Allstate’s attorney. The responses were not sufficient so I had to file a motion to compel. My motion was granted with sanctions. Allstate dismissed the complaint, but ended up paying me $1,200 in sanctions.
I then helped the client file in small claims court against Allstate for malicious prosecution. Today was the hearing for my client. An Allstate adjuster showed up and offered $5,000 to my client. She accepted and dismissed her case.
So, in summary, Allstate tried to bully my client in to paying money she did not owe. Instead of collecting $3,500, they paid out $6,200. Amazing! This could have been all avoided if they would have just done the right thing and stopped pursuing her when they had proof she did not own the car.
Do not let the insurance company, or an attorney or a debt collector, bully you. If you do not owe the money, it is worth fighting it.