Sergei Lemberg Shares His Tips and Strategies With Creditors at Compliance Symposium

Yesterday I attended the Midwest Compliance Symposium, a training conference for creditors, hosted by Delta Outsource Group and CBE Companies. One of the sessions featured a “fireside chat” (sans the fire) with John Bedard and Sergei Lemberg, of Lemberg Law, a consumer attorney. Here’s what was said, expressed in excerpts (not 100% verbatim), in a Q and A format.

Bedard: How do you find your clients?

Lemberg: I spend approximately $50,000 per month on online advertising to buy keywords (including terms such as debt attorney and harassing phone call).

Bedard: Do you advertise using the names of debt collectors?

Lemberg: I used to, but I stopped buying pay-per-click ads using names of debt collectors a few years ago. I just didn’t like the vibe of it. I still also use videos, and we have an app, though it’s less successful than I had hoped – we still have about 25,000 members.

Bedard: Do you actually talk with the clients you represent?

Lemberg: Yes, several humans talk with the consumers we represent. We have a multi-step process that includes 1) intake with a paralegal, 2) online sign up, 3) talk with an intake supervisor, 4) talk with a litigation paralegal, 5) speak with an attorney (or maybe just communicate by email, if I don’t need further clarity – but I give my attorneys leeway to make their own decisions about this).

We also ask for screenshots or a voicemail recording of calls, as well as certainty about revocation, if that is involved.

Bedard: How many of your cases end up in law suits, and can you tell us about how you proceed?

Lemberg: We send demand letters first. About 25% end up in law suits.

Some simply ignore the letters.

Sometimes there is a disagreement – a consumer says x happened; defendant says y happened. Those cases will get filed as long as the plaintiff is believable.

Sometimes the company won’t share call recordings; sometimes they do. If the evidence rebuts our client’s claim, the case is dropped. If the evidence rebuts the claim, but we notice another actionable claim, we will send a new demand based on that claim.

People come to us because they are pissed or don’t know where to turn. That’s about 95%. Some are “case fishers”… you can tell who those are. I don’t want those cases.

Bedard: How many demands/law suits do you file?

Lemberg: We file about 250 pre-suit demands per month, and about 50-60 lawsuits per month. About 65% of the time cases are settled.

Bedard: How do you determine what amount to demand?

Lemberg: No defendant will settle a case for 100 cents on the dollar. So we try to find a middle ground that’s reasonable and appropriate but doesn’t make defendants want to run to court.

Bedard: How do you charge your clients?

Lemberg: We don’t earn anything unless we win. We eat what we kill.

Bedard: What happens to your expenses when you lose a case?

Lemberg: We write off expenses when we don’t win. Clients are not out of pocket – except when they have been deceptive – then we will bill them.

Bedard: Do you tell people not to pay their debts?

Lemberg: I don’t get involved in the debt… unless I am hired to represent someone on a debt collection matter. There are just too many variables.

Bedard: Do you encourage people to complain to the government?

Lemberg: No, we don’t encourage people to file complaints.

Bedard: Do you have relationships with Attorneys General or other authorities?

Lemberg: There was a time when we had a relationship (a brief 6 month stint) with an app called PrivacyStar. I think they sent complaints directly to the CFPB or FCC. But not any longer.

Bedard: What effect will proposed rules have on the industry and your business?

Lemberg: I don’t know, folks. I’m just sitting here enjoying the here and now. I really don’t know what will happen.

Bedard: Do you file claims in “grey” areas?

Lemberg: I kind of like uncertainty because it allows for banks and collectors to do what they want to do, and it allows us to do what we want to do.

Bedard: What would you do if you weren’t a consumer lawyer?

Lemberg: I don’t know… I’d take photographs… pick vegetables… I’d develop hobbies.

Bedard: What do you like least about being a consumer lawyer?

Lemberg: Here’s an example – yesterday I drove two hours each way to a hearing for a case. It didn’t go my client’s way and they were very upset. I don’t like the often thankless, entitled segment. People expect things you can’t always deliver and they don’t appreciate what you do for them.

Bedard: The CFPB boasts about how much they recover for consumers. How much have you recovered?

Lemberg: I’m really not sure… I’m guessing $15 million. I think the CFPB boasting is a bunch of *&#$. They get hundreds of thousands of complaints. If they gave those to me, I’d get action and recover money for those people.

Bedard: How do folks beat you?

Lemberg: I think smart lawyers find opportunities to make a point, but you can’t be aggressive in all cases. Find the right jurisdiction and the right judge, and make a point with that judge… because they’ve been before that judge and know what will appeal to them. It’s not a replicatable strategy, but it’s effective.

Bedard: Have you thought about defending creditors?

Lemberg: Yeah, in retirement. I like what I do, but I’m not politically attached to it.

Bedard: Is there anyone you won’t sue?

Lemberg: No. I’m an equal opportunity “suist.” I take particular delight in suing a defendant where the attorney is clearly trying so hard to make a point, thinking I won’t ever try to sue them again. Well, I will, and here it is.

Bedard: What advice would you offer to collectors?

Lemberg: Don’t piss people off. When you’ve reached the wrong person, apologize, stop, document the call, and make sure you take responsibility for going to your supervisor and get the number removed from the dialer.