They say that everything’s bigger in Texas. For examples, one could point to everything from cattle, to hats, to oversize pickup trucks. Now add to that list the tumbleweed-sized cojones on Dallas resident Craig Cunningham.

A recent piece by the Dallas Observer details how Cunningham flips the script on debt collectors, takes advantage of their tactics and with some mean m0ves of legal judo actually makes money by suing their asses and winning big.

Of course without being behind on his bills, Cunningham wouldn’t have any problems with collection agencies. His troubles started in 2005, when a combination of failed real estate speculation, huge credit card debt and subprime mortgages sank him and forced him to go into foreclosure on two investment homes.

As you can imagine (or may be experiencing) the bill collectors quickly came a-calling.

Desperate, the now 29-year old Cunningham (who is currently between jobs except for his work as an Army reservist) figured out how to make the hardball ploys used by the debt chasers to his own lucrative ends.  Searching for information in online forums, he was told about the many federal and state laws that protect consumers against unfair debt collection practices.  The told him that if he knew a few basic rules, the odds were good that he could catch a collections agent violating them.  Then he could sue.

Here’s an account of his first bout with the man:

Cunningham armed himself with this knowledge, and the next time a debt collector called, the trap was set.

It didn’t take long. Cunningham had canceled a home alarm service with ADT Security after two months, and the company had billed him a $450 early termination fee, which he disputed. ADT sent his account to Equinox Financial Management Solutions, a third-party debt collector. The collection agency sent him a letter asking that he call back immediately. He dialed, armed with a voice recorder.

“Can you garnish my wages if I don’t pay?” he asked.

“Yes,” the voice on the other end of the line said.

“Can you put a lien on my house?”

“Yes.”

Wrong answers. Turns out, Texas consumer rights laws are some of the most consumer-friendly in the country. And according to a federal consumer protection law, the Fair Debt Collection Practices Act (FDCPA), debt collectors are prohibited from threatening legal action that would violate state laws. In this case, garnishing wages or putting a lien on Cunningham’s house would violate the Texas Debt Collection Act.

Cunningham engaged an attorney and within a few months he had a cool $1,000. This was too easy. He was hooked.

He figured that he could handle these types of complaints on his own and so he ditched the lawyer. So far he has filed 15 other suits in federal court without the help of a lawyer, earning settlements totaling more than $20,000.

He now is regularly able to trap bill collectors in his web and make them pay for their crimes.  And he’s not the only one. There is a subculture of people known to the debt collection industry as “credit terrorists” (although I’d call them debt freedom fighters) and they are good at striking fear into the hearts of callers.

We’re written about the illegal and unethical practices of debt collectors before. Most hire poorly trained staff who are chasing an easy buck and never think that they can get caught on tape.

So if you are being harassed by debt collectors, maybe you’ve just found a new source of income. The Observer article is a fascinating read and an interesting place to learn more about a successful debt freedom fighter.  You’ll also want to learn more about Federal laws governing debt collection and your local statutes as well.

Texans are known for their fight. Saddle up and ride with this one.  Yee-haw!

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