Sounds good to me! Once a court has dismissed a case twice, it can be pretty difficult to successfully prosecute it on the third try. You were smart enough to recognize this and use it as leverage. Good job!
I've represented debtors for four years, primarily in bankruptcy litigation matters, but I've also done several FDCPA and FCRA claims.
If people would consistently enforce their rights under the law, collection agencies would effectively be shut down. They would be buried in validation requests, stimied by cease and desist orders, and gouged by legal damages.
But the biggest hit of all would come in the form of debtors who actually defend themselves in court. Right now, collection agencies boast a HUGE default judgment rate. So they don't really expend all that much in legal fees, in the aggregate, when they decide to sue. In my early days of practicing law, I was getting paid $50 a case to file an appearance and complaint for collection agencies. Then, the 90% of the time where the debtor failed to answer the complaint or show up for court, I would get another $25 to file a motion for default judgment.
So the vast majority of the time, the agencies that contracted with me were receiving judgments for $75 plus filing fees. If the debtor did file answer or effectively defend themselves at the initial hearing (which doesn't take much), the cases would be referred to a big firm and the cost to the collection agency would skyrocket.
So right now the collection agencies are profitable, but that could definitely be changed. But I've always failed to see how they make economic sense per the original creditor. Even if the debtor pays up, the creditor is still losing, on the average, at least 50% of its claim. Plus, an original creditor is not bound by the FDCPA and can do quite a bit more to collect on its debt than the collection agency. Original creditors are also statistically more likely to actually collect on their debts.
So I don't even know why companies use collection agencies rather than doing their collections in-house. The only things I can think of are that they think the collection agencies are experts at squeezing money out of people, or that the creditors don't want the ill-will that comes with collections.
So there's my diatribe. While compiling your "debtor's manual to shutting down the collection agencies" consider this little trick I discovered: the libel claim!
This is how it works. Libel generally consists of a false statement made with knowledge of the fact that it is false or a "reckless disregard for the truth." So say a collection agency reports an erroneous or inflated debt to a credit reporting agency. The debtor disputes the debt with the collection agency and the CRA, providing as much evidence as possible showing that the debt is wrong.
So now the collection agency and the CRA have evidence showing that the debt as reported is incorrect. If they do nothing to fix the matter, then the publishing of the erroneous debt in a credit report could constitute a "false statement made with reckless disregard for the truth" and the debtor now has a possible libel claim (in addition to the FDCPA and FCRA claims) against the collection agency, the credit reporting agency, and possibly the original creditor.
Something for you to think about. Best of luck!