Fast Cash International has been calling people harassing them for loans they do not owe. Read more...
Supreme Court Ruling - Debt collectors can no longer use the "bona fide error" defense under the Fair Debt Collection Practices Act. Read more...
Debt collectors becoming more aggressive. Read more...
ARTICLES
Hey, debt collector, wrong number
By Ivan Penn, Times Staff Writer
Published Friday, March 26, 2010
http://www.tampabay.com/features/consumer/how-to-keep-someone-elses-collection-calls-from-bothering-you/1083095#
For almost three years, I have had calls to my home by folks looking for a "Mr. Sanford."
Mr. Sanford apparently had my telephone number in his past, and now I'm the beneficiary of his misdirected calls.
So when Charles Urian of Pinellas Park called me to complain of some 50 calls over the past few months about a debt he did not owe, I could empathize.
Seems a company called FMS (Financial Management Services, a Tulsa, Okla., collection agency) sent the automated calls — now popularly used by collections services — to Urian's home phone.
Urian just wanted the calls to stop, but he couldn't figure out how. The automated recordings just asked him to "Press 1," if he was the debtor.
He wasn't. What's more, the Urians have had their telephone number for some 15 years, so they don't understand how this all happened to them.
"We don't owe anybody," Urian said. "We're on the Do Not Call List. Why do they keep calling?"
Well, the Do Not Call protections are aimed at sales and solicitation calls.
FMS Inc. does not sell products.
"They're not sales calls of any kind," said Cody Smith, a representative at FMS. "The Do Not Call does not apply."
Smith says FMS, just as other debt collectors, receives telephone numbers from companies that are owed money.
"We're not blindly calling anyone," Smith said.
He said consumers should speak with the debt collectors to have their number removed from their lists, if the number is incorrect.
"It should be a simple conversation," Smith said.
It should be. But it isn't all the time.
Urian called the police and then the media, hoping to put an end to it all. He said he could not get the calls to stop and did not know what to do.
He's not alone. Dozens of complaints have been lighting up online complaint boards about FMS because of streams of automated calls.
But FMS does not appear to have violated any laws or regulations.
Frank Dorman, a spokesman for the Federal Trade Commission, said the commission has not taken any action against FMS. But policy prohibits him from releasing information about whether the company is under investigation.
The Better Business Bureau has 52 complaints against FMS, said John Zajac, a spokesman for the BBB. They are largely related to debt collection issues rather than complaints about unwanted phone calls.
And 43 of those complaints have been resolved to the customers' satisfaction.
It appears that Urian should be joining the satisfied complainants, as Smith at FMS said Urian's telephone number has been removed from the call list.
But for those confronting a similar problem, here's the Edge:
• Confront the company. Once you let the company calling you know that you are not the party being sought, it must stop calling you and remove your name from its call list. This can be tricky because some people such as Urian do not have caller ID to know who to call or write, if the call is automated. You might need to get a contact number from law enforcement or a consumer protection agency to help you call the company.
• Report a debt collector for alleged violations to your state Attorney General's Office at www.naag.org and the Federal Trade Commission at www.ftc.gov.
For more information about dealing with debt collectors and what consumers' rights are under the law, visit: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm
Survey: Debt collection calls growing more frequent, aggressive
By Marcia Frellick
January 28, 2010
http://www.creditcards.com/credit-card-news/debt-collectors-become-more-aggressive-break-law-1276.php
Families facing mounting debt and uncertain economic futures often also face increasing calls and letters from debt collectors. Now, consumer debt attorneys say those contacts have become more aggressive, and a new survey finds abuses of the laws that protect debtors are common.
Forty percent of respondents in a national Scripps Howard survey answered yes to at least one of the following questions:
Has a debt collection agency ever threatened you with violence?
Have you or your family ever received multiple calls from a debt collection agency, so many that it seemed to you to be harassment?
Has a debt collection agency telephoned you or your family at inappropriate times of the day, such as before 8 a.m. or after 9 p.m.?
All of these practices are against the law under the 1977 federal Fair Debt Collection Practices Act (FDCPA) -- the law that covers communications and abuses in the collection of personal and household debts, including debt from credit cards, a car loan, a medical bill or mortgage.
Some consumer advocates had reported in recent years that many debt collectors were taking a kinder, gentler approach to dealing with consumers in the wake of the recent economic crisis. This survey of 1,001 respondents, conducted by the Scripps Survey Research Center at Ohio University from Sept. 27 to Oct. 21, 2009, shows that many collectors have not opted to make nice.
Legal experts also say the law is regularly violated, and this is reflected in the volume of complaints about debt collection to the Federal Trade Commission and the National Association of Attorneys General. Consider these statistics:
Debt collection was the No. 1 consumer complaint listed by the NAAG in 2008, above auto sales and home repair/reconstruction.
The FTC gets more complaints about the debt collection industry than any other industry it regulates. In the first six months of 2009, consumers filed 45,050 complaints with the FTC about third-party debt collectors -- collectors who buy up the debt from the original lender. Those complaints are up 19 percent from the same period in 2008.
Contact becoming more frequent, aggressive
Houston-based consumer debt attorney Dana Karni said she is seeing an escalation in aggressiveness of the calls.
"I just recently filed a lawsuit on behalf of a consumer who was threatened with arrest. She and her four minor daughters were home at the end of August, and she got a phone call from the collector," she said. Karni says the collector, who earlier had told her client there was a warrant out for her arrest, left this message on her client's answering machine: "I am making my way towards your area now. I do need a signature here on the summons. I'm over here by a truck stop finishing up my coffee, and then I'll be stopping by. If you have any questions or concerns, I advise you contact this number immediately."
Sometimes it's the number of calls -- not the aggressiveness of the calls -- that constitutes harassment, says Timothy G. McFarlin, an Irvine, Calif.-based attorney. This has become a bigger problem over the years, thanks to innovations such as auto-dialing. "What's really shocking to me is the frequency of the calls," he says. "Collectors have always been very abrasive and angry and try to scare and intimidate people on the phone. But what's new is how frequently. They'll call every hour whether they pick up their phone or not."
David Cherner, director of state government affairs for the largest trade group for debt collectors, ACA International, says he agrees that the number of contacts is increasing. He says, however, that the jump is a natural byproduct of more accounts going into collections over the last two years because of the economy. The Government Accountability Office reports that about 6.6 percent of credit card accounts were 30 or more days past due in the first quarter of 2009 -- the highest rate in 18 years. But Cherner disagrees that collectors are crossing legal lines.
"The debt collection industry understands that, although volume of accounts has increased, the ability of consumers to pay has declined," Cherner says. "I don't believe aggressiveness is going to mean illegal practices, but I think the collection industry is trying to help consumers out by communicating with them about their financial obligations and trying to work toward an amicable resolution."
He said while there are more contacts with consumers, collectors are also increasingly willing to make deals, particularly in working out payment plans. McFarlin says his clients also have seen collectors more willing to deal: "The collection agencies are in desperate times as well. They demonstrate their desperation in being super-aggressive in collecting and then taking anything they can get," he says.
Mistaken identity a common complaint
Among consumers' complaints about collectors is that they have the wrong information when they call. In the Scripps Howard survey, 39 percent of respondents said they were contacted by a debt collection agency about a bill they did not think they owed. Thirty-four percent said they were asked by a debt collection agency to pay an amount they believed was incorrect. This is the kind of complaint that has the FTC and the GAO asking for changes in the law. In its Feb. 26, 2009, report to Congress, the FTC recommended requiring collectors to have more accurate information on the amount of debt and the actual debtor, saying it could boost the prospects for collection and avert collection calls to the wrong person.
TALLAHASSEE — Responding to criticism over inactivity on 4,400 state complaints against debt collectors, Attorney General Bill McCollum and Chief Financial Officer Alex Sink proposed separate measures Tuesday to rein in abusive tactics. The gubernatorial rivals' dueling announcements — coming less than 30minutes apart — further inflamed a weeklong feud that began after the Orlando Sentinel exposed serious cracks in the system designed to protect consumers. The analysis found McCollum's office did little to address 4,400 complaints received this year. His office blamed Sink, even though her office doesn't oversee the Office of Financial Regulation, which licenses the collectors. The fight served as a precursor to the governor's race between Sink, a Democrat, and McCollum, a Republican. Sink declared her support for four reforms that would make it easier to investigate, punish and track problematic debt collectors. "We do need to put more teeth in the laws," Sink said in an interview. "We need some new legislation to prevent these debt collectors from harassing our citizens. "Less than 30 minutes later, McCollum's office issued a statement asking the Legislature for more power to file civil lawsuits against the aggressive debt collectors. In a letter to House Speaker Larry Cretul and Senate President Jeff Atwater, McCollum proposed an initiative to make some tactics an inherent violation of the state's Deceptive and Unfair Trade Practices Act. "I'd like to have the law changed so it's easier to prove," McCollum said at a news conference. "So if my office wants to, we can go to court and shut down those debt collectors. "McCollum said his office formed a taskforce to look at each complaint and work with the financial regulation office.
Is Texting the Next Frontier in Collections?
By Darren Waggoner and Peter Lucas
August/September 2009 Collections & Credit Risk
U.S. CONSUMERS SEND 80 BILLION text messages a month on their cell phones, according to Maynard, Mass.- based Mercator Advisory Group Inc. The number has not escaped the attention of financial service companies, which see "texting" as a way to build communications with customers.
Financial service providers send 12 million text messages per day, reports Mercator. Most of the messages are service-related messages permitted by the account holder - such as alerts sent to notify customers when a transaction has occurred or that a checking account is close to being overdrawn.
"Texting is a channel that consumers consider less intrusive, gets right to the point, and can be used to complement traditional communications channels," says John Messall, director of customer finance services at Overland Park, Kansas-based cellular carrier Sprint Nextel.
The collection industry is concerned, however, that the Fair Debt Collection Practices Act (FDCPA) and state laws are too antiquated to fairly govern the use of text messaging as a means for contacting debtors.
"The biggest concern is that the [FDCPA] and state laws really don't address how to use these new methods of communications," says David D. Chesner, legal counsel and legislative director of state government affairs at ACA International, a trade group for collectors.
Texting is one area where current laws hinder collectors' ability to fully use the technology, Cherner tells Collections & Credit Risk. First, he says, texting offers only a limited number of characters to provide information to consumers. Federal and state laws, however, require extensive disclosures that can exceed the character count. Also, there is a greater likelihood that the text could be inadvertently disclosed to a third party if two people share a cell phone, thus violating the FDCPA.
As the bills keep piling up, here's at least some debt relief: You don't have to take calls or pay the bills for relatives who died and didn't leave enough money to cover their outstanding expenses.
Now, don't go trying to scam bill collectors. (Lord knows, I've got plenty of bills to pay.) Big Mama taught us better than that.
But the Federal Trade Commission issued an alert recently to help consumers understand what their obligations are under the law when it comes to paying the debts of their deceased family members.
"Generally, someone's estate is responsible for paying their debts," the FTC said in its alert. "But if there isn't enough in the estate to cover the debts, they typically go unpaid."
In other words, it's not your problem. Read more...
Widespread Harassment from Phony Debt Collectors Raises Concerns of Mass Data Breach, Warns BBB
WEDNESDAY, 12 AUGUST 2009 04:16 PRESS RELEASE HUMAN INTEREST
HTTP://WWW.ENEWSPF.COM/
Chicago, IL–(ENEWSPF)– Scammers may have Social Security and bank account numbers, home addresses and employer information
Chicago, IL - August 5, 2009 - The Better Business Bureau is issuing an alert about phony debt collectors that are calling consumers nationwide and claiming that they have defaulted on a payday loan and will be arrested if they don't pay immediately. Claiming to be lawyers, the scammers say they are with the "Financial Accountability Association" or the "Federal Legislation of Unsecured Loans" and are equipped with a disconcerting amount of personal information about their potential victims.
"Because the scammers have so much information about potential victims, the BBB is concerned that this may be the result of a data breach," said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. "Thousands of people may have had their personal information compromised, and given the scammers' tactics, it appears that those who have previously used payday loan services could be particularly at risk."
According to reports received by the BBB and posted online, the scammers accuse the victim of defaulting on a payday loan and claim they are being sued. The phony debt collector threatens that, if the victim doesn't pay as much as $1,000 immediately via wire or by providing bank account or credit card numbers, he or she will be arrested and extradited to California within the hour to stand trial. The scammers often may have the victim's Social Security, old bank account numbers or driver's license numbers as well as home addresses, employer information and even the names of personal friends and professional references.
FOX25 Special Report
Updated: Friday, 08 May 2009, 1:43 PM EDT
Published : Thursday, 07 May 2009, 8:15 PM EDT
(myfoxboston) - Job loss, medical issues, and getting over-extended are just some of the reasons why people get stuck in debt. With the economy in crisis, defaults are at an all-time high. Creditors do have a right to the money they are owed. But some of the tactics collection agencies are using can only be described as outrageous.
With her son, Randy, serving a second tour in Iraq, Diane Stadelbauer has enough to worry about.
He was just obnoxious, very sarcastic, Stadelbauer says of the repeated calls from debt collectors, trying to hunt the army soldier down. What kind of a welcome home is this? Your threatening to have legal action waiting for him when he steps back in the country?
Diane says she and her husband received at least 10 calls, even though Randy hasn't lived with them in more than a decade.
They say the collection agency also phoned Randy's sister and even his ex-girlfriend, demanding $7,000 from a 1999 car loan.
It was truly egregious, she said.
And to make matters worse, Randy’s Rhode Island-based lawyer, John Longo, says the loan in question was settled years ago.
By Arthur Delaney
First Posted: 06-12-09
http://www.huffingtonpost.com/2009/06/12/debt-collectors-huffpost_n_214505.html#
The Tompkins County Public Library in Ithaca, N.Y. just can't get a break. Last week the Huffington Post reported that since November, the library has received an angry letter from some lawyer or attorney general every couple days because an unscrupulous debt collector has been giving the library's address to the poor saps the collector has been harassing.
This week, the indirect harassment of the Tompkins County Public Library continues!
"On Monday of this week, our library received yet another mailing addressed to "National Processing Division" from the United States Bankruptcy Court," wrote library director Janet Steiner in an email to the Huffington Post on Wednesday. "We returned it to the post office unopened."
Many HuffPost readers wrote in to share debt collector horror stories.
Rene Thompson of Kentucky wrote that her mother left no estate except a broken-down car when she died in June 2007. Thompson learned first-hand what can go wrong when debt purchased from a credit card company for pennies on the dollar is passed from collector to collector. After her mother died, Thompson wrote, she contacted her creditors to let them know she'd left no estate.
Most were very kind but about two weeks after her death I received a letter from a company asking me to call about one of Mother's credit cards. I called and that's when the hell started. The individual from a collection company started giving me flack for not being willing to pay Momma's bills myself. I explained that I had been on disability for almost 8 years due to an accident and was on a fixed income. He then suggested that I should have used the insurance money Momma left to bury her to pay them! That's about the time I had, as my Momma would have put it, a hissy fit. After the hissy fit, I called my cousin, the attorney.
Consumer Tips Empowering YOU to be a savvy consumer
Posted By Gerri Willis, Personal Finance Editor
Defend against debt collectors
http://tips.blogs.cnn.com/2009/06/08/defend-against-debt-collectors/
June 8, 2009
78,838. According to the federal government, that’s the number of people who formally complained about debt collectors last year. As more and more consumers are falling behind on their bills, the collections industry is trying harder than ever to collect that debt.
According to the Federal Trade Commission, more complaints are lodged against the debt collection industry than any other. And they’re reportedly using technology like social networking sites or cell phone texting to get you to pay up. Experts say we’re just seeing the tip of the iceberg.
1) Know the rules
First, there are strict laws about how debt collectors have to do business. They must identify themselves as debt collectors. They can’t harass you and they can’t talk about your debt to anyone but you or your attorney. You shouldn’t be getting phone calls before 8 a.m. or after 9 p.m. They can’t threaten to sue you if they don’t have any intention to do so. And, they can’t misrepresent the amount you owe.
By Michael Diamond
June 05, 2009 • 10:36 am
http://blogs.app.com/inthemoney/2009/06/05/debt-collectors-face-the-wrath/
You know the drill. Phone rings. You check caller ID. It’s your lender/loan servicer/bail bondsman. They want their money. You don’t have it. You don’t answer. They call again. And again. And again.
A few New Jersey Assembly members feel for you. Democrats John J. Burzichelli, Matthew W. Milam, Wayne P. DeAngelo and Paul Moriarty have introduced a bill called the “New Jersey Fair Debt Collection Practices Act” to eliminate abusive efforts to collect debt. And it would give consumers a way to dispute their claim.
Among the highlights:
*A debt collector can’t call you earlier than 8 a.m. or later than 9 p.m.
*A debt collector can’t call you if he or she knows you are represented by an attorney with regard to the debt. I take it that means you’re filing for bankruptcy.
*A debt collector can’t call you at work. (Leave your cell phone in your car. Comcast keeps calling my cell phone while I’m at work. It’s kind of annoying.)
By James Thomson
SmartCompany
May 28, 2009 10:20am
CASH-strapped companies are turning to debt collectors to keep their companies afloat, with debt collection agency Dun & Bradstreet reporting a 20 per cent rise in the number of debts referred to it in the first three months of the year.
According to D&B's data, the dollar value of debts referred has also jumped sharply, increasing from $900 in the first quarter of 2008 to $1100 in the first quarter of 2009.
While the 20 per cent jump in debt referrals is a concern, D&B chief executive Christine Christian says the most worrying spike was a 146 per cent jump in the number of debts referred between the last quarter of 2007 and the last quarter of 2008.
"These businesses have been backed into a corner," she says. "They realise if they don't move they won't be at the front of the queue. There is only a limited amount of cash out there."
Most debts are being referred with 90 days of their due date, down from around 120 days a year ago.
While companies in New South Wales and Victoria are most common referrers of debt, the biggest spikes in debt referrals occurred in the Northern Territory (up 53 per cent), Queensland (up 52 per cent) and Western Australia (up 42 per cent).
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