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Debt Harassment News:
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...
AG puts debt collector out of business
Business First of Buffalo - by Matt Chandler
http://www.bizjournals.com/buffalo/stories/2009/05/25/daily19.html
Wednesday, May 27, 2009
Attorney General Andrew Cuomo obtained a court order against Lamont Cooper and his two Buffalo-based debt collection companies Emanee Development Inc. and Dial Tech LLC under which the companies will shut down.
Also, in an announcement made Wednesday, Cooper will be forced to pay restitution to consumers statewide.
According to Cuomo's office, employees at both companies unlawfully lied to consumers, threatened to arrest them and intimidated them into paying debts that they sometimes did not owe. They would call third parties including neighbors or employers to embarrass and harass consumers.
At a time when New York families are already struggling with unprecedented levels of debt, unscrupulous collection agencies add salt to an open wound, Cuomo said. Using fear and intimidation to take advantage of individuals facing debt is a shameful and illegal scare tactic. This judgment is the first step in this office' expanding investigation into debt collectors that violate the rights of consumers and operate outside of the law.
According to the Attorney General's Office, Cooper operated Emanee and Dial Tech, which did business under the names of various shell companies and fictitious law firms across the state, including: Claims Process Services, Claims America, CMC Recovery Services, Lomax & Barnes and Murray, Bradshaw & Associates. Collectors at the companies used various tactics to collect debts including falsely accusing customers of illegal activities, telling them they would be arrested within 24 hours if they did not pay their debt and threatened them with lawsuits, while posing as lawyers.
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Debt Collectors Using Facebook
Posted By: Jessica DuffMay 7, 20009
http://www.todaysthv.com/news/news.aspx?storyid=84670
In today's Web report, Jessica Duff takes a look at the issue of debt collectors using Facebook to contact people that owe money. But is it legal? Apparently it is not legal to use such tactics. It violates both state and federal law. It shows how desperate debt collectors are to track down overdue accounts.
There are people on Facebook that actually work for debt collection agencies. And they may be requesting to be your friend.
Many debtors are having employees create accounts on Facebook. This is what consumer experts are calling facebait. But some debt collectors are getting to be deceptively sneaky.
By Liz Pulliam Weston
http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/SleazyNewDebtCollectorTactics.aspx
It may not be your debt, but it could be your problem. Collection agencies are bullying blameless consumers into paying debts they never owed.
The Minneapolis collection agency repeatedly called Lisa and her husband, Michael, according to a lawsuit filed by the Minnesota attorney general, and demanded that the couple pay a debt owed by one Lisa Sterns. The couple, just as repeatedly, told the collector they didn't know any Lisa Sterns and asked the company to stop calling.
Allied ignored the couple's requests. At one point, the collector insisted that the Burks were lying or, if Lisa Burk were not Lisa Sterns, that she knew Sterns and could tell Allied Interstate where to find her. It took intervention by the attorney general's office for the calls to finally stop.
The Burks' experience with abusive collection agency tactics was annoying. Paul Alappat's encounter with a collector was expensive.
Alappat said he was called two or three times by Buffalo, N.Y., collection agency Capital Management Services about a Chase Bank credit-card debt. Alappat told the collector he had never possessed a Chase Bank card and asked them to stop calling him.
When he applied for a home-equity loan two years later, however, the collection showed up on his credit report. His lender told him that if the $394.74 debt were not resolved, the loan couldn't be made.
"Since I was in a hurry to get the loan approved," Alappat said, "I paid the full amount, including the interest."
By Shalia Dani
April 14, 2009
Tampa Tribune
It's a call nobody wants to get, but 13 million Americans currently face calls from collection agencies trying to recover debt. Collectors are getting more aggressive as defaults and delinquencies rise, Gail Cunningham with the National Foundation for Credit Counseling says. Ignoring the calls and letters won't make the problem go away. Here's what you need to know.
The collector on the phone may work for the company that says you owe it money. The caller could also be from a collection agency hired by the creditor. Increasingly, though, creditors are hiring law firms to call debtors. Don't be fooled into thinking you are being sued just because a law firm is calling. A creditor will usually try to avoid a costly lawsuit, says Gerri Detweiler, creditor advisor with consumer Web site credit.com.
Know the rules
You have 30 days after the collector contacts you to dispute all or part of the debt. The collector must provide written proof from the creditor that you are the debtor. If you decide to fight, answer the collector in writing and keep a copy. Use the 30 days to investigate the debt and figure out how you can pay it off. If it's been 3 to 6 years or more since you first fell behind on the payment, statues of limitation may get you off the hook, but that's little help for new debtors.
By Ryan Singel, March 31, 2009
http://blog.wired.com/27bstroke6/2009/03/woman-sues-debt.html
But that's exactly what her debt collectors did, the Edwardsburg, Michigan resident charges in a civil lawsuit accusing Assets Recovered and Advanced Equity of violating collections law by harassing her online, on the phone and in person. And she wants a minimum of $25,000 for the alleged violations of Michigan law.
Thanks in part to the post on her Myspace page, Newland suffered "damage to her business and community reputation, extreme mental distress, aggravation, humiliation and embarrassment," according to her complaint filed in Michigan state court on March 23.
Under most state laws, debt collectors may not publicize a debt or even tell a debtor's friends, family members or work associates about a debt in order to shame a person into paying. They also must refrain from using abusive or oppressing methods, and generally have to stop calling one's home or work after being asked to communicate in writing.
Stop harassing debt collection calls
Posted: Friday, March 27 2009 at 12:40 pm CT by Bob Sullivan, www.msnbc.com
Harassing calls from debt collectors have become a way of life for many as the U.S. economy has faltered and unemployment soared. Debt collection is big business: About $40 billion each year is recovered from consumers by collectors, according to the International Association of Credit and Collection Professionals. With so much money at stake, aggressive tactics and outright harassment - are common. Last year, the Federal Trade Commission received 78,000 complaints about debt collectors.
In one FTC complaint I've read, a consumer describes this harrowing episode. He was threatened by a collector over a $600 medical bill that he couldn't pay. Out of spite, the collector managed to break the debt up into nine $70 unpaid bills, just so the consumer would get nine separate dings on his credit report.
But you don't have to put up with dirty tricks. Put one phrase in one letter, and you can stop the harassing calls and interruptions. The beginning of the end of a debt nightmare is to get debt collectors off your back. Here's how.
When collection agencies call, they can be rude, threatening, and manipulative. But you have the law on your side. The Fair Debt Collection Act has very clear rules about what debt collectors can and can't do. Naturally, collectors often don't follow the rules, so it's important that you know your rights. Don't let the collectors bully you: Even though you owe someone money, and even if you may feel inferior at the moment, you deserve to be treated with respect and integrity. And you are guaranteed protection under the law.
Brown Forces Sub-Prime Auto Lender to Stop Harassing and Intimidating Borrowers
State of California, Department of Justice
Office of the Attorney General, Edmund G. Brown Jr.
News Release
March 10, 2009
For Immediate Release
Contact: (916) 324-5500
http://ag.ca.gov/newsalerts/print_release.php?id=1693
"This company charged its customers exorbitant interest rates for car loans and then waged an illegal campaign of harassment and intimidation when they couldn't pay up," Attorney General Brown said. "Now Lobel must stop its abusive tactics and comply with the law."
Lobel Financial is headquartered in Anaheim, Calif. but makes loans to customers in Los Angeles, San Diego, Sacramento, the Bay Area, the Central Valley, and other areas of the state.
Lobel provides financing to people with poor credit who purchase vehicles through used-car dealerships. The typical interest rate of their loans is between 21-23 percent. Lobel performed its own debt collection efforts when consumers failed to make the required payments.
By David Migoya
The Denver Post
Posted: 03/04/2009 12:30:00 AM MST
Debt collectors should be barred from sending text messages to consumers without first obtaining their permission, the Federal Trade Commission says in a new report to Congress.
The recommendation is one of several changes the FTC is urging for the Fair Debt Collection Practices Act. The FTC also recommended increases in the amount consumers can collect from rogue agencies it sues, an allotment unchanged since 1977.
"Private actions, not FTC actions, were intended to be . . . the main means of promoting industry compliance with the FDCPA," the report notes.
The advent of new technologies, such as text messaging, opens avenues for collectors to reach debtors but should be restricted if it can needlessly cost consumers additional money.
"Consumers should not have to pay to be contacted by a debt collector," the FTC says in the report issued Tuesday.
The debt-collection act established specific standards of conduct for collection agencies and prohibits abusive, deceptive and unfair practices.
The nature of consumer debt has changed drastically, with mortgage and credit-card debt increasing the most.
Settlement Includes Comprehensive Consumer Complaint Handling, Employee Training
For Release: October 6, 1998
http://www.ftc.gov/opa/1998/10/nationwide.shtm
Nationwide Credit, Inc., of Atlanta, Georgia, has agreed to pay a $1 million civil penalty as part of a settlement with the Federal Trade Commission to resolve allegations that the company violated the Fair Debt Collection Practices Act (FDCPA). The $1 million civil penalty is the largest ever in a debt collection case. According to the FTC, Nationwide's debt collectors harassed consumers, made false and misleading representations, failed to send required validation notices, failed to verify debts when requested to do so by consumers, and made impermissible third party contacts regarding consumers' debts. Many of these allegations are the same as charges the FTC made against Nationwide in 1992. The consent filed in 1992 also prohibited violations of the FDCPA and required Nationwide to pay a $100,000 civil penalty.
The settlement includes a comprehensive consumer complaint and resolution program which was developed by Nationwide's new management and owners. "Under the new program, every consumer complaint about collection practices must be thoroughly investigated and responded to -- I expect the new program to set the standard for handling consumer complaints in the debt collection industry," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection.
The FDCPA prohibits abusive, deceptive and unfair debt collection practices. For example, debt collectors cannot make false statements, threaten to take legal action they cannot or do not intend to take, use profanities or obscenities, call consumers at work if they know it is inconvenient or that such calls are not allowed by the employer, or call consumers at other times they know to be inconvenient to the consumer, such as before 8:00 a.m. or after 9:00 p.m.
According to the FTC's complaint detailing the charges, Nationwide's collectors, on numerous occasions:
*called consumers at work when they knew the consumers' employers prohibited such calls;
*talked with third parties, including neighbors, children, and employers, for purposes other than acquiring location information about consumers, without consumers' consent;
*used obscene or profane language;
*caused the telephone to ring, or engaged a person in telephone conversations, repeatedly or continuously, with the intent to annoy, abuse, or harass a consumer;
*falsely implied that failure to pay the debt could result in arrest, imprisonment, or garnishment of wages;
*threatened to take action -- such as filing a lawsuit -- when they did not intend to do so;
*called consumers at times or places that they knew or should have known were inconvenient;
*failed to notify consumers of their right to dispute and obtain verification of their debts, and to obtain the name of the original creditor; and
*continued to try to collect debts after consumers disputed them in writing, and before Nationwide verified the debts.
"ZOMBIE DEBT RISES FROM THE GRAVE TO GET YOU"
Article posted in 03/25/08 Tampa Bay Times
Article taken from Newsday
But four months ago, a debt collector contacted her, saying she had an unpaid card balance of $5,655 from 1992. With interest, the letter claimed, the debt had grown to $19,400.
As old debt seems to rise from the dead, it's taken on a name zombie debt. And in recent years, more such debt is coming back to haunt consumers, according to lawyers who specialize in debt.
Many credit card companies have started selling delinquent accounts to collectors to boost quarterly earnings, according to a report by Kaulkin Ginsberg, a Maryland-based adviser on debt collection. The collectors then resell some of that debt to other collection agencies.
The debt is often sold for pennies on the dollar. A $10,000 debt might cost a collector just $100. So even if the collector managed to get paid just a few hundred dollars of that debt, the profit margin would be substantial.