Houston-based LTD Financial Services got slapped with $1.3 million in civil penalties to settle FDCPA violation charges.
Washington Mutual issued a press release in response to the action filed by the NY Attorney General. We reported on that action earlier this week.
An astute observation on the passage of BAPCPA: "Be careful what you wish for."
Yesterday, the First Circuit Court of Appeals affirmed a lower court’s ruling that slashed a request for legal fees sought by counsel representing plaintiffs in a Fair Debt Collection Practices Act matter. The FDCPA allows attorney fees on successful claims, and the plaintiffs in this case were successful, but for a variety of reasons, attorneys fee award ended up being a little more than 10% of what was sought. The case should serve as a wake-up call for consumers, attorneys and Congress.
The plaintiffs, a married couple, sued Corporate Receivables, Inc. and one of its employees for abusive debt collection practices (the husband owed the debt). They took their case to a jury and presumably did so with the hopes of getting a significant award of actual damages.
Continue reading "First Circuit: Attorneys Fees Cut in FDCPA Suit" »
From the Houston Chronicle:
Collection agencies are using abusive phone tactics more frequently and the consumer's best defense may be to secretly record the abuse, a panel of Nevada lawmakers was told Friday.A proposed bill would allow Nevada consumers to record phone conversations initiated by debt collection agencies without notifying the agency. The Nevada Supreme Court ruled in 1998 that recording telephone conversations without the consent of both parties is barred under state law.
KCEN-TV out of Texas reports that aggressive debt collectors are bullying our troops overseas. An attorney tells them:
I hate to say it, but they're easy targets. They’re in Iraq. They’re in Afghanistan. They’re at bases across the world and the collectors realize that. They start going after spouses, they start calling commanding officers..
The report suggests that debt collectors "hope military members will quickly fold and hand over money, before they know their rights and realize they're being violated."
When you’re deep in debt, going to the mailbox can feel pretty overwhelming. In fact, I’ve had clients tell me that it’s something that have dreaded on a daily basis. Of course, this time of year, in addition to bills and junk mail, there are also greeting cards from friends and family.
I still get holiday greeting cards from people I have not spoken to in almost 20 years (let’s not let Roy, my associate know that as he’ll only remind me how old I am). Of course, I do not get cards like the one that fellow NACBA member and Hawaii Attorney Stuart Ing recently shared.
I am not sure if it’s funny, or just plain wrong. The artwork is pretty. It is apparently designed by Hallmark artist Johne Richardson (I did not misspell the first name).
The greeting card is fairly inoffensive to the eye. Soothing. A means of conveying peaceful wishes to someone struggling...almost like a sympathy card. And then... I get to the requisite FDCPA language on the inside left. You’ll need Adobe, – but you can check it out here.
I would vote yes. According to The Warren Group, "Massachusetts home sales fell by double-digit percentages in October, and the median sale price of single-family homes dropped 6.9 percent compared to October 2005..." And there's more: "condominium sales dropped 19.5 percent in October, down to 2,226 units sold from 2,765 during the same month in the previous year. The median condominium sale price dropped 4.8 percent to $261,750 from $275,000."
This does not bode well for homeowners who have been hoping for continued growth in home values, which would in turn, allow them to tap into equity and refinance their way out of adjustable mortgages. It doesn't sound like that can happen any time soon.
In a press release, Timothy Warren, Jr. , the CEO of the Warren Group had this to say:
“While we expect the market to stabilize sometime in 2007, it appears as though the housing sector is undergoing a significant correction.”
I have no idea what why he expects the housing market will stabilize sometime in 2007. If anyone has a clue, I encourage you to comment.
The Boston Globe is reporting that J.A.Cambece Law Offices, PC has agreed to pay $75,000 and implement procedures to protect consumers following an investiation from the Massachusetts Attorney General's Office.
Thomas F. Reilly, the attorney general, alleged that representatives of the J.A. Cambece Law Office PC violated state and federal debt-collection laws by using profane language, placing calls to consumers at improper hours, making unauthorized communications with consumers at their places of employment, and failing to provide proof of the validity of debts.The settlement "imposes restrictions on this firm to protect consumers from abusive practices," Reilly said in a prepared statement. "It also sends a message to the collection industry that abusive tactics will not be tolerated."
I’ve often commented on the sad tactics debt collectors use to shake down distressed debtors. Fortunately, there’s no prize for the sleaziest tactics. If there were, Alpine Credit Inc. out of Lakewood, Colorado would win a blue ribbon.
A client of my colleague and fellow NACBA member Will Evans received a letter from Alpine that conveyed this delightful message:
“The bench warrant from your arrest will remain in effect until your judgment is satisfied. We are confident, at some point in time you will be pulled over for a traffic violation, will need to renew your drivers license, or will be arrested at your home. You must post a cash bond before you will be released from jail. Your failure to face the seriousness of this matter will only result in further expenses.”
Interestingly, Alpine Credit apparently touts itself as being “professional”, “ethical” and “legal.” For real.
Will tells me that his client was “…in extreme distress because she was afraid to take her kids to school for fear of being pulled over and arrested in front of them.”
At the risk of sounding unprofessional, what kind of desperate little scum-bag bill collector needs to descend to such levels? I can't imagine it's ethical, and I know it's not legal.
Most people would – if they could - pay their bills. The last thing struggling folks need is a letter like this…and the fear and sleepless nights it spawns. A violation of the Fair Debt Collection Practices Act? You bet. But perhaps more importantly: it's just plain wrong.
The American Bankers Association is telling the Arizona Republic that the new bankruptcy laws (which will have it's first anniversary on Tuesday, October 17) is working as it was intended. Fortunately, there is more than one source for news. Delaware Online reports that after one year, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is not quite doing what bankers had hoped or paid for.
Certainly, bankruptcy attorneys - including yours truly - would agree that there has been a substantial drop in case filings. A Toledo Blade report attributes the drop in filings to higher legal fees and a “difficult” income test. Most bankruptcy attorneys have had to increase their fees since October 17, 2005 due to the increased work on a typical bankruptcy. In many cases, the work has doubled than it was under the old law. However, I am not convinced that the means test is “difficult.” While it’s an extra form, and more paperwork, I cannot say however, it is “difficult.”
What remains difficult is the struggle people face in dealing with debt that's grown out of control. That difficulty is only intensified when debt collectors get ugly. From the Pittsburgh Post-Gazette, this year the Pennsylvania Consumer Protection Bureau has received the highest number of complaints against abusive debt collectors than any other industry, such as telephone companies:
Take the case in which a collection agency telephoned a woman's 5-year-old daughter, ordering her to tell her deadbeat mommy that she'd better pay her credit card bills.
I have to wonder: did the bill collector also tell the 5-year-old that mommy could not file bankruptcy anymore because it was too expensive and there was a difficult income test? I hope not. Debt collectors are not supposed to lie.
Congress has approved changes to the Fair Debt Collection Practices Act. In her blog, Harvard Law School Professor Elizabeth Warren explains why she's not happy about it.
Getting telephone calls from debt collectors can be unpleasant. But what happens when you’re getting hounded by collectors for a debt that is not even yours? How can that happen? Today, the Boston Globe asked those questions and found a system that isn’t working as well as it should or could.
A recent ruling out of the First Circuit Court of Appeals found that GMAC violated a Chapter 7 Discharge Injunction when it refused to release a lien on an automobile unless the Debtors paid the pre-petition balance in full.
The Facts:
The Debtor purchased a 1994 Chevrolet Cavalier which was financed in part with a GMAC loan. Four years later, the Debtor and his spouse filed for protection under Chapter 13 in the US Bankruptcy Court for the District of Maine. A proof of claim filed by GMAC was allowed, and GMAC received approximately 1/3 of the amount in its proof of claim by the time the Debtors found the need to convert their case to Chapter 7.
When the Debtors converted their case, they gave notice on their Statement of Intention that they intended to “surrender” the Cavalier. GMAC then filed a motion for relief from stay seeking permission to pursue its rights under Maine state law. The court granted the motion. The Debtors continued to keep the car and they eventually received their Chapter 7 discharge, which had the effect of erasing all pre-petition obligations to GMAC. Apparently GMAC was not interested in repossessing the vehicle, because they did not think it was cost effective to do so.
In September 1999, the Debtors realized that the Chevy Cavalier was inoperable. Rather than pay to fix it, they opted to simply “junk” it. Under Maine law, salvage dealers require a release of lien. With this information, the Debtors repeatedly called GMAC and asked them to take the Cavalier or release the lien. GMAC’s response was basically “we aren’t doing anything until you pay us every penny owe us.”
The frustrated Debtors, who undoubtedly thought they were through with the bankruptcy process, filed a motion in the bankruptcy court to reopen their bankruptcy case. This would enable them to file an Adversary Proceeding in the bankruptcy court against GMAC. An Adversary Proceeding is a lawsuit within a bankruptcy proceeding the purpose of which is to litigate certain rights and obligations of the parties to the suit. In this case, the Debtors wanted to hold GMAC accountable for violating the Discharge Injunction.
While the case was reopened, the court eventually ruled in GMAC’s favor. The court found
(i) GMAC’s in rem right under Maine law to enforce its lien against the vehicle survived intact the chapter 7 discharge of the Pratts’ unsecured personal liability on the loan;
(ii) by Maine statute, a secured creditor has an unqualified right to refuse to release its lien until the loan balance is paid in full;
(iii) the GMAC refusal to release its lien did not coerce the Pratts to repay their discharged personal liability on the car loan, but simply invoked its legitimate in rem remedies as accorded under Maine law; and
(iv) the situation was no more coercive than had GMAC offered the Pratts a reaffirmation agreement whereby they could consent to repay both the secured and unsecured portions of the loan indebtedness.
Reaffirmation Agreements and Surrender
A reaffirmation agreement allows a debtor in bankruptcy to retain collateral and continue payment terms that are fair and acceptable to both parties. The agreement effectively takes the debt out of the bankruptcy – which is why they should not be entered into casually. But most important for these Debtors, the bankruptcy code expressly prohibits a debtor from being coerced into reaffirming a prepetition debt. The activity must be considered "objectively" coercive. In this case, the Debtors were not interested in reaffirming this debt. They declared their intent to “surrender” the collateral, and took no action to prevent its repossession.
Congress did not define the term “surrender”, so the Court refused to read more into the plain meaning of the word. For example, “surrender” does not mean “deliver.” The Court found it appropriate that if the Debtor’s have declared their intent to surrender the vehicle (which they did) and have made it available for surrender or repossession (which they did too), then the Debtors did all they needed to do.
Forceful Negotiations or Improper Coercion?
The Court noted that here is a fine line between what might be construed as a forceful negotiation and improper coercion. GMAC was resting its laurels on Maine law which allows it to refuse to release a lien until the outstanding balance on the loan is paid. But Maine law is superseded by federal law if federal law dictates a different result.
[E]ven legitimate state-law rights exercised in a coercive manner might impinge upon the important federal interest served by the discharge injunction, which is to ensure that debtors receive a “fresh start” and are not unfairly coerced into repaying discharged prepetition debts.
The Holding
Based on the following:
1. That GMAC expressed that it was not going to repossess the vehicle because it was not “cost effective” to do so;
2. That GMAC conditioned the release of the lien on the payment of an outstanding balance that was covered by the Chapter 7 discharge injunction;
3. That these actions amounted to a demand for reaffirmation, but these actions did not comply with the anti-coercion provisions of the bankruptcy code; and
4. That the Debtors “were confronted with the grim prospect of retaining indefinite possession of a worthless vehicle unless they paid the GMAC loan balance, together with all the attendant costs of possessing, maintaining, insuring, and/or garaging the vehicle.”
The court held that GMAC violated the discharge injunction and the Debtors were entitled to damages.
This case affirms the strong policy behind the strict adherence to the Chapter 7 discharge. Curiously, GMAC did not think it was cost effective to repossess the vehicle. Undoubtedly, it would have been most cost effective to repossess the vehicle or release the lien, rather pay the legal fees and damages it now faces.
Attorneys all over the country are increasingly taking bad debt collectors to task for their abusive tactics. This comes from Texas:
The problem's so bad; the Federal Trade Commission gets more complaints about debt collectors than anything. The tactics of debt collection agencies have been described as heavy-handed and mafia-like.
The IRS is slated to begin its "private debt collection initiative" on September 7. In other words, they are sending private debt collectors out to collect Uncle Sam's money. In anticipation of the occassion, the IRS issued a statement today entitled "Simple Steps Can Prevent tax Scams as Private Debt Collection Begins."
The IRS sees a variety of different scams on different issues. One recent example involves a bogus e-mail claiming to be from the IRS. In this “phishing” scheme, the scam artist’s e-mail claims to be from the IRS, tells recipients that they are due a federal tax refund, and directs them to a Web site that appears to be a genuine IRS site. The bogus sites contain forms or interactive Web pages similar to IRS forms or Web pages but which have been modified to request detailed personal and financial information from the e-mail recipients.In general, all taxpayers should keep in mind the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts. If in doubt about someone claiming to be from the IRS or working on behalf of the IRS, call the agency’s toll-free help line at 800-829-1040.
Today I battled a debt collector who was harassing one of my clients. I enjoyed myself, and I tend to when I know I am right. I am waiting for authority from my client to sue them. Here’s why:
My clients retained me to seek bankruptcy. They told the creditor (Discover Card) – and this collection agency (Nationwide Credit) that I was their attorney and to call me. They did, and on July 17 (shortly after they left a message seeking confirmation of retainer) I called and spoke to them and confirmed representation. But today, they called my client – and told my client that I never returned their call. They also told my client they were going to continue to call her until I returned the call. My client was troubled by this, since it’s my job to help her and her family get through this tough financial time.
So I called and spoke to the collector. She was a peach. She told me they the company never heard from me, and then in the same sentence, acknowledged that “my name was in the system” – and spelled incorrectly (McLeon). I called her out on that and said “if my name is in the system, then clearly you know I am her attorney. Why are you calling my client.” Her reply was that if I would “do my job and return the call” they would not bother my client. Can you sense how that my got my blood to boil?
Retired Massachusetts Bankruptcy Judge Carol Kenner appears in today's Boston Globe with this great op-ed.
In November of last year, I wrote an article highlighting what I perceived to be some of the weaknesses in court rules that are exploited by unscrupulous debt collectors, their attorneys and their agents. I also pointed out in April that in Maryland, debt collectors were indicted. Those collectors were engaging what is called "sewer service": representing to the court that a defendant had been served, when in fact they were not. The term "sewer service" is derived from the presumption that the process papers are tossed in the sewar, rather than properly given to the defendant.
Following last week's series on the debt collection system in Massachusetts in today's Globe, Warren Fitzgerald, president of the Massachusetts Bar Association had this to say:
An amendment to current small-claims rules may be required to ensure that notice requirements are meaningful. In terms of professional debt collectors, requiring them to serve personal notice on an individual who allegedly owes money may be necessary....Collection agencies and their attorneys have every right to pursue people who owe money, but they must do so lawfully. Lawyers in particular are governed by ethical rules that clearly prohibit some of the conduct described in the Globe series. If some lawyers are not obeying the rules, they should face disciplinary charges. Such behavior is an embarrassment to the overwhelming majority of lawyers in Massachusetts who are honest and ethical.
Was the Boston Globe’s four part series this week was just the wake up call that elected leaders needed to seek a revamping of the debt collecting industry? In what appears to be a collective quest to do away with the wrongs cited in the reports, leaders including state attorney general and gubernatorial candidate Tom Reilly to Boston Mayor Thomas Menino are vowing to seek various changes in response to the report.
Too little, too late.
Lieutenant Governor Kerry Healey, the presumptive Republican nominee for governor, said Reilly "has failed to do enough to protect consumers in Massachusetts." But Healey also found fault with the state court system. It has been, she said in a statement, "too lax, loosening notification rules for debt collectors instead of enforcing them to protect average citizens."Deval L. Patrick, one of two Democrats vying with Reilly for the Democratic nomination, was less direct in his criticism. But he said the lack of enforcement is stark evidence that, "at both the federal and state level, the government is on the side of the big players, and not the little guy."
Harvard Professor Elizabeth Warren comments Harvard Professor Elizabeth Warren comments on the four part Globe series I have written about here:
It isn’t just the debt collection agents who get a black eye in this series; it is the government officials who are charged with the responsibility to watch out for the public and who instead made themselves the dupes of out-of-control debt collectors.Do three things: First, read the series. Second, drop an email to the Globe to tell them what you thought—this makes a huge difference on the amount of follow-up reporting. Third, post a blog here about what you thought was the most outrageous act or your view about what is happing.[sic]
I want to taste this awful stuff one more time. The people who were featured in the Globe articles deserve at least that much, and the officials who didn’t help them deserve so much more.
If Professor Warren's weblog is not in your favorites yet, it should be.
I just got through reading many of the comments posted to the Globe’s Spotlight series Debtor’s Hell.comments posted to the Globe’s Spotlight series Debtor’s Hell. They range from folks sharing their own experiences, to other more pompous remarks that the consumers profiled got what they deserved because they should not buy what they cannot afford. The latter reflects a profound lack of understanding of those things in life that push people into debt to begin with.
It’s rare that my clients have not suffered through a divorce, a job loss, a health care crisis, or in some cases, a death of the primary bread-winner. I have represented people who have had to use credit cards to put food on the table. In addition, as I have commented on here, there is a lack of financial literacy education in our schools. If parents cannot control their money, how are their children going to do it?
But more importantly, the latter comments reflect a lack of understanding of how the credit card industry engages in tactics that are not all together dissimilar from a stereotypical loan shark. Default interest rates, interest rates upwards of 20 and 30 percent, and card user agreements that are often stuffed into monthly bills along with advertisements for useless trinkets. The system is one-sided and fundamentally unfair. It is also perfectly legal.
Richard Daniels, a creditor’s attorney, made this astute observation:
''Any system that puts people's backs up against the wall doesn't work,'' he said in an interview. Daniels described the penalties and fees that credit card companies tack onto consumer bills as ''usurious'' and ''totally unconscionable,'' making it impossible for people to get out of debt. Such charges, Daniels declared, amount to ''classic abuse I wish to hell Congress would do away with.''''This used to be an honorable business,'' Daniels said, when discussing collections for credit card companies. ''Now, the guys on the other side are thieves.''
The final of the four part Globe Spotlight series, Debtor’s Hell, asks if regulators and legislators (and in some case gubernatorial candidates) unaware of the debt collection industry's free-for-all or are they simply unwilling to act.
Unwilling? Or simply uncaring?
Every person who comes before the courts in Massachusetts has the right to be treated with dignity and respect, to be accorded an opportunity to present his or her case and to have that case decided in a way that is fair, impartial, and timely. The Boston Globe’s report on debt collection in small claims sessions of the District Court focuses attention on an “industry which has swamped the court dockets with lawsuits.”
The rest is here
The third Globe installment focusing on the hell debtors go through looks at constables as well as county sheriff offices.
The office of constable is as ancient as it is obscure, governed in Massachusetts by laws that date back to the 1600s. One power of the office - never repealed - is to ''take due notice of and prosecute all violations of law respecting the observance of the Lord's day, profane swearing and gambling.''Nowadays, constables, and the deputy sheriffs who perform parallel work, busy themselves delivering subpoenas and other court papers, placing liens on real estate, and seizing personal property to satisfy court judgments - in the case of constables, judgments of no more than $2,500.
Where they differ is in accountability. Constables, for example, can legally operate only in the communities that license them. But that restriction, the Globe found, is often ignored.
Today's Boston Globe installment (the second of a four part series) focuses on the Massachusetts Court system.
[The small claims session] is a de facto arm of a fast-growing and aggressive industry that has swamped court dockets with lawsuits - cases that often lead to threats of jail for debtors.* * *
A Globe review of proceedings and records in 20 of the state's 70 small-claims courts found that court officials and collection lawyers routinely break court rules, almost always to the detriment of the defendant. Collectors are almost never asked to prove the debts they claim; defendants are rarely informed of their rights. And debtors, usually too strapped to afford a lawyer, must contend with this legal mismatch alone.
Today the Boston Globe starts a four part series on the plight of consumers facing debt collectors (it also appears on the front page of the Sunday Globe. The piece describes many issues and I have written about here in the last several months. Even though I have linked it here, you'll only have access to a few pages before you're required to sign in with a user name and password. If you’re not already registered with Boston.com, you’ll need to do so. Registration costs nothing.
How can a debt incurred in 1995 somehow be in debt collection now? It’s called “re-aging.” In other words, debt collectors may do what scientists, philosophers and politicians only wish they could do: turn back the clock. The Dallas CBS affiliate reported on this subject on Tuesday.
I came across this article describing the tactics debt collectors use to get money from financially distressed debtors:
In one outrageous example, a collector for a funeral home threatened, to "rip the bodies" of the plaintiff's parents out of the ground, "put them on his lawn..." and chop their heads off.
Unfortunately, the article is not all together accurate because of this:
With new bankruptcy laws making it harder to wipe out credit card bills, experts say collection agencies feel justified doing whatever it takes to collect.
New York Attorney General Eliot Spitzer has filed suit against Boyajian Law Offices, P.C., JBC Legal Group P.C. and JBC & Associates, P.C. for abusive debt collection practices and activities.
The suit alleges that the Boyajian companies (1) used dunning letters and falsely stated or implied that they came from attorneys; (2) falsely accused debtors of criminal activity, and threatened debtors with arrest; and (3) failed to supply verification of the debt when requested to do so.
In addition, they were apparently trying to collect on bad checks which were more than 6 years old - and in New York, the statute of limitations for bringing such a claim is 6 years. According to a report here the outfits were apparently collecting checks made payable to Ames and Bradlees, two retailers than have long since been out of business.
Boyajian released this fascinating statement:
"Our clients deserve the full protection under New York law to recover their losses from those who passed bad checks, regardless of the time period that may have elapsed," he said. "Instead of protecting the consumers, it appears the Attorney General of New York is seeking to protect bad check writers who have written checks in the past." [emphasis added].
This debt collector is saying "I don't care what the statute of limitations says"! Boyajian (who is reportedly a lawyer in California) is defending himself and his companies by saying that he does not care what the law says. And it's not like he could have been misquoted - this was from a written written statement.
Are these entities and are these activities what Congress is thinking of excluding from the Fair Debt Collection Practices Act? If it is, then consumers - and attorneys general in all 50 states need to be concerned.
See my prior posts:
The Fair Debt Collection Practices Act is a federal law that gives many protections to consumers. While the law has broad sweeping effect across the nation, states and municipalities are allowed to enact even stronger protections.
In response to a 70 percent increase in consumer complaints in two years, the New York City Department of Consumer Affairs held information gathering hearings, and may propose tighter restrictions on debt collecting agencies.
"People ought to pay their debts," Jonathan B. Mintz, the city commissioner of consumer affairs, said during a break in the five-hour hearing. "But when debt-collection companies cross the line, which unfortunately they appear to be doing in an increasing way, then something has to change."
Read more about it in the New York Times.
Last month I wrote about pending legislation that would amend the Fair Debt Collection Practices Act to exclude companies that collect bounced checks. In today's Orlando Sentinel, Jeff Gelles shares his point of view:
...it seems only fair that people accused of a crime should be told forthrightly who's sending them letters or answering their calls. If these programs rely on deception, something is wrong.
In today's Hartford Courant, Washington Post columnist Michelle Singletary comments on the amendments to the FDCPA to exempt "check-diversion" companies now under consideration in the Senate:
Every consumer ought to be paying attention to this legislation because if it passes (it's already been approved by the House and is now being considered by the Senate), it will erode our consumer rights - not our right to bounce checks, but our right to be treated fairly when we do make a mistake.
See the May 3 blog entry for additional informaton on this legislation.
USA Today is reporting today:
A private debt-collection firm tapped by the IRS to seek repayment from Americans who owe back taxes has been tangled in legal controversy, including a bribery scheme involving a collection contract in Texas and a federal investigation of another collection deal in Louisiana.
An interesting development indeed.
The Senate Banking, Housing and Urban Affairs Committee is considering legislation that will exempt from the Fair Debt Collection Practices Act the for-profit companies who collect on bad checks. The House passed similar legislation last year. According to a report in today's Baltimore Sun, the legislation is supported by the National District Attorneys Association, as well as prosecutors who go after people who write bad checks.
But consider this: the Sun report noted that a 35-year old contract specialist with the Justice Department bounced a $21 check at the grocery store. The bounce was an accident - changes were made to the check writer's savings account, and the overdraft protection did not kick in when it should have. When she noticed the check did not clear, she contacted the grocer.
But she said it was too late. A letter from a check-diversion company - but appearing to be from the district attorney's office- threatened to criminally prosecute her if she didn't pay about $181 and take a financial management class, she said. Afraid, [the check writer] said, she paid the fee rather than fight it."There is no reason to feel threatened and afraid in that way and intimidated," [she] said yesterday.
Who hasn't bounced a check by accident? There are lots of reasons: you forget to write down a debit card purchase, or you forget to carry the two. Not everyone is committing fraud, and not everyone gets a criminal charge filed against them.
It would appear that once again, Congress is trying to address a small problem with a big change in the law....much like it did when it passed the Bankruptcy Abuse and Consumer Protection Act in 2005 to address what it perceived was widespread fraud in the system.
I sure am glad it's an election year.
The Washington Post is reporting that debtor collectors are asking the Federal Communications Commission for authority to use automated dialers to call a debtor's cell phone. Currently, if a bill collector wants to call a debtor on a cell phone they have to (gasp!) actually dial the number.
This request follows the report issued last week by the Federal Trade Commission showing an increase in complaints against debtor collectors.
When I wrote an article on reforming the Rules of Civil Procedure to address a loop hole being exploted by debt collectors, my focus was on Massachusetts. However, the Maryland Attorney General has managed to get indictments against two Baltimore Debt Collectors for what is aptly described as "sewer service": representing to a court that a defendant has been served, when in fact they have not.
I know it is happening in Massachusetts. That knowledge is what prompted the article.
If you find yourself being chased for a Massachusetts "judgment" stemming from a lawsuit you were never properly served with, contact me. The only way we can stop them is to fight back.
The number of complaints against abusive debt collectors is increasing according to a report by the Federal Trade Commission.
An old client called today to tell me about a problem he was having with a bill collector. It seems he fell behind on their credit card payments, and the credit card company sent the account out to two different collection companies who took turns calling (or harassing) the client.
While on the phone with one of the collection companies, the client offered to pay some money towards the account and asked for an address to where the check should be sent. The response was “we’ll settle it today for ‘x’ amount.”
The client jumped at the chance to get these boneheads off his back and off his phone.
“I’ll accept," he gleefully responsed. " Where do I send my check?”
The response:
“We don’t want your check. We want your bank account information and we’ll do a transfer.”
Smell a rat? I did and you should.
Continue reading "Don't Give Collectors Your Account Information" »
You get yourself a new credit card and think, ‘hey, my kid is going off to school….I’ll give him one too.’ Or perhaps ‘I’ll give one to my elderly mother, just in case of an emergency.’ Then you encounter some financial problems, and end up defaulting on the credit card agreement. You may even contemplate bankruptcy. But you’re confident that your mom and your son won’t get stuck with the credit card bill. After all, you signed it. You applied for it. You made the decision to give it to them. Indeed, you even paid the bill….when you could. They are not going to try and collect it from them.
Think again.
Continue reading "You and Your Credit Card Terms: What You Don’t Know may Bite the Ones You Love." »
If you remembered my October 17 entry, I mentioned the price in gold and how I expected it to rise. Quiet whispers using the “I” word (“inflation”…shhhh!) will also mention that precious metal that tends to fare better when the dollar value goes down.
With that in mind, one might expect to hear stock tips on gold mining companies, or gold and other precious metal ETFs. One might want to check out sites that discuss gold investing, such as www.kitco.com or www.financialsense.com. However, with a bit of shock and awe (and not a good “awe” I might add), I learned that in this peculiar economy where credit card defaults are at an all-time high, the stocks investors are taking a second look at are those of (gulp) debt collection companies.
For real.
Continue reading "Who are the Debt Buyers beating that lets them beat the S&P?" »
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