Archive for the ‘Debt Collectors’ Category
Firm Also Will Notify Consumers with “Time-Barred” Debt That It Will Not Sue to Collect
One of the nation’s largest consumer debt buyers has agreed to pay a $2.5 million civil penalty to settle Federal Trade Commission charges that it made a range of misrepresentations when trying to collect old debts. In addition, the company, Asset Acceptance, LLC, has agreed to tell consumers whose debt may be too old to be legally enforceable that it will not sue to collect on that debt.
The proposed settlement order resolving the agency’s charges also requires that when consumers dispute the accuracy of a debt, Asset Acceptance must investigate the dispute, ensuring that it has a reasonable basis for its claims the consumer owes the debt, before continuing its collection efforts. The proposed order also bars the company from placing debt on consumers’ credit reports without notifying them about the negative report. The U.S. Department of Justice filed the proposed settlement order this week at the FTC’s request.
“Most consumers do not know their legal rights with respect to collection of old debts past the statute of limitations,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “When a collector tells a consumer that she owes money and demands payment, it may create the misleading impression that the collector can sue the consumer in court to collect that debt. This FTC settlement signals that, even with old debt, the prohibitions against deceptive and unfair collection methods apply.”
The FTC’s action – alleging that Asset Acceptance violated the FTC Act, the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act – is part of the FTC’s continuing efforts to protect consumers adversely affected by the struggling economy. The agency today also issued a new publication for consumers, “Time-Barred Debts: Understanding Your Rights When It Comes to Old Debts”.
Michigan-based Asset Acceptance buys unpaid debts from credit originators such as credit card companies, health clubs, and telecommunications and utilities providers, as well as other debt buyers, and attempts to collect them. Asset Acceptance has purchased tens of millions of consumer accounts for pennies on the dollar. It targets accounts that other collectors have pursued and are more than a year past due, and in some cases attempts to collect debt that is more than 10 years old. Some of this debt is too old to be legally enforceable – state statutes of limitations cut off the right to sue to collect the debt after some period of time has passed, depending on the state and the type of debt. And many consumers do not know that making a partial payment of a debt may reset the state law’s clock on the collector’s ability to take legal action.
The FTC’s nine-count complaint charged Asset Acceptance with:
- misrepresenting that consumers owed a debt when it could not substantiate its representations;
- failing to disclose that debts are too old to be legally enforceable or that a partial payment would extend the time a debt could be legally enforceable;
- providing information to credit reporting agencies, while knowing or having reasonable cause to believe that the information was inaccurate;
- failing to notify consumers in writing that it provided negative information to a credit reporting agency;
- failing to conduct a reasonable investigation when it received a notice of dispute from a credit reporting agency;
- repeatedly calling third parties who do not owe a debt;
informing third parties about a debt;
- using illegal debt-collection practices, including misrepresenting the character, amount, or legal status of a debt; providing inaccurate information to credit reporting agencies; and making false representations to collect a debt; and
- failing to provide verification of the debt and continuing to attempt to collect a debt when it is disputed by the consumer.
The proposed settlement requires that when Asset Acceptance knows or should know debt may not be legally enforceable under state law – often referred to as “time-barred” debt – it must disclose to the consumer that it will not sue on the debt and, if true, that it may report nonpayment to the credit reporting agencies. Once it has made that disclosure, it may not sue the consumer, even if the consumer makes a partial payment that otherwise would make the debt no longer time-barred.
The order also prohibits the company from:
- Making any material misrepresentation to consumers and making any representation that a consumer owes a particular debt, or as to the amount of the debt, unless it has a reasonable basis for the representation. To ensure it has such a basis, the order requires Asset Acceptance to investigate consumer disputes before continuing collection efforts;
- “Parking” – or placing – debt on a consumer’s credit report when it has failed to notify the consumer in writing about the negative report, and;
- Violating the Fair Credit Reporting Act and the Fair Debt Collection Practices Act, in the ways alleged in the complaint.
The FTC has issued a new publication to help consumers understand how debt collectors attempt to collect old debts, along with their rights in these cases. “Time-Barred Debts: Understanding Your Rights When It Comes to Old Debts” provides information on when a debt is too old for a collector to sue, what consumers should do if a debt collector calls about a time-barred debt, and whether a consumer should pay a debt that’s considered time-barred. It also provides advice on what consumers should do if they are sued for a time-barred debt, including defending themselves in court and asserting their rights under the Fair Debt Collection Practices Act. Finally, it has links to other FTC publications and videos about dealing with debt.
The Commission vote authorizing the staff to refer the complaint to the Department of Justice was 4-1, and the vote to approve the proposed consent decree, was 3-1, with Commissioner J. Thomas Rosch voting no for both. The DOJ filed the complaint and proposed consent decree on behalf of the Commission in U.S. District Court for the Middle District of Florida today. The proposed consent decree is subject to court approval.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the District Court judge.
Story Source from: Under FTC Settlement, Debt Buyer Agrees to Pay $2.5 Million for Alleged Consumer Deception
Debt collectors have been known to use various techniques to secure payment, some of which violated the Fair Debt Collection practices act (FDPCA). This can include pestering debtors, their friends, relatives and co-workers with calls at inappropriate times and places. In other cases, debt collections for debts of the dead, can rise from the grave too, but in ways that they shouldn’t. Debt collectors have been known to call loved ones and others to pay off the debts of their dearly departed. Is this outrageous? We think so.
Aside from being callous, post-mortem debt collector calls are deceptive as relatives of the deceased are typically not responsible for the debts, unless the debt was joint among the deceased and the living. Playing on the lack of knowledge of the average consumer, and perhaps believing that the memory of the deceased would be tarnished in some way, debt collection agencies will call relatives and try sympathy tactics to convince the living that they should or must pay off a debt. The debt collector may not actually inform the bereaved that they have to pay the debt, but they will read from a script that is convincing enough to give that impression and to omit the fact that the living are not required to pay it.
Debt collection agencies justify such tactics with a cold heart and insensitive mentality, taking advantage of loved ones still saddened by the passing. Consumers beware: in the vast majority of cases, you need not pay the debt of someone who has passed. Check with a good consumer lawyer and find out how to protect yourself and to stop this practice.
A NJ man recently received phone calls from someone claiming to be a debt collector. As it turns out, he paid his loan back months ago but the phony collection calls still tried to scam him out of hundreds of dollars. He’s telling his story to warn others of the threatening calls and collection harassment he is experiencing over a debt he does not owe. Experts say be careful leaving your personal information on any website, and contact the proper authorities if you are the victim of such calls – including an attorney who will fight for your rights.
The Federal Trade Commission (FTC) alleges that debt collection agency, West Asset Management, violated the Fair Debt Collections Practices Act (FDCPA) on multiple occasions, leading to thousands of consumer complaints.
Century Negotiations President Amy Michalo-Rojas urged clients, and the general public, to stay informed about these types of cases so they can recognize when a debt collector violates their legal rights.
West Asset Management allegedly violated the FDCPA—the law designed to protect consumers against deceptive and harassing debt collection tactics—by calling consumers multiple times a day, using rude and abusive language, taking funds without consumer permission, falsely claiming consumers would be jailed or sued, and even contacting consumers regarding debts that did not belong to them.
“Many factors can inspire a debt collector to break the law, from an unethical work environment to the challenge of collecting in a recessed economy,” explained Michalo-Rojas. “But individual consumer awareness and reported complaints can stop these violators and warn potential lawbreakers against similar behavior.”
Read the entire story here: Unscrupulous Debt Collection Agency Pays Record Settlement, Offers Lesson in Consumer Awareness, Says Century Negotiations
Computers are used to keep track of everything from personnel records, to bank accounts, to loans and revolving credit. When computer glitches occur, they can create havoc in your life. Just ask Daniel DeVirgilio, an Ohio man who recently received a cable bill for $16.4 million. An engineer at Wright-Patterson Air Force Base, he did the math and came to the conclusion that he would have to order 1.6 million on-demand movies or one pay-per-view fight 4,000 times in order to accumulate charges that high. Time Warner issued a statement saying they will work together with DeVirgilio to resolve the issue, but not every victim of such computer bugs is so lucky.
Take Patrice Perry, a client of our firm, for example, who received an even crazier bill from Capital One bank for $286,651,237 in 2009. After receiving repeated phone calls at work and at home by Capital One collectors, she retained counsel. Then she was sued and when she went to Court to defend herself, Capital One didn’t show up. Months of torment ensued, including phone calls to family members and co-workers and a refusal to cease harassing her. After being sued for debt harassment by our firm, Capital One released a statement blaming “human error” for the billing letter but they never commented about their harassing acts. Blaming a computer for sending a letter that also happened to increase the level of harassment was not the only thing happening here. For months, this consumer endured a living hell every time she picked up her phone or opened her mailbox, wondering what Capital One would try next.
Whether it’s a computer glitch or someone intentionally causing the computer to print a letter that was knowingly outrageous, companies will hide behind these excuses to justify the unfair practices they use with their customers. Have you received such a letter? What can you do if you receive a bill of much more than you could ever owe? Debt collectors must comply with the FDCPA even if the debt or the amount claimed is accurate or not. The Act was put in place to protect consumers by enforcing fair debt collection practices. If you or a loved one is experiencing harassment at the hands of a debt collector, contact an experienced attorney who will stop collection calls, end the harassment, and correct your bills once and for all.
In most cases, people who receive collection calls accrued the debt themselves and have fallen behind on their payments. In some instances, however, these charges are a result of identity theft. Because people rely on technology to pay bills and make banking transactions, it is important to stay protected against hackers and Internet fraud. The best way to avoid collection agency harassment is to reduce the risk of having your identity stolen in the first place.
Consumers who use debit cards should check their account activity frequently. Every major bank has an online banking option which makes it quick, convenient, and free to monitor checking accounts. Anyone who comes across questionable or suspicious transactions on their statement should contact the bank as soon as possible.
Credit cards are better protected against fraud. Therefore, they should be used for online shopping and other Internet transactions instead of debit cards. Information shared online runs the risk of being stolen by hackers and used without your knowledge or consent. Again, people who suspect their accounts have been used fraudulently should contact the credit card company immediately.
Collection calls only begin once payments have not been made for a significant amount of time. Regular credit checks are a surefire way to stop theft in its tracks. Some criminals can open new cards in the victim’s name; in some cases, the only way a person knows that this new account exists is by seeing it on their credit report. Credit scores are very sensitive to missed payments, and even a fraudulent card can have a negative impact on your score for a while.
It is important to understand why collection calls feel like harassment in order to deal with the stress they create.
Many Americans have fallen behind on their credit card, mortgage, and/or car payments because they have experienced some form of financial difficulty. This causes stress on the individual, as well as family and friends that are affected. To make matters worse, collection agencies are making harassing collection calls about past-due accounts on a daily basis. These agencies use fear tactics on vulnerable people for one purpose: to make money.
When a consumer falls behind on their payments, creditors often retain debt collectors or sell the debt to them for a fraction of the total debt. Now, it is up to the collection company to turn a profit for themselves by collecting as much money as possible. It is typical for these agencies to pitch a “deal” to settle for less than the original debt; in fact, they are still making a profit because they bought the debt for far less. This is when the debt harassment starts.
Debt collectors will often use threats and lie to the consumer to try to force a payment out of them. They will up the ante even further to squeeze as much money out of the person as they can. This causes added stress and anxiety on the consumer who is already overwhelmed by their finances in the first place. Even though some of the tactics they use are unethical, collections companies continue to use them for financial gain.
It is important for people in this situation to remember to stay calm. Many of the intimidation practices used by debt collectors calling the home or office are empty promises. If the threats feel like harassment then an experienced debt collection lawyer can help you learn your rights and stop the deception once and for all. Otherwise, taking positive steps to get out of debt is the best way to stop collection calls.
While millions of Americans must grapple in this difficult and topsy-turvy economy, some businesses continue to thrive. In fact, Portfolio Recovery Associates, Inc., a company that purchases, collects, and manages consumer debt, are reporting record-breaking profits.
Portfolio Recovery Associates, like other debt collectors, makes money by purchasing consumer debts from creditors, banks and other financial institutions. As defaulted debt or late pay debt increases, buyers and debt collectors like Portfolio Recovery Associates see their revenues rise as well. From 2009 to 2010, Portfolio Recovery Associates experienced increases in net income of 66% from $12.4 million to $20.6 million. At the end of their fourth quarter of 2010, Portfolio Recovery Associates’ total revenue rose 38% from 2009 for a record $100.8 million.
Isn’t it ironic if not more than a little bit aggravating that the success of debt collectors, like Portfolio Recovery Associates, has a banner year while most Americans struggle with loss of income, jobs and being choked by debt? Debt collection and debt buying are not on recession proof; they are recession successful. As Americans fight to pay off accumulated debt, collection agencies flourish.
Of course, someone needs to do the collecting, it is just that when collectors deal with so much business in response to market conditions, it makes one wonder if the abusive behaviors consumers complain about will rise as well and/or if all the FDCPA protections are being complied with . The next time you receive an aggravating or uncivil collection call, remember that you have rights, and you don’t have to tolerate abuse.
Are you experiencing debt harassment? Collection agencies often prey on consumers. Why? Because it is in their best interest to scare consumers into paying. Creditors often use collection agencies to recover funds on delinquent accounts. The collection agencies are handsomely paid for their services, which often involve nagging collection calls and a barrage of written notifications.
Are you aware of your rights as a consumer? Have you heard of the Fair Debt Collection Practices Act and debt collection laws? You don’t have to be intimidated or anxious about your limitations in knowing the law. Help is available. To start, view the video to become more aware of tactics employed by credit collectors.
Debt harassment attorney Craig Thor Kimmel speaks with Jim Donovan from CBS Philly about the abusive practices of debt collectors:
In 2008, Portfolio Recovery Associates Inc. was sued for fraud after affidavits were submitted bearing the name of Martha Kunkle, who died in 1995.
It appears that Martha Kunkle has come back to life. Last July, lawyers for Portfolio Recovery Associates sought judgment in a lawsuit against a Seattle woman for $2,892.10 in credit-card debt and interest that she allegedly owed. It was a fairly standard debt-collection case except that Portfolio included an affidavit signed by Martha Kunkle to vouch for the debt’s validity.
A spokeswoman for Portfolio Recovery said the document was “inadvertently used by our outside counsel” because of “human error,” adding that the suit was dropped later “upon review of the case.” She also stated that Mrs. Kunkle’s name does not appear on any other affidavits submitted in other cases.
This practice of robo-signing, in which affidavits are signed without fully reviewing underlying documentation, is more common in debt-collection cases than foreclosures.
Minnesota Attorney General Lori Swanson is investigating numerous debt buyers debt collectors for this practice of falsifying affidavits. Missouri Attorney General Chris Koster said he wants to investigate whether Martha Kunkle’s name appears on any affidavits used to collect debt in the state of Missouri.
Concerns about Ms. Kunkle’s affidavits were raised in 2008 by lawyers for Jeanie Cole, one of thousands of Montana residents sued by Portfolio Recovery Associates to collect debts. After failing to locate Ms. Kunkle, lawyers for Ms. Cole interviewed her daughter, who worked at Providian in a document-processing division. Providian National Corp, a credit-card issuer, sold a number of delinquent account balances to Portfolio Recovery Associates and other debt collectors, which then sued the borrowers to collect the debt.
The daughter testified in a deposition that other Providian employees used the name Martha Kunkle when signing affidavits. Along with other employees, the daughter was responsible for signing affidavits. After counter suing Portfolio Recovery Associates for alleged violations of the Fair Debt Collection Practices Act, Ms. Cole was the lead plaintiff in a 2008 federal-court suit in Montana alleging the company targeted 16,000 borrowers using “false and misleading” affidavits.
Article Source: Dead Soul Is a Debt Collector
