Debt Collection Abuse Protections For Consumers In NY

Trying to protect the public from the "exploding" collections industry, the New York state Assembly has passed a series of bills aimed at fighting abusive and unfair collection practices in New York State.

The package of bills includes amending the state Debt Collection Practices Law to create a private right of action by a debtor who has been a victim of improper debt collection practices. This would be a critical addition to state protections in light of the debt collector's trade group, ACA International, hiring a Washington lobbyist to kill an individuals' right to file a private suit against abusive debt collectors.

The legislation passed by the Assembly would also prevent collectors from seizing income that is exempt from collection under state and federal law, such as Social Security and veterans' benefits.

RJM, CACH, Asset Acceptance, LVNV Funding And Other Zombie Debt Collectors Jamming Civil Courts

RJM, CACH, Asset Acceptance, and LVNV Funding collection agencies are well known to victimized consumers and consumer attorneys. What is now becoming clear to the media, however, is the scale of their actions.

In Chicago, for example, more than 119,000 civil lawsuits against alleged debtors are clogging courtrooms, and at least half will result in judgments that debt collectors will use to dock wages, seize bank accounts and file liens against homes, compounding the woes of troubled borrowers.

But because debt collectors operate on volume, pushing through lawsuits based on little more than lists of names, addresses and alleged amounts due, there are also plenty of instances of mistaken identities, cases where debts are alleged when the bills have been paid and even situations where people have fallen behind and tried to work out repayments only to be hauled in to court.

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Pacific States Credit Owner Arraigned On 111 Counts

Jeff Allan McCoon owns Unifund, a debt buying company and Pacific States Credit, a collection agency. He uses Unifund to buy debts from other companies and then collects the debts through his collection agency, Pacific States Credit, by tracking down property possibly owned by the alleged debtors and filing liens against it. If the alleged debtors ever want to sell the property, they have to pay the liens first, whether they actually owe a bill or not.

So what? Many debt buyers operate on just such a business plan, leading their accounts to be known as zombie debts that never die. The difference in the Jeff Allan McCoon method, however, was not going to court to obtain a civil judgment but filing the liens anyway as if he had obtained a judgment.

The Sacramento County District Attorney's office is not amused.

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What To Do When You Have Been Sued By A Debt Collector

Indiana consumer attorney Robert Duff has a good article on what to do when you learn you are being sued by a debt collector. The post examines the problems debt collectors have in proving their cases and why it is important to seek representation even if you are knowledgeable about consumer rights.

"I understand that debt collection is a business, but that doesn't mean you can cut whatever corners you like in search of the almighty dollar. I've seen too many people's lives and well-being injured by greedy debt collectors. I don't think there is much of a difference between a debt collector who sues the wrong person because their practice is to attempt to collect debts without the appropriate documentation and a bus company who injuries a customer because they neglected maintenance on their bus."

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Portfolio Recovery Collections Does Not Let The Facts Stand In Their Way

Q: Is anyone else getting bizarre calls from Portfolio Recovery? They say I owe on a Visa bill from 1993! I told them I did not and they keep calling with threats and insults. I told them to take me to court and get a judge to order me to pay after they prove the debt is real.

The calls started sometime last summer and this is the first I've heard that I owe money from 1993. Are these people are valid company or are they manufacturing /buying fake debt records? To what government agency can I report them to?

A: Everybody must get calls from Portfolio Recovery. They get sued all the time for violating consumer protections and there are hundreds of complaints against them on consumer websites. Not surprising for a debt buyer that places old and unproven collection accounts on credit reports without contacting the consumers to see if it is the right person. It is somewhat surprising their stock (NASDAQ:PRAA) has tanked to under $40.00 from over $60.00 though. How can you cheat so much and still not make money?

Even if the account was with the right person they cannot sue to collect a bill past the statute of limitations however. Nor can they place a 1993 bill on a credit report. Since they are a collection agency they have liabilities under the FDCPA which do not allow them to threaten to take action they cannot legally perform. They know all that but hope you don't.

Contact a consumer attorney in your area to have them review your Portfolio Recovery information. Portfolio Recovery might just need a cease and desist letter. Or they might need a lawsuit.

Midland Credit Management Buys Debt Cheap And Wins Big

Encore Capital Group, AKA: Midland Credit Management, spends lots of time and money defending itself in court for violating federal consumer protection regulations. So much so that some might wonder how they still make money.

Today's New York Times sheds some light on the profit strategy. Encore Capital Group, AKA: Midland Credit Management, buys alleged charged off debts for pennies on the dollar from original creditors with little documentation or proof of who really owes what if anything. Then they send the collections work (files with social security numbers, dates of birth and other private information) to India, where call centers of telephone debt collectors work for 25% of American wages calling tens of thousands of Americans an hour. If you don't pay much for the paper or the bill collectors you can be wrong a lot and pay a lot of fines in federal court and still get crazy rich.

As a bonus, if the Indian debt collectors can talk somebody into monthly payments on an alleged debt so old that it is beyond the statute of limitations, the statute of limitations clock is restarted, allowing Encore Capital Group, AKA: Midland Credit Management to file suit against the unsuspecting American consumer.

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Debt Collectors Mann Bracken and Creditors Receivable Management Named In Federal Class Action

The often sued Mann Bracken, LLC and Creditors Receivable Management, LLC have now been sued in a class action for violations of federal debt collection laws on behalf of clients of Hess Kennedy, the Campos Chartered Law Firm and the Consumer Law Center.

Hess Kennedy, the Campos Chartered Law Firm and the Consumer Law Center are all law firms providing services to consumers with a specific focus on evaluating the actions of creditors and credit collection agencies and their compliance with Federal and State consumer protection laws such as the Fair Debt Collection Practices Act, Fair Credit Billing Act and the Fair Credit Reporting Act.

If you or someone you know is the victim of illegal activities by Mann Bracken, LLC or Creditors Receivable Management, LLC contact David Lipman of Hess Kennedy, +1-954-510-7848.

New Jersey Taking On Abusive Debt Collectors

New Jersey legislators introduced a bill that regulates the practices of abusive debt collectors and gives state authorities the power to issue more significant fines for violations.

The bill, dubbed the New Jersey Fair Debt Collection Practices Act, goes further than the federal version, the FDCPA, by imposing rules on original creditors, not just third party collection agencies that are hired by creditors or buy debt at a discount.

The bill pending before the Assembly is aimed at prohibiting abusive, deceptive and unfair collection practices. A significant provision in the bill makes some willful acts of abuse, such as knowingly placing false information on a consumer's credit report and harming their credit rating, a violation of the Consumer Fraud Act, which could mean a fine of $10,000 or more to the offending debt collector.

Columbia Credit Services Collection Agency Sued By San Francisco

The city of San Francisco has sued the collection agency Columbia Credit Services Inc., the National Arbitration Forum, and FIA Card Services alleging unfair and unlawful business practices.

The filing charges that the National Arbitration Forum is an “arbitration mill, churning out arbitration awards in favor of debt collectors and against California consumers.”

FIA issues credit cards to California consumers and Columbia Credit is a debt purchaser and collection agency based in Sacramento, Calif. The suit charges FIA and Columbia with participating in NAF’s “sham by forcing consumers into the NAF forum which they know to be biased in their favor.” The suit also charges Columbia with seeking attorney fees from consumers that lose an NAF arbitrated suit, “an unlawful business practice” that abets NAF’s activities.

The law suit found there were 33,933 consumer arbitration hearings in California involving consumer collections from January 2003 though March 2007. Of these, only 30 resulted in favor of the consumer.

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CreditAssist Financial Offers Collections Disguised As Debt Settlement

CreditAssist Financial Services markets itself as a debt settlement company to consumers on sites such as this one and this one. They advertise themselves as "America's Number One Discount Debt Settlement Firm."

They collect the consumer's state of residence, email, and phone in advance just so they reduce debt more efficiently. Not because they are really a collection agency skip tracing for debt buyers. Right? You be the judge.

CreditAssists' consumer websites explain what their experience means to the consumer:
"CreditAssist's founders were former collection executives with some of the largest Credit Card Companies in the nation (Citibank, American Express, Bank of America, and Washington Mutual). This means that they know the inner workings of credit card companies, debt buyers and collection agencies, what they will agree to in terms of debt settlement and what they won't."

But CreditAssist is sending this press release to collection agency news sites like InsideARM (accounts receivables management) pitching a different service called DebtBuyerAssist.

The press release puts a different spin on what their experience means to bill collectors:
" CreditAssist was founded by collection industry veterans Rick Wittwer and Carmine Dorio. Our experience managing collection activities at most the major credit card issuers including Citi, American Express, BofA, and WAMU puts us in an enviable situation. We know the effectiveness and ineffectiveness of mail, collection call, and legal collection strategies. We also understand the costs associated with each of these strategies. No matter how much effort or expense is placed against the majority of accounts, debtors just won't respond, says Mr. Dorio."

"CreditAssist works with Debt Buyers to identify their unreachable populations and helps them develop both print and voice customized referral strategies. The debtors are offered an alternative to resolving the debt through one of their collectors by referring them to CreditAssist, an independent debt settlement company that represents the debtor to the debt buyer and offers similar settlement rates."

The consumer is charged a fee by CreditAssist to negotiate on their behalf. But if CreditAssist has sold the consumer's information to a debt buyer as DebtBuyerAssist and is also collecting a fee from the debt buyer that would be acting as a third party debt collector without disclosing it to the consumer they are supposedly representing. It would violate the FDCPA and every related civil or criminal statute ever enacted past present or future.

Anyone who has paid CreditAssist or even provided their contact information to http://www.debtsettlement4less.com or http://www.creditassistfs.com needs to contact a consumer attorney immediately.

Who Will Rescue Bond Insurers?

New York state officials have asked investment bankers to draw up a rescue plan that could include back-up credit financing for the sinking guarantors. They are also reaching out to private equity firms and uber rich investors such as Wilbur Ross, Warren Buffett, et al, about investing fresh equity capital for insurers such as Ambac and MBIA.

Capital and credit lines could head off credit rating downgrades. The work is headed by Eric Dinallo, the New York state insurance superintendent.

Debt markets have been pricing in the bet that bond insurers will lose their triple-A status. The withdrawal of triple-A ratings could lead to losses for banks with exposure to hedges, derivatives and bonds whose value depends on that rating.

Historic Wealth Loss For Minorities

Lending institutions have condemned minorities to further wealth disparity. Now standing at about ten-to-one, the wealth gap between African American and white median households cannot but grow bigger in the wake of the subprime lending catastrophe. The Boston-based United for a Fair Economy recently released a report, detailing the carnage wreaked on people of color by predatory lenders — and it is mind-boggling.

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Junk Debt Buyers Use NYC Courts To Scam Millions

The Community Development Project released a report entitled “Debt Weight: The Consumer Credit Crisis in New York City and its Impact on the Working Poor.” Among many other findings, the report reveals that third-party debt buyers are abusing the New York City Civil Court system to take unfair advantage of New York consumers, obtaining judgments of almost $800 million in the past year using largely inadmissible evidence, often without properly notifying the people being sued.

The report also finds that the number of consumer debt cases filed in New York City has increased more than 300% in the past five years to nearly 320,000 cases – roughly equivalent to the total number of all civil and criminal cases filed in United States federal courts in a given year.

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