Collection Agency Midwestern Health Mangement Contacting Patients Under Phony Name

There are state and federal regulations to discourage collection agencies from abusing consumers. However, if the consumer doesn't know the real name of the collection agency, accurate complaints to authorities are harder to come by.

A lawsuit has been filed in U.S. District Court against the Midwestern Health Mangement Inc., collection agency, and its parent company, Heartland Health for using those same deceptive practices.

Attorneys representing Brett and Saundra Smith and Aaron Dillman, all of St. Joseph, filed a document Monday in Kansas City stating that Heartland, through Midwestern Health Management Inc., the company with which it has contracted to collect patients’ debts, has attempted to deceive by using the “fictitious” name Northwest Financial Services when contacting people with alleged medical bills. The lawsuit describes Midwestern as a wholly owned subsidiary of Heartland. The two entities share the same corporate officers, the lawsuit said.

The lawsuit is seeking class-action status. If a judge certifies the case as a class-action lawsuit, its outcome could affect every Heartland patient who has been contacted in the past year by Northwest Financial Services.

“We’re talking tens of thousands of people,” said Derek Potts, one of the attorneys representing the plaintiffs.

The lawsuit claims Heartland is in violation of the Fair Debt Collection Practices Act, a law that makes it illegal to deceive consumers about who it is that is trying to collect money from them.

In this situation, attorneys say, the plaintiffs received phone calls from individuals identifying themselves as representatives of Northwest Financial Services, as well as correspondence with the heading Northwest Financial Services attempting to collect money they allegedly owed to Heartland. But nowhere on the correspondence was it indicated that Northwest Financial Services was related to Heartland.

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Jefferson Capital Systems Collection Agency And CompuCredit Hammered By Feds

After CompuCredit failed to present an acceptable settlement offer to the U.S. government, U.S. regulators moved forward and accused CompuCredit Corp and two banks of deceiving hundreds of thousands of credit card customers by withholding important details and blindsiding them with fees. The FTC lawsuit also names collection agency Jefferson Capital Systems, a subsidiary of CompuCredit, as a defendant for violations of the FTC Act and the Fair Debt Collection Practices Act (FDCPA).

The regulators filed a series of civil and administrative-proceeding charges against the companies seeking more than $200 million in restitution and civil penalties.

After a joint investigation by one agency that regulates banks and another that enforces consumer fraud and deception rules, the regulators said the companies engaged in "unfair and deceptive practices" by failing to properly disclose upfront fees and credit limits to consumers with poor credit.

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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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National Arbitration Forum Exposed By BusinessWeek

What if a judge solicited cases from big corporations by offering them a business-friendly venue in which to pursue consumers who are behind on their bills? What if the judge tried to make this pitch more appealing by teaming up with the corporations' outside lawyers? And what if the same corporations helped pay the judge's salary?

It would, of course, amount to a conflict of interest and cast doubt on the fairness of proceedings before the judge.

Yet that's essentially how one of the country's largest private arbitration firms operates. The National Arbitration Forum (NAF), a for-profit company based in Minneapolis, specializes in resolving claims by banks, credit-card companies, and major retailers that contend consumers owe them money. Often without knowing it, individuals agree in the fine print of their credit-card applications to arbitrate any disputes over bills rather than have the cases go to court. What consumers also don't know is that NAF, which dominates credit-card arbitration, operates a system in which it is exceedingly difficult for individuals to prevail.

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Lawsuit Seeks Ban On American Express Use Of Manadatory Arbitration

Chicago consumer lawyer Andy Martin today filed suit against the American Express Company accusing the iconic brand of systematically violating a series of federal consumer protection laws. Martin also charged the company with seeking to terrorize ('in terrorem') its customers into submission.

'AmEx's mandatory consumer arbitration program is a massive fraud. Even Amex ignores the provisions of their own documents. My consumer reform lawsuit filed today in DuPage County, Illinois Circuit Court is one of the most important consumer actions filed in recent years. I aim to shut down the credit card industry's efforts to use ‘arbitration' to exclude consumers from access to any remedies in customer-company disputes.

'Arbitration is not a ‘quick, cheap and easy' remedy as it is falsely presented by arbitration organizations. Arbitration can be costly, protracted and very expensive, which is why the consumer credit industry tries to use mandatory arbitration to deprive customers of judicial remedies,' Martin emphasized.

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Credit Reporting Agency TransUnion Settles Largest Consumer Class Action Suit In History

If you have used a credit card or carried any kind of debt or loan account in the past 21 years it's very likely you can take part in an unprecidented $10-billion dollar lawsuit settlement.

Credit reporting agency TransUnion must pay back Aldin Cubillas and 160 million American consumers for selling their private credit information.

Anyone with credit information held by Transunion can retrieve their credit score which normally costs about $12. And on top of that they can enjoy 6 months of credit monitoring -- a $60 dollar value -- for free.

It's punishment for selling consumer credit information to marketers who then turned around and used that data to sell products and services right back to you.

Ken McEldowney with Consumer Action said, "TransUnion was getting deep into credit reports to get information to tailor lists that were valuable for other companies. This is by far the largest class action ever and the largest ever involving privacy violations. It sends a strong message to organizations that hold your private information."

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National Arbitration Forum Exposed By ABC News

Anastasiya Komorova, a recent Russian immigrant, had no idea what was going on when bill collectors started calling her about the $11,000 in credit card debt she owed.

"One time one of them called me an idiot," Komorova's husband Nima Nayebi said.

The problem was that Komorova, who lives in San Francisco, had no idea what the collectors were talking about.

"I have never had a credit card with that company. In fact, when that credit card was issued, I hadn't had any credit cards," she said.

It turned out the credit card company had the wrong Anastasiya, who spelled her name a little differently.

But when the case went to private arbitration — not public court — none of that mattered. Like most consumers, Komarova lost to the credit card company in the private system of resolving disputes.

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Dell Slapped Down For Fraud And Abusive Debt Collections

Dude, you're getting a fine and a restitution order.

New York Attorney General Andrew Cuomo has won a lawsuit against Dell and their credit division, Dell Financial Services (DFS) for fraud, false advertising, deceptive business practices, and abusive debt collection practices.

State Supreme Court Justice Joseph C. Teresi, who made the ruling, said: "Dell has engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates."

"Dell lured consumers to purchase its products with advertisements that offered attractive "no interest" and/or "no payment" financing promotions. In practice, however, the vast majority of consumers, even those with very good credit scores, were denied these deals. In a classic "bait and switch" scheme, DFS instead offered consumers financing at high interest rates, which often exceeded 20%. Dell and DFS frequently failed to clearly inform these consumers that they had not qualified for the promotional terms, leaving many to unwittingly finance their purchase at high interest rates."

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Maxed Out On Showtime Tonight

Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders is a book and documentary that show abusive practices in the credit card industry. The book and movie use interviews with creditors and debtors. The film is on tonight at 7pm on Showtime and will also be on Monday May 26 at 10 am, and Thursday May 29 at 11pm. The film is also available through Netflix, Amazon.com and the usual locations.

The purpose for the book and the movie is to raise awareness of how credit and lending issues affect society. The film and book illustrate how banks and other creditors deliberately market to people who are more likely to have problems paying and that the creditors benefit from connections to government, the debt collection industry, and from lawmaker apathy.

The trailer is below.

Neon Claims Advantage Collection Agency Banned By New York AG

Neon Claims Advantage, a Nebraska debt collection agency, has agreed to be banned from doing business in the state of New York as part of a settlement agreement with the New York attorney general's office.

Before Neon's client, Quality First Auto Glass went out of business, it would estimate the cost of a repair, submit the estimate to the customer’s insurance company and then accept the amount the insurance company was willing to pay as payment in full for its auto glass repair work.

But once Quality First Auto Glass closed, it hired Neon to collect from the customers the difference between the company’s original cost estimate and the insurance company’s payment.

It didn't matter to the collection agency there was no legal obligation for anybody to pay the additional money since the insurance payments had been accepted as payment in full.

In all, Neon Claims Advantage had 424 accounts alleging over $233,000 in debts that did not exist.

The NY attorney general’s office, which began investigating after receiving complaints from customers, said Neon Advantage made misleading claims (alleging an actual debt) and did not validate the amount of the alleged debt in the letters it sent to the Quality First customers as required by the FDCPA.

The attorney general’s office intervened in the case before any of the 424 Quality First customers who were targeted by the debt collection agency paid any money on the collections attempts.

In a related settlement, the Attorney General’s Office permanently barred Alan Moore, dba Quality First Auto Glass, from attempting to collect the $233,000 again with a different collection agency or by any other means.

Audio and Video Of An Iraq Combat Vet Being Abused By Bill Collectors Over A Non Existant Debt

Minnisota consumer law attorney Pete Barry appeared on KMSP Fox 9 News on Tuesday, May 6, 2008, for a story on abusive debt collection. Includes audio of an Iraq combat vet at home on leave visiting his family being abused by telephone bill collectors even though there is no delinquency.

Click image to watch.

Verizon Wireless Defends Another Federal Suit Over Fraudulent Collections

The often sued Verizon Wireless bill collectors are on the docket again.

The newest complaint, filed in Alabama federal court, asserts the No. 2 wireless service provider is destroying the credit of an otherwise uninvolved citizen.

Verizon Wireless is trying to collect more than $1,000 from Johnny Howard he does not owe, and is falsely reporting the alleged debt on his credit reports. Howard is an identity theft victim. After complying with Verizon Wireless’ demands to fill out a police report and send them a copy, he was turned over to a collection agency anyway. The collection agency later received the police report, according to the lawsuit, but the problem was not resolved. The overdue account remained on Howard’s credit reports, prompting him to contact TransUnion L.L.C. and Equifax. Equifax eventually removed the account; TransUnion did not. TransUnion is included in the complaint.

“This wrongful conduct has drastically impacted plaintiff’s credit score and credit worthiness and has caused him past and future monetary loss, past and future emotional distress, and other damages that will be presented,” the lawsuit states.

Instant Cash Title Loans Busted By VA Attorney General

Title lending is the less well known and even more insidious cousin to payday lending. A borrower in desperate shape puts up the title to their car as collateral for a few hundred dollars at interest rates 20 or more times higher than traditional finance companies.

An $815 loan would typically require repayment of $2,625 over 12 months — or lose the car. Not surprisingly, many borrowers lose their cars to repossession.

Virginia Attorney General Bob McDonnell, has had enough of it. He says Instant Cash Title Loans, a title lender in his state, charged illegal interest rates for more than two years and is seeking relief for its customers in court.

The suit was filed in Richmond Circuit Court and asks all loans made by the company during the relevant period to be considered "null and void." He also seeks an amount equal to the aggregate of all principal and interest collected on the loans for the allegedly affected consumers.

Sallie Mae Collections And Lending Under Investigation

If you are a former Sallie Mae collector or other employee, the James-Hoyer Law Firm would like you to contact them.

They are investigating the following issues on behalf of all Sallie Mae student loan borrowers:

Unfair collection practices

Discriminatory lending practices

Failure to timely disclose terms of loans

No choice in selecting your student loan lender

High or excessive interest rates

Unexplained increase in the balance of your student loans

Improper fees assessed on your student loans

No Free Credit Reports At Experian Owned FreeCreditReport.com

Does "free" mean no charge? Answer: No. In another new wave of TV ads featuring a goofy singer working at a fish place you are promised a "free" credit report! Yet, what you get is a charge of $40 and monthly charges on your credit card.

Once on the Freecreditreport.com website, you are asked to fill out personal information and give your credit card information. You must agree to the terms and conditions to continue. Most people just click accept without reading them. A decision that seems reasonable at the time but is a robbery in progress.

Accepting the terms and conditions obligates you to pay $39.95 now and $14.95 a month for their monthly credit report monitoring. So essentially your free credit report costs you about $180 a year.

This is not new. Experian, owner of the falsely named Freecreditreport.com website, has already been fined before by the FTC for doing the same thing.

You’re already entitled to a free copy of your credit report from each of the three major credit bureaus every year. To get those, go to AnnualCreditReport.com. It’s the only Web site where each year you can get free credit reports from all three major agencies: Equifax, Experian, and TransUnion. Even better, you can avoid the add on sales pitches and just call 877-322-8228 to avoid the hassle.

Recording Industry Association of America and MediaSentry Picked On The Wrong Mom

The Recording Industry Association of America (RIAA) and their attack dog, MediaSentry, don't get the press they deserve. There are a few watchdogs such as the Recording Industry vs People blog, but overall there are too few people who fight back against the illegal debt collection tactics and intimidation used by the RIAA to create much press.

So it's nice to see a substantial expose by BusinessWeek magazine on the successful fight of Tanya Andersen, a single mom who fought the illegal tactics in civil court and who is on the verge of a major victory.

Wachovia Fined 144 Million In Consumer Ripp Off Investigation

Wachovia has agreed to pay $144 million to settle allegations that it did not take adequate measures to stop a telemarketing fraud that scammed thousands of mostly elderly consumers.

In February this year, the fourth largest bank in the US had been sued by customers for allowing fraudulent telemarketers to use its accounts to rip off millions of dollars from consumers.

The federal Office of the Comptroller of the Currency said Wachovia did not act quickly enough to block telemarketers and payment processors who had their accounts at the bank, and obtained customers' bank account numbers while selling products including vouchers for discount travel and groceries and medical discount plans.

Wachovia agreed to $125 million in claims, and $8.9 million toward consumer education programs. It will also pay a $10 million fine.

Wachovia executives, when quizzed about the lawsuits, pleaded ignorance about the thefts. However, newly released documents from the lawsuit have now established that Wachovia was quite aware about allegations of fraud, but had in effect, chosen to solicit business from companies it knew had been accused of telemarketing crimes.

Linda Pera, an executive who left Wachovia in 2006, while referring to a company that was later accused by federal prosecutors of abetting in stealing up to $142 million, wrote, "We are making a ton of money from them."

Debt Collectors Told To Pursue Consumers For Bills Owed By Health Net and WellPoint

Last week, the Los Angeles City Attorney sued WellPoint, Inc.accusing them of illegally canceling health care coverage that left consumers with unpaid medical bills that were not their responsibility. A few weeks earlier, LA filed a similar suit against Health Net, saying the insurer illegally denied more than $35 million in claims.

Thousands of people were fraudulently denied benefits. Consequently, some or all of those consumers with canceled health care coverage have ended up in collections.

You might think the bill collectors going after sick people who don't really owe the money would stop harassing them. But you would be wrong.

In advice to medical debt collectors, Rozeanne Andersen, executive vice president and general counsel for ACA International, a pro bill collector lobbyist, said, “Debt collectors are hired to collect debt.” “Until a final judgment is determined, debt collectors can assume the debt is valid.”

The advice of the ACA is to sue, garnish, lien, etc., until the California courts order Health Net and WellPoint to pay the medical bills they fraudulently skipped out on.

Then what, Rozeanne? When Health Net and WellPoint pay the medical providers where will the thousands of sick people who gave in and paid the phony bills to your bill collectors go to get their money back? How will they get your phony collection accounts off their credit reports? How do they recover the jobs they weren't hired for or the apartments they couldn't rent or the homes they couldn't buy because your bill collectors artificially lowered their credit ratings?

Any bill collector re-victimizing the people who paid their insurance but received no coverage should be added to the Los Angeles City Attorney's suit, along with their cheerleader, the ACA.

Congress Closer To Stopping Credit Card Industry's Abusive Practices

The credit card industry took the center stage on Capitol Hill this week, during hearings on the "Credit Cardholders' Bill of Rights," legislation sponsored by Rep. Carolyn Maloney (D-NY).

Credit card abuses are widespread, entrenched and unlikely to end without a ban. Unfair practices that are causing so much pain and financial damage to hard-working families must be stopped such as credit card companies piling on excessive fees; charging interest on debt that is paid on time; charging so-called "trailing interest" that is added between the time a bill is sent out and the date the bill is paid; increasing interest rates on cardholders who pay their credit card bills on time (employing so-called "universal default"); and applying higher rates retroactively to pre-existing credit card debt.

"The playing field between card companies and cardholders has become very one-sided in recent years. Yet, more and more Americans are turning to their credit cards to help pay bills, buy groceries, and make ends meet in this troubled economy," said Maloney, who serves as chairwoman of the Subcommitee on Financial Institutions and Consumer Credit.

"Instead of looking the other way while Americans fall deeper into debt, Congress can and should take swift action to reform major credit card industry abuses and improve consumer protections for cardholders," she said.

Use A Validation Letter To Make The Collection Agency Prove Their Claim

Q: I received a statement from a collection agency stating that I owe a popular magazine company money for a subscription. When I filled out the post card for the magazine it had stated that I would get 4 free issues and then charged after that if I wished to keep the subscription. Well, it has been many months since I received the magazine and I never sent in the money b/c I decided against the subscription. Now all of a sudden I am getting a letter to collect the money.

My question is, can the magazine send me to collections? I can see if I received all the issues and never paid but that just isn't the case. I have just never heard of such a thing, being sent to collections for a magazine subscription. Is this just a scare tactic to get my money or is this true?

A: Until federal prosecutors start prosecuting companies such as the one you describe for mail fraud, those companies will keep sending fraudulent bills to their accomplice collection agencies to scam people out of money.

In order to keep the collection agency from placing the account on your credit report you need to reply to their demand letter and let them know you dispute the bill. The letter you need to send is called a "validation letter". You can Google the term to come up with examples. I like the one here.

After they are unable to come up with a signed contract or any enforceable legal agreement between you and the magazine company they must close the account and move on to the next victim who is less prepared to protect themselves.

If they do not close the account save all the paperwork and request representation on a FDCPA complaint from a NACA attorney in your area so you can have the collection agency stopped and recover the $1000 statutory damages from them in civil court.

Cell Phone Companies Using Fake Consumer Group To Protect Fraudulent Bills

If you receive a collection agency demand for an alleged cell phone bill find out when the service supposedly occurred. There is a two year statute of limitations on cell phone bills. It is likely any collection agency letter has language that makes the letter false, and subsequently, a FDCPA violation. If the alleged charges are over two years old contact a consumer attorney right away.

Many of the millions of alleged cell phone bills being pursued beyond the statute of limitations are for disputed services, fraudulent early termination fees, or the result of cell phone companies refusing to cancel accounts even though they are no longer under contract. In several states where legislation is pending that would outlaw the more egregious cell phone billing schemes, a "consumer protection" group has shown up to lobby against reform and tell legislatures that customers are happy with phony phone bills.

The fake consumer group with a website that's so bad it's funny is called MyWireless.org. A fact filled expose about their efforts to deceive and who is paying for MyWireless.org can be found here.

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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Ellis Crosby & Associates Collection Agency Ordered To Pay $1.3 Million

Four years after Ted Ellis Crosby was court-martialed by the Navy for being a drug dealer, he founded the Ellis Crosby & Associates collection agency. Last year, Crosby spent six months in a Florida county jail for being a felon in possession of a firearm. And also last year the state of Florida obtained a court order banning Crosby from conducting debt collections in Florida and sued his collection agency for $1.3 million after hundreds of complaints about Ted's illegal practices. You would think that would be enough to discourage Ted.

But you would be wrong.

Winning the 1.3 million (that Ted and his bill collectors will never pay) was a moral victory of sorts over Ted and his collectors for their:

1) Claiming or implying to be attorneys or government agents and threatening arrest or other legal action against consumers.
2) Claiming or collecting non existent or exorbitant debt amounts.
3) The use of harassing or intimidating techniques such as repeated phone calls or calls to neighbors, relatives and employers.

In one phone call taped by a consumer who was falsely accused of owing Ted money, one of Ted's bill collectors pretended to be talking on a walkie talkie coordinating a police raid on the consumer's home so he could take the single mom away from her two young children if she didn't pay $1000 by credit card right then.

However, since bill collectors are charged in civil court for their mail and wire fraud and police impersonations, instead of criminal court where they belong, Ted and his collectors were out and available during this suit by the state A.G. to set up another company, Bass Prelitigation Services, and go on about their organized crime business.

Now the Florida Attorney General is also pursuing a separate $1.3 million civil suit against Bass Prelitigation Services.

Meanwhile, if the past is a guide to the future, as he gets closer to losing the next million dollar suit, Ted Ellis Crosby will be inventing a new collection agency name and printing new letterhead for his next criminal operation.

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.

Luebke Baker and Associates: Collection Agency Or Co-Conspirator?

Updated. Includes FTC reply.

Luebke Baker and Associates is a collection agency in Peoria, IL. They collect delinquent magazine subscriptions for Consolidated Media Services among other supposed clients. They must do lots of collections for Consolidated Media Services considering the number of reports about them on sites like RipOffReport.com, ConsumerAffairs.com, etc. There are page after page of similar complaints about the way Luebke Baker and Associates is trying to collect old magazine subscription bills. Many of the complaints involve possible FDCPA violations because of the tactics and possible statute of limitations complaints because the alleged subscription debts are so old. Those are civil questions, however. What about the possible criminal aspects?

Res judicata comes to mind. Res judicata is a Latin phrase meaning the thing has been judged already. Consolidated Media Services was judged and judged harshly. The FTC nuked Consolidated Media Services after judging them to be a criminal operation which gained its revenue from victims of crime. In 2002 the Department of Justice, at the request of the Federal Trade Commission, charged Consolidated Media Services and the other names it went by (Cross Media Marketing, Media Outsourcing, Direct Sales, and Magazine Sweepstakes) with violating federal laws by misrepresenting and failing to fully disclose the costs and conditions of magazine subscription sales. They also charged that the defendants failed to cancel subscriptions and pay refunds. The complaint further alleged violations of a previously issued FTC order prohibiting deceptive practices in selling magazines.

The FTC settled with the defendants in 2003 for fines and more orders prohibiting deceptive practices. Consolidated Media Services, by way of its parent company Cross Media Marketing, subsequently filed filed for bankruptcy in June 2003 and went out of business.

Which begs the question, regardless of civil FDCPA or statute of limitations violations, what is legal about Luebke Baker and Associates collecting for unpaid magazine subscription bills already judged by the federal government of the United States to be criminally fraudulent?

Isn't Luebke Baker and Associates victimizing the same people already thought to have been protected by the actions of the Department of Justice and the FTC?

An answer has been received from the FTC.

And it says you are on your own. While the following answer might be interpreted to mean any contact by Luebke Baker and Associates is a FDCPA violation per se, the point is still that as far as your federal government is concerned each victim of the fraudulent magazine subscription charges is required to perform their own law enforcement action against Luebke Baker and Associates in state or federal civil court.

FTC: Although we can't opine on the legality of a particular business practice, the order (http://www.ftc.gov/os/2003/06/crossmediastip.pdf) defines what the settling defendants must do when attempting to collect debts, and they are bound by the FDCPA, which, among other things, prohibits false representations about the character or legality of a debt, and requires a collector to provide verification of the validity of a debt once a consumer has disputed it. We cannot say whether or not the FTC is looking into a collector's activities in this or any other matter.

I hope this is helpful.

Frank Dorman
Federal Trade Commission
Office of Public Affairs
202-326-2674

Credit And Collection Agency Watchdog Question

Dear Illinois Attorney General Madigan,

I've been reading about the scam Luebke Baker and Associates, a collection agency in Peoria, IL has been perpetrating on innocent victims in stories like the one here.

However, since the magazine subscription bills generated by Consolidated Media Services were ruled to be fraudulent by a federal judge as seen here why isn't your office prosecuting Luebke Baker and Associates for fraud? Has there been a reversal of the fraud ruling regarding the magazine subscription bills Luebke Baker and Associates are collecting? Are there no relevant fraud statutes in Illinois?

Isn't it too great a burden on each citizen to have them fight off Luebke Baker and Associates one at a time?



The answer will be posted here.

Collection Agencies and Collection Lawyers Might Be In Trouble

The Recording Industry Association of America (RIAA) has been sued for racketeering, fraud, and illegal spying by an Oregon woman who added claims to an existing lawsuit against the RIAA, several recording companies, and data investigation company MediaSentry for tactics in use as part of an RIAA campaign to sue music downloaders.

If Anderson wins it will establish the defendants and their bill collectors violated private investigation laws, used illegal methods of seeking payment, pursued litigation even though they should have known that the investigations were illegal, and intentionally caused emotional distress through malicious prosecution.

Lawsuit Makes TransUnion Help Some Identity Theft Victims

Eric Drew filed negligence suits against TransUnion, Bank of America, Chase, Citibank, Equifax and Experian so that others wouldn't have to live the nightmare he did.

While Eric Drew was in the hospital for leukemia his identity was stolen by a hospital worker. Credit was issued in Eric's name to a fraudulent address used by the identity thief. When Drew called to complain from his hospital bed, he was told to submit paperwork to prove that it wasn't him.

"I was fighting for my life, barely able to function, and then on top of all that, I had to leave the hospital to help find the criminal and fight to clear my credit," said Eric. "I was determined not to let cancer or a thief get the best of me."

The thief was eventually caught but that did not clear Eric's name. It took him two years to clear his credit reports of the fraudulent address and phony account information.

In this unprecedented settlement, TransUnion agreed on an undisclosed financial sum, as well as three major policy changes which they have agreed to implement in the next six months.

These policy changes include:

* Protection for impaired (hospitalized or elderly) victims of identity theft by allowing them or their caregivers to submit a verifiable note from a doctor or medical facility in lieu of the traditionally required police report and affidavit to have fraudulent items removed from their credit report.

* All victims of identity theft will have all information pertaining to that theft permanently removed from their credit report even if it is re-reported.

* A free credit freeze for all victims of identity theft when they request it.

Eric's legal battle with Bank of America, Chase, Citibank, Equifax and Experian on behalf of others continues.

FTC Settles With Debt Reduction Companies

Debt-Set and Resolve Credit Counseling sold debt reduction services through Web sites and television and radio advertisements with claims such as “Reduce Debt Now” and “Eliminate Harassing Calls.”

When consumers called a toll-free number they were encouraged to enroll in a “debt consolidation program” if their unsecured consumer debt was up to one month overdue, or a “debt settlement program” if overdue longer.

The FTC sued them for violating federal regulations by falsely promising to obtain lump-sum settlements, such as “fifty cents on the dollar” or “50 to 60 percent” of consumers’ total unsecured debt, or to negotiate with creditors for lower interest rates.

The FTC complaint also accused them of claiming that they would not charge consumers any up-front fees before obtaining the debt relief and that participation in their program would stop creditors from calling or suing them to collect debt.

The settlement prohibit the defendants from engaging in the violations alleged in the complaint, and require them to disclose truthfully key terms of the program: all fees and costs they charge, including when and how such fees and costs will be paid by consumers; the approximate time period before settlements will be achieved; and the fact that consumers’ balances typically will increase before settlements for all accounts are achieved.

Home Depot And Their Collection Attorney's Shakedown Consumers

Miami handyman Glenn Rudge was falsely accused of shoplifting an $8 set of drill bits by Home Depot. When Rudge showed his receipt to prosecutors they dropped the charge. Rudge thought he'd settled the matter.

He was wrong. Home Depot hadn't got their collection attorney involved yet.

The next month Mr. Rudge got a letter from the Palmer Reifler law firm. Home Depot's lawyers demanded Rudge pay Home Depot over $3,000. They gave him 20 days to surrender the money.

Rudge ignored the demand. Then he got a letter demanding an additional $3,000, as "pre-litigation" attorney's fees, for a total of just over $6,000. If he didn't pay, the letter warned, the sheriff's office would be called.

Mr. Rudge was doing work for a lawyer and showed her the letters. "I took one look and said, 'This is outrageous,' " says the lawyer, Alison Harke. "These letters are designed to make people settle because they believe they are going to jail." She filed a suit against Home Depot.

A confidential settlement was reached.

But Home Depot isn't alone in partnering with collection attorneys to run shakedown scams.

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Some Credit Repair Companies Are Credit Ripoff Companies

With falling home values, increasing mortgage defaults and a recessionary economy, more people are drowning in a sea of debt. May will turn to companies that sell credit repair and credit counseling services. Some of those companies, though, are not law offices and sometimes the services they charge for do not exist. Many of these companies aren't regulated by federal law.

Anyone can open a credit counseling business. As a result, the services provided if at all can vary widely.

The trick is to not get confused by the similar names and similar claims.

CBS News has a guide to help you know what to look for here.

Phony Legal Aid Services Seeking Out The Most Vulnerable

Colorado has filed a federal suit against Legal Aid National Services, Inc., (LANS). Legal Aid National Services president Kendrick E. White, White's wife Jasmine Ewing, and White's half-brother Derrich E. Brown, have also been sued by the state.

The defendants defendant preyed on lower-income consumers with confusing business names and false promises of legal aid.

According to the Attorney General's complaint, the defendants misrepresented the "legal services" they provided to consumers in Colorado and across the country.

Although the defendants claimed that trained professionals would provide legal services, the complaint alleges that consumers were charged for legal advice by staff with little or no legal training.

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Bad Credit Could Mean No Health Care

The Fair Isaac Corporation is collecting payment history information from large hospitals across the US.

The Fair Isaac Corporation is the company that developed the FICO credit score for lenders.

A new tool nicknamed “Med-fico” is in development, and would help hospitals determine a patient's ability to pay before they were treated. Your credit could soon affect your access to medical care.

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Tax Rebate Scams Underway

Even before Congress passes an economic stimulus package, identity thieves are using promises of tax rebates to trick people into revealing financial and personal data, the Internal Revenue Service said Wednesday.

Under one scheme, the IRS said, people are receiving phone calls telling them they can only receive a rebate if they provide bank account information for a direct deposit.

The tax agency stressed that it does not collect information by telephone and that no legislation has been enacted that would allow it to provide advance payments to taxpayers or that specifies the details of those payments.

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Identity Theft Ring Gets 20 Felony Charges

The ring leader, according to detectives, obtained victims' personal information from a business where his mother cleaned at night. He is accused of using the information to open c