News 9 in Oklahoma City reported that debt collection agency GC Services are under fire for allegedly forcing call center employees to work in unsanitary conditions. According to the report, backed up toilets caused sewage to flood part of the building, yet employees were not allowed to leave work. When one employee called the Occupational Safety and Health Administration to complain, he was fired.
ER Solutions to Open 13th Call Center in Augusta
ER Solutions, a debt collection agency known for collecting on cell phone, banking, and cable television debts, had Augusta, Georgia, atwitter when they showed up in town to accept applications from prospective debt collectors. According to a report by WJBF-TV, ER Solutions is planning to open its 13th call center in Augusta next summer. Company executives were quoted as saying that that 400-person call center will be ER Solutions’ “crown jewel,” and that they are looking for debt collectors with “Southern charm.” Sounds like an oxymoron to us.
Report Finds Consumers Without Attorneys Fare Worse
The American Bar Association recently released the results of a survey of state judges, which pointed to stark differences in legal outcomes between people who are represented by attorneys and those who are not. The judges surveyed said that, against the backdrop of the recession, they are seeing more consumers represent themselves. But 62% of the judges said that consumers are being negatively impacted by this trend. The ABA’s press release noted, “Nearly half of the judges responding believe that there is a middle-class gap with respect to access to justice, stating that the number of people who are not represented and who do not qualify for aid has increased.”
Debt Collectors Digging Up Information on Facebook
The Houston Chronicle reports that the debt collection industry is abuzz about using social networking sites like Facebook to gather information about consumers who owe money. The Fair Debt Collection Practices Act regulates the ways in which debt collectors can gather information about consumers, but hasn’t kept pace with technology. As consumers put an increasing amount of private information on Facebook and other social networking sites, there’s a question about whether that information is in the public domain, and can be treated like information in other publicly available databases, or whether debt collectors accessing that information would violate privacy provisions of the FDCPA.
There’s some consensus among debt collectors that gathering contact information via social networking sites is acceptable, but other information may not be. The bottom line? Pay attention to social networking sites’ privacy options, and ensure that the information you wish to remain private stays private.
Massachusetts Senate Comes through With Consumer Debt Collection Protections
This week, the Massachusetts Senate took a giant leap forward in protecting consumers who face property seizures for uncollateralized debt. The Boston Globe reports that creditors who win legal judgments against consumers can’t wipe out their bank accounts, take their cars, or touch Social Security or disability income. Previously, the law allowed collectors to seize cars worth more than $700 or all but $125 from a bank account. The legislation, which still needs to be approved by the House, raises the limit for cars to $7,500 and for bank accounts to $2,500. Definitely a step in the right direction.
Debt Collectors Scheming in Anticipation of Economic Recovery
The debt collection industry publication, Inside ARM, provides a wealth of insights into what debt collectors are thinking, doing, and planning. One of their recent blog posts brought to light one way in which debt collection agencies are getting primed to take advantage of our country’s eventual economic recovery.
As we’ve discussed on numerous occasions, both here on the StopCollector blog and in the media, debt collection agencies are increasingly using the court system (and taxpayer dollars) to do an end run around consumers and get judgments in their favor. Often, consumers aren’t aware that they’re being sued, aren’t present to defend themselves, or don’t have legal representation. All too often, this results in a judge finding in favor of the debt collection agency.
If you don’t have a job and are in financial straits, you may think that a legal judgment is no big deal. After all, a debt collection agency can’t squeeze money out of a proverbial turnip, can they?
As it turns out, the debt collection industry may be planning to take a truckload of lemon judgments and make sweet lemonade. According to the blog post by Denise Cross, “As the economy recovers, [a legal collection strategy] might gain even more traction with the rise of employment, a key aspect in leveraging the legal channel through wage garnishment.”
What does this mean? If you’re currently unemployed but eventually find a job, a debt collection agency that already has a judgment against you can garnish your wages. That’s like handing a drowning man a life jacket made of lead.
Blogger Denise Cross is counseling debt collection agencies “with recent vintage judgments re-run employment and asset verification as part of their ‘dead judgment’ strategy.”
So, be forewarned that the hammer may drop. And, if you find out that you’re being sued by a debt collection agency, it’s critical to mount a vigorous defense. Your future income and assets may depend upon it.
Debt Collectors Tell All
If you’ve ever wondered about what makes debt collectors tick, you have to read CNN Money’s “Confessions of Former Debt Collectors.” Featuring fascinating mini-profiles on 10 former debt collectors, the piece is an eye-opener. Some former collectors admit to violating the Fair Debt Collection Practices Act, using any tactic that would get people to pay. Others paint a rosier picture about their behaviors and activities. Most say that they the job wore them down. One says, “I’m sick of all the agony I put people through,” while another says, “If you didn’t break the law, you were asked what was wrong with you.”
Pulling the Curtain Back on Debt Collection Lawsuits
The New York Times published a phenomenal article on a disturbing debt collection trend: at a time when taxpayer-funded court systems are trying to do more with less, debt collection agencies are stressing the burdened justice system with sometimes frivolous lawsuits against consumers. Andrew Martin reports that Cohen & Slamowitz, for example, file around 80,000 lawsuits each year.
Martin crunches the numbers, and determines that the average number of lawsuits filed per Cohen & Slamowitz lawyer is 5,700 – an astronomical number that is only made possible by automating the process using computer software. The result is that numerous cases are filed on the basis of a law firm having only the consumers, name, address, and alleged amount owed.
Martin reports that this approach is problematic on a number of levels, in that the wrong person may be named in the suit, the amount owed may be incorrect, and the plaintiff in the lawsuit may not even legally own the debt. Unfortunately, in a large number of cases, the consumer isn’t represented by an attorney, or doesn’t appear in court to defend him or herself, and judges have no choice but to rule in favor of the debt buyer.
The article also discusses some states’ efforts to curb debt collection lawsuit abuses by forcing debt collection attorneys to provide further substantiation of the debt, and the pushback by the debt collection industry.
The StopCollector Case Files: Rogers vs. Capital One
Over the past few days, we’ve discussed a class action lawsuit being brought by Lemberg & Associates against Capital One Services, NCO Financial Systems, and Capital One Bank. The law firm is also bringing a class action lawsuit against Capital One Services, United Recovery Systems, and Capital One Bank for sending similar letters that are in violation of the federal Fair Debt Collection Practices Act (FDCPA). Like Mr. Wood, Henry Rogers received a letter that he thought was from his creditor, Capital One Bank. Yet calls to the toll-free number were redirected to United Recovery Systems, which is a misleading debt collection practice. In addition, the letter fails to mention that Mr. Rogers has the right to dispute or obtain verification of the debt, which is also a violation of the FDCPA. Similarly, the letter doesn’t clearly state that it’s from a debt collector. Instead, that information is buried on the back of the letter.
The letter was a mass-mailed form letter that offered an annual percentage rate (APR) of 0% if Mr. Rogers agreed to a payment plan, but threatened that his APR would “return to 19.90%” on the entire debt if that agreement was not honored.
If you live in Connecticut and received a letter similar to the one Mr. Rogers received, and would like to join the group of consumers intent on holding Capital One Services, United Recovery Systems, and Capital One Bank accountable for their actions, complete the form here or call 1-888-384-3576.
The StopCollector Files: Class Action in Woods v. Capital One
Yesterday we gave you an overview of the ways in which Gareth Wood was victimized by Capital One Services and NCO Financial Systems on behalf of Capital One Bank. Essentially, when they sent Mr. Wood a “Pre-Legal Notice,” these debt collectors violated the Fair Debt Collection Practices Act (FDCPA) in a number of ways.
Lemberg & Associates is in the process putting together a class action lawsuit for these violations. Why a class action suit? Because it appears as though the letter Mr. Wood received was a form letter. This form letter is likely to have been mass-mailed to thousands of consumers whose accounts are past due. When a situation like this arises, it’s impractical to expect every single consumer to hire a fair debt attorney and individually obtain justice. Class actions are made available to help consumers get relief when a company injures many people in the same manner.
If you live in New York and received a letter similar to the one Mr. Wood received, and would like to join the group of consumers intent on holding Capital One Services, NCO Financial Systems, and Capital One Bank accountable for their actions, complete the form here or call 1-888-384-3576.
