As Bakersfield station KGET reported, debt collector harassment can happen to anyone. KGET notes that, for the past two years, a Bakersfield man received up to five calls per day from NCO Financial. The debt collection agency was looking for someone who didn’t live there, but no matter what the man did, the calls from NCO wouldn’t stop. It took the intervention of the TV station’s help line to convince the debt collection agency to remove the man’s number from their books. An attorney weighing on the matter opined that the consumer may be able to sue NCO for harassment under the Fair Debt Collection Practices Act, even though the man was not a debtor.
Top Debt Collectors: #16 - Arrow Financial Services
We’ve been counting down the top debt collection agencies, and number 16 on our list, Arrow Financial Services, definitely runs with the big dogs. Back in 2004, Arrow Financial was purchased by Sallie Mae, which is a publicly traded company (NYSE: SLM). Sallie Mae is best known for making student loans. While it was once a government service, Sallie Mae became fully privatized in 2004, and no longer has ties to the U.S. government. Given that Sallie Mae is in the business of making loans, it shouldn’t come as much of a surprise that it purchased a collection agency the same year it went private. Arrow Financial is one of three Sallie Mae collection agencies; General Revenue Corporation and Pioneer Credit Recovery are the other two.
Arrow Financial has offices in four locations: Rockville Centre, NY; Austin, TX; Whitewater, WI; and Niles, IL. In addition to collecting on behalf of original creditors, the company buys up old debts. One of its areas of focus is convincing original creditors to let Arrow Financial buy up the debt of consumers who participate in Consumer Credit Counseling Services. Another comes into play in the arena of auto loans. When a consumer gets behind in payments and a vehicle is repossessed, the vehicle is sometimes worth less than the amount that is owed on the car. Arrow Financial is one of several debt collection companies that will buy up the difference (called a “deficiency balance”), and try to collect money from consumers who have already had their vehicles repossessed.
Top Debt Collectors: #17 – Creditors Interchange
We’re often asked about the top debt collectors in the country, so we’ve been doing a countdown for the top 20. We’ve discussed CBCS, RJM Acquisitions, and Asset Acceptance. Today we’re covering number 17, Creditors Interchange.
Creditors Interchange has been around since 1960, and is located in Buffalo, New York. They collect on behalf of credit card companies, banks, universities, cities, and auto lenders. The company does typical collection activities, but they also collect on dismissed bankrupt accounts, and conduct business-to-business collections. Creditors Interchange also buys debt that’s been written off by original creditors. A quick Google search returns results that link to consumers expressing anxiety about threatening calls they’ve received from CI’s collectors.
Top Debt Collectors: #18 – Asset Acceptance
We’ve been conducting a countdown of the top 20 debt collectors. This installment is about Asset Acceptance, which ranks number 18 on the list.
Asset Acceptance Capital Corp, also known as AACC, is a publicly held company (NASDAQ: AACC), and uses the tagline, “Returning Value to Our Credit Driven Economy.” The company has three subsidiaries: Premium Asset Recovery Corp. (PARC), which specializes in collecting on health care debts; Asset Acceptance, LLC, which buys debt that the original creditors have written off; and Consumer Credit, LLC, a financing company that works through retailers in Michigan.
AACC has 1,700 collectors. The company’s main office is in Warren, Michigan, but they also have call centers in Arizona, Florida, Illinois, Ohio, and Texas. Their legal offices are in Maryland, New Jersey, and Virginia.
The company, which was launched as Lee Acceptance Company in 1962, underwent numerous expansions, becoming AACC in 2003. The following year, it was listed on NASDAQ. In 2006, it acquired PARC. Currently, the President and CEO is Rion Needs, while former CEO Brad Bradley is Chair of the Board of Directors.
On July 30, AACC announced their second quarter earnings. The company collected $87.3 million during the second quarter, and a total of $181.4 million during the first six months of 2009.
Aside from medical debt, which is purchased through PARC, AACC buys debt from credit card companies, utilities, consumer loans, second mortgages, home improvement loans, health clubs, student loans, home equity loans, and auto deficiencies.
First Phase of Credit CARD Act Takes Effect
Two provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (also known as the Credit CARD Act), which was signed into law on May 22, took effect on August 20. If you’ve received a letter from your credit card company informing you that they’re kindly providing you with a few more days to pay your bill, you can be assured it’s not out of a sense of largesse or generosity. Instead, it’s thanks to a provision in the Credit CARD Act that requires issuers to mail or deliver a statement at least 21 days before payment is due. The previous requirement was 14 days.
The other provision of the Credit CARD Act that went into effect on August 20 is that credit card companies have to give you a 45-day written notice before they raise interest rates or change the terms of the account. If your credit card issuer notifies you of a rate increase, you can close the account to avoid a rate hike. However, you do have to pay off the balance under the existing terms within five years - and the credit card company can ratchet up the minimum payment by 100%.
The White House has a fact sheet about the various provisions of the Credit CARD Act, including those that will go into effect next year, and the Chicago Tribune has a nice roundup of the changes. Among the most helpful are those that prohibit banks from charging fees when you go over your credit limit, unless you authorize the credit issuer to approve charges that put you over the limit. In addition, consumers can’t be charged fees for electronic transfer or telephone payments. One of the most welcome changes is that, if the balance includes different interest rates, if you pay more than the minimum payment, that amount must be used to pay off the higher interest balance first.
It should be noted, however, that not everyone is thrilled about the Credit CARD Act. Chuck Jaffe, over at MarketWatch points out a number of problems with the law, and has some sound advice for consumers who want to make sure they have the credit necessary to meet unexpected emergencies.
Top Debt Collectors: #19 – RJM Acquisitions
Continuing on our top 20 countdown of debt collectors, RJM Acquisitions slips in at number 19. Draw your own conclusions, but the company doesn’t even have a website. In a nutshell, RJM buys old debt from creditors, and then tries to get consumers to pay. RJM has a reputation for harassing people into paying debts that are past the statute of limitations for collection.
Each state has a different law regarding how old a debt has to be before it is no longer collectible. Keep in mind that, if you agree to a payment plan or a settlement with a company that buys “junk debt,” you may be restarting the clock. In other words, if you make a payment, the debt may again be considered current.
California A.G. Gets $1 Million from CashCall
California Attorney General Jerry Brown succeeded in obtaining a $1 million judgment against predatory lender CashCall, Inc. Brown argued that the company violated California Business and Professions Code Section 17200. Brown’s press release noted that CashCall:
- Made excessive and verbally abusive telephone calls at all hours of the day and night;
- Caused borrowers to incur bank fees by repeatedly trying to collect payments despite knowing there were insufficient funds in the borrowers’ accounts;
- Threatened to initiate law enforcement and wage garnishment proceedings against borrowers without any basis for doing so;
- Improperly discussed private financial information with borrowers’ friends, colleagues and neighbors;
- Failed to honor borrowers’ requests to cancel automatic withdrawals from checking accounts; and
- Continued to contact borrowers by phone after receiving requests to only contact them in writing.
These practices are also illegal under federal law, namely the Fair Debt Collection Practices Act.
Top 20 Debt Collectors: #20 - CBCS
We’re often asked about the top debt collectors in the country, so we thought we’d do a countdown, and give you the 411 on each. Coming in at the number 20 slot is CBCS.
CBCS calls itself “The Solution Provider for Debt Resolution,” and uses the tagline, “More than expected, sooner than expected.” The company’s corporate headquarters is in Columbus, Ohio, but CBCS boasts ten regional call centers. It doesn’t offer online services for consumers, and instead directs consumers to call the number or write the address listed on the debt collection letter.
CBCS focuses on a few industries, namely health care, credit card, financial, telecom, and utility.
NY Attorney General Creates Web Portal for Debt Collection Abuse
In case you haven’t seen it, New York Attorney General Andrew Cuomo recently launched a website, www.NYDebtHelp.com, that explains consumer rights, allows victims of debt collection and debt settlement companies quick access to the Attorney General’s office to file complaints, and outlines the actions that Cuomo is taking in regard to debt collection and foreclosures.
NY Attorney General Andrew Cuomo Sues to Shut Down Debt Collection Operation
Continuing his crusade against unscrupulous debt collectors, New York Attorney General Andrew Cuomo last week filed suit against the Benning-Smith Group, seeking to shut down the Buffalo-based operation.
According to the Attorney General’s press release, the Benning-Smith Group ran “at least 13 debt collection companies that operated out of multiple locations and under various assumed names in Western New York. The company names include:
Abrams, Burke & Associates
- Benning and Smith Acquisitions, Inc.
- Brady and Caruso, LLC
- DebtPayments.com
- DebtPayments.com, LLC
- Fredericks, Goldstein & Zoe
- Graham, Noble & Associates Bookkeeping
- Graham, Noble & Associates LLC
- Graham, Beagle & Associates LLC
- Kingman, Cole and Associates, LCC
- Marshall and Ziolkowski Enterprise, LLC
- Marshall Ziolkowski Acquisitions, LLC
- Lansky, Goldstein, Zoe
- OLS Payment Services
- University Debt Collection
The press release said, in part:
According to the more than 850 consumer complaints filed with the Office of the Attorney General, the Federal Trade Commission and the Better Business Bureau, the Benning-Smith Group’s employees violated state and federal law by routinely posing as law enforcement officials and threatening to arrest or to physically harm consumers unless they made arrangements to pay the company immediately. Additionally, the Benning-Smith Group made abuse and humiliation a trademark of their collection practices by verbally abusing consumers and, in some instances, sexually harassing them. To date, the Attorney General’s investigation has identified more than a thousand instances in which the Benning-Smith Group breached state and federal statutes.
At news conferences last week, CNN reports, Cuomo introduced two victims of the Benning-Smith Group. The debt collectors threatened the victims with immediate arrest and verbally abused them over the phone.
