If you ever received a ticket in Clarksville, TN, don’t be surprised if you’re contacted by the Alliance One debt collection agency. According to the Tennessean, Clarksville has hired Alliance One to go after people who haven’t paid tickets – some of which are 30 years old – and is paying the debt collector 21.8% of anything that it can collect. That’s powerful incentive to go after consumers – whether or not the tickets are legitimate or whether or not the statute of limitations has expired. Even the city admits that it can’t legally force people to pay tickets that are more than ten years old, and that some citizens are being targeted even though they sold the vehicle before the ticket was issued. But that likely won’t stop Alliance One from trying to get people to pay up.
AFNI Expands Bowling Green, KY Staff
Business must be booming in the debt collection industry. As reported by the Bowling Green Daily News, the AFNI debt collection agency is hiring 60 new workers for its Bowling Green, KY, call center. It’s interesting to note that there are already 450 employees at the facility, and that the starting pay is $9 per hour. A company spokesperson said that AFNI conducts background checks and drug testing on applicants, while the story noted that, “The call center is open from 8 a.m. to 11 p.m. daily, but employees don’t work traditional shifts.” Anyone who has been on the receiving end of debt collection calls knows that debt collectors work at all hours of the day and night.
Minnesota Debt Collection Agency Given the Boot
It takes the most egregious behavior for a state to give a debt collection agency the boot, but here’s one that takes the cake. Most states don’t have debt collection laws that give the consumer an avenue of redress when he or she is abused by a debt collector, but states often have licensing laws that are similar to the Fair Debt Collection Practices Act. According to an article in the Minneapolis Star Tribune, the Minnesota Department of Commerce has fined Steven Westlund, who does business as the Five Star Group of Minnesota and Commercial Surveillance Bureau, $60,000 for operating without a license and threatening a consumer. Westlund allegedly said, “I will come to your home and get the money out of you,” and that he would, “hunt you down like a dog if you don’t send me money now.”
When Debt Collection Agencies Use Unscrupulous Process Servers
Although the debt collection industry defends its use of the taxpayer-funded court system to obtain default judgments against consumers whom they say owe money, their dirty secret is that these same consumers often don’t know they’re being sued. 
A case in point is that of Richland Holdings and payday loan company Rapid Cash. Both companies outsourced their process serving (the means by which consumers are notified of an impending court date) to On Scene Mediations. As reported in the Las Vegas Review Journal, On Scene Mediations didn’t actually serve the papers to consumers, leading the debt collectors to obtain default judgments. Although both companies are supposedly cooperating with authorities to rectify the situation, court officials now must review the 20,000 default judgments the two companies have obtained in the Las Vegas area since 2004. Unfortunately, Richland Holdings and Rapid Cash aren’t footing the bill for the review…. Once again, the taxpayers are left holding the bag.
Arizona and Ohio Municipalities Turning to Debt Collection Agencies
Arizona and Ohio municipalities have hopped on the debt collection bandwagon, joining other cities across the U.S. that are trying to make up their budget shortfalls by turning to debt collection agencies to recoup monies owed by citizens for power, gas, water, and other services. A report from Tucson’s KVOA notes that Mesa hauled in $1.4 million last year after using a debt collection agency, while a report from WFMJ notes that Warren, Ohio, has netted almost $340,000 after hiring Capital Recovery Systems.
A Debtors’ Prison By Any Other Name Still Smells Rotten
The Post-Tribune reports that indebted Indiana consumers are finding themselves incarcerated. This alarming trend stems from debt collection agencies’ increasing use of the taxpayer-funded court system as part of their business strategy. All too often, debt collection agencies send legal documents to consumers’ old addresses, and the consumer doesn’t receive notification of an upcoming court date. If a consumer misses three court appearances in a row, he or she can be arrested and sent to jail for “contempt of court and failure to appear.”
The Post-Tribune walks the reader through the process step-by-step. Initially, a debt collection agency files a small claims case. When the consumer doesn’t appear, they obtain a judgment. The debt collection agency then files a “proceeding supplement to execution.” When the consumer doesn’t appear for that, the debt collection agency files for a contempt hearing. When the consumer doesn’t appear for that, an arrest warrant is issued.
Although debtors’ prisons are supposedly an anachronism, arresting people who may not even know they have a court date and throwing them in jail with criminals is despicable.
Federal Reserve Releases Consumer Debt Data
According to the Los Angeles Times, the Federal Reserve Bank of New York released data suggesting that consumer debt has contracted for seven quarters in a row, but that bankruptcies and foreclosures both increased. Since 2008, household debt has decreased 6.5%, but second quarter bankruptcies have increased 34% and new foreclosures increased 8.7%. Californians had the largest per-person debt at $77,500, while Ohio had the lowest per capita debt at around $40,000. The average American owes $48,800.
EEOC Questions Legality of Using Credit Checks for Hiring Decisions
The Associated Press reports that the Equal Employment Opportunity Commission, the federal agency tasked with enforcing employment discrimination legislation, has stepped up its investigations of employers who use credit checks as the basis of hiring decisions. Pre-employment credit checks can have a disproportionately negative effect on African Americans and Latinos, and the EEOC says that employers have to prove that not hiring someone because of bad credit is relevant to the job being sought.
The AP report references a study by the Society for Human Resource Management that found half of major companies check the credit reports of some job applicants, while 13% do credit checks for every applicant.
The EEOC filed a class action lawsuit against Dallas-based Freeman Companies, saying that the company allegedly discriminated against men, African Americans, and Hispanics because they used credit history and criminal records to reject employment applications.
Lenders May Leverage GPS Data for Nefarious Purposes
According to an article in the Bangor Daily News, Maine’s State Bureau of Consumer Credit Protection was recently contacted by an auto finance company, asking if the state would have a problem with installing GPS systems in vehicles that were financed. The idea is that if you get a loan from a finance company, and that finance company wants to sell your loan to another finance company (a common practice), your GPS data would be analyzed to find out, for example, whether or not you really have a job (evidenced by whether or not you travel to your workplace everyday). The Consumer Credit Protection Bureau couldn’t find a legal reason to prohibit the placement of GPS devices in vehicles, but such a practice would clearly raise considerable privacy concerns. After all, the company would have a record of everyplace you travel, and could sell that information to other companies. Scary stuff.
Changes in Student Loan Repayment Options
The Kansas City Star published a helpful overview of changes in student loan repayment options, thanks to the Health Care and Education Reconciliation Act of 2010. The applicable provisions, which took effect July 1, are under the auspices of the Income-Based Repayment Program. The article notes two important changes: the elimination of the marriage penalty, which now takes into account a couple’s combined student loan debt when determining minimum payments; and annually adjustable minimum payments based on either the initial amount borrowed or the current loan balance, whichever is higher.
