Monthly Archives: August 2014

Debt Collectors: Like Bankers, Or Worse?

Well, in my book, not many are lower than bankers. debt collector office

I mean the Big Boys (and Girls) who ripped off America

with the foreclosure crisis and other escapades.

The New York Times has a story on a former banker who

became, a debt collector.

Most of us do not realize just how enormous this business is:

From 2006 to 2009, for example, the nation’s top nine debt buyers purchased almost 90 million consumer accounts with more than $140 billion in “face value.” And they bought at a steep discount. On average, they paid just 4.5 cents on the dollar. These debt buyers collect what they can and then sell the remaining accounts to other buyers, and so on.  (from the NY TImes story)

As we consumer lawyers keep trying to tell judges, the entity suing our client should be able to prove it actually owns the debt.

Original creditors hardly ever sue any more; the debts are sold and re-sold.

And, as reported in the N. Y. Times, sometimes the debt information is stolen, and innocent consumers pay the wrong party.

portfolio of paper — his paper — had been stolen and was now being “worked” by one of the many small collection agencies on the impoverished and crime-ridden East Side of Buffalo. Using his spreadsheets, this unknown agency was calling his debtors and collecting debt that was rightfully his. The debtors, of course, had no way of knowing who actually owned the debt. Nor did they have any reason to suspect that they might be paying thieves. They were simply being told they owed the money and had to pay.

Maybe that explains the tactics frequently used  by scumbag collectors.

A current client of mine was told she would be arrested, and she is on her way out of the country.

She was terrified she would be stopped at the airport.

The Consumer Protection Finance Bureau has chronicled some of the debt collector abuses it has found:

Calling repeatedly or at odd hours to collect a debt. One collector made calls before 8 a.m. or after 9 p.m., which violates the Fair Debt Collection Practices Act. That same company called some consumers as many as 20 times in a two-day period. That’s viewed as harassment under the debt law.
Failing to keep track of debt collection calls. The CFPB also whacked debt collectors for failing to track calls they made to consumers. Fair debt rules prohibit companies from hounding consumers with repeated calls, but if there’s no call-log, the bureau says, there’s no way for collectors to ensure they’re complying with the law.
Deceitful efforts to collect payday debts. In some cases, payday lenders used ploys like non-existing promotions to trick consumers into calling them. Debt collectors have to identify themselves to consumers.
Hiring debt-collection cowboys. The CFPB said that some payday lenders hired third-parties to collect debts for them but failed to ensure those hired hands followed the fair debt law. Some of the hired guns posed as attorneys, called at odd hours and falsely threatened criminal prosecution for bad debts, all of which are violations, the CFPB said.
Outsourcing credit services. The bureau found that outsourcing also was a problem at the credit bureaus. The consumer watchdog said some credit bureaus failed to outline clear policies that contractors who handle call centers, disputes and sales of credit products were expected to follow.
Failing to track consumer complaints. One or more bureaus, the CFPB said, didn’t monitor and and analyze complaints, a failure that can prevent bureaus from spotting and correcting problem areas.

More on this next week.

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Keeping Out Of Bankruptcy

bankruptcy car loan

Best way to stay out of bankruptcy?  Don’t borrow too much. Including car loans. Now that banks are packaging car loans like they used to do with mortgages, into big trusts that generate securities that pay interest, the car loans are getting as messed up as mortgage loans used to be. But They Would NotContinue Reading

What Is This Change That Will Help My Credit Score?


Actually, Fair Isaac, the company that gives us FICO, the    main credit report scoring system, announced TWO changes in how it reports debt. Medical Debt For the first time, FICO will categorize separately medical debt from non-medical collection accounts. There have always been good reasons for this. How many of us intentionally incur medical debt, like, say, weContinue Reading