Entries in Creditors (3)


FTC Files Complaints against Debt Collection Agencies

Comstock/Thinkstock(WASHINGTON) -- The Federal Trade Commission filed complaints against seven debt collection companies in California for making fake threats to consumers who owed money that they had been sued or could be arrested if they did not pay, at times threatening their employers and family members.

The complaints are part of a crackdown on debt collectors, including one company that allegedly threatened one woman in Illinois who could not pay for her daughter's funeral to "dig her daughter up" and made threats to "eat" her dog.

Debt collectors generate more complaints to the FTC than any other industry, according to the government agency. Last year, there were 144,159 filings against collection companies, the second largest category of complaints to the FTC. There were 250,854 identity theft related complaints last year, or 19 percent of all complaints.

Last month, the FTC filed a complaint against Rumson, Bolling & Associates, based in Van Nuys, Calif., for allegedly making abusive calls to debtors, including the Illinois woman who reportedly owed money after her daughter's funeral. The company also threatened to use "violence or other criminal means" to harm the alleged debtors, including calling them "deadbeat," "white trash," "piece of crap," "crackerhead," "scumbag," and "lowlife."

The Central district court in California granted a temporary restraining order which became a preliminary injunction against the business.

Christopher Pitet, an attorney for all but one of the defendants listed in the complaint, said when given the opportunity to provide the court with evidence, they will show that they committed a "substantial amount of resources" to comply with the Federal Debt Collection Practices Act.

"If there are instances where employees did not comply with the Act and mistreated debtors or did the things alleged in the FTC's complaint, I will be the first to say to say those things never should have happened under any circumstance," Pitet said.

Copyright 2011 ABC News Radio


Blockbuster Announces Start of Auction Process

Photo Courtesy - Blockbuster Inc.(DALLAS) -- Video rental company Blockbuster said Monday that it has initiated the process to auction the company in an effort to maximize value for its stakeholders.  An initial bid of $290 million was established by four large creditors, according to The Hollywood Reporter.
Blockbuster decided to sell the company when creditors could not come to an agreement about a recapitalization plan for the company, which filed Chapter 11 bankruptcy last fall.

The companies which participated in the "stalking horse" or initial bid to set the minimum acceptable bid are Blockbuster debtors Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Managemen, Varde Partners and Colbalt Video Holdco (managed by Monarch Alternative Capital).

The initial bid did not include billionaire investor Carl Icahn, who also owns are large amount of Blockbuster's debt.

Blockbuster expects to close a sale no later than April 20.

Copyright 2011 ABC News Radio 


New FTC Policy Could Allow Debt Collectors to Target Family, Friends of Deceased Debtors

Photo Courtesy - Getty Images(BOSTON) -- A proposed "statement of enforcement policy" by the Federal Trade Commission (FTC) could cause debt collectors to use more aggressive tactics. The new policy is likely to weaken laws that block debt collectors from seeking payments from families of consumers who have recently died.

"The plain language of the Fair Debt Collection Practices Act does not allow collectors to contact friends, neighbors or relatives except to obtain contact information for debtors," said Robert J. Hobbs, a lawyer and expert on debt collection issues for the National Consumer Law Center.

Hobbs believes this new policy will "open the door for collectors to seek money by prodding and misleading grieving relatives and friends into thinking they have obligations that they don't."

There are currently at least five firms that specialize in the collection of debts of the deceased, according to a recent Minneapolis Star-Tribune report. Nordstrom, Citigroup and Wells Fargo are just a few of the creditors that employ these debt collection specialists.

The FTC is accepting public comments from consumers being targeted  by debt collectors regarding outstanding debts of the deceased until Nov. 8.

Copyright 2010 ABC News Radio

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