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Entries in Debt Collection (4)

Thursday
Oct272011

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

Wednesday
Mar232011

Debt Collection Firms Still Abusing Consumers Despite Reforms

Stockbyte/Thinkstock(NEW YORK) -- More consumers are complaining about abuses by debt collection firms, despite attempts to reform the industry.

An official report says complaints about debt collection companies rose 17 percent last year.  The largest number of complaints came from people who say they were badgered with repeated phone calls.

John Ulzheimer of SmartCredit.com says many firms have been targeted by regulators.

"The work that they did for consumers was either completely irrelevant immaterial and in some cases just a flat out scam," Ulzheimer says.

Under rules that went into effect last fall, credit reporting firms are not allowed to charge a fee unless they act on a consumer's behalf.

"No upfront fees until some sort of service has been rendered," explains Ulzheimer.

Copyright 2011 ABC News Radio

Wednesday
Nov032010

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

Friday
Sep242010

Bank Fires Collection Agency Over Obscene Collection Calls

Photo Courtesy - ABC News(DALLAS) -- Two days after being confronted by ABC News, Bank of America has fired a debt collection agency after several of its operators were caught using racist and obscene phone calls to collect debts from bank customers.

"What's up, you f---ing n---r?" said one of the collection agents in a message to 32-year old Allen Jones of Dallas, who owed $81 on his Bank of America credit card.

"This is your f---ing wake up call, man," the debt collector said in a message left at Jones' home at 6:30 a.m.

In a message left a few minutes later, the debt collection agent told Jones, "You little, lazy ass bitch, get your mother f---ing ass up and go pick some mother f---ing cotton fields, bitch."

Jones said the calls continued even after he told the debt collection company he had paid his credit card bill.

"The representative acted like, oh, we can call you as many times as we want," Jones said in an interview to be broadcast Friday on ABC World News with Diane Sawyer and Nightline.

The calls came from the Harlingen, Texas office of Advanced Call Center Technologies. ACT is a Philadelphia-based company that provides collection services for a number of major corporations.

Jones saved the taped messages and hired lawyers to sue ACT. A jury in Texas found the both the debt collectors and the corporation responsible and awarded Jones more than $l.5 million. 

Copyright 2010 ABC News Radio







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