Is it possible to get a debt collection lawsuit over a debt so old your credit company had already written it off as a loss? As two women found out, the answer is unfortunately, yes. Even worse—it’s legal.
A recent My 9 News story reveals that debt collectors such as New Jersey-based First Century Financial buy up old credit card debts at pennies on the dollar, then use their legal arm Pressler & Pressler to pressure consumers into paying up – even if the debt is too old to legally collect. The two women featured on the show were shocked to receive debt collection letters, claiming they owed thousands of dollars to collectors they’ve never even heard of, and that failure to pay would result in arrest and legal action.
Thankfully, there are ways to fight back. The Fair Debt Collection Practices Act protects consumers from debt collection harassment. When faced with a debt collection letter you should always demand proof of the debt’s existence and the name and address of the original creditor. If you receive any legal papers – a lawsuit – you should contact a qualified attorney immediately.
Debt collection harassment can lead people to do odd things. Recently a New Jersey consumer landed in a hospital after setting himself n fire at a Rent-A-Center store in protest of the volume of late payment notices and collection calls he’d received from the chain.
The man went to the retailer to speak with a manager about the collection letters and calls he had been receiving regarding missed payments on furniture rentals. When he was told a manager was not available, he doused himself with lighter fluid and lit the fluid with a cigarette lighter, setting himself on fire in front of customers and employees of the store.
The consumer was in critical condition after the incident, but it clearly shows how debt collection abuse can trigger mental issues. Of course, it’s easy to think that he brought it on himself, but consider this: the retailer has been accused in the past of unfair business practices concerning its credit granting and debt collection tactics. In 2006, the state of California reached a $7.75 million settlement with the company for what regulators said was a failure to “disclose the true cost of its rent-to-own program.”
Just when you thought a debt collector was calling from America, it turns out, that call is more likely than not from India. That is right, you may be getting a telephone call asking you to pay a delinquent bill straight from Gurgaon, India. These bill collectors sit in cubicle farms thousands of miles away, calling more than 100 customers a day.
Encore, based in San Diego, is one of a growing number of collection agencies training and employing foreign nationals in India and elsewhere around the world for pennies on the dollar. Many Indians, at most, bring home $63.00 a month.
When outsourced employees from Indian are being trained, they take on an American name in case the consumer asks their name. Having an American name does not make them American, especially if they do not know the American lingo or their English is lacking. Consumers can routinely tell when a call is coming from abroad, and are clearly not as stupid as the debt collectors think.
This all begs the question of whether it is possible to take a foreign national and force them to adhere to the Fair Debt Collection Practices Act. Will these mild-manner folks, unschooled in the nuances of American syntax, be savvy enough to resist the urge to cross the line between legality and illegality?
More to the point, in the case of litigation against a debt collector for violations of the federal consumer protection laws, will the defending companies produce their employees for depositions? In such third-world countries it is often impossible to locate former employees due to lax record-keeping at the local level – so how would an aggrieved consumer even find the proper offending debt collector?
A collection agency operating in Florida and Georgia has been ordered by the Federal Trade Commission to cease all collection activities that run afoul of the Fair Debt Collection Practices Act (FDCPA) and pay a judgment of $3.4 million to settle all FTC charges.
Rawlins & Rivera, Inc. and Ryan & Reed, Inc., both of Florida and Georgia, have been ordered by the Federal Trade Commission to cease all collection activities that run afoul of the Fair Debt Collection Practices Act (FDCPA) and pay a judgment of $3.4 million. According to the government, the firms “used misleading dunning letters and abusive telephone calls to falsely threaten that consumers would be sued, their property seized, and their wages garnished if they did not pay the money that the defendants said they owed.” But the larger violations involved collectors representing themselves as attorneys.
In February 2007 the FTC said that the company’s agents were claiming to be attorneys and calling debtors and threatening legal action after “case reviews.” A Florida lawyer whose letterhead was used by the business was also named in the suit.
However, the big fine is full of sound and fury . . . signifying nothing.
The FTC reported it suspended much of the $3.4 million judgment because the firm is unable to pay it. Rawlins may continue to operate as a collection agency.
What would be interesting, however, would be to ask the owners of the collection agency whether they would ever suspend their harassment if a debtor said that he or she could not pay. Somehow, I doubt that.
In 2006, the Federal Trade Commission reported 69,204 FDCPA related complaints by consumers. In the first ten months of 2007, 3433 consumers sued collection agencies in U.S. District Court for alleged violations of the FDCPA. The state of Pennsylvania leads that statistic with 319 cases followed by New York with 296 and Florida with 286. Illinois ranked fourth with 257 followed by closely by Michigan with 253 cases. These five states represent 45% of all the cases that have been filed nationally for the year and these numbers continue to climb.
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