There should be criminal charges for this; at the very least, perjury for lying to the court.

Indeed we hope the AG follows up with a criminal investigation and charges against those who perjured themselves.

I'm seriously impressed with some of the things going on in NY. First they forced AIG to show who got what bonuses comprised of taxpayer dollars, now this.

@Paul E. Dykes: I, for one, agree with you completely. Unfortunately...that will likely not happen :(

@Paul E. Dykes:

Yeah, a lawyer gets 14 years in prison for contempt for refusing to declare ~2 million in assets (that he says don't exist) in a divorce case.

If that's what you get in that case, this should warrant about 30,000 years in FPMITA prison for contempt.

So what happens to the debt? The customers get their money back, but then the debt goes back on the books, I would hope. Sure, the company collected while breaking the laws, but that doesn't invalidate the debt. The smart ones getting their money back would be better off just letting the company keep the money to keep the debt settled.

Let me fix the first sentence for you: New York attorney general Andrew M. Cuomo is running for governor.

Hmmm, how are they going to update everyone who-they-screwed's credit reports now???

@balthisar:

Sure, the company collected while breaking the laws, but that doesn't invalidate the debt.

For something this serious, it should.

You could make it publicly popular by advertising it along the lines of making sure that vigilantism doesn't pay.

@Saboth: Yeah, lots of props to Andrew Cuomo, the State Attorney General. As a resident of New York, too long have we had to deal with a bunch of crappy politicians who try to use NY as a stepping stone to "bigger and better things". It's nice to see someone actually care about the people who live here. Governor Paterson, is still doing a terrible job and wants to tax us for ridiculous things (movie tickets, haircuts, digitally downloaded entertainment, and a whole lot more). The people agree, as Paterson has the worst approval ratings ever. I just hope Cuomo stays where he is and continues to protect the New Yorkers.

It's pretty much guaranteed this guy is running for a hire office. Most likely governor.

I@Corporate_guy: If he's doing the right thing for the people of New York, why shouldn't he run for the highest office in the state?

I live in Florida and wish that we had some similar traits in our political leaders.

@SgtMajorFragg: Charlie Crist was a really good AG, actually, and he seems to always be making a good faith effort to help us, even when he makes the wrong call on something.

@balthisar: You have to show the shady company that there are serious consequences for their actions. If these debts are forgiven, it'll set an example for other companies that use less then legal tactics to collect debt. If they know they won't be able to keep the funds that are collected under false pretenses, they'll be less likely to resort to underhanded tactics.

I like New York attorney general Andrew M. Cuomo.

@balthisar: On the other hand, I think that invalidating any debt that is collected (or they attempt to collect) by illegal means is the perfect incentive to make sure any company keeps all its debt collection operations aboveboard.

@I Love New Jersey: Hey. Better than Paterson.

@I Love New Jersey: I like Cuomo. I like CT's Blumenthal, too. Two kick-ass AG's.

@crymson777: From TFA:

The attorney general brought criminal charges against American Legal Process and its chief executive, William Singler, in April. Those proceedings are continuing, according to Mr. Cuomo's office.

@balthisar: Not entirely true. There are other legal avenues that you can follow to settle a debt, when you've been notified about a debt.

But you also seem to forget that a lot of these debt collection companies might not have accurate info. A lot of times, all they have is a name, a previously known address, and an account balance. That's it. If the person moved and got a new address, they'll start looking for other "John does" or "Jane smiths" that could fit. If they decide that you're the John Doe they are looking for, they could sue you, even though it's not your debt.

That's the point of providing notice, and having your day in court. You can go in and present evidence that this wasn't your debt. Instead they chose not to provide notice, got default judgements and just garnished a bank account or wages before having any chance to defend yourself.

Once the judgement is entered, it is 1000 times harder to fight it. Once they have a judgement, you can't fight the debt on the basis of "This isn't my debt" anymore. The court has already ruled that it's your debt (because you didn't defend yourself) and has given the collectors some ammunition to force collection.

Imagine if YOU were the John Doe they decide is the one who owes this debt. You might be closing on a new house, or getting ready to leave or are in the middle of a vacation. Then suddenly this garnishment hits your bank account and all of your money for closing or your vacation is suddenly wiped out. Seized. You haven't done anything wrong, but your whole life is in a world of hurt.

That's ONE reason why this is so wrong. The attorney general is just forcing the return of illegally obtained funds, because it's not his job to rule on whether someone owes a debt or not. I'm sure, afterwards, they could go through the whole legal process and do it right, giving the alleged debtors a chance to defend themselves.

Another reason is that there are other avenues to settle a debt that a debtor can pursue. The biggest one being bankruptcy. If they know they are being sued, then they can file for bankruptcy and the whole thing goes away. Not the best of tools, but it is available. If they garnish the bank before you have a chance to do that, it can seriously affect your ability to live, eat, pay rent, etc. Bankruptcy is designed to settle the debts while continuing to provide for the basics.

@Saboth: The AIG thing was an abuse of power by the AG. This is not.

@Paul E. Dykes: I also wish the courts would smack down harder on companies that use perjury as a routine business practice.

I trust he's taking on RIAA and their violations of due process next.

@HiPwr:

Considering those are taxpayer funds going to the bonuses, I didn't really see it as an abuse of power. Not to mention, I am sure those people have to pay NY taxes on the funds. If you don't want government interference in your company, run it in a way that the government doesn't provide you with funds to stay in business IMO.

@Saboth: Congress authorized the bonuses. What law was broken?

@balthisar: Yes, it absolutely does invalidate the debt. Part of a debt agreement is that the creditor will not break the law in the collection of that debt. If they do so, especially deliberately like this, they should absolutely lose the right to collect.

If I broke into my friend's house to take back $100 he owed me, would you say he still owed me $100? Even if I caused that much damage breaking in?

No mercy, dammit. Creditors use every single tiny rule they can leverage to force debtors to pay more and more. When THEY break the rules, they should pay to the full extent of the law.

If they were being nice and letting debtors slide for reasonable circumstances, that'd be one thing. But they're the ones that wanted Mortal Combat-style rules. Maybe they should have thought a little harder about that, but eh, too late now!

(Also, I want to add that EVERYONE SHOULD SUE CREDITORS ALL THE TIME, OVER EVERY VIOLATION OF THE LAW. Most consumer lawyers will do these suits contingency (free to you, if you have a case), and the more people hold creditors' feet to the fire, the less abuses like this we'll have. It's called the "deterrent effect" of the law, and it's supposed to work that way, but too many consumers are underinformed and don't stand up for their rights, and the rights of everyone else!)

@econobiker: If they have debt collectors after them, they have already screwed up their credit reports.

@HiPwr:

I don't think they said any law was broken. He requested information. The company accepted taxpayer money, he represents taxpayers. I think they have a right to know where their money was going. If AIG doesn't like it, perhaps they should practice ethical business procedures in the future so that they can say "we don't owe you guys anything, so we don't have to provide anything."

@Saboth: The Attorney General is the state's top law enforcement official. Unless he had some notion that a law had been broken, he had no business interceding. It was a populist/political play, pure and simple.

@Julia789: He's been a nasty sharp stick in the eye for free speech, and he's doing it under the guise of "protecting the children from online predators." Who wants to argue against that?

He's actually rather shady... like any other slimy politician.

you mean HIGHER office?

@Adam Stewart: I'm not sure they would be able to garnish wages or bank accounts given that they would need either an original bank account number or social security number that is tied to the original debt.

A better example (that I've seen here often) would be if you send in a check for something and the company doesn't recieve it. Or maybe they over charge you and refuse to correct the account.

@balthisar: You can't take it as a given that the debts were legitimate. That's the whole point of the summons, hearing, etc.: to validate that the debt is legitimately owed.

I'm glad to see that the firm which falsified, i.e.: lied on, legal documents 100,000 times is facing criminal charges. Similarly, I hope that every individual lawyer involved in this scam at least faces an ethics complaint before the State Bar and has their pathetic legal careers brought to a permanent end.

I agree with the call for criminal charges against the collection agencies and their principals, and disciplinary action against the lawyers who filed the false claims.

I have one more question, and that is whether the court let its relationship with these collection lawyers become too relaxed and trusting, to the point where local court rules and formalities were shoved aside, that would have otherwise prevented the filing of false documents.

Go Cuomo. My state (KS) is still recovering (IMHO) from the anti-consumer regime of our former AG.

@pot_roast: Which one are you talking about, Cuomo or Blumenthal?

I live in CT so I know more about Blumenthal. Cuomo I only know from Consumerist and news stories.

As for free speech vs. child predators online, that is a diffcult balance to find and a hotly contested topic. I understand the concerns on both sides.

The courts need to watch themselves, the plaintiff should have to pay the court to ensure proper serving.

The link to the lawsuit in the NYT article is broken. I cannot find a way to notify NYT about that. They are too big and don't want to hear from the public.

The correct link is: [www.oag.state.ny.us]

Here's a very interesting website that often misleads debtors with biased anti-consumer advice: [forum.freeadvice.com]

@HRHKingFridayXX: It's not too difficult. Once they've chosen someone, then can pull their SSN and credit reports from the credit agencies with just their name and current or past addresses. Then when you've got a garnishment order, your credit report has your employer information listed on it, so they can garnish your paycheck. Debt collectors will then just send the garnishment order with only name and SSN to all the popular banks in the area hoping for a hit. Sometimes, they'll look at your credit report for clues of where you bank... ex: "oh, he has a mortgage with Bank of America, we'll try them. There's an auto loan through the state credit union, we'll send them an order also."

They don't need an account number, because the bank, when given the garnishment order, will look it up by name, address and/or SSN.

@SgtMajorFragg: I agree. When you run for higher office in Florida, you use your current position to pander to corporations rather than the consumers. It's nice to see something different.

Good for Cuomo.

You can't assume the creditors were going after valid debts, either. I have a common Irish-American name, and once got a nastygram from a collection agency trying to soak me for an emergency room visit at a hospital I'd never even heard of. One of my namesakes had skipped out on the bill, and the collection agency was finding other people with that name and trying to tag them with the debt.

@Eyebrows McGee (now with more baby!): I had a little incident with a hospital and their collection department that ended up in small claims court. I paid the bill and had record of it. They couldn't keep their records straight or communicate between departments. They dismissed my assertions that this was paid and took me to court. I was able to quickly prove I was right to the judge. The lawyer for the hospital lied repeatedly about a whole series of actions that I was able to prove were not true. His last swipe was to claim I showed up in their office and made a scene. I showed up there once picked up a copy of a paper and left. He said it as one last swipe. WTF? He and his lackeys lied through the entire thing all that happened was the case was closed in my favor.

@Marc Melton: I assumed he was a complete idiot when he wanted to tax soda.

@Adam Stewart: Wow. I'm impressed that's legal. You would think that the SS# used to open the credit card account would have to match the garnishment account. Then again, I guess not all things in collections have SS# in the first place (cable bills).