"He basically pulled out a bottle of lighter fluid, poured it all over his body, pulled out a cigarette lighter and lit himself on fire," Bloomfield Police Capt. Chris Goul said.

The man, 62-year-old Emilio Saladriagas, entered the Bloomfield Rent-A-Center location Tuesday and asked to speak to a supervisor about the late payment notices and collection calls, says the Star-Ledger. When a manager was not available, he pulled out the lighter fluid.

Employees doused him with water and he is now in stable condition at the burn unit of a local hospital. He has not been charged with a crime because he did not make "overt or criminal" actions to harm anyone but himself, according to police. The employees are receiving counseling.

"We don't know if he had mental health issues or what sparked it," [police] said. "Employees said he'd always been a nice man."

If you're in debt and having a hard time dealing with the collection calls and notices, there's help available. The first thing to do is to familiarize yourself with the Fair Debt Collection Practices Act (PDF). If you're being harassed, you can sent a letter to the debt collector demanding that they stop contacting you. They do not have the right to keep contacting you simply to try to get you to pay. You can also do a little research and locate some free or low cost legal help in your area. If you have a lawyer, the debt collectors are required to contact the attorney instead of you. If the debt collectors don't follow these rules, you can sue them! Not being able to pay your bills can be a humiliating experience, but don't give up.

Newark man sets himself on fire [Star-Ledger] (Thanks, Andrew!)

Third-party debt collectors are regulated by the Fair Debt Collection Practices Act (FDCPA) which is overseen by the FTC. Here are few practices which are prohibited under the law:

Harassment
Debt collectors cannot make threats of violence against consumers or publish lists of those who don't pay their debt. They may contact you in person, by mail, or by fax but can only call you between 8 a.m. and 9 p.m. unless you have agreed to alternate hours. They are also not allowed to use obscene language or call repeatedly (i.e. several times a day).

False statements
Debt collectors cannot misrepresent themselves. They cannot not falsely imply that they are attorneys, government agencies or that they work for a credit bureau. They cannot say that papers being sent you are legal forms if they are not, or say that they are not legal forms if they are.

Unfair practices
Debt collectors may not collect an amount greater than your debt, unless your state law permits it. They cannot use deception to make you accept collect calls or pay for telegrams. They also cannot threaten to take your property or contact you by postcard.

Linda Sherry of Consumer Action recommends that if a debt collector contacts you, the first thing you should do is ask for proof of the debt which should consist of a paper document with your signature stating that you applied for the debt. Also, be aware that some debts have a statute of limitations which could be from 3 to 15 years. Check your state's laws to see if your debt is still collectible because once you pay a portion of the debt the clock resets again.

You can stop a debt collector from contacting you if you submit a written request to them. Once they receive the letter, they cannot contact you again except to tell you there will be no more contact. Additionally, if you have an attorney presiding over your debt, they must contact the attorney instead of you.

Just because you are in debt, doesn't mean that debt collectors have the right to harass you or operate outside of the law. If you feel that a debt collector has violated the law, you can file a complaint with your state's Attorney General office and the Federal Trade Commission.

Debt collectors on the rampage [CNN]

Fair Debt Collection Practices Act [FCC]
(Photo: Getty)

I've been in a dispute with Discover Card for the past couple of years involving an account I opened with them in 2001. Initially, all was well on the account, I made payments on time, kept a decent balance on it for them to earn interest from, paid them off about 2x-3x my minimum balance. Then came the day I asked a friend to return a Blockbuster Video for me, which he failed to do. I didn't know about it until about 45 days later when I got a letter stating my account had been placed with a local collection agency. I immediately contacted the agency, explained the situation, and payed them in person at their offices within 24 hours of receiving the notice.

I checked my credit report about 45 days later to see if that collection was going to negatively affect me, and it didn't appear on any of the big three reporting agencies, so I considered the matter over and done with. At least, until I got a letter from Discover Card stating they had reviewed my account and that they were increasing my interest rate from 11% to almost 22%(!) - despite my flawless history with them and my other three credit cards. I fought back and forth on the phone with them asking them what was going on, and eventually they revealed that it was due to a default with another agency - The aforementioned Blockbuster video that hadn't been returned - Never mind that this had never appeared on any of the big three credit reporting agencies, and never has, so I don't even know how they knew about it. By the time I got an answer out of them as to what was going on, I had only about a week to meet the cancel-my-account deadline they set forth, so I immediately typed up a letter demanding they cancel my account.

Considering THIS matter over and done with, I then went on about my merry way.. until I got a statement the next month showing not only the increase to my charges, but also overage charges caused by this increase in interest, and late payment fees which put me over the balance, and then, of course, overage charges. Another round of phone calls revealed that they were taking the stance that the letter had arrived 1 day after the due date and they had full rights to change the agreement since I defaulted on replying in time, and the representative refused to help me any further. Another round of phone calls the next week got me as far as getting a rep smart enough in the law to admit that the postmark is what mattered, not the date of arrival, which was a good 5 or 6 days before the due date, but of course they did not retain envelopes as evidence of when I actually sent the cancellation notice.

Ding ding, round three. I faxed the copy of the certified letter receipt and a letter explaining the legal binding of postmark over date of receipt and my situation for whom it may concern. I called a few days after this letter was delivered, confirmed that they had received it, and was assured they'd look into it.

Sometime during this whole thing I sent them a payment for $1000, as a show of good faith and that I was trying to work with them. They applied this to all the charges, which I was disputing, instead of the actual balance, and this caused a further upset and round of phone calls and letters. After this, I sent them a letter in writing stating that I would make no more payments until the matter of the interest rate and inflated charges was settled.

Eventually they finally charged the whole account off and sold the account to a series of collections agencies, each one more nasty and rude than the first. None of them understood the concept that I was perfectly willing to pay off the original remaining $1,200 balance, despite having basically been robbed for $1000 already, just none of the ever increasingly inflated charges they were demanding, despite the fact that I wrote letters of dispute to each new agency I was placed with, which seemed to happen about every 60 days or so. By this time my account had ballooned to over $3,000.

Eventually, it was placed with a law firm in my state, who demanded that I start payment on the balance they were asking ($2005, an amount which seemed to vary depending on what agency or which Discover Card rep I talked to on any given day) or they would file a lawsuit against me. Research on this particular law firm showed that they, in fact, had zero hesitation filing lawsuits, even if the charges were being disputed, or against the wrong people, etc. Other accounts I managed to dig up via Google even showed them contacting and even trying to subpeona employers, family members, you name it, and that they had a tactic of filing without serving proper notice to the defendant, obtaining a default judgment since they would fail to appear since they didn't know about it, and dragging a simple collection into a long, involving legal matter that would cost me far more to rectify than the original balance of the debt.

Not wanting to turn what was already a dog and pony show until a full blown circus, and now 2 1/2 years into a never ending ring of disputes and challenges, I just conceded defeat and agreed to pay the balance in payments. The law firm agreed to my payment offer, and said that they were going to send me "some paperwork" to finalize everything. When the "paperwork" arrived, I found it was actually a Confession of Judgment, and there was no direct mention of the payment agreement or any stipulations that they would only file the Confession of Judgment in the event of my default, etc. This basically meant that at any time, they could choose without my knowledge or notification, to appear before a judge, show them the signed Confession of Judgment, and he could enforce whatever methods he chose to collect on the account, including repossession and docking my paycheck directly.

Naturally, I refused to sign this, and called to tell them so. I offered to have a lawyer re-draft it with stipulations that they could hold the Confession of Judgment in their care, but only file it in the event that I as 15 days or more past an agreed upon payment date, or some other kind of compromise, which they flat out refused. They basically said I sign it, or they'd get the default judgment, and that was that.

When I said I'd already retained an attorney in the matter, their tone suddenly changed, and now they wanted to talk settlement. The words "retained an attorney" apparently still do have some kind of magical intonation, even with other attorneys. They offered a settlement agreement of $1,200, which is pretty much what I owed them in the first place... well, if you exclude that $1,000 they stole to cover their bogus fees and charges, at least... so I agreed to that, and paid it within 72 hours. I waited for the letter of satisfaction from them, then another 30 days, and checked my credit report to see how it was being reported. Low and behold, all three agencies report it as having received a $1,200 payment, with an $805 balance, and it's marked as "Charged Off/Bad Debt," NOT as "Settlement" with a balance of zero.

I contacted the collection firm, who basically said I should contact Discover Card. Discover Card said I needed to contact the collection firm, and that they had remitted my payment, but they had never told Discover Card that a settlement agreement had been reached. I stated I had the letter of satisfaction from them, and would be happy to fax it over, and they said oh, of course, that would clear it right up. So I call a week later to confirm they received the fax, and of course no mention of it is on my account, and this has been repeated four times now.

I opened disputes with all three credit bureaus who opened investigations into the matter, and mailed them copies of the letter of satisfaction. All three updated in June with the same result:

Status:



Account charged off/Past due 180 days. $2,005 written off. $10 past due as of Jun 2008.

Obviously, $2,005 were NOT written off, a settlement was reached. And what the hell is this $10 past due as of Jun 2008?

Keep in mind I've already paid them $2,200 on a $1,200 balance at this point.

At this point, I don't even care about getting my money back. I just want the bizarre balance removed and the comments to reflect that the account has been settled as agreed, with a balance due of $0. Each Discover Card representative I speak to has no prior knowledge of anything I'm talking about, and results in the same thing; fax your letter of satisfaction, and we'll get it fixed, only to call a week later and repeat the whole process again.

I'm at the end of my patience and knowledge as to what to do here. Is there anything I can do to get my credit report updated "correctly?"

What a horror story!

In your case, we believe that it would be beneficial for you to consult a lawyer that specializes in consumer debt cases. As you pointed out, the phrase "retained an attorney" does still get the job done. Actual attorneys can be even more effective.

In the meantime, the FTC says that you can add a statement to your credit report:

If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service.

Good luck.

How to Dispute Credit Report Errors [FTC]

(Photo: imjoshdotcom )

Erin was the recipient of a recent scam attempt from Moreno and Woods, a debt collection agency that—according to her account and others found online—uses abusive tactics and fraudulent claims to try to con people into paying off debts they never owed to avoid things like wage garnishments and lawsuits. Erin fought back, and shared her story with us to warn others.

I received a voicemail today (5/27/08) out of the blue from a man who identified himself as David Cooper from Moreno and Woods. He said he was calling regarding Case Docket #93659, and that I must return his call immediately or else "the matter" could result in wage garnishment, denial of credit, or closing of existing lines of credit. He gave his number as 866-928-3160, ext. 109. Since the voicemail didn't provide any information that would allow me to discount the matter out of hand, I returned my call.

Cooper retrieved my file, asked if I was Ms. [redacted] - I said I was - and asked me to confirm the last four digits of my SSN - I did not reply to that. I asked him what the call was regarding, and he said that they had a "judgement" against me from Bank of America regarding an outstanding balance of $20,000 on Visa account ending #1181 that was opened in 2001 and closed in 2004. (To the best of my knowledge this account never existed, let alone belonged to me - even supposing someone else had opened it in my name, there should have been some contact regarding it at some point, or a record of it on my credit report). I asked in what court the judgement was obtained, and he said they had the judgement "in the office." I asked again what that meant, and what court of law had entered a judgement against me. He said that technically there was not a judgement yet, but three debt collections agencies had tried to get this money and so the claim was being filed in [redacted] County (where I reside - looks like they're smart enough now to Google area codes before they get on the phone) on May 30.

I said that I had no recollection of that account, had never been contacted by a collection agency, and that I have done business with Bank of America regularly over the past several years. I asked if he thought it was odd such an issue would not have arisen in that time. He said it was odd but he wasn't making it up and if anything someone might have stolen my identity. I said that I check my credit report regularly, and said that if someone has accumulated this debt by using my information, it would be extremely odd that it had not shown up on my credit report, and that neither BofA or a debt collection agency had contacted me in the intervening six years since the account was supposedly opened, or the four years since it supposedly defaulted. He agreed and said he was just trying to figure it since "the judgement" was against me for $20,000. At that point I told him that there might be people who fall for this sort of thing but I wasn't one of them.

He again tried to say that it wasn't up to him, there wasn't anything to "fall for" because he was looking at my folder right there, and there was a judgement against me in court. I asked in what court the claim had been heard - he said again it was going to [redacted] County and would be entered there. I said I understood that, but he had already referenced a docket number (93659) and I wanted to know what court of law had provided that docket number, since a docket number would not have been generated unless a claim had already been filed against me somewhere. He said, "The docket number is here - it's number 93659." I asked again what court of law had provided that docket number. He could not answer (obviously, since it is a scare tactic and no claim has been filed against me anywhere).

Finally I said he had already told me so many falsehoods I had no reason to believe anything he had to say - he asked, "What, falsehoods?" I said, "You called my home, you left a threatening message saying that a claim had filed against me in court and that I could face financial penalties, then when I called you said a judgement had been entered against me - none of that is true!" He asked me to hold on (sounded like he was trying to get a supervisor on the line or something) and I refused, saying "And I'm going to ask here not to call here again," and then hanging up.

Immediately following this conversation, I went online and obtained my credit reports from the three credit agencies (I had not obtained them in just over a year). Everything was in order - I printed off the reports - but while I was printing the last one an inquiry showed up on it from Marshall & Ziolkowski, a well known rip-off company who are now apparently using Moreno and Woods as a front. I immediately put a fraud alert on my reports as well. Hopefully this is the end of it, but I'm prepared to take legal action if they continue to contact me or try to report this fraudulent debt to the credit agencies.

I am just disgusted. The attitude would have been bad enough even if the debt existed, and since it DOES NOT EXIST, it's even worse. And as mad as I am, I'm glad they called me instead of someone who might have believed their scare tactics and paid them - I've worked in the legal field before (specifically, I have worked with creditors on debt consolidation and relief for the disabled and injured), I know my few debts down the cent and I am current on all of them, I am not easily intimidated over the phone, I know how to check my credit report, add a fraud alert, and dispute fraudulent claims, I know my rights and I know what information a legitimate company would have to prove any real debt - how absolutely terrified would I be if I didn't know any of those things? If I thought maybe there WAS some huge bill out there that I now had to pay or face legal penalties? These people should be in prison.

Erin points out that, should they call back, she has several options open to her:

The next steps, if they pursue this, could include me sending a demand for debt validation and/or cease and desist orders; reporting them to the BBB and relevant AGs [Attorney Generals]; and suing them for any violations of FDCPA or FCRA.

RELATED
Moreno and Woods [800notes.com]
"Report: Moreno And Woods"[Rip-off Report]

NPR says that a 77-year-old Tampa woman, Joan Kennedy Biddle, is suing to collect on a $300 loan that her great-grandfather made to the city of Tampa 147 years ago, during the Civil War. That modest debt (with interest) has grown to a little under $23 million dollars.

Biddle is in possession of an IOU signed by Tampa's mayor promising to repay her ancestor for money borrowed to purchase supplies to be used in defense of the city of Tampa. The IOU is dated 1861, after Florida joined the Confederacy. When asked why she's trying to collect the debt now, Biddle told NPR: "Better late than never."

In defense of itself, the City of Tampa came up with a rather impressive list of reasons why the debt is not valid, not least of which is the fact that it was payable in Confederate dollars — a currency that no longer exists. It seems that Ms. Biddle's IOU may do better on Antiques Roadshow than it will in a court room.

Tampa Woman Sues City for Unpaid Civil War Loan [NPR]

A lot of the data is old and potentially of little value—one hospital says the accounts it passed to the agency were all at least three years old or older. On the other hand, a gas company said that because it only had last known addresses on the accounts it handed over, it actually had no way of contacting the victims to alert them to the theft.

The agency president told the IndyStar, "We're obviously heartsick about this. We've been in business since 1972, and nothing like this has ever happened before." Responses from companies who had passed their customers over to the agency, however, varied from taking it seriously to regretting any inconvenience. We suspect they're not feeling too much concern for their non-paying clients.

"700,000 Hoosier IDs exposed after theft" [IndyStar] (Thanks to Deon!)
(Photo: Getty)

AOL lies to their customers and has a policy of refusing to escalate to supervisors:

If you refuse to pay your bill, AOL will threaten to ruin your credit (with AOL):

AOL's abusive relationship with its "members" is not new, but it is surprising how enthusiastically they have embraced the standard lies and deceit peddled by the debt collection industry. According to our tipster, the guide is from 2006, but the tactics and policies remain unchanged.

The only way to fight back against scummy collectors is to know your rights under the Fair Debt Collection Practices Act.

Read AOL's full collections guide, complete with other despicable practices, here.

PREVIOUSLY: EXCLUSIVE: Old AOL Cancel Script vs. New
AOL Retention Manual Revealed
Quit AOL By Fax, Mail, or Phone

• 40.3%, 27,929 consumers, complained of debt collectors attempting to collect more than they were owed
• 3.4%, 2,387 consumers, complained that collectors were attempting to collect interest, fees, or expenses that were not owed, such as collection fees, late fees and court costs
• 21.2% or 14,656 consumers complained of harassment from repeated or continuous calls
• 22.1% or 15,314 consumers complained of debt collectors making calls to employers, friends and family repeatedly in an attempt to allegedly gather information to assist them in collecting the debt
• 11.5% of the FDCPA complaints or 7,967 consumers complained of being harassed with collectors using obscene, profane or otherwise abusive language
• 11.4% or 7,913 consumers complained that they were threatened with a lawsuit or some other legal action that the debt collector could not or did not intend to take, such as seizure of property or arrest.

FTC publishes its Annual Report on the Fair Debt Collection Practices Act [Alabama Consumer Law Blog]
Federal Trade Commission Annual Report 2007: Fair Debt Collection Practices Act (PDF) [FTC]
(Photo: scoobymoo)

This all started in March of this year, St. Patrick's Day, to be precise. While out with friends, my phone slipped out of my pocket without me noticing. It wasn't until the next morning (Sunday) that I realized I didn't have my LG Chocolate phone. I traced my footsteps back, hoping I'd be able to find it, with no luck. A couple of hours later, when my roommate woke up, he realized he had a missed call. Hours after I lost the phone, someone had called his number from it. They left no message, and when we tried calling the phone back, it would go straight to voicemail. Hoping that whoever had the phone would call back again, I held off on contacting Verizon to report the phone stolen. By Monday morning, having still not been able to contact the person who had my phone, I called Verizon and reported all the details I've relayed so far - not only that my phone was lost, but that someone apparently had the phone. I was told that the phone would be placed on Verizon's lost/stolen list so that if someone else attempted to register the phone on a Verizon Wireless account, they would be able to do so (although I would not be given this information to help me find the phone). The phone would also be deactivated for a month and would be removed from my account.

Writing the phone off as gone, I bought a used Verizon Razr off eBay, which I received within a few days. I once again called up Verizon Customer Service. In that call, I registered the Razr with my account, and also checked again that my old phone was off my account. I was told that because my account was a single-phone plan, there was no way for both the Chocolate and the Razr to be registered simultaneously. The Razr was associated with my account, and therefor the Chocolate could no longer be used with my account.

Fast forward one month, towards the end of April. I logged into my bank's online access, and realized I had a negative amount of money, when I should have had a few hundred dollars. Looking at the pending transactions, a charge of $435.03 had been debited from my account the day before. I was stunned. The only bill I pay that's over $150 is my rent - there was no reason I should have such a large debit on my account. I hadn't lost my debit card, so I first checked those accounts which are automatically debited from my checking account. It didn't take long to find the culprit. Verizon showed a just-paid bill - sum $435.03. I opened the bill online and quickly scanned it - I had a couple of new media services that had been added to my bill (which then charged me for the prorated current month, plus next month for each of the services). But the kicker was the hundreds of dollars of data downloads. Music, games, ringtones - if you could get it from VZServe, it was charged to my account.

Remember also that this is the end of April - the 20th, in fact. I have to send my rent check out, but I have negative money. I call Verizon, and explain the situation. I'm already pretty sure of what's happened - the month that the Chocolate was deactivated for is over, and whoever has it is using it to make charges to my account. To make a long story short, I talk to numerous customer service reps over the next few days, explaining and reexplaining the situation. I am told that it is impossible for the Chocolate to still be able to charge downloads to account. I am told numerous times by supervisors and regular reps that they're looking into the issue and will call me back in an hour/this evening/tomorrow morning. I am told that I am lying, and that I must go to my local Verizon store and show them my Razr to prove that the data downloaded is not on that phone. I spend two hours sitting in that store, waiting as the store rep talks to the customer service rep, on my phone. It is determined that the data is not on the Razr.
Finally, on the 26th, I get somewhere. A database tech hears about my problem and looks into it. Apparently, when the Chocolate was deactivated and taken off my account, there was a problem. The Chocolate was removed from my account for the most part, but in some database, it was still connected to my account. This might, incidentally, explain why there were times when friends would call me and the line would ring and ring, without going to voicemail, and without my Razr ever actually ringing. Troy Brice, the supervisor I've been talking with for the past day or so, apologizes again and again. Yes, they can cancel my service. No, they won't charge me an early termination fee. They'll refund my entire bill (even the part that was actually my bill), and they'll even pay me back the horrible $100 overdraft fee that my checking account incurred for being so overdrawn (though I was required to send them a screenshot of my online checking account to prove that I was charged an overdraft fee). I get only apologies for the fact that I haven't had any money for the past week, as this fell between my biweekly paychecks. I should get my money in 4-6 weeks. Yeah, 4-6 weeks. This is, obviously, not acceptable. Troy and I chat for a little while, and he discovers that he can expedite the transaction. I'll have my money in 2-3 days - the amount is just under $600.

Late the next week, I do get my money deposited into my checking account - about $300. This pissed me off. I had no problem paying my actual bill, but my actual bill was only about $55, not $300. I go to their website and attempt to log into my account, but I can't. That was shut down when I closed the account. So I call customer service again and explain the situation. Again. They grant me limited access to my online account so that I'm able to see my last couple of bills. I quickly spot the problem - they're still charging me for the extra services and the data downloaded through them. I call Troy's line and leave a message. No reply back. Ever. So I go back to the regular reps. Again and again, they can't help me. My calls are dropped. They can't request refunds. When they can and take my bank information, the refund request is gone when I call back later to see how it's going. There are no supervisors available.

Finally, after dealing with this for over a month, I give up. I got some of my money back and I'll never have to deal with them again - I've got a new Cingular phone. Not a perfect solution, but better than nothing.
Fast forward to yesterday, December 10th. I have, in the intervening time, moved. I go to my mom's house, where I still get some mail because I used it as my permanent address while I was in college. And I have mail! I owe Verizon $114.07 and they've sold my account to Miracle Financial Inc, a collection agency. Add the agency's fees, and they want $134.60 from me. I have 30 days to dispute the validity of the claim.

I call the agency's number, at about 5:15 PM, and talk to [redacted], who is surprisingly polite and helpful, though she does ask me multiple times if I'd like to settle the debt, even though the first thing I told her was that I was calling to dispute the entire thing. She asks me to explain, and I do. She tells me that she can put a comment that I'm disputing the debt in the notes on the account, but that I should fax a letter, detailing why I'm disputing the debt, to the agency's Client Service Department, and gives me the fax number. They will then contact Verizon directly and discuss it with them.

I then call Verizon. At this point, I now want all my money back, so all I want right now is my bills. I'd had copies of them on my laptop but, foolishly, I'd deleted them after a few months. I need them in order to itemize each item and see what I should and shouldn't be charged for. Zach (who won't give me his last name), the supervisor who I explained my situation to, cannot give me access to my Verizon online account. He also cannot email or fax the bills. He can only send them by mail, which might take a few weeks for me to actually receive them. I inquire as to when I was first billed the $114.07 - July. So my account is already, in Verizon's eyes and quite possibly in the eyes of various credit reporting agencies, five months past due. Plus, I've got that 30 day deadline to dispute the debt.
A quick sidenote - Zach checked what address they had on file for me - it was my previous address. I'd never updated them because I had no business with them anymore. So I never received the bill back in July. Why I was billed in July for a service I cancelled in April, I have no idea.

I told Zach to please send me the July bill, and the last three bills before the account was closed.
I then went to consumerist.com and looked up Verizon's Executive Customer Service number. I called the number, and left a message, detailing my tale much more concisely than I've done here and asked to be called back. It's now 9:30 AM, and I haven't heard back yet. I'll call again later this morning. As soon as I send this, I'm writing a fax to send to the collection agency, ccing it to whatever fax numbers I can find for Verizon.

I'll send updates as more happens (or doesn't happen, which is more probable given Verizon's track record on this issue).

Veronica

(Photo:Ben Popken)

LTD is said to be taking the federal action "seriously," and that, "One complaint is one too many."

Debt collector settles charges for $1.3 million [Star-Telegram] (Thanks to David!)

RELATED: Things Debt Collectors Can't Do
Sample Letter For Disputing A Debt Collection Notice
Sample Letter For Telling A Debt Collector To Drop Dead

BusinessWeek introduces us to Van Rathavongsa, a factory worker from North Carolina who declared bankruptcy in 2002. One of the debts that was discharged by the judge was $9, 523 to Capital One, the huge (and notoriously shady) credit card company.

From BusinessWeek:

But Capital One continued to report the factory worker's discharged debt to credit bureaus as a live balance, according to documents filed in U.S. Bankruptcy Court in Raleigh.

This kind of failure by creditors to update credit reports happens with some frequency, consumer lawyers and court-employed bankruptcy trustees say. And it can have consequences: In September, 2003, when Rathavongsa tried to close on a $274,650 mortgage for a new house, his would-be lender, Wachovia (WB), said he would either have to pay Capital One or show proof from the credit-card company that the debt had been discharged. Despite several calls and a letter from his attorney, he says, Capital One never revised the credit report. To obtain the home loan, Rathavongsa eventually did what many consumers in this situation do. He gave in and paid Capital One $9,523 he no longer legally owed.

Owners of canceled liabilities can revive their value in two main ways: by directly pressuring consumers to cough up cash or by gaming the credit system, as allegedly happened in the Rathavongsa case.

Prisoners of Debt [BusinessWeek](Thanks, Jason!)
(Photo:loauc)

Under Federal Law, you can tell them stop. They do not have the right to keep contacting you simply to try to get you to pay. That's called harassment.

If they still keep contacting you, you can sue them and win in small claims court and win cashola. Which you can then use to pay off your debts. Nice.

Drop Dead Letter [The Clark Howard Show]
(Photo: Interpunk)

When Hughes got sick, Mary Olsen told him to put down her name as an emergency contact.

"I didn't want him to die and not know about it," she told the Contra-Costa Times. Hughes spent 3 or 4 days in the hospital and the bill came to Mary Olsen's house. It was for $42,000.

It was pages and pages and pages," she said. "They detail every shot they give you, every antibiotic, every aspirin.

"Phil and I were laughing about it. Here's a homeless man who doesn't have a penny to his name and he has this enormous hospital bill. How's he going to pay it?"

The humor quickly evaporated when a collection agency began hounding her with phone calls looking for Hughes. The collectors especially liked to call early Saturday mornings.

She told them Hughes did not live there, was homeless and could not afford to pay. Her pleas made no difference: The calls continued daily for a couple of weeks.

Mary Olsen says she's happy with the care that her friend received at the hospital, but is less than thrilled with the debt collectors. "Phil is so obviously an indigent person that no one would expect he would have enough money for lunch," she said, "let alone a hospital bill."

Hospital seeks $42,000 — from a homeless man [Contra-Costa Times]
(Photo:Contra-Costa Times)

Select Recovery of Aurora, IL repossessed a Ford Excursion on Thursday, but they didn't notice 4-year-old Fashawn Parker sitting in the back seat.

"Apparently they had given the vehicle a cursory check," Dan Ferrelli, an Aurora Police spokesperson, told WBBM. "They looked through the front windows. They didn't find anything in there and were unaware that the boy was in the back."

The driver of the car was inside the house picking up another child when the vehicle was repossessed. "He had said that a vehicle he was driving that belonged to one of his relatives was being towed away and that there was a four-year-old boy inside of it," said Ferrelli.

Luckily, the kid is some sort of crazy action star. When the car slowed down to pass through a construction zone, little Fashawn unlocked the door and jumped out of the moving car.

WBBM says no charges against the Select Recovery are expected. The 4-year-old was treated at the hospital for a few cuts and bruises and released.

According to the FTC's consumer information about vehicle repossession, some states would consider stealing someone's 4-year-old, even inadvertantly, a "breach of the peace," and, if so, the vehicle's owner may be entitled to compensation.

Boy Jumps From SUV Being Towed [WBBM via Jalopnik]
(Photo:WBBM)

Last Monday though, Procter received a call from Lt. Harold Kaufman from the Midlothian police.

Procter said Kaufman told her if she didn't pay, she could be subject to criminal charges.

"He didn't say what I could be charged with if I didn't pay. But I was so scared at the time, I didn't think to ask," she said.

Procter said Kaufman instructed her to get a cashier's check and deliver it to him at the police department and he would take it to Merlin's.

But after she got off the phone, Procter said she started to think something wasn't right.

So she called the Cook County State's Attorney's office to get their input. She said she was told she should go and make payment directly to Merlin's.

Procter has since paid her bill in full, but still resents the treatment from police and wonders if others have received similar calls.

Lieutenant Kaufman politely declined to defend his actions, saying: "I'm not going to comment any further for a ridiculous newspaper article."

Police as debt collectors? [The Star via Liz Weston and The Alabama Consumer Law Blog]
(Photo: Impactmedia)

Now, we're not sure to what extent the magazines are responsible for this company's actions, but the story is always the same. You cancel your subscription to a magazine or "free trial", then, magically you get an official-looking letter from NCAC that tries to scare you into renewing your subscription by citing the THE FAIR DEBT COLLECTION PRACTICES ACT and OTHER SCARY LANGUAGE.

National Credit Audit Corporation is owned by Choicepoint, and the complaints on the internet are all pretty much the same as the one Brian just sent us. People sign up for trial subscriptions to magazines, then are sent the scary collection notices. If you get one of these letters we suggest reporting the company to your local attorney general.

Brian writes:

Ben, Meghann, and Carey:

I thought I'd share a story about my experience with Popular Science Magazine and their parent company, Bonnier Corp's , efforts to renew the subscription I let expire by sending me a bogus debt collection letter.

About a year and a half ago, I had the opportunity to subscribe to Popular Science Magazine for $0.01. I never would have paid to subscribe to their magazine, but since it was basically free, I thought I 'd give them a shot. Their subscription card indicated that the subscription would automatically renew . Being clever, I crossed that sect ion out, initialed it, wrote in " DO NOT RENEW", and taped a penny to the card (so they wouldn't have my credit card or checking account information), and mailed it off. Honestly, I didn' t think that they'd accept it , but issues starting arriving a few weeks later.

Well, the magazine turned out to be about as boring as I thought it would be, so after a year of tossing issues into trash as they arrived, I let the subscription expire. They sent me the typical renewal requests with "Urgent" and "Time Sensitive Materials Enclosed Act Now !!" splashed across them, but I wasn 't interested.

Fast forward to today when I receive what appears to be a debt collection notice from a company called National Credit Audit Corporation (8512 Allen Rd, Peoria, IL 61615).

The letter implies that Popular Science engaged them because I " placed an order" for their magazine (which I never did), but failed to pay the $15.94 subscription fee . It then goes on to state that the matter can be easily resolved if I simply send them a check. It then goes on to say that, upon receipt of payment, the publisher will reinstate my subscription.

Near the bottom of the letter, there 's a full paragraph of very official-looking language that references the Fair Debt Collection Practices Act, disputing the "debt " within 30 days etc. I can scan and send you a copy of the letter if you' d like.

I called the long distance number listed on the letter for NCAC and listened to the prompts. Their menu system lists a number of prompts, one of which was "If chose to accept a free offer and do not wish to continue the subscription ..." After entering the 19 digit code from their letter, I was told that my subscription would be canceled and that I should disregard any future mailings.

So, they're trying to retain me as a customer by sending renewal offers disguised as bogus debt collection notices from a so-called debt collection agency? I' ve heard of some shitty customer service, but this takes the cake!

I then called Popular Sciences' customer service line, and after speaking with one of their agents for several minutes, was told that this is a common practice to try to get past subscribers to renew their subscriptions and she went out of her way to assure me my subscription would be canceled and that they were not really going to send it to a collection agency.

This smells like fraud to me. I tried calling Popular Sciences' corporate offices at 212-779-5297, but had to leave a message. I don 't expect that I' ll hear back from anyone. I'm therefore submitting this story to you, contacting the Kansas Attorney General's Office and am calling my local sensationalist news channel's "Problem Solvers" team to expose this company's attempt to prey on its customers.

How many consumers would fall for this scare tactic, thinking that f or the small sum of $15.94, they can resolve this "debt" without it impacting their credit rating? How many consumers are already receiving legitimate collection notices and would pay this to have it resolved? How many elderly or otherwise impaired individuals would simply pay this because it says they owe it? This is predatory, pure an d simple, and it needs to be stopped .

To Popular Science: This, you blithering idiots , is why the internet is eating your lunch!

Brian

Overland Park, KS

Choicepoint [Wikipedia]
National Credit Audit Corporation [Complaints.com]
National Credit Audit Corporation Re: Golf Magazine [Ripoff Report]

There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.

It doesn't happen "all the time," but it does happen, sadly enough. The "credit card nation" documentary, Maxed Out, interviews several families of debt-related suicides, and talks with debtors who have seriously considered taking their own lives.

Indeed, death can be the only way out of debt, especially in the wake of the credit-industry-driven revisions to the bankruptcy code, BAPCA. Indeed, as recently seen here 20% of Americans think they will never escape debt.

The recent MacDermid decision from the Sixth Circuit U.S. Court of Appeals reads like a heartbreaking tale of debt collection gone wrong. Debt collectors working in-house for Discovery (thereby saving Discover from FDCPA claims), allegedly threated Ms. MacDermid with (among other things) jail time, going so far as to make up a relationship with the local prosecutor's office. Here is what they said, according to the decision:

• had spoken with a lady named "Harriott" who had told her that, under the facts described above, Mr. MacDermid is legally liable for his wife's charge card; and
• that she had filed a report with the Giles County Sheriff's office; and
• that Harriott Barkly of the Giles County District Attorney's office, advised her that because the MacDermids were married, and because Mr. MacDermid was aware of his wife's problem, he "should keep a better eye on her" and should "keep her away from the internet"; and
• [that Adonica Gilmore stated about Mrs. MacDermid,] "I don't think you want her going . . . well you know"; and
• that there was no need for him to talk to a lawyer, because, even though there was no signature, and it was procured on the Internet, Mrs. MacDermid's application is binding on Mr. MacDermid, and he is definitely liable; and
• that [Adonica Gilmore stated], if the matter could not be resolved, "I'll just call Harriott" . . . and have the authorities "take a little trip out to your house."

These lies convinced Ms. MacDermid she had no choice but to take her life to save her husband from the debt she racked up.

In law, you take your "victim" as you find them. Ms. MacDermid was bipolar, but that was not her fault. That is why the Sixth Circuit found that Discover's debt collection constituted "outrageous conduct," and that Mr. MacDermid could therefore sue for intentional infliction of emotional distress.

You can read about the MacDermid case in more detail at Caveat Emptor, or read the case, complete with Ms. MacDermid's suicide note, yourself. — SAM GLOVER

If they call repeatedly, hoping someone will answer, they're probably violating 806, 15 U.S.C. 1692d. Subsection 5 prohibits:

What does our intrepid debt collector do next? Well, he could leave a message.... but by doing so he risks violating other sections of the FDCPA.

First there's: 805(b), 15 U.S.C. 1692c(b) which states:

Then there's 809, 15 U.S.C. 1692g "Validation of Debts" which depends on the "initial communication," but it's not clear if a vague answering machine message counts as "initial communication." Why? Well, because of 803(2), 15 U.S.C. ., which defines communication as:

No, this isn't a chapter of Catch-22, this is the law.

The CL&P Blog suggests that the law be clarified to include procedures for leaving an answering machine message. That might not be such a bad idea. —MEGHANN MARCO

Debt Collectors and Answering Machines [CL&P]
(Photo: theimacguy)

The FDSL just sent me a loan cancellation letter. They have decided that they will only take federal loans now to consolidate and Sallie Mae is primarily a private lender, and that is what they report my loan as. What the difference between a federal guaranteed loan and what they consider a federal loan through a private company is beyond me.

The advice given to me to try ed.gov was unfortunately wrong, or somehow I didn't say the right keywords when I applied so I was denied, even from the government. Or, as is to be expected, many still think that Sallie Mae is somehow a federal loan and I was given advice according to that assumption.

I Don't Know What I'm Going To Do Now [Sallie Mae Is Indeed Ruining My Life!]

We haven't seen it yet, but the trailer is really interesting. The debt collectors are so slimy! Anyone planning on seeing it? —MEGHANN MARCO

"Maxed Out" Opens in Theatres Today [CL&P]

UPDATE: J.D. from Get Rich Slowly writes,

For whatever reason, the production company for MAXED OUT contacted me and sent me a screener of the film. My wife and I watched it earlier this week. (I actually watched it twice so that I had a better feel for it.) They sent me the book, too, but I haven't had a chance to read it.

I posted my review here
In short, it's a fine film, but it has some flaws.

Might as well get into it. If I don't respond to your comment, that may be because you asked about criminal law, intellectual property, or something that does not fall within the (my) definition of consumer law. I will save those for another day. (For the questions about checking receipts, I think these posts had some pretty good answers.)

FunPaul asks:

I recently received a collection notice in the mail that said, contact us within 5 days or, um well, we'll send you more letters.

The debt isn't mine. The last name on the letter is not my last name, it's close though. . . . Do you have any advice for people who receive collection notices? I assume that there are a lot of people who don't know what to do when they receive a scary sounding letter and do things that could cost them money.

As Ben said, I do have a soft spot for debt collectors. Or the opposite. Actually, my office phone number apparently used to belong to someone who owes a lot of people money, so this happens to me all the time. The message is usually something like "This is _____ calling about an important business matter. Please call 1-800-DEBT-DUE and reference number XXXXXXX."

I am in Minnesota, so I can record phone calls. I use Skype to call, because the Pamela add-on makes recording easy. And I call back. I haven't had any trouble getting them to stop calling, but part of that is because I introduce myself like this: "HI, this is Sam Glover, I am a consumer attorney and I sue debt collectors. The person you are looking for is not at this phone number; please do not call again." (You can't lie about being an attorney, however, so don't copy this verbatim. Say you know your rights under the FDCPA or something.)

If they didn't stop calling, though, I would have a good record that I asked, and that they didn't comply. If you can't record without notifying the other party or getting their consent, tell them that you are recording. You'll have a record that they consented if it comes up.

Also, take careful notes of the time you were called, the person who called, what they said, what number they gave you, etc. Record voicemail messages, as well. You may never need them, but if you start getting harassed, all your careful records will come in handy.

idledebonair asked about the length of time a negative credit information can stay on your credit report.

First, this has nothing to do with whether or not you still owe the debt or whether the debt remains within the statute of limitations. Generally, then, the answer is seven years. You can find this in the FCRA (PDF link), section 605. There are two notable exceptions:

1) Credit transactions where the principal amount is—or can reasonably be expected to be (in the case of credit lines, for example)—$150,000 or more.
2) under the Higher Education Act of 1965, the seven years starts over every time you make a payment on an FFEL loan, and does not apply to Perkins loans.

In other words, it depends on the type of student loan, but you will live with Perkins loans until you pay them in full, and you will live with FFEL loans for at least seven years after your last payment, and there are a couple of other provisos to how long FFEL loans may be reported.

That's all for now. Keep the comments coming. — SAM GLOVER

I was hoping that I could get my interest rate down and also my monthly payments down considerably. Not a chance. They even get belligerent if you dare trying to make payment arrangements. I even tried to send $600 one month hoping they would take it in good faith and they just sent it back. It's either payment in full, or nothing so they can charge you late fees.

UPDATE: Reader D, who seems like he knows what the hell he's talking about, suggests that those of you having serious trouble with the servicer of your loan contact the Department of Education via the FSA Ombudsman. 1-877-557-2575. D. says this may not solve the problem, but will provide an advocate.

Sallie Mae Is Ruining My Life!

At first, I thought "Oh SH*T WTF did I do wrong?!" And then I looked at the amount: "$24.97 RE: Scientific American" and I thought "WTF, are they serious?!" I read further. "Dear Maxwell, We all make mistakes." Ok, great way to piss me off right away."

Maxwell has never subscribed to the magazine and when he contacted Scientific American they just sent him a canned response asking for his account information. Has this happened to you? It seems the "National Credit Audit Corporation" sends out hundreds of these bogus collection notices. This is most likely a scam. We recommend writing a polite letter to the company refuting the charges, for starters.

The rest of Maxwell's delightful email, inside.

Maxwell writes:

Related:
So You've Been Served By a Debt Collector

Regardless of guilt, you need to take some immediate steps if a debt collection suit lands on your doorstep, and reader and consumer lawyer Sam Glover is here to tell you what they are.

Unsurprisingly, he you advises to get a lawyer. It may come as a surprise that in this case they're not very expensive. — BEN POPKEN

In the event of a lawsuit, please head for the nearest lawyer [Caveat Emptor]

Learn about how the process works, what they can and can't do and how to fight back if they overstep and start harassing you.

Just remember, no matter how much dealing with the agents stinks, at least you're not going to rot in debtor's prison and die from consumption, although it might cement your future standing as a literary giant when someone discovers those sensational blog posts locked in your grandma's attic.

Of course, getting mired debt in the first place probably means you're too busy living and can't be bothered to read the fine information at the link below. We certainly couldn't.

"Debt Collection Practices: When Hardball Tactics Go Too Far" [Privacy Rights Clearinghouse via Lifehacker]

Here's a delightful snip:

1692d. Harassment or abuse...the following conduct is a violation of this section:

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number

For your viewing pleasure, after the jump are seven pages of creamy Federal law goodness on debt collection. Enjoy at your own peril.

"Federal "Fair Debt Collection Practices Act" from Title 15 of the United States Code

1692c. Communication in connection with debt collection

(c) Ceasing communication

If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except—

(1) to advise the consumer that the debt collector's further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

1692d. Harassment or abuse

A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.

(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.

(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of diction 1681a(f) or 1681b(3) of this title.

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

(6) Except as provided insection 1692b of this title, the placement of telephone calls without meaningful disclosure of the caller's identity.

1692e. False or misleading representations

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.

(2) The false representation of—

(A) the character, amount, or legal status of any debt; or

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

(6) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to—

(A) lose any claim or defense to payment of the debt; or

(B) become subject to any practice prohibited by this subchapter.

(7) The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

(9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.

(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.

(12) The false representation or implication that accounts have been turned over to innocent purchasers for value.

(13) The false representation or implication that documents are legal process.

(14) The use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization.

(15) The false representation or implication that documents are not legal process forms or do not require action by the consumer.

(16) The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 1681a(f) of this title.

1692f. Unfair practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.

(2) The acceptance by a debt collector from any person of a check or other payment instrument postdated by more than five days unless such person is notified in writing of the debt collector's intent to deposit such check or instrument not more than ten nor less than three business days prior to such deposit.

(3) The solicitation by a debt collector of any postdated check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution.

(4) Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.

(5) Causing charges to be made to any person for communications by concealment of the true purpose of the communication. Such charges include, but are not limited to, collect telephone calls and telegram fees.

(6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if—

(A) there is no present right to possession of the property claimed as collateral through an enforceable security interest;

(B) there is no present intention to take possession of the property; or

(C) the property is exempt by law from such dispossession or disablement.

(7) Communicating with a consumer regarding a debt by post card.

(8) Using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.

1692g. Validation of debts

(a) Notice of debt; contents

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(b) Disputed debts

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

(c) Admission of liability

The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.: