Credit | Bill Bartmann

Victim Awarded $10 Million from Abusive Debt Collector | Bartmann Blog

May 11, 2012 By Bill Leave a Comment

It would be the understatement of the year to say debt collector Reliant Financial Services (RFA) picked on the wrong woman in Diana Mey.

As detailed in this expose by ABC’s Nightline – http://abcnews.go.com/US/va-woman-fights-collect-10-million-debt-collectors/t/story?id=16205697#.T5hslsTUO8A – RFA’s egregious abuse just cost them a record $10,860,000 judgment.

RFA’s misconduct included:

- Attempting to collect on a debt not owed by Ms. Mey

- Threatening legal action of seizing Ms. Mey’s home

- Spoofing caller ID numbers so collection calls appeared to come from the local sheriff

- Use of threats and vulgarities

Fortunately Ms. Mey recorded the calls so there was no disputing what she went through. Unfortunately, collecting on this debt is going to be a lot more difficult than winning the case as RFA is apparently a fictitious business name.

A tip of the cap to Nightline for bringing this story to light and Ms. Mey’s attorneys, Martin Sheehan and Patrick Cassidy for taking a case they may never be compensated. You’ve likely saved many others from being victimized. Thank you for stepping up and giving a powerful voice to someone in need.

Join with Bill Bartmann as he works to change the debt collection industry.

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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Filed Under: Bartmann, Credit, Debt Collection

Bank of America – Stepping Up To Be Part of the Solution | Bartmann Blog

May 10, 2012 By Bill Leave a Comment

This week Bank of America begins the process of helping distressed homeowners stay in their homes. BoA announced Monday that they are sending the first letters offering a restructuring of mortgage debt, by reducing the principal, this week. This will save 200,000 BoA homeowners an average of 30% on their mortgage payments. This will make a significant difference in the lives many families and their support systems.

This comes on the heels of a Bank of America revamp of their short sale process (when homeowners owe more on the home than its current market value), cutting their approval time in half from 45 days to a maximum of 20 days.

Big banks are easy targets to knock. They should be recognized, too, when they do the right things.

Bill

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Anatomy of an Unlicensed Collector Shakedown | Bartmann Blog

May 9, 2012 By Bill Leave a Comment

Reporter Tina Jordan, did a phenomenal job of telling the disturbing story of Darrell, a disabled gulf war veteran, who has been pursued for a debt (that has a high probability of not even being his) by an unlicensed collector. Here’s my insider color commentary to Tina’s “play by play”:

Darrell was contacted in January 2010 for a delinquent bank credit card debt from 2004-2005.

Darrell’s account was no longer owned by the original bank. They had sold it to debt buyer Asset Acceptance LLC. Asset Acceptance in turn outsourced the collections work to Daniel N. Gordon Professional Collections (DNGPC). DNGPC is unlicensed in Oregon and do not have the legal right to collect debt in the state where they were pursuing Darrell. Why would Asset Acceptance contract an unlicensed firm to collect on their debts? They are hoping that since they bought the debt and are the current debt owner, that they fall within the loophole of debt “owner” instead of debt “collector” which allows them to collect and get around most all legal debt collection restrictions. However, how Asset Acceptance can argue that their proxy, DNGPC, is a debt “owner” too is a bit baffling. But, unless local authorities step in (unlikely in most jurisdictions today), they’ll end up getting away with it.

The original debt principal was $6,854, DNGPC/Asset Acceptance tacked on fees to make the amount they were trying to collect over $14,000.

Interesting tactic especially when you consider that Asset Acceptance likely purchased the debt for around $350. These extra charges, even if eliminated in a negotiated settlement, still leave them with a windfall and enough “juice” to make DNGPC’s “commission” lucrative relative to the minimal purchase price. However, if this debt was past the statute of limitation, the extra fees have a more sinister implication. By making the debt more significant there is a greater likelihood they could persuade the debtor to pay “something” to get the harassment calls to stop. If the debtor pays ANYTHING, the debt would instantly re-age to become legally collectible again.

Darrell disputed the debt by certified mail and asked for verification.

Savvy move. Debt collectors often have shoddy records and take the approach to throw a lot of s#@* against the wall and see what sticks. In Darrell’s case the collector didn’t respond directly to this request, it got worse as they went into full deep pocket bully mode.

DNGPC sues Darrell, presenting the court with an UNSIGNED cardholder agreement as evidence along with a document claiming their original complaint was delivered to a “John Doe” who was a 45 year old brown haired man, 5’10 and weighing roughly 180 lbs. Darrell is older, graying, 6’1″ and around 240 lbs.

Shaky evidence, sure. But since most defendants never show up in court to defend themselves, the collector receives a quick default judgement, even though there was never real verification that the true defendant never even knew there was a complaint filed against them. This is a practice known as “sewer service” because for all you know the notice of suit was thrown down the sewer, never even being attempted to be delivered to the proper person.

The real scary thing is that this is not uncommon. What Darrell is going through is a common everyday happening to millions of people within the U.S. and around the world.

Darrell commented to Tina, “I proudly served in the United States Air Force for 13 years, including two missions to Saudi Arabia during Desert Storm.” “I certainly didn’t think the America that I felt so honored to represent — at the time — would ever allow a megabank’s collection agency to harass ordinary people like me.”

Well Darrell, you’re not alone. You represent what might be the tipping point voting block in this coming election. Keep speaking up because an election year is when politicians really are listening.

Bill

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Filed Under: Bartmann, Credit, Debt Collection

Obama’s Common Sense Approach to Student Loan Collections Should Be Applied to Credit Card Debt | Bartmann Blog

April 11, 2012 By Bill Leave a Comment

The Obama administration has proposed to adjust minimum payments on student loans to be based on the borrowers actual earnings, instead of the total amount owed.

This common sense approach will result in multiple “wins” all the way around, including:

Higher collection amounts. When a loan is in default, you’re collecting nothing.
More money for debt collectors. Commission based collectors make more when more is collected.
Helping hand to those with low incomes
Improved credit rating for those in default who can now begin making payment again.

I can completely relate to what it’s like to struggle to pay back a student loan. It took me 15 years to pay back my law school loan. It was difficult at times no doubt, but it was important to me to fulfill my obligation and it gave me a great sense of accomplishment to do it.

It’s a horrible place to be in when you don’t have enough money and are forced to choose between bills you pay and bills you don’t. But, this is a reality many American’s are faced with. You can’t blame them for choosing the mortgage, electric and grocery bill over a student loan or credit card bill when their families’ survival is at stake.

What you can do is make it so they can pay something, and that means basing payments on what they can afford. And, as they get back on their feet and their income grows, they’ll be able to pay more. It’s a partnership. Why debt collectors take an adversarial tact instead of a “we’re in this together” collaborative approach has always baffled me. It’s just not smart business.

Suing them all and letting the courts sort them out (aka debt collectors standard operating procedure) is lazy, hurtful, costly and should be banned. I don’t know how you legislate common sense, but the Obama team seems to be on the right track.

Bill

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A Candy Store for Criminals: The Debt-Collection Business | Bartmann Blog

April 10, 2012 By Bill Leave a Comment

What could be worse than a criminal approaching you, assaulting you and demanding money?

When criminals are hired to do just that at a desk for their 9-to-5 job.

Every line of work has people who start out fine but go astray somewhere along the way, breaking the rules and maybe even the law. It would be convenient to paint such an innocent, it-happens-to-everyone portrait of the debt-collection industry, but the truth looks much less like a portrait and more like a mug shot: The debt-collection business has become a career of choice for criminals.

One woman disclosed on her application that she previously had been convicted of financial-card fraud and also for being a lookout in a burglary. She was hired by a major debt-collection firm, which told the Minnesota Commerce Department that she had no criminal history. That company had on its staff at least 81 people with felony or gross-misdemeanor convictions.

In other cases, criminals simply checked “no” to the application question about prior criminal convictions and that was a sufficient background check for the debt-collection company:

• One guy had a felony conviction in 2006 for sexually assaulting a woman. His debt-collection company fired him not for the conviction but because he did not collect enough money.

• A woman was convicted of forgery and then went on to swindle her former employer using fake payment requests. While on felony probation, she became a debt collector and stole credit-card data to pay for $1,561 of jewelry, food and car repairs.

• Another felon was convicted for receiving stolen goods and for felony domestic assault, after police found his girlfriend bleeding in a hotel lobby. Nevertheless, eight years later he was still working for a debt-collection firm.

Lobbyists for the debt-collection industry whine that these are isolated incidents of “bad apples,” but that’s not how Minnesota Department of Commerce Commissioner Mike Rothman saw it, who has come down hard on debt-collection companies: “Our investigation discovered a handful of companies that disobeyed the law, and effectively let the wolves loose in the henhouse. In numerous instances, credit card numbers, bank accounts and personal financial information of vulnerable, financially stressed people were handed over to criminals. It should come as no surprise what happened next.” He added that the same thing has happened in many other states.

Fortunately for Minnesotans, Attorney General Lori Swanson has been aggressive in prosecuting companies with a history of abuse of various types.

Then there are the constables. In case you have a romantic image of these officers walking down the street, smiling and whistling, that’s not what we’re talking about: A Massachusetts woman heard a knock on her door shortly after midnight. “They looked like police officers,” she said. One of them was tapping his nightstick and the other one said they were there to seize her car for unpaid credit-card debt. They said: “Don’t argue with us.”

Constables are appointed by towns to serve court papers and execute court orders. They receive no training and no state agency keeps track of their identities, yet they get to carry a badge and can charge whatever they like to seize a car. The fee previously was capped at $25, but constables sometimes charge $600 or more if you want your car back. If you don’t pay, they get part of the proceeds when your car is auctioned.

A Boston Globe investigation of just five counties showed that constables seized around 2,500 cars for debt collectors. In Boston alone, 88 constables had criminal arrest records.

Massachusetts Attorney General Martha Coakley has proposed regulations that would hold debt buyers responsible for abusive behavior by third parties that collect on their behalf.

Does the act of a criminal employee make the company a criminal itself? It does when the company doesn’t take its responsibilities seriously to screen carefully, train fully, monitor constantly, and fix problems immediately. And the same is true for debt-collection industry lobbyists and spokespeople: They need to stop their see-no-evil approach to claiming that the business only has a few “bad apples.” As with any degenerative addiction, only when the patient is honest about having a serious problem can effective treatment begin.

Bill

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Filed Under: Bartmann, Credit, Debt Collection, Government

A 43 Second Experiment in Doing Good | Bartmann Blog

April 4, 2012 By Bill Leave a Comment

This past week I’ve been completely taken aback by the overwhelming number of people, 2,226,833 as of this writing, who have signed an online petition on change.org. Over 2 MILLION people made their voices heard…that’s extraordinary!!

And, it got me to thinking about how powerful “we the people” really are.

Not individually, mind you, but collectively. Divided we can do nothing, but UNITED we can change the world. And, if you’re game, I’d like to try a little experiment to do just that…CHANGE THE WORLD. And, best of all, it will only take 43 seconds of your time.

Here’s the details….

I’ve set up a petition at www.change.org to BAN DEBT COLLECTORS FROM SUING TO COLLECT ON PAST DUE CREDIT CARD BILLS.
Click Here — http://chn.ge/billspetition
Sign the Online Petition
Tell 3 others to do the same (it’s easy to do right through change.org)

Banning collectors from suing will take away the bullies most powerful “stick.”

I will then take our collective signatures, bind them together in huge books and drop them on the desks of legislators in all 50 states on my 50 state tour to pass debt collection reform.

1 MILLION signatures should be quite a statement. What do you say, are you with me? It will only take you 43 seconds to help someone far less fortunate, for whom no one (except us) is sticking up for.

Go sign the petition now – http://chn.ge/billspetition

Thanks for your help on this worthy cause! – Bill Bartmann

Bill

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CFPB Causes Debt Collectors to Shudder | Bartmann Blog

February 17, 2012 By Bill 1 Comment

Consumer Financial Practices Bureau

In it’s first expansion of powers, the Consumer Financial Practices Bureau (CFPB) (also @CFPB on Twitter) has set it’s regulatory sites on debt collectors (and credit bureaus), privately sending shock-waves throughout the industry.

“Debt collectors and credit reporting agencies have gone unsupervised by the federal government for too long,” CFPB Director, Richard Cordray, told reporters

While no industry wants to be regulated by the government, if ever there was an unregulated industry that needed government supervision, it’s debt collection. According to the FTC, no industry has more complaints from consumers then debt collection.

The CFPB proposal includes the bold act of sending regulators into the offices of the largest debt collectors to observe their practices first hand. While an aggressive move, that will no doubt receive industry opposition, it’s is also wise one. As my mother would say, “an ounce of prevention is worth a pound of cure.” Levying charges for debt collector violations — after the fact — is nowhere near as helpful to consumers as preventing the violations from occurring in the first place.

Today, ten states do not regulate debt collectors, with regulations in the other 40 states varying greatly. This has created a “patch-work quilt” where consumers are treated differently based solely on their state borders. This action by the CFPB is the first, sorely needed, step in providing a uniform set of rules.

With this quick and bold action Richard Cordray is proving he’s up to the CFPB Directorship. (And I suspect, somewhere in Massachusetts, Elizabeth Warren must be smiling too.)

Bill

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Filed Under: Credit, Debt Collection, Government

Bank of America to Get Hit With Punitive Damages for Actions of Debt Collector

January 30, 2012 By Bill Leave a Comment

According to the Wall Street Journal, sometime this year Bank of America will be slapped with punitive damages in a collection dispute. What is interesting is that the collector in question isn’t an employee of Bank of America, but instead West Asset Management, a firm who purchased the delinquent debt from Bank of America.

West Asset Management has been sued for harassing and using “psychological warfare” to collect a credit card debt from a widow, owed by her deceased husband.

If the verdict comes down as expected this opens up a legal Pandora’s box for banks, who will become exposed to massive punitive damages on the heels of the thousands of annual lawsuits for debt collector abuse and misdeeds.

This could be the wake up call banks need to insist that the firms they sell their delinquent debt to, operate in an ethical, or if that’s too much, at minimum, a legal manner.

Bill

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How Bankers Can Protect Consumers Better Than Legislation Ever Could

January 5, 2012 By Bill 3 Comments

Bankers have become popular whipping posts of the media and consumers in our post financial collapse world.

While some of the outrage is well earned, a good portion is the result of sharks they have allowed to take over their financial services pond.

Case in point – debt collection firms.

Because banks sell their severely delinquent debt to debt collection firms for pennies on the dollar, they have gotten in bed with companies who standard operating procedure is to make these bank customers live’s a living hell. Their torment includes: harassing phone calls, unethical tricks, intimidation and lawsuits.

While some attorney generals across the country are working hard crack down — notably Lori Swanson (MN), Roy Cooper (NC), Greg Abbot (TX), Lisa Madigan (IL), Martha Coakley (MA) and Darrell McGraw (WV) — banks could single-handedly put an end to the abuse without a single piece of legislation needing to be passed.

How? By agreeing to only sell their delinquent debt to firms who have agreed to abide by the honorable debt collector pledge. The key elements of the pledge include:

1. To never attempt any collection effort on any credit card debt that is beyond the statute of limitation.

2. To never file a lawsuit for collection of credit card debt.

3. To never charge interest on a credit card debt that was charged off by the original issuer.

4. To never attempt to contact the consumer regarding credit card debt by telephone more than two times in any one 24-hour period.

5. To never resell credit card accounts to anyone who has not signed this Pledge.

To date 216 debt collection firms have signed this pledged and agreed to abide by it’s principles. If banks used their clout to pressure debt collectors to do the right thing, consumers would find their lives changed practically overnight… No legislation necessary.

Bill

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Filed Under: Bartmann, Credit, Debt Collection

“This is how the industry does it” – Not Good Enough for PA Judge

December 29, 2011 By Bill Leave a Comment

This week a Pennsylvania court threw out a case against Ms. Larry Smith because the debt collector, who had purchased the delinquent debt from Citibank, could not prove the validity of the electronic records it used as evidence of the debt.

While electronic records are admissible evidence, this case establishes that the collector must be able to show how these records were created, stored, protected from viruses and hackers, as well as chain of custody.

This decision will serve as a useful legal precedent and rob unethical debt collectors of one of their favorite tactics, “sue & hope.” Meaning they sue thousands and hope the individuals won’t show up to defend themselves (most don’t.) This typically results in a default judgment in favor of the debt collector.

It’s a sad commentary when the VP of Commonwealth Financial Solutions (the debt collector) repeatedly defended their actions by saying “this is how the industry does it.”

Actually he’s 100% correct…and that’s precisely the problem!

Fortunately the 3 judge panel saw through this and rejected this silly argument outright.

Bill

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Filed Under: Credit, Debt Collection

Victim Awarded $10 Million from Abusive Debt Collector | Bartmann Blog

Bill

Bank of America – Stepping Up To Be Part of the Solution | Bartmann Blog

Bill

Anatomy of an Unlicensed Collector Shakedown | Bartmann Blog

Bill

Obama’s Common Sense Approach to Student Loan Collections Should Be Applied to Credit Card Debt | Bartmann Blog

Bill

A Candy Store for Criminals: The Debt-Collection Business | Bartmann Blog

Bill

A 43 Second Experiment in Doing Good | Bartmann Blog

Bill

CFPB Causes Debt Collectors to Shudder | Bartmann Blog

Bill

Bank of America to Get Hit With Punitive Damages for Actions of Debt Collector

Bill

How Bankers Can Protect Consumers Better Than Legislation Ever Could

Bill

“This is how the industry does it” – Not Good Enough for PA Judge

Bill

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