Bank of America Proves Sometimes You’re the Biggest BECAUSE You Do It Best

bank of americaIn a stinging public report, the U.S. Consumer Financial Protection Bureau (CFPB) shined a bright light on consumer credit card complaints.

In the first report of its kind, Capital One lead all banks in complaints, account for 24% of all complaints since June 1 when the CFPB started tracking this information. That’s a very high percentage of complaints for the nations 8th largest credit card issuer.

On the other end of the spectrum is the countries largest bank, Bank of America, who had just 15 complaints across the millions of cards they’ve issued. It’s too early to tell precisely why BoA has done so well, but my intuition tells me it’s a situation where they’re not better because they’re bigger, rather they’re bigger because they’re doing things better. Especially when it comes to taking care of their customers and doing business the right way.

This isn’t shocking given the thoughtful, competent way CEO Brian Moynihan has run the business since taking over for Ken Lewis in 2010. I’ve admired the way he’s run their business including controversial decisions like:

  • Paying $8.5 Billion to upset investors for the way their subsidiary, Countrywide, represented the quality of loans
  • Not boosting dividends or buying back stock like other banks this March after receiving a passing grade on Federal Reserve stress tests

The dirty little secret of customer service is that it starts at the top. No doubt, Mr. Moynihan’s finger prints are all over this success story.

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

More Posts - Website

Top 10 Sleazy Debt Collector Tactics

angry debt collectorsThe hits, they just keep on coming.

Unfortunately the hits I’m referring to are “hits” debt collectors lay on their victims on a daily basis.

For 2012, here’s my Top 10 list of sleazy tactics they use:

10. Swearing/Vulgarities

9. Impersonating attorneys and threatening legal action

8. Threatening physical harm (the mob would be proud).

7. Threatening to visit your place of employment.

6. Lawsuits (like the people in debt need another piece of paper to tell them they owe the money).

5. Calling your neighbors and telling them you haven’t paid your bills.

4. Impersonating law enforcement.

3. Posting your past due debts on Facebook for all to see.

2. “Sewer” Service, i.e. dumping the notice to appear in court down the sewer so the victim can’t appear to defend themselves.

1. “Re-aging.” Requesting a tiny payment amount, on a debt that’s past the legal statute of limitations, so the debt becomes live and legally enforceable again.

What do you think?

Any tactics you’d have put in the Top 10? Let me hear from you. Comment on Facebook or let us hear your thoughts on Twitter!

 

sign credit card debt petition

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

More Posts - Website

Throwing the Book at Them

Except for one thing, the case of scam artist, Neil Warren Madison, Jr., isn’t terribly interesting.

He and his associates signed up to do collections for B2B customers and, after collecting a fee from them, went on to harass and intimidate their clients into paying up. As if this wasn’t bad enough, they also scammed the companies their were purportedly doing the collections for, stiffing them of the money they collected to finance a luxurious lifestyle.

Unfortunately, this kind of harassment and deceit is all to common when you lift up the debt collection industry “rock” and see what’s underneath. However, what is unusual is what law enforcement and the U.S. attorney’s office managed to do — get them sentenced to 8 years hard time in the hoosegow. Typically these kind of folks vanish like a puff of smoke at the first sniff of trouble, making catching them difficult and convicting them near impossible.

Law enforcement and our judicial system are critical components in the fight against debt collection abuse. The greater the number of prosecutions and convictions like this, the greater the deterrent. Scam artists follow the path of least resistance, when we make their path to money more difficult or the risk disproportional to the the reward, we’ll see positive results quickly.

This case is very positive step in the right direction.

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

More Posts - Website

What Does it Say If Scam Artists Impersonate You?

Debt Collection Scam IndiaMaybe you’ve got a “good” racket going?

This is precisely what’s happening in the debt collection business. ABC has reported a massive scam where call centers out of India are posing as U.S. collectors and threatening cash strapped Americans (most are customers of online payday loan companies) to pay up or else.

To date they have collected over $5 million dollars. But that’s not even the shocking news. The real head-scratcher is that there was NO OUTSTANDING DEBT OWED. 

In other words, by calling people who are likely to be used to debt collector calls (people who need payday loans), and making threats, they’ve collected $5 MILLION dollars where there victim didn’t even have an account that was in arrears.

Scam artists are the savviest kinds of criminals. Ruthlessly insensitive and armed with intimate knowledge of human nature, they can get people with next to no money to part with what little they have.

In the case of this scam, they didn’t have to look very hard for their mark. All they did was follow the unethical debt collector  playbook and voila, it worked for them too. They didn’t even bother to let the “little” issue of not having a real debt to collect stand in their way. In most cases they didn’t even go to the trouble to find an account that the victim would recognize, they just made one up. Then, through threats of jail, legal action and embarrassment at work, they extracted quick payments from their flustered targets.

Another embarrassing day to be a debt collector.

Note: A tip of the hat to the FTC’s Jon Leibowitz for getting on top of this scam and ABC news for bringing it to light.

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

More Posts - Website

The Important Distinction Between Management & Leadership

It’s been said that management is about getting a team to most efficiently climb a ladder. Leadership is deciding where the ladder gets placed. Here’s an example of this principle in action today in the debt collection industry.

Cleaning up a dirty industry, like debt collection, isn’t easy or fun. Obviously, it would be much better for the industry to clean itself up, rather than waiting for the government to to do it for us (they’ve already started with the creation of the CFPB.)

Self-policing comes from brave individuals, who must weather criticism (and worse) from their industry peers, for stepping up and publicly calling-out wrong behavior and its perpetrators.

One of the most egregious wrongs in debt collection is the legal process itself.

Many debt collectors take the approach of “sue ‘em all and let the courts sort them out.” Part and parcel of this litigious approach to collection is slipshod legal notification service that is internally referred to as “sewer service.” It’s called this because there is no proof the debtor was ever served notice that they were being sued and that they needed to appear in court to defend themselves, for all anyone knows the service processor dumped the notice down the sewer. Since they were never notified they don’t show up for their court date and the collector receives an automatic default judgement in their favor.

In my many years and 4.5M + clients I’ve worked with in the debt collection business, I have NEVER sued anyone.

The reason is simple: My clients already know that they legally owe the money and I don’t want to make their lives any more difficult by dragging them to court just to give them another piece of paper that tells them they owe the money.

They’re doing the best they can given the difficult circumstances they find themselves in.

On July 10-11th industry people are gathering at the Process Serving Standards Summit to try and create a voluntary set of standards for those serving legal papers in conjunction with the debt collection industry. Here’s the problem: Their success (which will take a lot of time, effort and energy) creates a solution to an ancillary problem. The entire problem they’re working so hard to correct would vanish entirely if they would instead focus on addressing the root cause – banning litigation itself.

Well meaning. Efficient climbing. Wrong wall.

sign credit card debt petition

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

More Posts - Website

The Debt Collection Industry’s George Costanza Moment

george costanza debt collectionThe debt collection industry is a lot like George Castanza.

Fans of Seinfeld will no doubt remember when George, in a state of despair, lamented to Jerry that every decision he has ever made has been wrong and his life is the exact opposite of what he wanted it be. To try and help, Jerry implored that “if every instinct you have is wrong, then the opposite would have to be right.” This flash of insight set George on a path behaving completely opposite to his natural instincts:

  • He introduced himself to a gorgeous woman by saying “My name is George. I’m unemployed and I live with my parents.” (She agreed to date him.)
  • On the date he stopped shaving, stood up to hooligans disrupting the movie and refused to come up to the girls apartment when invited. (Landed him an interview with his favorite team, the New York Yankees.)
  • During the interview he tells team owner George Steinbrenner that he’s not pleased to meet him, because “you’ve reduced my beloved Yankees to a laughing stock to serve your massive ego.” (Steinbrenner hires him on the spot.)

By acting completely against his instincts, George winds up with everything he wants. After a couple decades in the collection business I’ve come to believe that most debt collector’s natural instincts are about as on target as George Costanza’s.

Much of what they do in the name of “collecting debts” is counterproductive, with some bordering on the insanely self-destructive. If you went to kindergarten you learned the lesson of “you catch a lot more bees with honey than vinegar.” Apparently most of today’s debt collectors missed school that day, because their tactics seem to be designed to turn their customers into their mortal enemies – in record time.  How else can you explain their “bread and butter” business tactics:

  • Swearing
  • Screaming
  • Harassment & Intimidation
  • Incessant Non-Stop Calling (Collectors shouldn’t be able to have re-dial buttons)
  • Contacting the debtors friends, family, employer and neighbors
  • Embarrassing them on Facebook

Even Kramer (the author of a coffee table book about coffee tables) would see this is a nonsensical approach.

 

Legislating Manners & Good Judgement

The typical counter argument against business legislation is that companies today need less government, not more. Opponents argue that business legislation imposes new burdens on corporations, hurting their profits and hamstringing their ability to create new jobs.

But what if we actually lived in a Costanza world, where down is up, and up is down?

If debt collectors were required to regulate themselves by “doing the opposite,” here’s what their legislation might look like:

  • No yelling or swearing
  • Treat all with kindness, dignity, respect and good manners
  • No dressing up as law enforcement
  • No threatening jail time
  • No lawsuits whatsoever, under any circumstances
  • No lies, misrepresentations or pretending to be an attorney
  • No more than one call attempt per day
  • No contacting anyone accept the person who owes the debt
  • No threats to dig up dead relatives until they pay

Voila! Thank you Senator Costanza, what brilliant legislation!

Here’s the real life irony, debt collectors like Baltimore, Maryland’s Access Receivables, that employ a “nice guy” strategy, collect nearly 40% more than those using fear based collection methods. This legislation would save debt collectors from themselves.

And, debt collectors won’t know what hit them.

Their staff will enjoy their jobs more. Their collection calls will get answered and messages even returned. They’ll stop getting bashed in the media. The CFPB, FTC and attorney generals will stop breathing down their necks. And, they’ll wind up making lots MORE money.

Sure, it’ll be awkward at first, but like George’s new and improved life I think they’ll find a way to get used to it.

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

More Posts - Website

A New Low | Bartmann Blog

Accretive HealthI thought I had seen it all in reprehensible debt collection tactics, but apparently I was wrong.

Accretive Health has been accused of harassing patients in EMERGENCY ROOMS to pay their medical bills. This practice came to light in a scathing report by Minnesota’s great Attorney General, Lori Swanson, who told the story of  Deb Waldin of Edina, MN who said last July she was “curled up in a ball in excruciating pain from a kidney stone” when a billing employee of Accretive Health approached her for payment.

It has been reported that Accretive Health collectors were dressed as hospital staff within Minnesota hospital emergency rooms and they allegedly demanded that patients pay their outstanding bills before receiving treatment.

Besides violating the Emergency Medical Treatment and Active Labor Act (EMTALA), which requires hospitals to provide care regardless of a patients ability to pay, this conduct – if true – borders on inhumane. How much lower can a company go?

Yesterday, Minnesota’s progressive and outspoken Senator Al Franken (@alfranken) convened a hearing on the debt collection practices of Accretive Health. At this hearing Accretive Senior Vice President, Greg Kazarian, offered the company’s defense saying its mission is to “help patients pay their bills and help nonprofit hospitals improve their finances.”

They might want to consider including “helping their hospitals get bad PR and come under regulator scrutiny.”

Click below to join in Bill Bartmann’s effort to stop debt collectors from suing to collect on past due credit card bills.

sign credit card debt petition

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

More Posts - Website

There’s a Difference Between What’s Legal and What’s Right

AG Dustin McDaniel Arkansas Debt CollectorsBy conventional legal standards Arkansas Attorney General, Dustin McDaniel, failed. His original $194,000 victory against a debt collector Jack Boyajian, for violation of the Deceptive Trade Practices Act, was just overturned by the Arkansas supreme court.

To me AG McDaniel is 100% victor.

Why? Because Mr. McDaniel was absolutely right to go after Boyajian because Mr. Boyajian did:

  • Badger and harass consumers
  • Threaten civil and criminal action
  • Target people who owed nothing
  • Get sued in Colorado, Connecticut & NY for the same things

In fact, the case wasn’t overturned because this egregious behavior turned out to be untrue. Rather it was overturned because Mr. Boyajian, an attorney, successfully argued that his despicable conduct was carried out in the practice of law and that the Deceptive Trade Practices Act does not apply to the practice of law.

The Arkansas supreme court agreed.

“The practice of law cannot be regulated by an act of the General Assembly because the regulation of the practice of law is within the exclusive jurisdiction of the judiciary,” Chief Justice Him Hannah wrote in the court’s unanimous opinion.

So Boyajian walks. This however doesn’t make him innocent or any less horrible of a human being. And it certainly doesn’t make Mr. McDaniel anything less than a wonderful public servant. Unfortunately he and all our AG’s are working against some huge obstacles in their efforts to protect their constituents from some really bad people. This decision just happens to shine a light on it.

sign credit card debt petition

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

More Posts - Website

The CFPB & Productive Regulation

CFPBMost government regulation is a mess. What starts with good intent, often ends up creating a monstrosity of checks, balances and red tape that does little except add bloat to our federal government.

This is why the Consumer Financial Protection Bureau’s (CFPB) plan to simplify credit card disclosures is such a productive form of regulation. Simply, it’s addition by subtraction.

I have a hard time understanding the legal mumbo-jumbo that comes with a credit card application….and I’ve graduated law school!

Despite what the naysayers say, making financial obligations fully disclosed, in language that is understandable for the rest of us, is the kind of practical and impactful regulation all government agencies should strive for.

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

More Posts - Website

Student Loan Mess Putting Government in the Debt Collection Business

Student LoansThis is going to seem like a “dog bites man” kind of news story. It likely won’t come as a shock that debt collection firms contracted by the Dept. of Education, to collect on the $67 billion of defaulted student loans, are running into big problems with borrowers. This has been thoroughly documented in a detailed new report by the National Consumer Law Center (NCLC).

The report shines a critical light on the exacerbating part of the problem, a grossly inadequate complaint & response infrastructure. (No doubt the Dept. of Education had no idea what they were getting into when setting up a program that offered a significant financial incentive to collection firms that recouped defaulted debt.)

Bloomberg reports collection firms getting up to 37% funds collected, creating an environment where it pays, handsomely, to get people to pay up. It’s astounding to see student debt collector Joshua Mandelman earn $454,000 in a single year, twice the pay of the Secretary of Education (and a fraction of what his boss took home.)

Now I don’t begrudge anyone making money, wealth is responsible for curing nearly every societal ill. However what the NCLC report shows is that these earning are coming from student loan collection abuses. It’s amounting to a repeat of the same tricks and abusive behavior we’ve seen in areas like 3rd party credit card collections.

It may be time for Richard Cordray and the CFPB to step in and oversee not just public markets collections, but governmental efforts too.

 

Join Bill Bartmann as he works to reform the debt collection industry. Sign our petition here. 

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

More Posts - Website