I know it sounds tempting, but if a firm offers to modify a delinquent loan/mortgage of yours and requires an upfront payment… DO NOT PAY IT. IT IS USUALLY A SCAM.

Case in point: Arizona Attorney General Tom Horne, and his able Assistant Attorney General Cherie Howe, just reached a settlement with Underwater Property Solutions (UPS), a Scottsdale, Arizona based mortgage loan modification service company. The State accused UPS of deceptively scheming to collect advance fees from consumers looking for assistance in obtaining mortgage loan modifications.

UPS would tell consumers that they could stop foreclosures and that consumers were guaranteed a modification that would save them hundreds of dollars a month. This was nothing more than speculation and often proved to be false.

There are evil people out there who prey on the desperate because those who are desperate are most likely to grasp at any straw that resembles hope. There will be a special place in hell for these people, but for now we can’t just rely on Attorney Generals to protect us. We’ve got to educate ourselves and be aware.

Special Note: Attorney General Horne can’t enforce anything outside of his home state, even if he wanted to. That means this company, along with their co-defendant The Mortgage Law Group, LLP, that also does business under the name Macey, Aleman & Searns, a Chicago, Illinois law firm, are free to continue they’re reign of terror in other states.

Please help get the word out about this. 

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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All successful scams use the victims beliefs against them. Today most consumers in financial trouble know that those they owe money to may be willing to settle their account for less than the full amount due. After all, collecting something is better than collecting nothing.

Therein lies the seed that opens so many under financial duress to be preyed upon by scam artists. Case in point:

Yesterday Arizona Attorney General Tom Horne filed suit against Mortgage Relief Group, d.b.a. Mortgage Assistance Group, and its owner, Stan Allotey for deceiving consumers into paying fees, ranging from $995 to $3,245, for loan modification services by misrepresenting their ability to help consumers obtain mortgage relief and save their homes.

This company apparently would lure financially distressed homeowners into paying up-front fees with promises that the company would prevent foreclosure by negotiating modifications of mortgage loans. (The collection of up-front fees has been banned by the Arizona Foreclosure Consultant Regulation Law.) Then, once homeowners paid the upfront fees, the Defendants allegedly often failed to perform their part of the contract, keep homeowners informed of the status of their application for a modification, refund fees, or otherwise do anything to earn their fee.

“Predatory loan modification scams are an unfortunate part of the housing crisis,” Attorney General Horne said. “Cases such as this show that every consumer needs to thoroughly research the companies with which they do business. And it is a reminder that nobody should ever agree to paying up-front fees for services of this kind.”

I couldn’t agree more. And, this is just as true with firms that tell you they can do the same with your credit card debt.

It’s the wild west out there; ignore this at your own peril.

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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Watch this video news story from CBS reporter Mike Parker. As you can see, pictures really do speak a thousand words. This report paints a much more visceral picture of the kind of fraud against consumers that is going on out there in the real world.

And, as if the fraud by legitimate debt collectors wasn’t bad enough, this story shows how scam artists are posing as debt collectors and then running off with the money they collect.

To stop this it’s up to us as consumers to report this kind of wrong doing to both law enforcement and our Attorney Generals. As you’ll see in this story, Attorney Generals like Illinois’ Lisa Madigan really act on these tips and are coming down hard and fast on the perpetrators.

If you’ve been a victim, follow this link to find the contact info of your state Attorney General.

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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One of the most sinister tricks in the unethical debt collectors “handbook” is known to insiders as “Sewer Service.” This is the practice of mailing notice of a lawsuit against a debtor to an address without verification that it is accurate, current or actually received. For all anyone knows the suit notification was sent down the sewer.

This results in court cases taking place without the debtor present to defend themselves, resulting in a default judgement for the collection company. After all it’s not hard to win a case when your openent doesn’t show up. Such a high percentage of debt collection court cases result in no-show default judgments, that if this was a virus we’d have an epidemic on our hands.

Well Illinois lawmakers, spurred on by the tenacious state Attorney General Lisa Madigan, are cracking down on this scam. New legislation recently introduced would require court appearance notices to be served directly to a debtor’s home, like other typical court appearance notices.

Yesterday BusinessWeek wrote a great piece highlighting how Illinois debt collectors have co-opted law enforcement and the court system to “squeeze poor people who fall behind.”

While not everyone agrees with me that debt collectors should be banned from using lawsuits as a collection weapon (I have never sued a single of our over 4.5 million clients to collect a debt) I think everyone would agree that it’s a fundamental fairness that there should be proof that they were personally aware of the suit. If they then choose to not show, at least it was a conscious, deliberate decision.

There is another major benefit too. When debt collectors know that they are actually going to have to present a case, not just win by no-show, they will be much more judicious with who they choose to sue. A good outcome all the way around.

This Illinois legislation should put an end to this terrible practice and hopefully will be a role model for other states to follow.

Want to jump in and help us?

Sign the Bill Bartmann online petition to “Ban Debt Collectors from Suing to Collect on Past Due Redit Card Bills.”

(click here: http://www.change.org/petitions/credit-card-holders-ban-debt-collectors-from-suing-to-collect-on-past-due-credit-card-bills?utm_medium=facebook&utm_source=share_petition&utm_term=autopublish)

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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Medical researchers came up with a breakthrough in the 1980s in their quest to cure patients of HIV. They developed the Highly Active Antiretroviral Therapy, which non-scientists called a “drug cocktail.” Even though any single medicine was not powerful enough to cure people with HIV, it was discovered that the right cocktail of drugs could be highly effective.

Many U.S. attorneys general are working with each other and with the federal government to employ the same strategy to control and eventually eradicate the scourge that is unethical debt collectors, because just one strategy alone seems not to be enough.

West Virginia Attorney General Darrell McGraw saw how the settlement against a major debt collector in a class-action lawsuit would pay out a lousy ten bucks per victim. Exercising his rights to protect the citizens of West Virginia, McGraw then brought his own suit against the company for using false affidavits when obtaining default judgments against West Virginians and for not including necessary details when suing consumers.

Attorney General McGraw said:

Many consumers are frightened or unaware of their rights when they are sued and fail to respond to these groundless lawsuits, leaving them subject to judgments on debts that cannot be proved. Companies such as Midland rely upon this fear and typically drop their lawsuits if consumers know their rights.

Minnesota Attorney General Lori Swanson is prosecuting agencies who work with attorneys to scam consumers. Debt-settlement companies align themselves with lawyers so they can use official-looking letterhead to collect fees up-front for promising to help consumers with their overwhelming debts. Then they fail to deliver, leaving the consumers in even-deeper debt. Attorney General Swanson said: “It’s particularly galling. Here you’re seeing people who have a special privilege — the privilege to practice law — abusing consumers who are down on their luck.”

Illinois Attorney General Lisa Madigan is going after lawyers who specialize in requesting arrest warrants for consumers behind on their bills. One example is a 53-year-old woman who was stopped for a broken taillight. When the police ran her name, she was handcuffed in front of her kids and hauled away for a $2,200 debt that had turned into a default judgment.

The Wall Street Journal surveyed just nine counties in the U.S. and found more than 5,000 such arrest warrants issued since 2010 for debt-related cases. Attorney General Madigan said: “We can no longer allow debt collectors to pervert the courts.”

Texas Attorney General Greg Abbott has gone after multiple debt-collection companies, including one whose employees took the arrest-warrant threat to a whole new level. Their employees claimed to be associated with law-enforcement agencies and the IRS. They would insist that consumers pay their debts or risk facing arrest, prosecution, and imprisonment.

Massachusetts Attorney General Martha Coakley is onto the game some debt collectors play of threatening consumers with legal action while hiding the fact that the debt is “time-barred”; in other words, the debt has passed the statute of limitations for any legal action. Her amended regulations would require that consumers be informed of that fact.

Ohio Attorney General Mike DeWine has banded together with 18 other states to go after NCO Financial, a large debt-collector, for a whole range of violations, including extracting money from consumers for debts they did not owe, and charging excessive interest.

Ohio has a tradition of pursuing debt collectors. As Attorney General in 2010, Richard Cordray investigated two other debt-collection firms, and now he heads the Consumer Financial Protection Bureau. He therefore has first-hand knowledge of the games debt collectors play.

No doubt that is why Director Cordray has already proposed regulations that would involve on-site federal inspection of the top debt collectors representing 63 percent of collections in the U.S.

More bad news is in store for crooked debt collectors. Recently, state and federal officials gathered to announce the $25 billion mortgage-servicing settlement. Attorney General Lisa Madigan used that event to reinforce the regulatory cocktail that’s being assembled against the worst debt collectors:

Know that this is neither the beginning nor the end of our work to hold banks and other institutions accountable…. Today’s settlement should serve as a warning for financial institutions: there are consequences for engaging in practices that jeopardize the stability of our communities and our economy.

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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They sound so clinical and dispassionate. The Federal Reserve Bank of New York just releasedupdated statistics: “About $1.12 trillion of consumer debt is currently delinquent, with $824 billion seriously delinquent.” The report includes a chartthat provides additional facts: In 2000, about seven percent of U.S. consumers were subject to debt collection with an average amount owed of about $800. By the end of 2011, the number had grown to 14 percent of consumers, with an average amount owed of $1,400.

Let’s now run that through a robot-to-human translator:

• The targets for debt collectors have doubled in the last decade, and
• The size of the targets on their backs has grown by 75 percent, which means…
• The United States is one target-rich environment for debt collectors to continue to wreak their havoc.

If we regard the seven percent as sort of a baseline, that means we have a big new group of people who have entered the ranks of the “working humiliated.” They’re the ones who just a few years ago were donating to food banks, and now find themselves with no alternative but to get food from those same banks.

Whether it’s due to losing a job or being overwhelmed by medical bills, the reason doesn’t matter. Each night they study the contours of their kitchen table, trying to figure out how a declining income can cover bulging debts.

They have an open wound and at that very moment they get a dose of acid poured on it in the form of a phone call. In one case a debt collector called a woman who couldn’t figure out how to pay for her daughter’s funeral expenses. “They told me they were going to dig my daughter up and hang her from a tree if I didn’t pay.” Another laid-off person got a call at 2:57 a.m., saying, “If you refuse to answer the door to me I guarantee you that I will wake up every neighbor in your entire building, OK? And I’ll let everybody know you don’t know how to pay your bills.”

We’re in an election year, and voters everywhere are making their mental lists of top issues. This 14 percent represents tens of millions of voters. In fact, it’s a larger group than all African Americans in the United States. At a time when politicians are in awe of the voting power of older Americans, here’s a news flash: The 14 Percenters are an even larger group.

And let’s talk about the ability to influence the electorate. This year both political parties will spend a total of over a billion dollars on catchy television commercials and polite, nicely scripted phone calls to voters. Compare those with the influence from getting this call one consumer received: “I will find your sister and your daughter, and I will find you, and I will mess you up. Goodbye.” Not a day goes by when that same sort of message isn’t reinforced over the phone, at work, on Facebook, or in court against millions of consumers and voters.

Meanwhile, the biggest debt-collection firms continue to dodge and weave past serious sanctions. One of them filed 425,000 lawsuits in a single year against consumers. And after being hauled into U.S. District Court in a lawsuit involving more than a million consumers as plaintiffs, the company was able to settle — for a fine of $10 per consumer. Yet maybe I’m being too hard on that U.S. company. After all, it was recently named “One of the best places to work.” In India.

After all, paying enforcers in the United States was cutting into profits. Minnesota Attorney General Lori Swanson and Texas Attorney General Greg Abbott should be applauded for taking matters into their own hands and filing separate suits against that company for “robo-signing” violations. Richard Cordray of the Consumer Financial Protection Bureau has announced special inspections of the biggest debt collectors, and not a moment too soon.

James Carville became famous for focusing Bill Clinton’s campaign staff by declaring, “It’s the economy, stupid.” This current election year represents a real opportunity for people running for office — or wanting to stay in one — to outline truly bold steps to shut down the abuse. The message from the 14 Percenters could not be clearer or more succinct: “Make my phone stop ringing.”

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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