Crack Down On Abusive Debt Collectors

The FTC has Received 45,000 Complaints Against Debt Collectors in the First Six Months of This Year

(CBS)  Michelle Minton was stunned when she took a call about a $4,400 bill she says didn't exist. It was part of a 45-minute harrangue by a debt collector who issued this threat:

"If you get off the phone with me, that's it. The sheriffs will be there," said Minton, "and will come for your kids."

The company behind the call, Kingman, Cole and Associates, lists a P.O. Box in a UPS store as its address. It's one of 13 debt-collection companies run by a single Buffalo-based operation, as CBS News Chief Investigative Correspondent Armen Keteyian reports.

Today, New York Attorney General Andrew Cuomo sued the group, vowing to shut them down.
"They are going to scare people into paying," Cuomo said.

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CBS News has learned the Federal Trade Commission, has received more than 45,000 complaints against debt collectors in the first six months of this year. That's up nearly 20 percent over the same period last year.

Attorney Amir Goldstein, who has sued several collection agencies over their tactics, says, "it closes shop. Disappears. Nobody answers the phone anymore. Then they re-open under another corporate name."

We saw that firsthand here in Buffalo, chasing one debt collector from place to place. A company said to be out of business, that was actually up and running.

Adam Peterman, of ACA International says, "It's a rare exception."

Keteyian asked, "Lying on the phone. Attacking people. Berating people. Is that what your industry is about right now?"

"No, every consumer has the right to be treated with dignity and respect," said Peterman.

Minton says, "I can't afford lawyers. You know what I mean? My husband is the only one working."

Which is why she was bullied into doing the unthinkable -- paying $900 to settle a debt she didn't owe.

[PFLouLou]

This kind of behavior has been going on for years ALL over the country. Any Dave Ramsey listener can attest to that! I'm sure it's just come to light recently because of the economy. Debt collectors are TRAINED to evoke emotion from you to get your money...why else would you pay them before the food or the mortgage...especially in times like these.

Not borrowing money works too...but, many of these companies also collect for medical bills. Those are usually unplanned emergencies at the wrong time!

[raffie3009]

Mr. Kateyian was only focusing on one industry doing collections-The Debt
buyers. If he were to research and investigate institutions such as commercial banks, finance companies, credit unions, etc. He will find that
these companies adhere to the rules of the FDCPA. Too one sided. I have been in this industry a long time and don't see it in my area.

[joymotte]

Debt collecters made my life miserable. I changed my phone number, then disconnected the phone. Debt collectors go out of their way to break the law and harass you into paying a debt you do not owe. They are miserable human beings and must love to be hated. They threatened me with everything except putting me 6 feet under, and I'm surpised they did not do that.

[Aldymac]

What about people in their fiftys who have made a good life for themselves, have a little money saved up, have health insurance, untill the state boots out all insurers except the biggest companys through legislation, then the bread winner has an illness that takes him to the brink of death, he spends months in the hospital and uses all the savings to stay alive? Then the hospital bills are even more overwhelming, all the money is gone and the people use credit cards to try to get back on their feet or just to get back to work only to find their job can no longer be performed to the ability they had before the illness, and they lose their job?
Creditors have very little patience, that credit card never gets sick, is never late on the interest, never misses a day of work, never loses its job, but when the 'card holder' does, and has something happen far beyond his or her control, the 'card owners' become very nasty people. They farm the debt out to collectors, people whose only interest is the money they can make at someone elses expense, they care nothing about the circumstanses the 'card holder' may be under. It's all about the money, nothing else. The tactics they use are to create all the stress they can to make the person on the other end of the line or the recipient of the threatening letters to think they are even lower than the debt collectors. Some of those people have had illnesses that weakened their bodys to the point that the stress causes them to have heart attacks, some die, some are brought to an even greater point of suffering. The rest go bankrupt and try to start over again.
I have often wondered how many people the debt collectors have caused to die because of their actions, caused by the greedy big bankers or other businesses, simply because they can't live without their luxerys. It would seem that there could be wrongfull death law suits brought against these people to bring the playing field more on a level.
People who have things come against them that they have no control over, should be given the time they need to get back on their feet, the creditors should be willing to do what it takes to help these people get to the point they can make a full recovery by putting their debts on hold untill they can again begin to pay back what they owe. The stress put on people trying to recover only adds to the problem and increases the time of recovery, which in turn puts more of a burden on agencys that do try to help people in need.
The only deadbeats Obama wants to help are the very rich ones.

[phi1460]

After reading all of these comments there are a few people state that people should just not take out loans, credit cards they can't afford. I do agree with that but most people who have taken these loans/credit cards more than likely had good paying jobs and where paying on the debt till the economy tanked and companies started laying everyone off. So, this does not give the debt collectors the right to talk to people the way they do. I would suggest if you cant pay your bills go through a debt consolidation agency that is rated by the BBB. Some of them are actually law firms who contact these debt collectors so there is no issue with the harrassing calls and abusive behavior they place a stop to that immediately.

[anticristvs]

I had a guy call and Harass me over a Balleys Gym account i cancelled
in the mid 90s and the company claims is still active.
so i owe them a cancellation fee or some strange thing.
i was going to pay up just as the guy becomes beligerant over the phone. so me not being the shy one
proceeded to invite the guy to a nice Steak Dinner
or a hamburger....
the caller was from India, im asuming they still reguard cows as sacred. that really ticked him off. so then i proceeded to
lay into him with a barrage of 4 letter words,
oh how poetic 4 letter words sound when in rapid fire they flow.

[zonkzilla]

I am being sued right now for a debt I do not owe so I understand the story.
I offered to settle for $1,000 just so I did not have to worry about it and waste my time but they said no.
The real reason I got sued is that they harassed me constantly and threatened me just like the lady in the story and I reported them to the State Attorney General who contacted them and told them to stop to which they replied "we don't know what he is talking about". Now they are getting revenge for me not rolling over and letting them abuse me. They do not have case.
Fortunately I studied Law in college so I will go to court and fight but what about all the other people who do not know how to defend themselves?
Debt collectors are bottom feeding crooks and break the law every minute of every day and our Congress does nothing because it is huge money.
This is the second time I have been sued for a bogus debt, the last one was dismissed by the judge at the first hearing but I still had to take a lot of time to get to that conclusion.

As for "If you get a bad reputation you will not be able to pick up any new clients" my response is HA HA HA HA HA HA HA good joke.

[puzzler125]

I wouldn't have stayed on for 45 minutes much less one minute. I would have used *69 or whatever necessary to track down the company and report them the minute I hung up the phone!

[Void_Master]

You know, all the government really has to do to put a stop to 99% of these illegitimate calls and collections attempts is to prohibit lenders from selling off bad loans. As long as that practice is allowed, there is plenty of monetary incentive to trick consumers into defaulting.

[Void_Master]

Get caller-ID, turn the ringer off and do not use an answering machine.

When you get a call, take a look at who it is. If you want to talk to them (someone you know and NOT a collections call), answer it. If it's not someone you know; as in, you don't recognize the name or number or no name or number appears, do not answer it.

[jtdev1]

Thats no way to live.

Take the bull by the horns and attack the problem.

If you can't afford to pay your bills (for whatever reason) do an evaluation of your financial situation. Remember, Bankruptcy stays on your record for 10 years, paying off a $5000 credit card at 30% interest takes 33 years. You do the math.

[shutout2730]

I think the government should forgive ALL loans, not just student loans (Google search: "Albany forgive student loans"). Then, no one would have any bills to pay, and we could just give all our money to the government. Some of it would be used to pay off our forgiven loans, and the rest could be distributed on a needs-based disbursement plan.

[kcits]

That didnt work out so hot for Russia, and I dont think communism would work here either.

[shutout2730]

"That didnt work out so hot for Russia, and I dont think communism would work here either."

kcits, I was being sarcastic. Isn't it scary that we are so far down the socialist road that I can post something like that, and it isn't immediately clear that I'm making a joke.

[cyberus-2009]

So I see a lot of talk ...

... where's the crackdown?

[dwilson59]

cyberus-2009

The crackdown happens on the small one man operation. Most small firms will not even have ins or carry 2+ million in ins covarage. I have 20+ years in the collection field. If you get a bad reputation you will not be able to pick up any new clients.

[PFLouLou]

AMEN!

[dwilson59]

The small little firms out there buy the debt at 10%. They dont care as long as they hold the debt they will keep doing this. 98% of collection firms record all calls to protect them. If an atty files a suit on your firm it will cost you the min of 20k to fight a suit.

[formrusmcsgt]

Better solution:

Don't borrow.

[jtdev1]

Obviousy you didn't read the article. They DIDN'T owe the debt.


Not everyone is a dead beat...


besides, most people don't take on debt they don't intend to pay. Layoffs are rampant nowadays...

[kcits]

About 6 years ago , our mail started coming to the house open. Bills would sometimes not arrive. I managed to pay them on time because I kept track of them. I even filed a complaint with the postmaster.
Then 3 years ago I started receiving calls from collectors about a $500 credit card that wasn't being paid. When asked for the address it was sent to, they told me it was in a town 20 miles away. I put 2 and 2 together and figured out that someone had possibly stole an application from my mail.
The collection people didnt care. They wouldn't listen. It was sold a few times I think as the collectors changed, each time I would go over that I never had a credit card like that. In fact I do not own a credit card.
Finally it was sold to someone who after listening to my story offered to settle it for $100. Knowing it would cost more than that to get a lawyer to fight it, I paid it. Lucky for me I did, because someone else started an insane attempt to get 4 times the original amount when the whole thing started. I got a subpoena and had to go to court. Lucky for me I had proof that it was already settled with another collector.
I can understand the reasoning when paying to make things go away now. It isnt a matter of if you are guilty sometimes. But what its going to cost to prove it, and if you have that money.
I now have something on my credit reports saying I dont want any applications and I bend over backwards to destroy old bills and such. I was lucky that time, I am not going to press my luck.