Crack Down On Abusive Debt Collectors

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.