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ABC News Exposes Debt Collectors and Their Ugly Tactics

By       Message Roger Shuler     Permalink
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opednews.com Headlined to None 3/25/11

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Cross Posted at Legal Schnauzer

Sleazy debt collectors are back in the national spotlight, thanks to a recent investigative report from ABC World News Tonight.


Complaints against debt collectors have increased 17 percent over the past year. And reporter Elisabeth Leamy shines light on some of the industry's most shocking tactics, such as use of obscene and racist language and threats to have alleged debtors arrested.

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The ABC story certainly grabs the viewer's attention, focusing on collectors that probably are on the fringe of the industry. (See link to video below.) But we would like to see Leamy follow up with a piece about the slightly more subtle tactics that some mainstream collectors use. These tactics might not immediately shock the viewer, but they, too, are illegal and probably are highly effective for collectors, helping them turn handsome profits in a time of economic hardship for many Americans.

We also would like to see ABC News focus on the role of debt-collection lawyers, such as Derrick McGavic of Eugene, Oregon, who recently was forced to give up his law license and close his practice after a barrage of consumer complaints.

As regular readers know, Mrs. Schnauzer and I have encountered mainstream collectors, such as Pennsylvania-based NCO, and their lawyers, such as Angie Ingram of Ingram and Associates in Birmingham. Like the sleazy outfits spotlighted by ABC News, NCO and Ingram treat the Fair Debt Collection Practices Act (FDCPA) as barely a bump in the road, something that doesn't even slow them down in their underhanded pursuit of profit.

Do NCO and Ingram representatives scream obscenities or resort to racist language? We have not experienced that, although they did insult us a number of times. But they do make unlawful threats, of a slightly more subtle variety than the "we're going to have you arrested" standby. And like some of the alleged debtors featured on ABC, we captured these moments on audiotape. We soon will be sharing this audio with Legal Schnauzer readers so you can get a feel for how these outfits operate.

Our problems started from a debt I allegedly had on an American Express card. Millions of Americans have cards from AMEX, MasterCard, VISA and other well-known national companies. NCO and Ingram are the types of firms that often wind up trying to collect for those companies--and you can expect them to bend, or flat out break, the law. Based on our experiences, here are a few things you can look for:

Failure to provide written notice of debtor rights--This so-called "mini Miranda" warning is required by the FDCPA, and neither NCO nor Ingram provided it before launching a phone campaign in our direction. Why is that? The mini Miranda is designed to alert the alleged debtor of a potential problem and educate them about their rights under the law. That works against collectors. We suspect they much prefer to catch individuals cold via the phone, in an effort to strong-arm money out of them that they might not even owe--or that the collectors almost certainly cannot prove they owe.

False statements about who they represent--Ingram reps told us repeatedly that they worked for American Express, that they had been hired by American Express, that Angie Ingram was American Express' lawyer. That was a blatant lie, which amounts under the law to fraud. Discovery in our ongoing lawsuit shows that Ingram was hired by NCO and, in fact, is a member of the NCO Attorney Network. Ingram admitted in discovery that it had no documents from American Express even showing that I had a card, much less that I owed a debt on one. Why the lies? Our guess is that the Ingram reps know it is more effective to say they work for a national credit-card company than to tell the truth--that they work for a debt collector that the listener probably has never heard of.

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Threats to sell our house "on the courthouse steps"--In our view, this tactic is more lowdown than the use of obscene or racist language. What is one of the greatest fears for many Americans? Losing their home, having nowhere to live. Ingram reps repeatedly told us that they were going to sell our house, the whole thing, "on the courthouse steps" Never mind that they can't do that under the law, especially for an alleged debt, in a relatively small amount, that was only in my name--while my wife and I jointly own our house. In fact, an Ingram rep told Mrs. Schnauzer that they were going to sell her house, moments after admitting that the alleged debt did not involve her. Why use of the term "on the courthouse steps"? That makes it a form of public humiliation for the alleged debtor. Again, we suspect this kind of threat is extraordinarily effective in getting targets to cough up money they might not even owe. It also is grossly unlawful.

Perhaps the most interesting part of the ABC News report came from Fred Williams, a Buffalo News  reporter who spent three months working undercover as a debt collector. Williams also has written for Kiplinger's, Personal Finance, and USA Today and probably has done more than any other American journalist to expose unethical debt collectors. You can check out Williams' reports here:

Fred Williams: Fight Back Against Unfair Debt Collection Practices

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I live in Birmingham, Alabama, and work in higher education. I became interested in justice-related issues after experiencing gross judicial corruption in Alabama state courts. This corruption has a strong political component. The corrupt judges are (more...)
 

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