We have written extensively here at Legal Schnauzer about our experiences with third-party debt collectors, the folks who have done so much to earn the nickname "bottom feeders."
Now Chris Hansen and Dateline NBC have joined the fray, with an investigative report on Sunday night that showed the shocking depths to which some debt collectors will sink in order to get consumers to cough up money.
In the case of third-party debt collectors, who buy old "junk" debt from original creditors for pennies on the dollar, they often cannot prove that a consumer owes the debt. With no legal leg to stand on, the "bottom feeders" resort to tactics that New York Attorney General Andrew Cuomo compares to terrorism. These tactics are at the heart of the Dateline NBC report, and I've seen such tactics in a very personal way.
Hansen is best known for his "To Catch a Predator" series on would-be pedophiles. He takes on a different sort of predator--one interested in money, not sex--with his latest piece, which originally aired back in March. Like the sexual predators Hansen has become famous for confronting, these financial predators do not feel constrained by the law.
In some splendid investigative reporting, Hansen shows just how brazen third-party debt collectors can be. In one case, a collector threw a string of insults at a consumer. In another, a collector indicated that an alleged debtor was going to be thrown in jail.
These conversations were tape recorded, and you can check them out here. They are gross violations of the Fair Debt Collection Practices Act (FDCPA), which governs debt-collection activities. But Cuomo says junk-debt collectors resort to unlawful tactics because they tend to work--and pay off handsomely.
I've seen those tactics firsthand, and I know the pressure and stress an unethical debt-collector can apply to an alleged debtor. I've reported on our experiences in the following posts:
* Welcome to My Nightmare
* Financial Terrorists Ride Again
* Financial Terrorism Revisited
Like Chris Hansen, I have tape recordings of several conversations with debt collectors, and I will be sharing them with Legal Schnauzer readers. In our case, the original creditor allegedly was American Express, the debt collector or buyer (I'm not sure which) was NCO Financial Services, and the phone calls came mostly from Ingram & Associates, a Birmingham law firm.
NCO apparently is notorious for flagrant violations of the FDCPA. Public records indicate that Ingram & Associates' principal Angie Ingram is part of something called the "NCO Attorney Network"--even though her surrogates repeatedly told us Ms. Ingram "worked for American Express," "had been hired by American Express to sue you," "had a fiduciary relationship with American Express, etc."
The Ingram & Associates folks threw all kinds of insults, threats, and falsehoods at us. Here is just one example:
First of all, neither NCO nor Ingram ever sent us anything in writing, informing us of our rights to dispute the debt or have it validated, as required by the FDCPA. They simply started calling us and alleging that we owed a debt. Did they ever offer any written proof that we owed the debt? Nope.
But they were happy to say they could sue us and that we could wind up having the deed to our house auctioned off "on the courthouse steps."
Could Ingram carry out this threat? Well, they didn't. And seeing as how they never offered a shred of proof that we owed the debt, it's hard to see how they could. And seeing as how the debt was in my name only, but our house is jointly owned by my wife and me, it's hard to see how they could sell the deed to our house on the courthouse steps.
But the fine folks at Ingram & Associates, apparently with the blessing of NCO and American Express, wanted us to believe we could wind up homeless because of an alleged credit-card debt that they had not proved we owed.
Did this cause us a little distress? That would be quite an understatement. We went for weeks thinking we might have to declare bankruptcy or we would somehow wind up homeless.
Only after researching the matter over several weeks, did we begin to suspect that we were the target of an unlawful scam.
But that's how these outfits operate. If a consumer believes he might become homeless, he is more likely to cough up money than if the collector follows the law and doesn't make bogus threats. As Andrew Cuomo told Chris Hansen, these outfits can rake in millions of dollars in a few days time, using underhanded and unlawful tactics.
Predators? Bottom feeders? Those terms might be too kind for the debt-collection greaseballs we've encountered.
But don't just take my word for it. Here is Andrew Cuomo talking about the debt-collection industry:
And here are insights from Harvard University law professor Elizabeth Warren: