Whataburger Has a Serious Beef With the Bullying Tactics of a Big Debt Collector

If you are an everyday American consumer and get a hankering for  fast food, you might want to consider a run to your local Whataburger.

The Texas-based company deserves your support for its willingness to stand up to one of the biggest bullies in the debt-collection industry. In fact, this debt collector is even bigger than most Americans realize because, unbeknownst to many, it is owned by a banking behemoth.

We are talking about NCO, a company that is based in Horsham, Pennsylvania, and owned (in a roundabout way) by JPMorgan Chase.

As we noted in a recent post, Chase is the largest private corporation in the world, and it made a quiet entrance into the disreputable debt-collection business by purchasing NCO in 2006. It's almost as if Chase is embarrassed by its association with NCO--and it should be. Chase bought the company in a backdoor sort of way, and a couple of byzantine transactions since then seem designed to hide who really resides behind the curtain at NCO.

Mrs. Schnauzer and I have firsthand experience with battling NCO and its corrupt minions, so we were delighted to learn that Whataburger wasn't going to sit back and take abuse. What happened? Here is how reporter Patrick Danner describes it in an article titled "Court Case Not the Way Whataburger Likes It" for The Houston Chronicle:

Everyone hates harassing calls from unrelenting debt collectors, even the folks at Whataburger Restaurants. 

Exasperated officials at the San Antonio-based burger chain have gone to court in an attempt to stop persistent collections calls made to its corporate headquarters to get an unidentified employee to pay up on a debt allegedly owed. 

Whataburger last week sued NCO Financial Systems, saying the collection efforts of one of the nation's largest debt collectors "amount to a campaign of harassment against Whataburger that is unreasonable . . . and reckless."

Imagine that. A company not only stands up to a harassing debt collector, it also stands up for one of its employees. Who saw that one coming in postmodern America?

I hope the fine folks at Whataburger, and their lawyers, know who has the deep pockets behind NCO. It's JPMorgan Chase, and this might be a fine time to out Jamie Dimon's underlings as the backers of a major sleazoid in the debt-collection game.

How do you figure out who's pulling the strings at NCO--and who has vicarious liability in the Whataburger case? Well, it isn't easy, but we will try to explain:

In November 2006, a company called One Equity Partners completed the acquisition of NCO. One Equity Partners is the private investment arm of JPMorgan Chase, so that seems to make the connection clear cut. But things got murky earlier this year, and here is how: In April, NCO merged with APAC Customer Services, and both now operate under an umbrella company called Expert Global Solutions (EGS).

What in the heck just happened? Who's on first? Well, this clears it up: One Equity Partners owns EGS, and that completes the circle back to JPMorgan Chase.

If you need a scorecard to keep track of this shell game, here's how it would look: NCO merged with APAC; they both are neatly tucked under EGS, which is owned by One Equity Partners, which is owned by JPMorgan Chase.

That means Whataburger, on behalf of an employee, is taking on the largest private corporation in the world. I know who I will be rooting for in that fight.

The writers and readers at The Consumerist also seem to be pulling for Whataburger. A report by Mary Beth Quirk explains one of the many ugly secrets behind the debt-collection business:

Debt collectors know where you work, so companies will go after people there in an effort to tick off employers enough that the individual will pay up to make the calls stop. But Whataburger isn't sitting for that. It's seeking unspecified actual damages to cover the toll charges for the long-distance calls, and punitive damages as well 

Whataburger claims that since at least 27 calls were made after the cease-and-desist, NCO is in violation of the federal Fair Debt Collection Practices Act. It wants up to $1,000 for each call. 

Whatanemployer, that Whataburger.