The month of June is drawing to a close, and the first month of summer was dominated by a number of debt collection scams and consumer reaction in the court of law. All the news that was fit to print in the world of debt collection is conveniently wrapped up in the summary below.
Consumers across Connecticut have been receiving convincing phone calls from individuals claiming to represent debt collection services. Callers have the phone numbers, names, and Social Security numbers of consumers, and inform them over the phone that the will be served with papers at work or home for old debt, unless they pay a fine now via credit or debit card. The Better Business Bureau is warning consumers not to verify any of that information over the phone and never to give out credit card information.
Security National Automotive Acceptance Company (SNAAC) was sued in federal court by the Consumer Financial Protection Bureau (CFPB) for using aggressive debt collection tactics against America’s servicemembers. In the complaint, SNAAC reportedly violated the rights of servicemembers by threatening to contact their commanding officers about their debts and even threatened action under the Uniform Code of Military Justice (UCMJ).
The Consumer Financial Protection Bureau (CFPB) has been busy in recent weeks, this time filing a complaint against Syndicated Office Systems. The company operates as Central Financial Control, and operates as a debt collection agency collecting medical debts for hospitals and other healthcare providers. The CFPB ordered the company to pay $5.4 million in relief, correct its practices, and pay a $500,000 fine for causing “stress and confusion” among consumers.
More than 600 business owners in California were scammed by Neil Madison to the tune of $6 million. Madison’s company cold called numerous business owners promising to help deal with their business debts, for a small fee. Owners were told to send him a check, he’d keep a fee, deal with their debt collectors, and send the remaining money back. Those 600 business owners never saw a dime in return. Even worse, Madison used the money to purchase a yacht, multiple luxury vehicles, and a house on Laguna Beach.
The West Virginia attorney general, Patrick Morrisey, happily announced that Dominion Management Services (based in Virginia) will be forced to forgive $2.36 million in consumer loan debt and release liens on 435 vehicle titles. Dominion does business as CashPoint, and engaged in unlawful debt collection practices within the state of West Virginia.
Here we go again with the Consumer Financial Protection Bureau. The CFPB is investigating a number of collection agencies that have filed lawsuits against student loan borrowers. According to the CFPB, the collection agencies in question have aggressively pursued borrowers even though they cannot prove a legal right to collect on the loans.
The Better Business Bureau of West Florida is warning residents of Clearwater, FL and surrounding communities about a debt collection scam targeting individuals in the area. The BBB notes that ACS Incorporation Collection is using false emails and names to trick people into paying debts. More than 1,200 complaints have been filed against ACS with the BBB of West Florida.
Louisiana Attorney General Buddy Caldwell has warned consumers throughout the so-called ArkLaMiss region that scam artists are posing as debt collectors to try and collect on alleged debts. The scammers are posing as law enforcement or other government officials to demand payment on loans or accounts that don’t even exist.
A bill is making its way toward the desk of Iowa Governor Terry Branstad that Story County Board of Supervisor officials want him to veto. The letter from the Board of Supervisors asks Gov. Branstad to line-item veto the privatization of court debt collection in Iowa. The group fears that debtors with little money will be unfairly targeted by private organizations and coerced into repaying debts on payment plans they simply cannot afford, while also collecting fees that county courts do not charge.
Debt collectors fed up with letters that go unanswered and phone calls that are ignored are now turning to text messages to harass consumers with outstanding debt. Debt collection agencies are allowed to contact consumers via text, but the Federal Trade Commission (FTC) filed complaints in federal courts in New York and Georgia to shut down three agencies using deceptive and threatening text messages to coerce consumers.