Missouri Supreme Court Tells Debt Buyers “We’re Not Taking Your Word For It” Anymore

On January 17th the Missouri Supreme Court issued an important ruling that extricated their state court system from being used as an extension of debt buyers collections department.

This decision requires debt owners (often a debt buyer who’s purchased the delinquent debt from a bank) to prove both that they own the account and how they calculated what was owed before a case can be tried. This is quite different from the “take our word for it” (or our internal record keepers word) that is the current, legally accepted norm.

From now on, in Missouri, debt buyers can’t just use the courts to bludgeon a payment or bankruptcy settlement for the debts they claim to own. First hand witnesses from the original lender (and all owners in the “food chain”) plus original documentation will need to be provided before a legal case can proceed.  Given the shoddy record keeping and “robo-signing” that is rampant in the industry, this should greatly curtail the “sue ‘em all and let God sort them out” methodology debt-buyers have used to affect lucrative settlements for decades.

 

Let’s hope this precedent is soon be replicated throughout the country.

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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Newsweek Debt Collector Expose Very Revealing

In the current issue of Newsweek, author Gary Rivlin (@grivlin) does a superb job peeling back the curtain and allowing the world to see what really happens behind the scenes in many debt collection operations.

His primary source, Alexis Moore, shares her disturbing first hand account of life as a “desperate for a paycheck”, debt collector. She remarked that “every day I was on the job, I was asked to break the law.” This is because her supervisors overtly forced her to break laws (and rules of decent human civility), if she wanted to keep her job.

Some may argue that she should have just quit. Likely those that would have Alexis tell her boss to “take this job and shove it” have never been a paycheck away from homelessness.

That’s one of the cruel ironies of debt collection abuse. Those doing the abusing are often in desperate situations themselves – financially, or with health issues like drug addiction. Because of their precarious personal situations, they are easily manipulated to do the bidding of deceitful operators.

Some examples of collection practice abuses shared in Mr. Rivlin’s riveting Newsweek story include:

  • When someone would hang up, calling back immediately –  time after time – until the person answered.
  • Informing 3rd parties (this is illegal) such as parents, relatives and neighbors about the money owed and enlisting their support in collections
  • Asking neighbors to pin notes on the debtors door, telling them the collector called and that they owe the money
  • Threaten foreigners with deportation
  • Use vulgarities, like the “F” word, to threaten and intimidate

Unfortunately, the solution is more complex than “there oughta be a law.” There are already plenty of laws, they’re just not policed anywhere near well enough. The real solution is on the supply side. Get banks stop selling their delinquent debt to collection firms who use lawsuits, and other coercive measures to collect, and this abuse of our neediest citizens will stop almost overnight.

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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Public Employees Being Used to Collect on Private Debt in Illinois

Yesterday I was invited to testify at an Illinois public hearing on Debtors’ Prisons, which were banned by law, but have insidiously surfaced as debt collection firms use state troopers, security bonds and the penitentiary system  to extract payment.

To their credit, state officials have identified the problem and are working to put an end to this egregious and un-American practice.

You can read about my testimony and what is happening to real live citizens of Illinois in this article and in this tv news report.

Prepare to be outraged. 

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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Public Hearing on Illinois “Debtor” Prisons

Before the holidays I shared this disturbing story of Illinois citizens being jailed for unpaid debts.

In most states the wheels of justice move at “government speed,” taking far too long to get wrongs, like this one, righted. This is not the case in Illinois.

In fact, tomorrow, I have accepted an invitation from The Illinois Department of Financial and Professional Regulation to testify at a public hearing on “debtors’ prisons.”  They are holding this hearing to work towards finding a solution to the practice of incarcerating debtors who fail to appear in court or who have violated a court order.

It’s encouraging to see public officials like Illinois Attorney General, Lisa Madigan, (@LisaMadigan2010who are willing to bring unfortunate and embarrassing situations like this to the public’s attention. It would be much easier to ignore and sweep under the rug. It’s obvious  that her reputation as one of the most pro-consumer Attorney Generals in the U.S. is well earned.

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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Presidential Courage on Display – Obama Puts People Over Politics with CFPB Director Recess Appointment

 

I’m impressed with President Obama.

Truth be told, I had privately doubted his mettle. In what is surely going to be a political hot potato for the upcoming campaign, he has managed to completely change my mind today  by announcing the recess appointment of Richard Cordray as the director of the Consumer Financial Protection Bureau (CFPB). My doubts have been erased.

To understand the murky ground he’s treading with this move read this breaking article from BusinessWeek.

This decision opens another political “front” he, Harry Reid and his colleagues in the Senate will need to defend. This they certainly don’t need or want, with control of the Senate very much in jeopardy. But there are times when REAL people are REALLY hurting and action needs to be taken, political consequences be damned.

This was one of those times.

Without a director, the CFPB was a toothless agency, unable to regulate (read: protect) the non-bank financial institutions that the neediest among us depend on as their financial lifeline.

And, it wouldn’t shock me, if Senator Reid wasn’t either behind this move, or was Obama’s enthusiastic compatriot.

Legal battles over the legitimacy of this appointment will no doubt ensue. But, at least while the slow wheels of justice grind on, Mr. Cordray will be hard at work, doing a job he is eminently qualified to perform.

Well done Mr. President.

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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USA TODAY Reports “First Time Senate Blocks Appointment to Shut Down Agency”

Today, the USA TODAY gave indepth details about how a political strategy blocked a president’s appointment in an effort to effectively shut down a full fledged government agency. In this case, it was President Obama’s appointment of the deserving Richard Cordray and the Consumer Financial Protection Bureau (CFPB).

 

Read the full story here: http://usat.ly/s7S6Vb

 

The irony runs deep as the Dodd-Frank bill (which legislated the creation of the CFPB) was passed in the Senate by a filibuster proof 60-39 vote. What was a good idea during a time of white-hot public scrutiny of financial misdeeds, is apparently not such a great idea when there is an opportunity to make the opposition look bad in an election year.

For more information on this topic and upcoming events surrounding the CFPB and the appointment of its leader, check back on our blog and make sure to follow us on Facebook and Twitter.

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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Kansas AG Schmidt Trying to Put an End to Midland Funding Chicanery

What’s worse than being abused for debts you owe? Being sued into paying debts that AREN’T yours.

This is the abhorrent trick Midland Funding, a subsidiary of the San Diego-based Encore Capital Group, which bills itself as “a recognized leader in distressed consumer debt buying and recovery.”

Kansas Attorney General Derek Schmidt said his office has received more than three dozen complaints about Midland Funding, which has filed over 3,300 lawsuits in Sedgwick County Kansas and has amassed over 1 billion in collections in just the past 2 years alone.

Attorney General Schmidt has his work cut out for him, but if my experience proves correct, the dozens of complaints he’s received about Midland Funding are likely to prove to be just the tip of a rotten iceberg.

Here’s Midland’s “Business” Model:

1. Midland tries to contact the alleged debtors to get them to agree to a payment plan.

2. If that doesn’t work, Midland files a lawsuit against the debtor.

3. “Tack & Mail” – Midland Funding pays the sheriff’s department or a private processor to place a summons on what the company believes to be the debtor’s door, and to send a copy of the summons by regular mail to the same address. This is the weakest kind of service because it is not assured that the defendant was actually notified.

4. Most suits result in default judgments for Midland because defendant doesn’t show up

5. When it wins judgments, Midland usually seeks to get money from the alleged debtors by garnishing their bank accounts.
According to an article in the Wichata Eagle, “The Midland case has exposed a potential flaw in the Kansas legal system that appears to have allowed people to be sued and judged on unconfirmed evidence.

In most of its cases, the only proof Midland offered was an affidavit in which an employee of a sister company, Midland Credit Management, swore that the consumer owed money to Midland Funding.
In its legal action against the firm, the Minnesota Attorney General’s Office claims that the affidavits were mass-produced and invalid.

Three employees of Midland’s St. Cloud, Minn., office testified that they routinely signed 100 to 400 affidavits a day — known as “robo-signing” — without any knowledge about the debts they were swearing that people owed.

Two of the employees testified that they had no idea where the affidavits they signed came from.

“They just came from the printer as far a where we get them,” testified Ivan Jimenez, an employee in the St. Cloud facility who signed affidavits in 2008 and 2009.

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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A Debt Collectors Public Defense – REALLY?

The Lubbock Avalanche-Journal recently reported that the state of Texas sued the nation’s largest debt-buyer and two of it’s subsidiaries for falsifying supporting affidavits to collect delinquent debts and using unlawful and deceptive collection tactics.

The legal filing says Midland Funding and Midland Credit Management have filed more than 60,000 lawsuits for collection in Texas courts.

60,000?! In Texas alone.

If I still had my cowboy hat I would tip it to Texas Attorney General, Greg Abbott, (@gregabbott_TX) for trying to put a stop to this. You can read all the gory details from the link above, but here’s what struck me…

Encore’s chief executive officer, Brandon Black, said “Encore and its subsidiaries strive to work with consumers to help them resolve their debt, but because 95 percent of consumers ignore letters sent by the company, the legal channel is often the only remaining option.”

95%? Really? I had to laugh at seeing that. Hare Krishna’s have a better connect rate Encore!

To put this absurd statement into perspective, my company CFS II has an 85% CONNECT RATE. Meaning only 15% of our customers ignore our communications.

Either Encore is REALLY REALLY bad at their communications or maybe they are just looking for a little plausible deniability in using (read: abusing) the legal system for their own enrichment?

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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Interesting….Using Laws Created for Organized Crime Against Debt Collectors

 

I think we may have a new trend in the making…

Resourceful consumer attorneys are starting to use RICO laws (legislation primarily used for prosecuting mobsters who “gave” the orders, but didn’t “actually” commit the crime) to go after deceitful and abusive debt collectors.

Using RICO legislation allows attorneys to create highly lucrative class action suits (read: gives attorneys the proper incentive to go after the bad guys.)

I expect to see much more of this approach in the future and think it’s a positive development. Any incentive to get debt collectors to clean up their acts is a good thing.

 

Here are a couple of examples:

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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What Debt Collection (Disturbingly) Sounds Like for Millions of Americans

 

Cord Jefferson of The Root uncovered this disturbing audio recording of a debt collection call to Romanda Lucas.

While I hesitate to share this because of it’s level of contempt and vulgarity, I am doing so because this gives a visceral insight into what millions of Americans, behind in their bills, are facing on a daily basis.

The threats from this call caused Romanda Lucas to change the locks on her home, because she literally feared for her safety and that of her family.

The accent of the caller suggest it originated from India, a popular source of staffing for many domestic debt collectors who use cheap overseas labor to harass and intimidate our friends and families.

In 2010 Sen. Al Franken’s (D-Minn) crafted enlightened legislation titled the End Debt Collector Abuse Act (EDCAA) bill. If turned into law, the legislation would prohibit collectors from seeking arrest warrants to collect debts and toughen already existing penalties against collectors who use illegal methods, like slurs and threats of violence, to collect money.

While it never made it to the floor for debate, I encourage Sen. Franken to reintroduce this needed legislation in 2012.

 

Bill

Hi, I'm Bill Bartmann and I am on a mission to reform the debt collection industry in America. Please join with me as we bring a petition to Washington D.C., and make Congress close all the legal loopholes in debt collection practices. It's time to stop these debt collection abuses and stop these criminals. Join with me! Sign the petition today! http://stopthesecriminals.com/petition

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