Newspaper Faces Down Collection Agency And Lets Them Off The Hook

Every day innocent consumers victimized by fraudulent collection agencies contact local TV stations and newspapers for help. Like cockroaches fleeing the sunlight, the bill collectors predictably shut down their scam, close the account and flee.

But they slink off with a smile, because they are exposed without consequence. The media fires blanks.

Dorothy Archambeau contacted a Minnesota media outlet when she began receiving unexplained and threatening collections letters from American Accounts & Advisers (AAA) collection agency. As described in the article, the bill collectors violated a raft of Fair Debt Collection Practices Act provisions such as not being able to explain the alleged debt, making threats to take action they had no intention of taking (they were going to sue over a debt they couldn't explain?) and intimidation, by expressing regret for the "action now being taken" without telling Archambeau what that action was.

Yet, at no time did anybody, including the Minnesota media outlet, refer Archambeau to the FDCPA which provides consumers $1000 statutory damages plus legal fees from the fraudulent and threatening bill collectors. Nobody at the paper knows a lawyer in Minnesota?

Holding fraudulent and threatening bill collectors at least accountable in civil court, if not criminal court, not only compensates the victim, it sends a message to the perpetrator about the acceptability of their actions. And if the community is fortunate enough to have an aggressive consumer attorney, the fraudulent and threatening bill collector can be faced with a class action claim so all victims can be compensated and the community can express its disgust with a single voice.

Apparently the consumer "watchdogs" at the Pioneer Press, however, think business as usual down at the AAA is just fine.

TV Station Confirms Credit Bureaus Don't Know If They Put Judgments On The Right Reports

Before a charge can be filed in criminal court a burden of proof called "probable cause" must be met by law enforcement. A civil suit must have enough proof to be able to withstand a motion to dismiss, otherwise the plaintiff can be counter sued for filing a frivolous claim.

However, credit bureaus place judgments on consumer credit reports without any idea if the report they are tainting is the right one. And the consequences to the victims of credit bureau indifference to the truth are not small.

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Home Depot And Their Collection Attorney's Shakedown Consumers

Miami handyman Glenn Rudge was falsely accused of shoplifting an $8 set of drill bits by Home Depot. When Rudge showed his receipt to prosecutors they dropped the charge. Rudge thought he'd settled the matter.

He was wrong. Home Depot hadn't got their collection attorney involved yet.

The next month Mr. Rudge got a letter from the Palmer Reifler law firm. Home Depot's lawyers demanded Rudge pay Home Depot over $3,000. They gave him 20 days to surrender the money.

Rudge ignored the demand. Then he got a letter demanding an additional $3,000, as "pre-litigation" attorney's fees, for a total of just over $6,000. If he didn't pay, the letter warned, the sheriff's office would be called.

Mr. Rudge was doing work for a lawyer and showed her the letters. "I took one look and said, 'This is outrageous,' " says the lawyer, Alison Harke. "These letters are designed to make people settle because they believe they are going to jail." She filed a suit against Home Depot.

A confidential settlement was reached.

But Home Depot isn't alone in partnering with collection attorneys to run shakedown scams.

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Barack Obama vs. Predatory Lenders

Barack held a Town Hall meeting in San Antonio, TX on February 19, 2008 prior to winning his 9th and 10th contests in a row. The crowd at his victory speech wanted to know his plan to take on predatory lenders.

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Payday Lender Whistleblowers Testify In Virginia

A former manager of a payday lending store urged Virginia legislators to pass aggressive industry reforms to stop what he called “financial terrorists” from preying on vulnerable Virginians.

The former manager revealed he was trained to push people into taking out the maximum $500 payday loan as a way to keep them coming back for more money. “I realized I was working for financial terrorists, bent on financially enslaving as many hardworking Americans as they possibly could, he said at a news conference. He appeared with John LaCombe, founder of CapAmerica, a group of former payday loan borrowers and whistleblowers.

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Returning Soldiers Face Collection Agency Harassment.

After countless hours of training and a year of combat duty in the desert, the last thing a returning soldier should expect is a new and unfamiliar conflict: Close quarter collection agency harassment.

But that's what happened to Dan Whiting.

Shortly after enlisting at college in 2004 Dan Whiting's unit was deployed for training and then combat duty.

About a month after deployment a letter arrived at Whiting’s parents’ house to say the soldier owed the government $221.99 because he received education benefits to attend college and then dropped out.

Whiting’s parents contacted the VA and explained their son did not drop out. Their son had been sent to Iraq.

That should have been easy enough to understand.

But last month, three years after being told their bill was wrong, another letter arrived at the Whiting house. This time, the government was writing to say that Whiting owed the government $872.30, which included penalties from the earlier debt, along with another charge for education benefits.

And the government went one better for its soldier. Whiting’s inexplicable $872.30 bill had been sent to a collections agency.

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Some Credit Repair Companies Are Credit Ripoff Companies

With falling home values, increasing mortgage defaults and a recessionary economy, more people are drowning in a sea of debt. May will turn to companies that sell credit repair and credit counseling services. Some of those companies, though, are not law offices and sometimes the services they charge for do not exist. Many of these companies aren't regulated by federal law.

Anyone can open a credit counseling business. As a result, the services provided if at all can vary widely.

The trick is to not get confused by the similar names and similar claims.

CBS News has a guide to help you know what to look for here.

Phony Legal Aid Services Seeking Out The Most Vulnerable

Colorado has filed a federal suit against Legal Aid National Services, Inc., (LANS). Legal Aid National Services president Kendrick E. White, White's wife Jasmine Ewing, and White's half-brother Derrich E. Brown, have also been sued by the state.

The defendants defendant preyed on lower-income consumers with confusing business names and false promises of legal aid.

According to the Attorney General's complaint, the defendants misrepresented the "legal services" they provided to consumers in Colorado and across the country.

Although the defendants claimed that trained professionals would provide legal services, the complaint alleges that consumers were charged for legal advice by staff with little or no legal training.

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FEMA Provieds Toxic Trailers, Evicts Victims, Then Sends Threatening Collection Letters

FEMA is the agency with acres of empty mobile homes because they couldn't find the hurricanes to take them to.

FEMA is the agency that put homeless Americans and their children in trailers filled with toxic chemicals.

And on the same day the Centers for Disease Control released a study that the poison in the FEMA trailers was 75 times the limit OSHA allowed workers to be exposed to, FEMA started sending collection letters to hurricane victims who had so far survived both the hurricanes and FEMA.

Gail Fotheringham, 57, a grandmother who lived in a FEMA mobile home for 18 months with her daughter and three grandchildren after a hurricane destroyed their home was surprised when she got a FEMA collection letter. Instead of charging her rent FEMA had evicted her and her family.

"You have not paid the amount you owe the Federal Emergency Management Agency for Mobile Home Rental," said the letter, which seeks a balance due of $1,357.58.

The FEMA letter says, "if you do not pay your debt or take other action ... within 60 days from the date of this letter, FEMA will submit your debt to the Department of the Treasury. FEMA will continue to add interest, penalties and administrative charges to your unpaid debt until your debt is paid in full."

FEMA victims like Fotheringham could also be prosecuted, the IRS could collect the debt from future refunds or Social Security payments, or the debt cold be referred to a collection agency, the letter said.

Failure To Prosecute Usury Laws Allows Predatory Lenders To Steal Cars

Potomac area lawyer Leonard J. Koenick shared the following story with the Washington Post, making the point that payday lenders aren't the only predators running loose.

"I'm a lawyer, and a client recently came to me with something called a "motor vehicle equity line of credit." For the "privilege" of borrowing $300, she had to first pay a $150 "membership fee" and was charged 300 percent interest. Her finance charge was $79.44 per month and, of course, that was only the interest. Her collateral was her car, and she had to give the lender a duplicate car key. She missed one payment; they took her car and sold it.

If that isn't criminal, it should be."