Bay Area Credit Service Collection Agency Let Off The Hook By Media

When Paula and Arnie Celick moved into their Auburn, CA home with a new phone number, they didn't know a previous user of the number was being pursued by collection agencies.

The collection agencies refused to honor the Celick's requests to stop calling. The phone company and others were powerless to restrain the insistent bill collectors who kept calling the wrong people. Finally, the Celick's called KCRA Channel 3, the local NBC television affiliate for help.

As KCRA explains it on their website: "The Call 3 Problem Solvers called the most persistent collection agency -- Bay Area Credit Service -- who promised to put the Celicks on their internal do not call list."

Problem solved right? Wrong. The bullies at the collection agency who had already been told not to call the Celicks already knew they were calling the wrong party. They don't care and they suffered no consequences from telling the TV station what it wanted to hear.

If KCRA really wants to help they will refer Bay Area Credit Service for prosecution under California's telephone harrassment law. Then they will refer a consumer attorney to the Celicks who can recover the value of the time stolen from the Celicks and register the community's disgust with Bay Area Credit Service by obtaining civil damages for intentional emotional distress.

Fee Harvesting Credit Cards Trap Many In Debt

Fee harvesting credit cards are marketed so that consumers will not be able to tell the difference between the high interest rate and high fee cards and regular credit cards.

Fee-harvesting cards represent the the subprime credit card market, credit cards offered to people with low FICO scores or students just starting out with no credit. Sometimes borrowers think they are getting a financial life preserver, but it's really an anchor in disguise.

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Homeowners Protest Mortgages Designed To Fail

Hundreds of protesters wearing yellow T-shirts with the Neighborhood Assistance Corporation of America logo, took their protest to the lobby of the struggling Bear Stearns investment bank.

The group said the government continues to blame homeowners facing hard financial difficulties in making payments on mortgages that were structured to fail, while using billions of taxpayer dollars to aid the financial sector.

In a government-led bailout, JPMorgan Chase this month offered to buy the struggling investment bank for a small fraction of what it was valued at a few weeks ago.

Credit Crises Was Warned About By Obama A Year Ago

The following letter from Senator Barack Obama to Bush appointees Ben Bernanke, Chairman of the Federal Reserve, and Henry Paulsen, Secretary of the Treasury, supposedly entrusted with guarding the integrity of the U.S. financial system, and sent off over one year ago was prophetic and beyond wise in its call to avert the catastrophe we are witnessing today. It's dated March 22, 2007.The letter has been up at Obama's Senate site for a year but no one else, it seems, has picked up on it....

March 22, 2007

The Honorable Ben Bernanke
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, D.C. 20551

The Honorable Henry Paulson
Secretary
U.S. Department of Treasury
1500 Pennsylvania Ave, NW
Washington, D.C. 20220


Dear Chairman Bernanke and Secretary Paulson,

There is grave concern in low-income communities about a potential coming wave of foreclosures. Because regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market, I urge you immediately to convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge.

We cannot sit on the sidelines while increasing numbers of American families face the risk of losing their homes. And while neither the government nor the private sector acting alone is capable of quickly balancing the important interests in widespread access to credit and responsible lending, both must act and act quickly.

Working together, the relevant private sector entities and regulators may be best positioned for quick and targeted responses to mitigate the danger. Rampant foreclosures are in nobody's interest, and I believe this is a case where all responsible industry players can share the objective of eliminating deceptive or abusive practices, preserving homeownership, and stabilizing housing markets.

The summit should consider best practice loan marketing, underwriting, and origination practices consistent with the recent (and overdue) regulators' Proposed Statement on Subprime Mortgage Lending. The summit participants should also evaluate options for independent loan counseling, voluntary loan restructuring, limited forbearance, and other possible workout strategies. I would also urge you to facilitate a serious conversation about the following:

* What standards investors should require of lenders, particularly with regard to verification of income and assets and the underwriting of borrowers based on fully indexed and fully amortized rates.

* How to facilitate and encourage appropriate intervention by loan servicing companies at the earliest signs of borrower difficulty.

* How to support independent community-based-organizations to provide counseling and work-out services to prevent foreclosure and preserve homeownership where practical.

* How to provide more effective information disclosure and financial education to ensure that borrowers are treated fairly and that deception is never a source of competitive advantage.

* How to adopt principles of fair competition that promote affordability, transparency, non-discrimination, genuine consumer value, and competitive returns.

* How to ensure adequate liquidity across all mortgage markets without exacerbating consumer and housing market vulnerability.

Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short-term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation.

Nevertheless, a consortium of industry-related service providers and public interest advocates may be able to bring quick and efficient relief to millions of at-risk homeowners and neighborhoods, even before Congress has had an opportunity to act. There is an opportunity here to bring different interests together in the best interests of American homeowners and the American economy. Please don't let this opportunity pass us by.

Sincerely,

Barack Obama
United States Senator

Economic Decline Good For High Interest Lenders

As hundreds of thousands of American homeowners fall behind on their mortgage payments, more people are turning to short-term loans with extreme interest rates, just to get by.

While hard figures are hard to come by, evidence from nonprofit credit and mortgage counselors suggests that the number of people using these so-called "payday loans" is growing as the U.S. housing crisis deepens.

"We're hearing from around the country that many folks are buried deep in payday loan debts as well as struggling with their mortgage payments," said Uriah King, a policy associate at the Center for Responsible Lending.

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Collection Agency Complaints Top FTC List

Complaints over alleged FDCPA violations and crimes by bill collectors once again topped all other complaints received by the Federal Trade Commission, according to its latest annual report to Congress released Friday.

The number and percentage of complaints about debt collectors are up. That's according to the Federal Trade Commission's latest annual report on the Fair Debt Collection Practices Act.

In 2007 nationwide, consumer complaints about debt collectors went up "in absolute terms and as a percentage of all complaints." In 2007, there were 91,019 consumer complaints against third-party and in-house collectors, representing 26.7 percent of all complaints the FTC received.

Third-party debt collectors received the most complaints, generating 70,951 in 2007. The complaints in 2007 represented 20.8 percent of all the consumer complaints the agency received, up from 19.9 percent in 2006.

More than a third involved consumer reports that collectors demanded larger debt payments than allowed by law. Some said collectors were going after debts consumers didn't owe or were discharged in bankruptcy.

In the next biggest category, consumers complained of being repeatedly harassed. In some cases, consumers reported obscene or abusive language.