Is debt settlement like bankruptcy? How do they compare? What are the drawbacks?
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Monday, April 21, 2008
Thursday, April 3, 2008
Dead People and Credit Cards
Found here:(Original Post)
Received this as a forward. I don't know how far this is true… but it sure was fun reading!
Be sure and cancel your credit cards before you die. This is so priceless, and so easy to see happening, customer service being what it is today.
A lady died this past January, and The Bank billed her for February March for their annual service charges on her credit card, added late fees and interest on the monthly charge. The balance of $0, is now somewhere around $60. A Family Member placed a call to The Bank.
Here is the exchange:
Family Member: "I am calling to tell you she died in January."
The Bank: "The account was never closed, and the late fees charges still apply."
Family Member: "Maybe you should turn it over to collections."
The Bank: "Since it is 2 months past due, it already has been."
Family Member: So, what will they do when they find out she is dead?"
The Bank: "Either report her account to frauds division or report her to the credit bureau. Maybe both !"
Family Member: "Do you think God will be mad at her?" (I really liked this part !!!!)
The Bank: "Excuse me?"
Family Member: "Did you just get what I was telling you? The part about her being dead?"
The Bank: "Sir, you'll have to speak to my supervisor." !
(Supervisor gets on the phone)
Family Member: "I'm calling to tell you she died in January."
The Bank: "The account was never closed, so the late fees and charges still apply." (This must be a phrase taught by The Bank!)
Family Member: "Do you mean you want to collect from her estate?"
The Bank: (stammering) "Are you her lawyer?"
Family Member: "No, I'm her great-nephew."
The Bank: "Could you fax us a certificate of death?"
Family Member: "Sure." (fax number is given)
After they get the fax:
The Bank: "Our system just isn't set up for death. I don't know what more I can do to help."
Family Member: "Well, if you figure it out, great ! If not, you could just keep billing her. I really don't think she will care."
The Bank: "Well, the late fees charges do still apply."
(What is wrong with these people??!!)
Family Member: "Would you like her new billing address?"
The Bank: "Yes, that will help."
Family Member: " Odessa Memorial Cemetery, Highway 129, Plot Number 69."
The Bank: "Sir, that is a cemetery!"
Family Member: "What do you do with dead people on YOUR planet?!!
Tuesday, April 1, 2008
DA Says Collection Scam Netted Two New Yorkers $1.6 Million
Prosecutors in Manhattan have charged two men with defrauding clients of over $1.6 million in a series of debt collection scams spanning six years.
by Patrick Lunsford
insideARM
March 31, 2008
The Manhattan District Attorney charged two New York City men with collecting more than $1.6 million on behalf of clients but failing to remit any of the money collected over the course of six years.
by Patrick Lunsford
insideARM
March 31, 2008
The Manhattan District Attorney charged two New York City men with collecting more than $1.6 million on behalf of clients but failing to remit any of the money collected over the course of six years.
In a press release issued Friday, Manhattan District Attorney Robert M. Morgenthau said that 73 year-old Lionel Fuhrman and 43 year-old Steven King used more than a half-dozen different aliases and company names to target local businesses for collection contracts. After the businesses turned over their debtor records, they typically never heard from the defendants again, according to Morgenthau.
The DA’s office charged the two men with conspiracy to defraud, grand larceny and possession of stolen property. Both pleaded not guilty at an arraignment in New York Thursday, according to the Associated Press.
Morgenthau said that Fuhrman and King used the business name Levy Fitzgerald & Associates or Levy Fitzgerald Inc. from 2001 to 2004 and ripped off more than 100 clients. During that time, the DA’s office said the pair pocketed nearly $1.2 million in collections without ever paying their clients.
The pair allegedly operated from small offices in Manhattan using telephone and fax solicitations to drum up business. When clients began to ask about the status of the debts, the two disconnected their phone lines and started over in a new location.
Fuhrman is alleged to have also operated on his own from 2005 to July 2007, soliciting business under the names Harris & Klein, Solomon & Bailey Inc., Ross, Hollander & Associates, Inc., Michael Roberts & Associates and Collection Solutions. Morgenthau said that Fuhrman racked up an additional $400,000 in fraudulent collections in that time.
The DA’s Special Prosecutions Bureau began investigating the pair after receiving complaints from local businesses.
Monday, March 24, 2008
NCO-OSI Deal Signed, Now it has to Get Done
Now that the two collection giants have agreed on a price and made their intentions toward each other known, work begins on getting the deal approved and moved into the integration phase.
by Patrick Lunsford
insideARM.com
December 13, 2007
As soon as the ink dried on the agreement that will send Outsourcing Solutions, Inc. (OSI) to the NCO Group family for $325 million, the focus of top executives shifted to ensuring the deal is approved and closed by the end of the first quarter of next year.
The all-cash deal, announced yesterday (“NCO Group to Buy OSI for $325 Million,” Dec. 12), will combine the U.S.’s two largest collection agencies: Horsham, Pa.-based NCO Group and OSI, headquartered in St. Louis. But there is still a ways to go before the agreement is complete.
“A lot of things have to happen before this deal is done,” Brian Callahan, NCO’s vice president of financial reporting, told insideARM.com this morning.
For starters, government regulators must approve the deal which, while expected to not be a problem, could require scrutiny due to the size of the two firms and their combined market share. OSI shareholders will also have to give their blessing, a hurdle that is not as straight-forward as might be expected with a privately-held firm.
“We have over 200 shareholders,” said Kevin Keleghan, president and CEO of OSI. “Various hedge funds and private equity firms are left over from our 2003 restructuring. But they all are looking for value and so far the deal has been viewed very favorably on their part.”
Keleghan said that his focus for the next few months will be getting the deal done. After that, he said that he will do anything he could to help successfully integrate the two giants. But Keleghan conceded that his run with the company would likely soon end.
“I think after the deal is done, and an integration plan is in place, my job is done here and it will be on to the next mission,” Keleghan said, adding that he is not currently looking at other opportunities.
The combined company will employ some 29,000 people in about 140 offices in ten different countries. Both companies have been clear leaders -- even dominate players -- in the debt collection industry for years. And both have also recently expanded their offerings to include more business process outsourcing services.
To some observers, the commonality of the two firms could present several roadblocks to completing the deal. For one, deciding what operations to keep and what to jettison could mean headaches. Secondly, regulators could decide the combination of the two giants in the field presents antitrust problems.
But Keleghan noted that each company has its own focus, so fitting together the pieces may not be the Herculean task some might consider it to be. “The two companies are much more complimentary than most people think,” he said.
For example, said NCO’s Callahan, NCO counts traditional third-party contingency collection work as one of its largest business lines, while OSI’s first-party business is a huge contributor to its top and bottom lines. Also, the two firms’ debt purchasing units have been active in different markets, buying portfolios from completely different debt segments and at different stages in maturity.
This should help in the government approval process, said Callahan. “There’s just not as much overlap as is probably perceived,” he said.
When government regulators look at the deal, they will have to consider that the combined company will not dominate a business sector that both have been expanding into over the past few years: business process outsourcing services.
“While the new NCO will clearly be the largest ARM company in the world, it will be competing against much larger firms for BPO contracts,” said Mike Ginsberg, CEO of M&A advisory firm Kaulkin Ginsberg. “Also, you have to consider that the combined company will still make up only a small fraction of the overall ARM industry.”
by Patrick Lunsford
insideARM.com
December 13, 2007
As soon as the ink dried on the agreement that will send Outsourcing Solutions, Inc. (OSI) to the NCO Group family for $325 million, the focus of top executives shifted to ensuring the deal is approved and closed by the end of the first quarter of next year.
The all-cash deal, announced yesterday (“NCO Group to Buy OSI for $325 Million,” Dec. 12), will combine the U.S.’s two largest collection agencies: Horsham, Pa.-based NCO Group and OSI, headquartered in St. Louis. But there is still a ways to go before the agreement is complete.
“A lot of things have to happen before this deal is done,” Brian Callahan, NCO’s vice president of financial reporting, told insideARM.com this morning.
For starters, government regulators must approve the deal which, while expected to not be a problem, could require scrutiny due to the size of the two firms and their combined market share. OSI shareholders will also have to give their blessing, a hurdle that is not as straight-forward as might be expected with a privately-held firm.
“We have over 200 shareholders,” said Kevin Keleghan, president and CEO of OSI. “Various hedge funds and private equity firms are left over from our 2003 restructuring. But they all are looking for value and so far the deal has been viewed very favorably on their part.”
Keleghan said that his focus for the next few months will be getting the deal done. After that, he said that he will do anything he could to help successfully integrate the two giants. But Keleghan conceded that his run with the company would likely soon end.
“I think after the deal is done, and an integration plan is in place, my job is done here and it will be on to the next mission,” Keleghan said, adding that he is not currently looking at other opportunities.
The combined company will employ some 29,000 people in about 140 offices in ten different countries. Both companies have been clear leaders -- even dominate players -- in the debt collection industry for years. And both have also recently expanded their offerings to include more business process outsourcing services.
To some observers, the commonality of the two firms could present several roadblocks to completing the deal. For one, deciding what operations to keep and what to jettison could mean headaches. Secondly, regulators could decide the combination of the two giants in the field presents antitrust problems.
But Keleghan noted that each company has its own focus, so fitting together the pieces may not be the Herculean task some might consider it to be. “The two companies are much more complimentary than most people think,” he said.
For example, said NCO’s Callahan, NCO counts traditional third-party contingency collection work as one of its largest business lines, while OSI’s first-party business is a huge contributor to its top and bottom lines. Also, the two firms’ debt purchasing units have been active in different markets, buying portfolios from completely different debt segments and at different stages in maturity.
This should help in the government approval process, said Callahan. “There’s just not as much overlap as is probably perceived,” he said.
When government regulators look at the deal, they will have to consider that the combined company will not dominate a business sector that both have been expanding into over the past few years: business process outsourcing services.
“While the new NCO will clearly be the largest ARM company in the world, it will be competing against much larger firms for BPO contracts,” said Mike Ginsberg, CEO of M&A advisory firm Kaulkin Ginsberg. “Also, you have to consider that the combined company will still make up only a small fraction of the overall ARM industry.”
Monday, January 28, 2008
Court Enters Final Order in FTC Action Against Florida Debt Collectors
A federal court has entered a final order against a Florida debt collection agency, its principals, and its attorney, settling a Federal Trade Commission action that alleged that the defendants violated the FTC Act and the Fair Debt Collection Practices Act (FDCPA) while collecting consumers’ debts.
The FTC’s complaint alleged that the enterprise used misleading dunning letters and abusive telephone calls to falsely threaten that consumers would be sued, their property seized, and their wages garnished if they did not pay the money that the defendants said they owed. The complaint alleged that the collectors often shouted and used profanity and other abusive language to carry out their collections.
The stipulated final order, among other things, permanently bars the defendants from falsely representing the character, amount, or legal status of a consumer’s debt, that their collector is an attorney or represents an attorney, or that if the consumer does not pay, the defendants can or will file a lawsuit against the consumer. It also prohibits them from violating the FDCPA in any way, including by disclosing a consumer’s debts to any third parties, using profanity or other abusive language in collection calls, or by continuing to attempt to collect a debt before providing verification of the debt to consumers who properly request such verification. The settlement also requires the defendants to provide consumers with a toll-free number and mailing address to file complaints, promptly investigate each such complaint, and take steps to cease, resolve, and cure any violations of the court order or the FDCPA.
The defendants are Rawlins & Rivera, Inc. of Florida, Rawlins & Rivera, Inc. of Georgia, Ryan & Reed, Inc. of Florida, Ryan & Reed, Inc. of Georgia, RRI, Inc., the corporations’ officers, Janis Brust, Joe L. Hunt, Sr., Joe L. Hunt, Jr., and a Florida lawyer, Robert W. Bird, whose letterhead was used for many of their collection letters. The settlement contains a monetary judgment of $3.4 million, which represents the total amount the defendants took in through their allegedly improper debt collection activities. The settlement requires the defendants to sell property and transfer the proceeds of the sale to the FTC. The remainder of the $3.4 million will be suspended based upon the defendants’ inability to pay.
The Commission vote to authorize staff to file the stipulated final order was 5-0. The order was entered by the U.S. District Court for the Middle District of Florida, Orlando Division, on January 14, 2008, along with an order dismissing Shannon Hunt from the complaint.
NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.
The FTC’s complaint alleged that the enterprise used misleading dunning letters and abusive telephone calls to falsely threaten that consumers would be sued, their property seized, and their wages garnished if they did not pay the money that the defendants said they owed. The complaint alleged that the collectors often shouted and used profanity and other abusive language to carry out their collections.
The stipulated final order, among other things, permanently bars the defendants from falsely representing the character, amount, or legal status of a consumer’s debt, that their collector is an attorney or represents an attorney, or that if the consumer does not pay, the defendants can or will file a lawsuit against the consumer. It also prohibits them from violating the FDCPA in any way, including by disclosing a consumer’s debts to any third parties, using profanity or other abusive language in collection calls, or by continuing to attempt to collect a debt before providing verification of the debt to consumers who properly request such verification. The settlement also requires the defendants to provide consumers with a toll-free number and mailing address to file complaints, promptly investigate each such complaint, and take steps to cease, resolve, and cure any violations of the court order or the FDCPA.
The defendants are Rawlins & Rivera, Inc. of Florida, Rawlins & Rivera, Inc. of Georgia, Ryan & Reed, Inc. of Florida, Ryan & Reed, Inc. of Georgia, RRI, Inc., the corporations’ officers, Janis Brust, Joe L. Hunt, Sr., Joe L. Hunt, Jr., and a Florida lawyer, Robert W. Bird, whose letterhead was used for many of their collection letters. The settlement contains a monetary judgment of $3.4 million, which represents the total amount the defendants took in through their allegedly improper debt collection activities. The settlement requires the defendants to sell property and transfer the proceeds of the sale to the FTC. The remainder of the $3.4 million will be suspended based upon the defendants’ inability to pay.
The Commission vote to authorize staff to file the stipulated final order was 5-0. The order was entered by the U.S. District Court for the Middle District of Florida, Orlando Division, on January 14, 2008, along with an order dismissing Shannon Hunt from the complaint.
NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.
Tuesday, December 18, 2007
Default Judgments against Military Personnel.
Debtors have rights! This has been the purpose of this blog. To explain the rights of debtors as it pertains to collection efforts, lawsuits and judgments. I have a new one that I will not go into detail about the background, but take from it what you need and feel free to email me if you have further questions.
Pursuant to the Soldiers and Sailors Civil Relief Act (SSCRA) a default judgment may not be obtained against an active soldier or sailor. An affidavit of non-military service is required to obtain a default judgment, but is often overlooked by the plaintiff's attorney and the ruling judge.
While I am not an attorney and do not provide legal advice, I have studied the SSCRA and the use of it in vacating default judgments. Any active duty military personnel receiving a default judgment may file a motion to vacate judgment and pray for relief under SSCRA. In doing so, the defendant should request the affidavit of non-military status that should have been filed by the plaintiff with the motion for default judgment. This may sound confusing, but it is a simple process. Sample forms are available online. The instructions may be a little overwhelming, but go the simple route, find the form you need, fill in your info and go to the clerk of the court. They will help you.
Pursuant to the Soldiers and Sailors Civil Relief Act (SSCRA) a default judgment may not be obtained against an active soldier or sailor. An affidavit of non-military service is required to obtain a default judgment, but is often overlooked by the plaintiff's attorney and the ruling judge.
While I am not an attorney and do not provide legal advice, I have studied the SSCRA and the use of it in vacating default judgments. Any active duty military personnel receiving a default judgment may file a motion to vacate judgment and pray for relief under SSCRA. In doing so, the defendant should request the affidavit of non-military status that should have been filed by the plaintiff with the motion for default judgment. This may sound confusing, but it is a simple process. Sample forms are available online. The instructions may be a little overwhelming, but go the simple route, find the form you need, fill in your info and go to the clerk of the court. They will help you.
Soldiers & Sailors Civil Relief Act (SSCRA) Main Menu
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Note: On 19 December, 2003, President Bush has signed the “Servicemembers Civil Relief Act,” new legislation to help ease the economic and legal burdens on military personnel called to active duty status in Operation Iraqi Freedom. Authored by Veterans’ Affairs Committee Chairman Chris Smith, the Servicemembers Civil Relief Act updates and strengthens the previous Soldiers & Sailors Civil Relief Act of 1940 (SSCRA). For complete details, see Servicemembers Civil Relief Act, Simplified, and Servicemembers Civil Relief Act in Detail.
Chapter 1 - Introduction
Chapter 2 - General Provisions
Chapter 3 - General Relief, Interest Rates, and Judicial Proceedings
Chapter 4 - Rents, Mortgages, and Foreclosures
Chapter 5 - Insurance
Chapter 6 -Taxation
Chapter 7 - Public Lands
Friday, November 9, 2007
FDCPA Section 801 & 802
§ 801. Short Title [15 USC 1601 note]
This title may be cited as the "Fair Debt Collection Practices Act."
This is the initial post written to dissect the Fair Debt Collection Practices Act for ease of comprehension for consumers. Section 801 really has nothing to interpret as it is just the "Short Title".
It says the Fair Debt Collection Practices Act is called The Fair Debt Collection Practices Act. Now that I have wowed you with my mastery of the English language and interpretation of congressional writings, I'll move on to another section.
Section 802 is a declaration of the problems addressed and need for the FDCPA. Subtitle a addresses the adverse effects of not having regulation in collection practices. It states that harassment and abuse from collectors is invading privacy, causing tension in households and causing consumers to lose their jobs.§ 802. Congressional findings and declarations of purpose [15 USC 1692]
(a) There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
(b) Existing laws and procedures for redressing these injuries are inadequate to protect consumers.
(c) Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.
(d) Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce.
(e) It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.
Subtitle b cites "inadequate" consumer protection suggesting reform to the Consumer Credit Collections Act. It's pretty straight forward and needs no interpretation.
Subtitle c says the abusive acts are not necessary, there is a means to collect the debt without causing the afore mentioned "injuries" to consumers. As many of us will agree, there is no need for collectors to be nasty and aggressive when collecting a debt. The majority of the time, consumers are not running from it because they don't want to pay, just their inability to do so. Financial hardship can come to anyone at anytime. Whether it be an illness to you or your family, a loss of income, the adjustable rate killer that is sweeping the nation with ARM's locking so high home owners have to choose between a credit card or their home, or just getting in too far.
Subtitle d refers to collectors operating outside of the state in which the consumer lives. Interstate commerce, or commerce from two different states falls under a different code of laws than intrastate or same state commerce. The FDCPA transcends the boundary of interstate commerce and encompasses collectors operating in any state to be regulated at the Federal level.
Subtitle e is a statement of purpose for the FDCPA. In short, it's to regulate collectors so as to not advantage those who use abusive practices and to set a guide in which all collectors should maintain a professional non-threatening manner when collecting from consumers.
That's it for now, more sections to come later. These are the easy ones!
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