Consumer Resources

One time, before I started working on consumer law cases, I had a problem with a gym who demanded that I continue making monthly payments even though I’d tried repeatedly to end my gym membership. It was frustrating, and I felt like I was harassed by the random Texas company the gym used to do their collection calls.

In my frustration and anger, I searched for places that could hear my complaint, perhaps mediate an “OK” outcome for both sides, and get this Texas company to stop calling me twice a day, every day.

I either was a bad researcher, or just didn’t take the time to look very hard. My first thought was to file a complaint with the Better Business Bureau. Like the movie, The Revenant, the BBB didn’t do much for me. I did get to air my grievance, I suppose, in a long winded series of entries typed into the BBB’s online form. But the Texas company continued to call.

Don’t be like me. There are certainly times to use the BBB, but there are perhaps more useful outlets than the BBB to lodge complaints over debt collection problems. For instance, let’s talk about the Nebraska Attorney General today.

The Nebraska AG’s office has a consumer protection division, under the “public protection” link. One of the jobs of the AG’s office is to protect the public from fraudulent business activities and also to educate consumers. I don’t know how many attorneys work in the AG’s office, let alone how many staff the consumer protection division. I do know, after reading Bad Paper, that larger states like New York, had only two attorneys assigned to the entire consumer protection division. That’s either a lot of complaints handled by only 2 attorneys, or there’s not that many complaints filed with the AG’s office in New York.

If you have a problem with a debt collector, or get sold a lemon for a car, or have another consumer law problem, there is a form on the Nebraska AG’s website to file a complaint. They ask you questions like “have you hired an attorney for this matter?” and “how much did you pay for this product?” and “please describe what resolution you are seeking for this complaint.” It is thorough and also asks you to submit any documents that support your complaint.

I’d like to know how many of these complaints the AG’s office receives on an annual basis, and what the average resolution to these cases are. Anyone out there gone through it and willing to share stories from the other side?

I haven’t seen any data published by the Nebraska AG’s office on how many complaints they receive annually for illegal debt collection practices, but I did find a news release by the Nebraska AG stating that they were joining a coalition to “address illegal debt collection practices.” You can read the entire news release here. So at least you know that the Nebraska AG has teamed up with a lot of other government agencies, both federal and state, to participate in “Operation Collection Protection.” Whatever that means.

 

What Debt Collectors Can’t Do….#3

For #2, go here.

For #1, go here

This time around in our “what debt collectors can’t do” series, let’s talk about when player 3 enters the game. For all of you non-video gamers, you are Player 1, debt collector is Player 2, and any third party is Player 3. There are a series of prohibitions in 15 U.S.C. 1692b concerning what debt collectors can’t do if they communicate with third parties. Here’s a brief check list of prohibitions in that section:

  • Failing to identify themselves as a debt collector;
  • Stating to a third party that the consumer owes any debt;
  • Contacting a third party more than once, unless requested to do so;
  • Using postcards;
  • Using language or symbols on any envelope or communication indicating debt collection business;
  • Contacting a third party after knowing the consumer is represented by an attorney.

But hold up, wait a minute. Does my dog count as a third party? Uh, no. Here’s the specific language describing what a third party is:

“Any debt collector communicating with any person other than the consumer…”

So not my dog. But definitely your neighbor, boss, spouse, girlfriend, boyfriend, friend you are only friends with on facebook and don’t talk in real life, sister, brother, nephew, niece, aunt, uncle, grammy, grampa, and even your kids.

In an effort to be even more exhaustive in my list making, here’s a list of third parties a debt collector CAN contact when trying to collect a debt:

  • The consumer
  • The consumer’s attorney
  • A consumer reporting agency (if permitted by local law)
  • The creditor
  • The creditor’s attorney
  • The debt collector’s attorney

Anyone else, and the debt collector better have prior specific permission from the consumer or local court OR only be seeking location information for the consumer from a third party. Location information means basically the contact information for the consumer, like address and telephone number. And this statute also specifically includes “employer information” as part of the “location information” that a debt collector may seek from a third party.

Improving the Debt Collection Market for Consumers

In a recent press release, the Consumer Financial Protection Bureau announced that it is considering a proposal to strengthen protections for consumers in the debt collection market. Its reasons for turning a magnifying glass to the debt collection industry have to do with how many complaints the CFPB has received, and how many consumers are likely to be affected at one point or another with a call from a debt collector.

Read the CFPB’s article here.

The CFPB noted that the bulk of the complaints it receives has to do with debt collectors calling consumers about debts that were already paid off, discharged in bankruptcy, or wasn’t their debt in the first place. Not surprising there.

Sometimes it seems like the CFPB is more awestruck with the highest number it can boast on its website – like telling us that more than 70 million consumers were contacted by a debt collector within the past year. Or that, because of CFPB’s enforcement actions against creditors and debt collectors, they’ve gotten hundreds of millions of dollars refunded to consumers.

That’s great and all, but what are they proposing to do about tightening up the debt collection industry? Turns out, the million dollar numbers the CFPB likes to brag about is a lot more concrete than the proposals of tightening up the debt collecting industry:

  1. Capping collector contact attempts;
  2. Making sure that companies collect the correct debt – which means collectors would have to have more information and more accurate information on debtors before they start collecting;
  3. Collection companies would have to make it easier for consumers to dispute a debt.

I understand and really appreciate what the CFPB is trying to do here. But what I’d like to see more of is hard and fast rules about how many “contact attempts” are too many, and exactly how much information is enough to move forward with collecting a debt. It’s not surprising at all to me that the bulk of complaints the CFPB receives is about debt collectors – it’s a tough and underhanded business meant to make the consumer feel bad, confused, and frustrated.

Indeed, the CFPB notes, like the Bad Paper book, that often the original creditor only gives names and debt amounts to a debt collector, in exchange for a nominal sum of money for each account. Given how loose and fast the original creditor and debt collectors play with consumers’ information, I’m surprised there aren’t more complaints filed with the CFPB.

What Debt Collectors Can’t Do…#2

Hey hey hey. I’ve got another good one for you to think about when you’ve got debt collectors calling you:

Debt collectors are prohibited from communicating with your place of employment if the debt collector has reason to know that your employer prohibits those kinds of communications.

This issue seems to flare up with some regularity, and like everything in the law, has a few caveats. Here’s the full legalese from the statute:

Communication with the consumer generally. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt….(3) at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.” 15 U.S.C. 1692c(a)(3)

Lauritzen Gardens resized

Here are the takeaways from the statute that you should keep in mind next time you get a phone call from a debt collector while you’re toiling away, working for the man:

  • A debt collector can call your employer all they want IF you give the debt collector permission to do so. This isn’t legal advice, this is just common sense – don’t do that.
  • Does your employer have a policy on personal phone calls in the workplace? Whether explicitly and painstakingly recorded in an employee handbook, or informally acknowledged in the office that personal calls on the company’s dime “is just not cool, man,” your employer probably doesn’t want to get calls from debt collectors any more than you want debt collectors to call your employer.
  • This provision was included because who really likes to have their dirty underwear aired in front of their work colleagues? I better not see any hands waving in the air.
  • The best way to make sure the debt collector understands that your employer does not allow debt collection phone calls is to verbally inform the debt collector on the phone, and write down the time, date, and who you talked to in order to keep a record.
  • And if your employer is OK with those kinds of harassing phone calls, you should probably polish up that resume and find a better employer.

You Need to Read This

https://www.propublica.org/article/for-nebraskas-poor-get-sick-and-get-sued

 

For those of you Nebraskans who might have missed this article, published in the Lincoln Journal-Star, as well as ProPublica, The Atlantic, and The Daily Beast, you should read it. The author explores how rampant debt collection lawsuits have become in the state of Nebraska – particularly, the overwhelming amount of lawsuits filed by Credit Management Services.

 

In case you don’t feel like reading a whole other article (you’re busy, I get it), here are some take aways:

 

  • In 2013 Credit Management Services filed 30,000 lawsuits, which is more than all of the other Nebraska collection agencies combined. That amounts to filing approximately 120 lawsuits per business day.
  • “From 2008 to 2014, CMS seized at least $88 million from Nebraskans’ wages and bank accounts, according to court data analyzed by ProPublica.”
  • “In 2013, Cook County, Illinois, which contains Chicago and has a population of over 5 million, had about the same number of collection suits as Nebraska with its population of fewer than 2 million. That year, it cost $172 in Cook County to file suit for the sort of small amounts that predominate in Nebraska, where the fee was $45.”
  • Many of the debtors are low income (making $30,000 or less annually), and many of the debts being collected on are less than $700.

 

This article shows not only how collector-friendly Nebraska laws are (which begs the question, why isn’t someone in the state legislature taking this cause up already?), but also reinforces my belief that everyone should be educated on their consumer rights. And hopefully get educated before you get that call demanding payment for a past-due medical bill or over due credit card account.

 

Here’s the link to the article again, in case you missed it at the top:
https://www.propublica.org/article/for-nebraskas-poor-get-sick-and-get-sued