We are non-commercial, all volunteer and supported by our readers. Please help sustain the Dew by making a donation.
A Consumer Win
When Debt Collectors are Bullies
Anyone who’s ever been hassled by debt collectors calling incessantly to collect a debt, especially one that’s not even owed, will be glad to learn that the Department of Justice and Federal Trade Commission, a consumer protection agency, have been working together to rein in some of the worst debt buyers. In United States v. Asset Acceptance, LLC, a suit brought in the U.S. District Court in the Middle District of Florida, in Tampa, the defendants have agreed to a settlement which imposes a fine of $2.5 million and a number of changes in their business practices.
Asset specializes in purchasing old consumer debts from other companies, and then holding and collecting on these debts over a long period of time. According to the complaint, as of Sept. 30, 2010, Asset held more than 34 million individual accounts with an original value of more than $42 billion, making it one of the nation’s largest debt buyers and a market leader.
The Department of Justice, according to Tony West, Assistant Attorney General for the Civil Division, hopes that this settlement will help set the standard for appropriate behavior by other players in an industry that’s really only taken off in the last ten years. Since the Fair Debt Collection Practices Act hasn’t been updated in about three decades, it’s likely that the newly organized Consumer Financial Protection Bureau will be looking at how to strengthen the law.
In the mean time, perhaps the most important part is a requirement that debt collectors notify consumers in writing of their intent to provide information to credit rating agencies, so consumers can challenge any errors at the outset, instead of discovering them when they need to take out a loan.
According to the complaint, many of the debts Asset purchased are outside of the statute of limitations and consumers have no enforceable legal obligation to pay that debt. In some states, consumers can reset the statute of limitations if they promise to pay the debt or make a partial payment on the debt. Asset is alleged to have collected on this so-called “zombie” debt without informing consumers that these debts were not legally enforceable, or that in making a partial payment or promise to pay, they may have unwittingly breathed life back into these debts.
This is an important point, but perhaps not entirely clear. What it means is that when time has run out on collecting a debt and the collector can no longer bring a suit in court, if a person makes a payment in response to a request, he can inadvertently start the clock running again. And, since the statutes of limitation vary in the different states (the limit can be anywhere from 3 to 10 years), consumers need to inform themselves. The information is quite readily available, including on this web site. In the settlement, Asset agrees not to take advantage of this restart provision and not penalize people making a good faith effort to pay their debts.
The settlement also requires other changes to Asset’s business practices that create safeguards for consumers. For example, the company must conduct a reasonable investigation into the legitimacy of a debt when it becomes aware of a consumer dispute or if the company who sold a debt to Asset provided unreliable information about the original debt. The company can no longer consider undelivered mail to constitute notice that information about a consumer is being reported to a credit reporting agency or repeatedly contact third parties in a way that violates the Fair Debt Collection Practices Act.
If $2.5 million seems like a paltry amount, I guess we have to content ourselves with the fact that it is really hard to put a company in jail. It hardly seems fair, especially on a day when we learn that Georgia is routinely putting parents in prison for failing to pay child support. 845 in the month of October alone.
- Photo licensed by LikeTheDew.com on 123RF Stock Photo.
Worthy of Comment
Also on the Dew
I arrived in Beijing on an old Boeing 707 China Air flight in November 1978 after a week in Japan. The entry formalities at Beijing Airport were slow but considerably quicker than the Shenzhen Railway Station where I had previously entered China from Hong Kong. I caught a taxi from the airport to the Beijing Hotel on Dongchangan Jie. Taxis were a new experience for me in China, previously it was the “foreigners bus”. The Beijing Hotel had a long and fascinating history. It was built as a five-story brick building in 1915 and two years later a seven-story French sty Read on →
It's the second week of January 1999 and the McCartneys are visiting Atlanta. But not for a concert. On this trip, Heather McCartney is unveiling her line of houseware items at the America's Mart, and Paul is there to guarantee his daughter ample media play. After helping to promote Heather's rugs, cushions and other items arrayed with designs inspired by the Huichol and Tarahumara tribes of Mexico, Paul and his son, James, make a smooth exit to explore the side streets of Atlanta. According to Paul, James, then 21, wanted to "visit the funky side of town." So into the Read on →
My friend and co-author, Robert Clark, and I long planned to give readers a look at the Southland and its abundant beauty, unusual charms, and fascinating stories. We came up with “Closed Wednesdays” but never got it off the ground. Too much traveling, too many book-related events, and life’s way of throwing detours in our path got in the way. We stepped back and thought things over and decided to offer readers something a bit shorter. Seems today’s hectic pace discourages many from reading long pieces. Robert’s idea, “The Photo of the Week,” resulted and so far it is getting a good recept Read on →
The excitement and acclaim that greeted both the Peachtree and the Broadway premieres of producer David O. Selznick’s adaptation of Gone With the Wind seventy-five years ago this week seems genuinely cringe-worthy today, after multiple indictments over recent years of Margaret Mitchell’s novel as racist and historically distorted. Mitchell is clearly culpable on the first count, although by no means uniquely so, but latter-day critics who charge her with distorting history would be well advised to consider the history she had to work with and, in some aspects, even undertook to revise. Released in mid-summer 1936, Mitchell’s book had already sold more Read on →