Look Out Consumers: Debt Collections Get Scarier
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iStockphoto As if we don't have enough on our collective plates worrying about our legitimate debts, it is now coming to light that more scam artists are trying to collect on debts you may not even have. Just this week in the state of New York, an ex-con and his cronies were busted and a nationwide debt collection company was shut down. Based in Buffalo, NY, the “debt collection agency” operated using several different company names, including Central Resource Man, Interchange Payment Solutions, Next Step Services, Silverbay Services, Teleport, Final Claims Asset Locators and Final Control Asset Locators.
The apparent ring leader was Tobias Boyland, a convicted felon who, along with three other individuals ran debt collection practices in at least four different locations in Western New York. The complaints that were filed against them with the District Attorney's office alleged that Boyland and his team would contact individuals about debt collections, often using threats of being arrested to frighten people into paying back debts. The team also intimidated consumers by lying to them about the status of their debts that have have gone to court. Some involved in the ring even posed as law enforcement officers to add to the intimidation. In many cases, the amount of the debt was inflated or had already passed the statue of limitation, Consumers were scared, believing they were being sued or face legitimate incarceration, they started paying up. While this ploy is scary on its own, many of the collection calls the companies were making were about debts that didn't even exist!
Due to the scare tactics, many consumer volunteered their checking account information, sent money via Western Union, or mailed out money orders. All of the monies were directed to be sent outside of the Buffalo area, to further mislead authorities and consumers alike. The Fair Debt Collection Practices Act prohibits any debt collection company to pose as an attorney or a member of law enforcement, threaten a lawsuit, accuse debt holders of a crime, or threaten arrest. The fraudsters violated many aspects of this federal law and were arrested. At the time of arrest, Boyland was in possession of a loaded semi-automatic pistol. New York Attorney General Andrew Cuomo and his office has been pursuing deceptive debt collection practitioners and has successfully shut down several operations and will continue to do so.
We as consumers now have an additional concern to worry about concerning debt. While many people are getting much better about handling their debts and avoiding it altogether, there are still many families struggling to get back on track. Knowing the debts they do owe can lead them to be victims of fraudulent practices, makes the burden and humiliation of debt even bigger. When you are dealing with debt collectors and making an honest attempt to clean up your credit, make sure you know your rights. Review the Fair Debt Collection Practices Act.
Get smart about your personal finances and your debts. Make notes on the dates and times you are contacted by a collection agency. Be certain you actually owe the debt before you take any action. If you feel that something is amiss with the way your debt is being handled, speak up! Contact your local authorities. While it can be very scary to deal with thug-like callers demanding money, don't make additional financial mistakes by sending money to just anyone. Know your rights and take a stand when it comes to people messing with your money, your credit score, and your sanity.
Tagged: Personal Finance, Debt Management, consumer issues, debt collections, Fair Debt Collections Act, fraud
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Some collections company in Buffalo (not sure if it's one of these) contacted me last year about a delinquency on a mortgage with Chase. I've never had a mortgage, and at that time I didn't have any sort of an account with Chase. They called me every day for two weeks.
I simply followed all the standard steps on debt validation. Sent a letter to each of their two offices requesting proof of the account and of how much I owed. Added a nice but firm warning that if they do not provide validation and continue to harass me, my lawyer would be contacting them about their breach of the Fair Debt Collection Practices Act. Funnily enough, after I received the return receipts on the letters, I never heard back from those companies again.
Go Cuomo, but it's also important for people to know their rights when it comes to debt collection.
Thanks for that tip on "standard steps." Every few years we are hounded for a couple of months with daily calls about a supposed debt connected with a house my husband lost to his ex-wife. We've verbally asked for documentation and we never received any. One place told us that they don't even know what the debt is for - just that we owe it. I have never known what to do about these calls.
The other day we got a phone call from a guy who claimed he has been trying to contact one of our neighbors and asked me if I would give them a message to call him. He was very friendly and seemed to know my neighbors, but his request seemed odd to me. I went online and entered the phone number he had given me to determine if he was legit. It turned out that he was connected with a debt collection agency. I guess his tactic was to embarass my neighbors with my awareness of their debt. I never delivered his message. This seems like an unfair practice by the collection agency.
Last year my mom started getting phone calls from a collection agency (I'd moved out, but I use my parents' address and phone numbers as a permanent contact info, since I tend to move a lot) about a $400+ bill from the university hospital which was connected to the university I was studying at, at the time.
I called them back, asking them for peculiars: what was done? When did I go? I would've automatically pegged this as a scam but for the fact that the red tape at the university is more like red cement--thick and impossible to get through. Plus I'd been getting treatment through the student health center, but that was supposed to be covered under the "fees" category of my tuition. The guy on the phone couldn't tell me. Smelling "scam" I then called the hospital, and, true to my recollection, the hospital did not have me listed anywhere, and certainly did not have me owing $400. So we ignored the guy, and as far as I know he's never called back.
I was contacted by the law firm of Dewy, Cheatham , and Howe for a debt I never owed. Could this be a scam?
If collection agencies are hounding you, you have a very important right which is outlined in the Fair Debt Collection Practices Act. This is the right to have a collection account “validated.”
The collection agency must prove that the debt is legally yours and that they have the right to collect it from you. In addition, the collection agency must stop all collection activity until they can provide you with this evidence. If the agency cannot validate the debt, they must end their efforts to collect on it, and they must stop reporting the collection amount to all of the credit bureaus.
I've been dealing with a debt collector for some time now--they won't validate the debt or and other proceedure. They even went to a local court and got a court order which I ignored. They then got a "contempt of court" issued. My attorney got that knocked down within minutes of issue. We are looking at the court order--which garnishsed my Social Security Disability. So far, we have them for lieing to the court, violation of Social Security laws, and falsely stating that I was in contempt.
And to top everything off--these people are supposed to be lawyers!