18 Comments

Wow, so slimy, yet so innovative!

Debt collection agencies need to be abolished, no exceptions. If a debt didn’t originate with a corporation they should have no right to try to collect or sell it.

Awesome, impressive criminal behavior!

A completely faked judge, courtroom, and legal proceedings down to the smallest detail.

Amazing!

I seriously have to wonder what the hell goes through such people’s minds when ideas like these are passed around the discussion table. Is there a debate, and the most reprehensible and legally shaky idea gets veto’d in?

Seriously, how did that discussion go? “Well, we could call them at all hours of the day, show up at their house unexpectedly, and show up at their places of work.” “Hmm…I like it, but it’s not quite evil enough.” “How about, instead of doing it legally, we pretend to be the law and scare them into giving us the money they owe?” “Kiss me, I love it. You’ve earned yourself a raise.”

Isn’t that a criminal offense in itself? Also, I can’t believe that the debt collection agency would make money off their accounts when they’re sinking so much overhead into a scheme like this.

Remind me, please, why we don’t still have drawing and quartering on the books?

ChC
While this one, if the allegations are true, is slimy beyond belief, your proposal to ban the sale of debts would be a disaster. It would lock up credit markets even worse.

– If I hold a municipal bond, I’m not allowed to sell it, but must wait until it matures. What if I need the money now? If there is no way to sell, I’ll have to think long and hard about tying up my money for any substantial term in an illiquid investment.
– Say some poor soul, who after buying a GM bond say….10 years ago, wised up to the fact that they were headed for disaster. Would you have them be out of luck, forbidden from selling the debt?
– If I’m a small business man, concerned about running my coffee shop, should I spend my time trying to collect every $15 bounced check, or concentrate on running my shop, and get a guaranteed couple bucks for it from a collection agency?
– Due to the nature of business, many accounts receivables are 60 or even 90 days until they’re paid as a normal course. In the meantime, I’m stuck making payroll. Would you have it such that I need to sink in a vast additional pile of capital to cover this float between expenses and income? If I’m in a business where they reliably pay, I can sell the receivables for only a few percent fee, offloading the risk of the occasional deadbeat, plus reducing my capital requirements.

Joe: Yes….my thoughts as well. Impersonating a police officer….big no no.

ChC: That would make honest debt collection almost impossible. You can’t seriously expect every mom and pop store to understand all the rules for legal debt collection. Should they just do the best they can and maybe break a few rules? Or should they just avoid collecting entirely?

Maybe I’m biased, but when an entire industry is rotten to the core I say it should be abolished.

I have been getting calls several times a day for a decade or more; recorded messages insisting that I return the call to somebody named Patel who I assume works in India. They are looking for somebody named Zanubria, as well as other random people. My name is not Zanubria, and I suppose I could call Patel and explain this to him but why bother? He would only ask for a lot of personal identifying information that would be entered into their database to eventually be used against me with some phony claim. My favorites are the ones that say that by not answering them I am acknowledging that I am indeed the person they are hounding. Seriously, who replies to these calls? If they were going to sue me they would have done it years ago. They don’t even know who I am and they don’t care.

I miss the old days where at least a live person would make the call and offer threats.

If some mom and pop store loses out on a bounced check, let them make the calls. Most of the debt is sold off by financial companies, lenders and the like, anyway and we all know the shenanigans they have been involved in.

Oh, and to NN Guy: I don’t see where bonds, corporates or munis, fit into this. If you bought a GM bond and are still holding it, I really hate to be the one to break this to you, you are SOL.

ChC: How will the mom and pop know what they can and cannot lawfully say or do when they make the calls? And what about the person who holds a debt but can’t afford to wait until it matures?

How could I, for example, sell off an annuity for a fixed payment if the new owner of the annuity would have to get me to collect for them?

I don’t think you realize how badly you would be hurting the people you are trying to help. If you reduce the value of debt, that means those who go into debt get less money in the first place. A thriving market for debt makes it possible to lend.

Debt is debt is debt, no matter the form. Your PRINCIPAL of not allowing debt to be sold is a poor one.

I was using the example of a GM bond holder (screwed, btw by the command of a man, instead of being in the front of the line per the rule of LAW) as a great example of why being able to sell debt is useful – they could have got something instead of the nothing they did get. And no, I’m not stupid enough (nor will ever be) to buy any part of any industry dominated by unions after what they and their cronies in DC did to the GM bond holders. Only a fool would do so.

And David hits the nail on the head: “A thriving market for debt makes it possible to lend.”

BTW ChC: Yes, I got those same calls as well. I finally started asking them who it was they wanted, pressing those @$$ clowns. They finally shut the heck up and quit bothering me. Something else you can do is block the number from where the call is coming.

At least they tabled their plans for mock executions.

I guess I should have excepted the bond market from my blanket statement, but I don’t think some guy named Patel is hounding the holders of munis and corporates. It’s banks, credit card companies and mortgage holders who failed to perform due diligence in the first place and don’t want to be bothered making the calls themselves who are feeding this market, and I think you know that.

Another example: I had a Brooks Brothers credit card and I don’t know if they didn’t mail me a statement or if it got lost in the mail but they turned it over to another party for collection without even sending a second notice. That’s just lazy, as well as bad customer service, and they deserve to eat that fifteen dollars. And, no, I didn’t pay the collection agency for that one either.

So, ChC, you acknowledge you defaulted on a debt where you borrowed money in good faith because you were unhappy with their admittedly poor way of collecting. No matter what they did, it doesn’t change the fact that you cheated them.

From what I understand, PA makes it notoriously difficult to collect a debt. I spoke with someone at a large debt collection firm and they pulled out of PA because they could not make any money. From what he told me, PA does not allow you to garnish a person’s wages and exempts a large amount from a bank levy (you can only levy money above a certain amount from a bank account). If the person does not own real property you can attach to, you are screwed. Involuntary collection in PA is pretty much impossible. Under those circumstances, it is not surprising a creditor would make up an alternative court.

Chris. That in no way excuses the behavior of the dirt bag collectors in this case (if, a big if, the facts as alleged are substantially true).

Potential creditors should respond in a logical matter – reducing their exposure to potential deadbeats and raising rates to cover the losses. Of course, the so called consumer activists will whine up a storm, yadda yadda yadda….lack of credit, hurting those on the margin, so on and so forth.

I would take the opposite position. I think PA should respond in a logical manner and reduce its barriers to collecting valid debts. Virtually all of the various collection rules which have been enacted are properly described as “hoops,” which creditors need to jump through. They have little, if any, relationship to weeding out un-meritorious claims. They do nothing but needlessly increase transaction costs. Maybe its true that the banks should not have lent Deadbeat X that money? I can agree to that. But the idea that since they never should have lent the money in the first place does not mean that they should be arbitrarily impaired from attempting collection.