Robert Friedman's Open Salon Blog

They Are Pulling "A Madoff"

Tue, 24 Nov 2009 14:11:17 -0500

Another Debt Collector Scam

Debt collectors resort to a lot of illegal tricks but the one I am going to tell you about here is really quite creative. It involves the use of IRS form 1099c. The two main culprits in this seem to be Asset Acceptance Corporation and Portfolio Recovery Associates. Both are infamous for being sued with regularity for violations of the FCRA and the FDCPA.

Basically these bottom feeders buy debts for pennies on the dollar that are well past the statutues of limitations in no matter which state you are in. The debts date back to the 1990's. After they buy the debts the amounts are inflated as much as possible and then charged off as losses even though there really is not any loss. 1099c's are then issued to the unsuspecting consumer. So the consumer essentially is getting a tax bill on a debt that is out of statute and which the debt scavenger absolutely has no prayer of verifying (validating the debt as prescribed by the Fair Debt Collection Practices Act).

According to one of the Attorney Generals, if the debt cannot be validated the 1099c cannot be filed. Do you think that is stopping these slime buckets? They are betting that you are an idiot and will just cave in under the pressure and pay or they will try to get some hefty tax deductions on all of the debts on which they are unable to collect.

Should you become a victim of this scam the very first thing you want to do is to serve the debt collectors with my demand for debt validation letter which you can obtain by opting in with your name and email address on by blog. I can promise you right now that they are not going to be able to validate the debt. Once you determine that to be the case you can then proceed to sue their sorry butts.

I recommend going to the National Association of Consumer Advocates (naca.net). They have a listing of qualified attorneys all over the US so it should not be difficult to find a lawyer relatively near where you live.

Not 10 Commandments But 8 Real Good Ones

Tue, 24 Nov 2009 04:11:22 -0500

We are moving into the holiday season and unfortunately for many people this holiday season is not too joyous. For those of you who are being annoyed by debt collectors or harassed by them I am going to give you the StoptheCallsFast 8 commandments:

I. Never speak to a debt collector unless they are working in house for an original creditor.

II. Never give financial information of any kind to a debt collector. You will be sorry if you do.

III. Always send all correspondence to debt collectors by certified mail-return receipt requested.

IV. Never agree to any terms with a debt collector unless they are in writing and only if the terms are legal and acceptable to you.

V. Never, never, never ignore written correspondence from a debt collector.

VI. Never believe anything a debt collector tells you unless it is in writing and you have had it verified.

VII. Never Accept phone calls from debt collectors.

VIII. Always check your credit reports after any initial communication attempts from debt collectors

You can email me at stopthecallsfast at gmail.com with any questions. Have a Happy Thanksgiving and think of what you are thankful for.

Lessons To Be Learned

Fri, 6 Nov 2009 06:11:22 -0500

I am presently preparing a case for one of my clients who has basically been the victim of multiple violations of the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. This saga started in 2003 when she purchased furniture from a well known furniture retailer. The retailer used GE Money as its credit card servicing agent and still does. The purchase occurred in April, 2003 and the furniture was delivered approximately 4 weeks later.

For purposes of privacy I will refer to my client as Jane. On the date of delivery Jane discovered that the order was incomplete and refused to let the delivery people unload the furniture from the delivery truck. The items were brought back to the retailer's warehouse. The next month Jane received a bill from GE Money. She called the retailer and asked then why this matter was still pending. She was told not to worry about it and that it would be taken care of.

For two years after the furniture was returned GE Money continued to bill Jane. Finally in August of 2005 Jane was told by a customer service representative that the furniture retailer had paid $2433.15 to GE Money which was the entire amount due to GE Money. Jane assumed at that point that the matter was closed. WRONG

On July 27, 2006, Jane received a letter from her bank stating that "A Bank Execution in your name(s) was served on XYZ Bank". You are probably asking yourself "What is going on here?" aren't you? That is what I said to myself when I started reading the paperwork that Jane gave to me.

It took me some days to piece together the pieces of this puzzle. Here is what I came up with. The furniture company acted in good faith and did pay GE the balance in the account. The problem is that GE never credited Jane's account but instead kept charging the account interest. It turns out that GE sold what they considered to be a receivable to a third party debt collector who proceeded to do what many 3rd party debt collectors do to make their money--sue Jane to get a default judgment. Here is where it gets juicy.

Unfortunately for Jane, she never knew that GE sold her account. She also never knew she was sued. It turns out that the 3rd party debt collector sued her not in her state of residence but in some other state. Jane was never served with a summons and complaint. The debt collector obtained a default judgment which was easy since Jane did not appear. Convenient, wasn't it? The default judgment was given to a collection law firm in CT to execute. They requested a bank execution in CT superior CT and it was granted. Mind you, all the while poor Jane had no clue any of these things were happening to her.

There are quite a few issues here which will probably be decided in a court of law. GE Money reported Jane's account as "charged off" to the credit bureaus. We know that this is not true. Here is the first violation of the FCRA. How can you report an account as a charge off or past due when the consumer never owed any money to begin with?

The second issue is that the furniture company informed Jane that the matter was closed and that they had paid the appropriate amount to GE. Apparently GE and the furniture company did not have clear lines of communication. GE sold Jane's account to a 3rd party debt collector. They made the representation to the debt collector that Jane's account was a good receivable and was collectible. Not so.

There is the issue here that Jane was never served a summons and complaint by the party who bought her account from GE. To me it would appear that the default judgment was obtained under questionable circumstances. That is being polite. Then there is the bank execution. In my opinion this represents a theft of funds from Jane's bank account. I think the attorney who is presented with this file is going to have field day.

There is a teachable lesson in all of this which I think may be somewhat clear to you. You cannot assume anything or trust anyone to take care of your financial affairs for you. You have to have your hand on the wheel and check to be sure that what people say they have done is really done. As Ronald Reagan said, "Trust but verify.". "Trust but verify" also means periodically checking all three of your credit reports.

Unethical Practices Commonly Employed By Debt Collectors

Fri, 18 Sep 2009 04:09:28 -0400

Being Aware of these illegal actions by these unscrupulous people could mean the difference between being sued and paying for a debt that it was illegal to pursue and financial liberation.

1. Filing false or fraudulent affidavits claiming that the affiant has personal knowledge of the records supporting the debt but does not produce said records with the affidavit.

2.Threatening to sue a consumer on a time barred debt

3. Failure to provide a validation notice,15 U.S.C. 1692g

4.Adding unauthorized amounts to debts. This is really one of my very favorite violations. I have seen some outrageous interest charges and fees added to alleged debts.

5. Proceeding with collecting a debt after debt collector has been asked to validate the date but has not complied.

Do any of the above points ring a bell? Have you heard stories from friends, acquaintances or relatives who have had these things happen to them?

It is easy to be taken advantage of or to be cowed into making a deal with these when you don't even have a debt that is legally collectible. How would you know? If you owned my system you would see it right there in my user's manual. People who own my self help system have the weapons to fight back and defeat these dirt bags.

You have nothing to lose but the money you payout to these criminals. I offer 3o day email support and a 30 day money back guarantee so what do you have to lose?

My Economic Recovery Package

Fri, 18 Sep 2009 04:09:15 -0400

I see what is happening to millions of people some of whom I know personally; how their personal wealth has been destroyed and how so many of them have lost their jobs. They now have become the prey of rogue, dishonest debt collectors. Where is their bailout package? Where is their TARP? Because of the financial fallout I am witnessing I have made a decision to slash my pricing.

I have decided to make my entire system available at half price for the month of September,2009. What is normally priced at $79.99 will be just $39.99 but only for September. For the very reasonable price of $39.99 you will receive my 6 proven letters used to stop debt collectors, the user's guide, an audio version of the user's guide so you can play it in your car plus the DVD of my October 15,2008 workshop "How To Deal With Debt Collectors".

If you read the news article about me published in ECommerce you will see that I have been there and done that. I know what it feels like not to have two nickels to rub together, to wonder where you are going to be living next month. I did not read about rising from the ashes. I did it! So can you.