Wednesday, May 9, 2012

Debt collector to pay $10 million for abusive debt collection practices

A West Virginia woman was awarded a $10 million settlement against a debt collector. Reliant Financial Associates (RFA) left a message saying that her house was in jeopardy if she didn’t pay the debt. The debt collector threatened her with action against her property and it wasn’t even her debt. She was a victim of mistaken debtor identity.

This type of harassment is more common partially due to debt buyers, a form of debt collectors. They purchase old debts that the original creditors have given up on, and then try to collect the money in order to make a large profit.

The West Virginia woman followed the correct procedure and wrote a cease and desist letter and sent it via certified mail. She received the confirmation showing RFA received the letter and then the calls began. She received several calls when answered, the caller would hang up. The caller ID showed the calls were coming from her local county government. She returned the call and found it went to the sheriff’s department and they informed her that no one was calling her from their office. The caller ID had been manipulated to look like it came from the sheriff’s office, a practice called “spoofing”.

One call she received, the caller began yelling at her using vulgar terms. The verbal assault went on for nearly two minutes before the man hung up. She immediately called 911 stating someone had threatened to assault her. At first, she didn’t correlate the obscene telephone call with the debt collector, until she did some research on the internet and found other women had been subjected to the same abuse.

Last May, the woman sued RFA for harassment and illegal debt collection practices. The RFA’s lawyer failed to appear in court. The judge called RFA’s actions “malicious” and awarded the record $10,860,000 judgment.

RFA is a fictitious name for a company called Global AG, LLC. RFA is just one of the collection companies run by the same people. This is common practice for debt collection agencies to change their names often to make it more difficult to file suits against them.

Tuesday, May 8, 2012

Debt collector disguising employees as emergency room personnel

A debt collections company, Accretive Health, is under scrutiny by the Minnesota attorney general. The debt collector is accused of hiring debt collectors as employees in emergency rooms and demand that patients pay before receiving treatment. Patients may think they are hospital employees until they realize they are demanding payment and may even discourage them from seeking medical help. In some cases, the debt collectors had access to health information.

The Accretive Health employees may have broken the law by not identifying themselves to patients as debt collectors. The Minnesota attorney general has not brought action against the debt collector, but has discussed the situation with state and federal regulators. However, a suit had been filed against Accretive Health when a laptop containing patient information was stolen, stating the debt collection company had violated state and federal debt collection laws and patient privacy protections.