Little Known Database That Helps Debt Collectors Call You at Work
…The Surprising Way Debt Collectors Know Where You Work
BusinessInsider.com — It is “perhaps one of the most powerful and private databases of American’s personal information ever created, containing 190 million employment and salary records, covering more than one-third of US adults.”
So there is this site called The Work Number and basically what they do is employment verifications for employers. That sounds OK right? Well, it is. It keeps companies from having to spend time verifying employment, they just outsource the job. One catch however, is that the company is required to provide The Work Number with weekly salary and employment information. So to make this requirement easy to handle, most companies provide The Work Number with access to their HR database directly.
What this means is that The Work Number has the work and salary history of millions of Americans. You might think that this is no big deal, after all they have to do employment verifications, and they need that information. Here’s the problem, The Work Number is owned by Equifax, one of the big 3 of credit reporting agencies, and they like to sell information, and sell they do. They market directly to debt collectors.
…ever wonder how the bill collector got your work number? Well, there you go.
Are debt collectors allowed to call you at work? Yes and no. Let’s take a look at some of the things the bill collectors can and can’t do. Keep in mind that what applies to debt collectors doesn’t always apply to the creditor who is trying to collect their own debt.
- FDCPA (Fair Debt Collection Practices Act) is what regulates debt collectors and their practices.
- Third party disclosure — debt collectors are prohibited from disclosing or discussing your credit or debt, with any third party. There are exceptions however, they may talk to your attorney, a credit reporting agency and the original creditor. They can also contact your spouse or your parents if you are a minor.
- Debt collectors are not allowed to contact you at unusual or inconvenient times or places. Typically the time to make calls is between 8 a.m. and 9 p.m.
- They are not to contact you if you have an attorney or other agency handling your debt.
- They may contact you at work unless, your employee prohibits calls at work or you advise them that you cannot receive calls at work, it’s best that you send a letter to that affect.
- They may not harass or threaten you. Specifically they cannot:
- Threaten violence
- Any harm or threaten to harm you or another person’s reputation or property
- Use profane or abusive language
- Call you repeatedly, or
- Make calls to you without identifying themselves as bill collectors
- Collection companies are not allowed to add interest of fees or charges that are not authorized by the original agreement or by state law
- …and many others
There is one tried and true method to get the debt collectors off of your back… pay your bills! I know it sounds easier than it is. If you find yourself overwhelmed with debt the best thing to do is contact a professional to help you get your life back.
If you are currently past due, the benefits of a debt management program will provide you with a fresh start. The biggest long-term benefit of the debt management plan is the reduction in interest. Reduced interest allows you to pay off your principal balances faster while saving you possibly thousands of dollars in finance charges.
In order to determine your eligibility you can fill out an online budget application form Now and then you will speak with one of our Certified Personal Finance Counselors © at (800) 920-2262.
Problems Riddle Moves to Collect Credit Card Debt
The same problems that plagued the foreclosure process — and prompted a multibillion-dollar settlement with big banks — are now emerging in the debt collection practices of credit card companies.
As they work through a glut of bad loans, companies like American Express, Citigroup and Discover Financial are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases.
Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. The concerns echo a recent abuse in the foreclosure system, a practice known as robo-signing in which banks produced similar documents for different homeowners and did not review them.
“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Noach Dear, a civil court judge in Brooklyn, who said he presided over as many as 100 such cases a day.
Last year, American Express sued Felicia Tancreto, claiming that she had stopped making payments and owed more than $16,000 on her credit card.
While Ms. Tancreto was behind on her payments, she contested owing the full amount, according to court records. In April, Judge Dear dismissed the lawsuit, citing a lack of evidence. The American Express employee who testified, the judge noted, provided generic testimony about the way the company maintained its records. The same witness gave similar evidence in other cases, which the judge said amounted to “robo-testimony.”
American Express and other credit card companies defended their practices. Sonya Conway, a spokeswoman for American Express, said, “we strongly disagree with Judge Dear’s comments and believe that we have a strong process in place to ensure accuracy of testimony and affidavits provided to courts.”
Interviews with dozens of state judges, regulators and lawyers, however, indicated that such flaws are increasingly common in credit card suits. In certain instances, lenders are trying to collect money from consumers who have already paid their bills or increasing the size of the debts by adding erroneous fees and interest costs.
The scope of the lawsuits is vast. Some consumers dispute that they owe money at all. More commonly, borrowers are behind on their payments but contest the size of their debts.
The problem, according to judges, is that credit card companies are not always following the proper legal procedures, even when they have the right to collect money. Certain cases hinge on mass-produced documents because the lenders do not provide proof of the outstanding debts, like the original contract or payment history.
At times, lawsuits include falsified credit card statements, produced years after borrowers supposedly fell behind on their bills, according to the judges and others in the industry.
“This is robo-signing redux,” Peter Holland, a lawyer who runs the Consumer Protection Clinic at the University of Maryland Francis King Carey School of Law.
Lawsuits against credit card borrowers are flooding the courts, according to the judges. While the amount of bad debt has fallen since the financial crisis, lenders are trying to work through the soured loans and clean up their books. In all, borrowers are behind on $18.7 billion of credit card debt, or roughly 3 percent of the total, according to Equifax and Moody’s Analytics.
Amid the surge in lawsuits, credit card companies are facing scrutiny. The Office of the Comptroller of the Currency is investigating JPMorgan Chase after a former employee said that nearly 23,000 delinquent accounts had incorrect balances, according to people with knowledge of the investigation.
Linda Almonte, a former assistant vice president at JPMorgan, claimed in a whistle-blower complaint that she had been fired after alerting her managers to flaws in the bank’s records.
The currency office, which oversees the nation’s largest banks, is also broadly looking into the industry’s debt collection efforts, focusing in part on the documents included with lawsuits. A spokeswoman for JPMorgan declined to comment.
The Federal Trade Commission is working with courts across the country to improve the process for pursuing borrowers who are behind on their credit card payments, mortgages and other bills. In a recent review of the consumer litigation system, the commission found that credit card issuers and other companies were basing some lawsuits on incomplete or false paperwork.
“Our concerns center on the fact that debt collection lawsuits are a pure volume business,” said Tom Pahl, assistant director for the F.T.C.’s division of financial practices. “The documentation is very bare bones.”
The lenders disputed the suggestion that they file lawsuits that include flawed or inaccurate documentation.
“We look at account records in our system to individually verify the accuracy of information before affidavits are filed and testimony is given,” said Ms. Conway, the American Express spokeswoman, who declined to comment on specific borrowers.
The industry has faced similar criticism over practices stemming from the housing crisis. Amid a surge in foreclosures, state attorneys general accused the banks of using faulty documents without reviewing them and improperly seizing homes. In February, five big banks agreed to pay $26 billion to settle the matter.
The errors in credit card suits often go undetected, according to the judges. Unlike in foreclosures, the borrowers typically do not show up in court to defend themselves. As a result, an estimated 95 percent of lawsuits result in default judgments in favor of lenders. With a default judgment, credit card companies can garnish a consumer’s wages or freeze bank accounts to get their money back.
In 2010, Discover sued Taryn Gregory for more than $7,000 in credit card debt. Ms. Gregory, of Commerce, Ga., had fallen behind on her bills, but said she had accumulated only $4,000 in debt.
After the suit was filed, Ms. Gregory, a 41-year-old child care assistant, asked Discover for proof of the balance. The resulting documents, which were reviewed by The New York Times, have inconsistencies. One statement, for example, says it was produced in 2004, but advertisements on the bottom of the document bear a 2010 date.
The lawsuit against Ms. Gregory is still pending. Discover declined to comment. Judges have also raised concerns about witnesses and affidavits.
In May, Michael A. Ciaffa, a district court judge in Nassau County, N.Y., challenged the paperwork signed by a Citigroup employee in Kansas City, Mo. He found that one document “has the look and feel of a robo-signed affidavit, prepared in advance,” according to court records. The case is still pending.
Emily Collins, a spokeswoman for Citigroup, said: “We continually review the effectiveness of our controls and policies for credit card collections, and ensure that affidavits are validated for accuracy and signed by Citi employees with knowledge of the client’s account. Citi Cards has a range of programs to support our clients who may be facing financial difficulty, and we make every effort to work with our clients to prevent delinquency.”
A review of dozens of court records showed that the same employee signed documents in cases filed against borrowers in three other states. In one lawsuit in Seattle, the employee attested in an affidavit in May that a customer, Vickie Sawadee, owed $14,000 on her Citigroup credit card. Although Ms. Sawadee was behind on her payments, she said she does not owe the full amount. She hired a lawyer to defend her case.
Many judges said that their hands are tied. Unless a consumer shows up to contest a lawsuit, the judges cannot question the banks or comb through the lawsuits to root out suspicious documents. Instead, they are generally required to issue a summary judgment, in essence an automatic win for the bank.
“I do suspect flaws,” said Harry Walsh, a superior court judge in Ventura, Calif. “But there is little I can do.”
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