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.

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.

Debt Collectors Harassing Widows

Debt collectors are continuing to harass widows and other family members to collect on the debts left by their deceased loved ones.  Harassing telephone calls and phony lawsuits are two of the means by which the debt collectors are trying to get the money owed.  This is illegal.  When you die, your estate may be liable for valid debts, but your family members are generally not liable for your debts.  One exception is when a family member guarantees a debt, such as a credit card.

One widow was contacted on the day of her husband's funeral by a debt collector trying to collect on a debt that her husband had incurred seven years before they were married.  Another woman was contacted at her work and at home for several months to collect on a debt for a truck her father had purchased before passing away.  It is not illegal to contact the family of the deceased, but it is illegal to harass them.

If you are being harassed by a debt collector, please contact us.

Credit Scores and Debt

There can be a lot of confusion when it comes to credit scores.  First of all, there is more than one credit score.  The most popular is the FICO score.  However, each of the three credit reporting agencies has a different formula to calculate the FICO score, resulting in higher and lower scores for consumers.

Second, a credit card company may use a different score to approve a loan than a home mortgage lender or auto loan financial institution would use, so the lenders are not consistent with the scores used to accept applications.

Another problem resulting from the recession is that many consumers have had their inactive credit cards closed by financial institutions.  This increases the outstanding debt to the available credit ratio, resulting in a lower credit score.

Outstanding uncollected debt that is older than seven years will be removed from the credit report.  Therefore, if you are being harassed by debt collectors and you make a payment because you think it will stop them from calling, then the clock on the time limitation will restart.

If you are being harassed by debt collectors, please contact us at 866.553.3272.