Show Me The Money: Creditor “Plays” Court To Collect on Debts

22 Nov

Don’t you just hate it when a collection agency calls your house daily and leaves successive messages from 7:30am to 8:45pm offering a one-time negotiated payment settlement for an obscene Lord & Taylor’s debt you incurred back in 1996 that should have already “fallen off” your credit report, but was sold to a new agency a week prior to said fall-off date (or so, I’m told)?

Well, whether you find your financial health currently stifled by irresponsible payment history and debt, or you are simply the victim of erroneous information listed on your credit report, just know that many creditors are suffering from the effects of the recession just like consumers, and are either looking to these agencies to purchase your debt from them or to aggressively collect payment on their behalf. 

And while it is important to remember that it is oftentimes the people that decide to deliberately default on their $650.00 Verizon mobile payment obligations who make collection agencies necessary, there are also the unforeseen instances where debtors suffer lengthy illnesses, go through messy divorces or even lose their jobs that will also lead to the unrelenting collection calls.  But regardless of the situation, the unfortunate reality is that whether collecting on your Saks “shopping spree” Charge Card balance or your Appendectomy medical bill, the collection agencies are by design, of the indifferent and indiscriminate variety.

For instance, from the Total Buffoonery Files:

Pennsylvania Attorney General Tom Corbett [recently] announced that a consumer protection lawsuit has been filed against an Erie debt collection company accused of using deceptive tactics to mislead, confuse or coerce consumers – including the use of bogus “hearings” allegedly held in a company office that was decorated to look like a courtroom.

Corbett said the civil lawsuit was filed by the Attorney General’s Bureau of Consumer Protection against Unicredit America Inc., with corporate and business offices located at 1537 West 39th St., Erie, also identified as the “Unicredit Debt Resolution Center.”

“This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection,” Corbett said. “Consumers also allegedly received dubious ‘hearing notices’ and letters – often hand-delivered by individuals who appear to be Sheriff Deputies – which implied they would be taken into custody by the Sheriff if they failed to appear at the phony court for ‘hearings’ or ‘depositions’.”

Corbett said that in conjunction with the lawsuit, the Attorney General’s Office has also filed a petition for special and preliminary injunction, asking the court to freeze all Unicredit assets; prohibit the company from engaging in any debt collection; immediately cease all bogus hearings or depositions; and to provide detailed information about company bank accounts, assets and business records.

According to the lawsuit, fictitious court proceedings were used to intimidate consumers into providing access to bank accounts, making immediate payments or surrendering vehicle titles and other assets – sometimes dispatching Unicredit employees to consumers’ homes in order to retrieve documents or have consumers sign payment agreements.

Corbett said Unicredit allegedly used civil subpoenas to summon consumers to an office in Erie, which included an area referred to by Unicredit employees as “the courtroom.”

The fake courtroom allegedly contained furniture and decorations similar to those used in actual court offices, including a raised “bench” area where a judge would be seated; two tables and chairs in front of the “bench” for attorneys and defendants; a simulated witness stand; seating for spectators; and legal books on bookshelves. During some proceedings, an individual dressed in black was seated where observers would expect to see a judge.

Corbett said Unicredit is accused of violating Pennsylvania’s Consumer Protection Law and the Fair Debt Collection Practices Act, and also failed to comply with state and Erie County court rules in order to extract payments from consumers.

So, should Unicredit be formally charged and found guilty of these violations (wishful thinking, I know), will the debts of all the people they duped with these faux courtroom shenanigans be waived as part of a proper settlement?  And what of the company’s felonious acts of impersonating law enforcement officers and court officials? I’m thinking that it is foolishness like this that makes Unicredit and other suspect agencies just as, if not more “unlawful” than the individuals they seek to recover a debt from.

Right? Right?

But what do you think?

Debtors, creditors, lend me your ear: What (real) recourse do consumers have when agencies like this engage in such dubious practices in order to make reclaim a buck?  Conversely, what practical steps can creditors take to ensure proper receipt of the debts owed to them?

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