Missouri Attorney General Blindsides Two Debt Collection Firms with Lawsuits

Comment from observation on August 20, 2009 at 10:59AM EST

Vague allegations?

The Missouri's AG complaint, Case Number: 0922-CC08789, states in part:

ALLEGATIONS OF FACT RELEVANT TO ALL COUNTS

8. Defendants have repeatedly used deception and unfair practices to collect debts.

9. Unfair and deceptive acts and practices used and employed by the Defendants, include, but were not limited to the following:

a) Purchasing debts discharged in bankruptcy, with the intention of attempting collections; b) Attempting to collect debts from the wrong alleged debtor, and refusing to stop collection efforts when the consumer denies owing on the account; c) Attempting to collect debts that are well beyond the relevant statute of limitations; d) Inducing consumers to pay on accounts that are already paid or discharged in bankruptcy; e) Threatening actions that cannot be taken, such as garnishment of social security; f) Refusing to identify themselves or the account being collected and continuing collection efforts; g) Refusing to provide proof of the debt when requested to do so by consumers, and continuing collection efforts; h) Repeatedly calling consumers after notification that the alleged debtor is not at that number or residing at that location; i) Repeatedly calling consumers' employers after being advised to cease the practice; j) Submitting false credit reports, and refusals to remove the reports after notice; k) Assessing interest and fees that are not owed; 1) Filing lawsuits against consumers without documentation to support the case; and m) Filing false or misleading affidavits in Missouri courts.

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Judy Scott states in part, "We were not served and given no advance notice."

Have not been served, yet. Suit gets filed and then the clerk affects service. Advance notice? Government agencies do not give advance notice to any party under investigation nor to parties who are in the process of having litigation filed against them.

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InsideARM states, Koster’s announcement was very short on specific allegations and investigation findings.

Investigative findings are part of discovery and evidentiary proceedings during litigation??

The allegations seem to be pretty specific. Further, doesn't the complaint meet notice pleading requirements?

Donald Redmond, Senior Counsel for Portfolio Recovery Associates, in a letter to the FTC on July 31, 2009, published in public comments of the recent FTC Roundtable discussion held in Chicago, stated in part:

" "Notice pleading" deliberately de-emphasizes pleading, instead requiring "a short and plain statement of the claim" showing that the plaintiff is entitled to relief. By design, notice pleading leaves to the discovery phase the burden of developing facts that are either proven at trial or not."

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Looks like this is an industry and those who support it who wish to "have their cake and eat it, too" particularly when it applies to, only, their benefit.

Comment from Slander victim on August 20, 2009 at 11:57AM EST

Having known some folks from Missouri, I predict these companies will lose the suit based on the least sophisticated consumer standard.

Comment from Patrick Lunsford on August 20, 2009 at 12:04PM EST

To observation:

Yes, the allegations were vague, especially in the press release. Even when you look at the suit (which you pasted into your message), there is no indication of the scope of the alleged impropriety. We had to contact the AG's office directly to get the number of complaints and what even prompted an investigation.

There is typically MUCH more detail in suits filed by other state attorneys general against collectors.

Comment from Anonymous on August 20, 2009 at 12:20PM EST

Even if these companies will come out clean from the court, it will not be without a very costly defense and big dent into their reputation. The AG will not issue another press release that these companies were not guilty and the AG made a mistake.

Comment from jgallagher on August 20, 2009 at 12:42PM EST

This will probably end up a case where individual collectors abused the process to enhance personal performance to the detriment of their employers. Adequate employer monitoring may be lacking?

Comment from LAWLESSNKS on August 20, 2009 at 2:01PM EST

Vague is the rule to making laws, isnt it? That's what ensure an ongoing career for most of the legal world. My favorite part is assuming these agencies knowing purchased bankrupt accounts in order to attempt to collect them. No agency knowingly purchases what is the ultimate bad debt, it's un-f-ing collectable. Pursue the institution that "knowing" sold a bankrupt account, AG. Get at least a working knowledge here of the crime.

Comment from Ed Estrada on August 20, 2009 at 3:56PM EST

The AG KNOWS THAT BK COURT RECORDS ARE BEHIND AND WHEN AN AGNECY PURCHASES PAPER ITS NOT ALL GOLD.MAKING "Chicken Salad" out of "Chicken Shhhhhhhhh" isn't easy. THATS WHY ITS CALL BAD DEBT. ITS SIMPLE A COLLECTOR CALLS THE CONSUMER CONSUMER SAYS FILED BK GIVES ATTY INFO COLLECTOR NOTES ACCT AND VERIFYS BK CASE FINDED AND MOVES ON. AS FOR THOSE WHO SELL PAPER THEY TO DON'T KNOW IF A CONSUMER FILED BK YES THEY CAN SCUB THE ACCTS BUT EVEN THEN BK TAKE AWHILE MONTHS WE ALL KNOW THIS MR.ATTY GENERAL....

Comment from kjowen on August 20, 2009 at 4:01PM EST

oh please ... there are those in the industry who openly and blatantly focus on discharged debt. there are some that do nothing but discharged debt.

Comment from JJG on August 20, 2009 at 10:31PM EST

I agree,consumers file bk and collections are not notified till they contact the consumer by phone or mail.Collections agency are not in wrong to collect a debt that hasnt been updated with bk info. As a collector, When im told they filed bk i ask for attroney info and some tell me i should be in court and hangs up. Consumers can misled us in many ways to avoid the debt they owe.

Comment from DONALD DALY on August 21, 2009 at 10:28AM EST

COLLECTION AGENCIES WHO DO THEIR JOB DO NOT SIMPLY TAKE NOTICE OF THE ALLEGED BKPT AND MOVE ON. FOLLOWUP WILL CONFIRM IF THE DEBT IS INCLUDED OR NOT SOONER OR LATER. DEBT BUYERS WHO PURCHASE THESE TYPES OF DEBT DESERVE WHAT THEY END UP WITH.

Comment from MAJ on August 21, 2009 at 10:38AM EST

It appears as though the bulk of the AG's "allegations" are "blanket" allegations made by almost every person/attorney that files a suit. I agree with Ed Estrada above. this is a Bull*&*& attempt by the MO AG's office to improve PR. Nothing more!

Comment from DB-Admin on August 21, 2009 at 2:52PM EST

Since this is a pending law suit, I would think that the Courts will determine whether or not the AG has cause.

If he does? Too bad.

If he doesn't. Too bad, too.

I would suggest that the AG believes he has sufficient evidence to prevail in Court.

Comment from PublicSvcMsg on August 21, 2009 at 1:06AM EST

Most every agency pays to have their business swept of deceased and bankruptcy, even potential suit-ees, over 20 complaints each that reached the AG's office!! That's overboard under most reputable agency compliance standards. Over 24 years in the business, that's overboard and should be investigated. Sorry the newspaper obtained the information before the subpoena, just like the attorneys that scan case filings and send advertisments to represent.

Comment from Anonymous on August 22, 2009 at 2:02PM EST

This is the climate that is facing debt collectors in 2009 and probably in the years ahead. Both State and Federal authorities are focusing on consumer debt and in most cases will take the side of the debtor. This was brought about by sub-prime mortgage lending and the resulting issues we face in our economy today. Whenever any sector of our economy gets lax in oversight and enforcement third party entities usually get hurt because they cannot guarantee the accuracy of information they are given to extend credit or collect debts. These complaints are being reported all over the country in every state and AG are taking action. It doesn't matter if the complaints are 100% legit or not. There are some bad actors in our industry as well as all industries. Is PDM a member of ACA Internation. If they are a member and have operated within the law they should be able to get support from our trade association.

Comment from Anonymous on August 23, 2009 at 12:18PM EST

More than likely this is a case of individual agent trying to score more money- except of course in cases where it is alleged that bankruptcy discharged debts were bought.

But from my observation in a similar call center- most Managers sit on a podium surfing the internet and doing very little oversight work- no wonder this kind of thing happens- and of course, if you piss off the worker, a bunch of them can make your life miserable if they ever think as a group.

Comment from Illlinois on August 24, 2009 at 11:05AM EST

It sounds like it might be collecting from a spreadsheet rather than reviewing a file. A file would most likely have the BK discharge.