National Consumer Law Center Calls on Media to Expose Debt Collection Industry’s Widespread Illegal Practices

Consumers Hounded Nationwide; Tapes of Calls, Interviews with Victims Offered
--- Federal Trade Commission’s most complained-about industry

BOSTON – Increasingly-brazen elements of the debt-collection industry are hounding hundreds of thousands of Americans who’ve fallen behind on their debts with harassment tactics that can be intimidating at least and a clear violation of the law in many cases.

National Consumer Law Center today begins offering the news media a package of recordings and interviewees that extensively documents these rampant abuses (see below). Consumer advocates have also launched a campaign to strengthen the existing law governing debt-collection activities.

“We’ve been flooded with debt-collection horror stories from consumers and their attorneys around the country,” says NCLC’s Steve Tripoli. So many, in fact, that NCLC and attorneys working with the Center compiled tapes of illegal and abusive calls along with the names of consumers and lawyers in a dozen states willing to discuss their cases.

NCLC isn’t alone in documenting this problem. No less an authority than the Federal Trade Commission says its 15,819 consumer complaints about debt collection agencies in 2001 (the latest year available) gave debt collectors the impressive title of the FTC’s most complained-about industry for the third year running. And the FTC says that number is just the tip of the iceberg. (Read the FTC report at http://www.ftc.gov/os/2002/06/fdcpaar2002.htm)

The 1978 Fair Debt Collection Practices Act (FDCPA) – a consumer-protection landmark passed with bipartisan and industry support – was designed to address these problems. But today’s debt-collection industry is different and its tactics often subvert Congress’ original intent. “Bad actors – and there are quite a few – break the law more often because they know they’ll get away with it in most cases,” says the NCLC’s Tripoli.

Consumer advocacy groups are proposing several amendments to the law, including one that would close a legal loophole allowing penalized debt collectors to evade ongoing responsibility for their actions. They do this by shedding their corporate identities, only to return as legally-unencumbered “new” companies not bound by prior injunctions. The industry has attempted to weaken the FDCPA in the past, and NCLC staff worries there’ll be another try in the new Congress.

The wave of harassment by debt collectors is especially tough on low-income people who are often -- but by no means exclusively -- its targets. And most debtors have no interest in ducking their debts: Only a tiny minority can be reasonably classified as “deadbeats” who’ve decided to evade debts they can pay. The rest are people who’ve lost a job, suffered an illness or perhaps a death in the family and who have every intention of paying once they get back on their feet.

“In a weak economy featuring high consumer debt loads and troubling levels of long-term unemployment consumers need this law’s original intent reinforced,” says Tripoli. “Most consumers want to work out their debts – and they don’t need to pay the substantial human price of doing it in an atmosphere of pressure, harassment and illegal intimidation.”

MORE INFORMATION AND MEDIA CONTACTS

Consumers, Consumer Attorneys and a Former Debt Collector
Who’ve Agreed to be Interviewed:

To the news media: It’s often hard to get consumers to speak publicly about their experiences with debt collectors – they’re at a stressful point in their lives, the harassment was in some cases frightening, and many are ashamed of their indebted situation even if caused by an unanticipated shock.

A list follows of consumers who’ve agreed to be interviewed plus attorneys from 12 states who’ve agreed to talk about their debt-collection cases. There is also (the first name listed) a former debt collector you may find particularly interesting.

For an overview of this problem nationally call NCLC’s Steve Tripoli in Boston at 617-542-8010. For questions about specific proposals to strengthen the Fair Debt Collection law call Atty. Margot Saunders in our Washington office at 202-986-6060, Ext. 104.

POTENTIAL INTERVIEWS:

• Former debt collector MICHAEL FLANNAGAN, Puyallup, Wash. – 253-535-1612. This “reformed” debt collector (13 years in the business) ran a 30-person operation and can discuss the tactics he and his operatives used. He described them in detail in a videotaped 2002 court deposition.
  - YOU CAN WATCH PORTIONS OF THIS DEPOSITION (if your computer is equipped for video) in a news report from KSTP-TV in Minneapolis by going to this link: http://www.kstp.com/article/view/59450/
• Consumers Jan Vines, Ashley Moreno and Terry Richardson (separate cases)
  - Their attorney is JERRY JARZOMBEK in Fort Worth, TX 817-348-8325
  NCLC HAS RECORDINGS from these cases, and the clients are willing to be interviewed.
• Consumers Richard and Angela McGuire Pike, Albuquerque, NM 505-870-3654
  - Their attorney is ROB TREINEN (TRY-nen) -- 505-243-7773
  NCLC HAS RECORDINGS from two cases involving the Pikes.
• Atty. PETER BARRY in St. Paul, MN -- 651-714-8800, ext 135
  - THIS ATTORNEY HAS RECORDINGS of abusive debt-collection calls, which he’s chosen to distribute himself. He can also connect reporters to clients who’ve had problems with debt collectors, but due to privacy and pending litigation concerns asks that this also be done through him.
• Atty. PHILLIP ROGERS, Grand Rapids, MI – (616) 776-1176
  - NCLC HAS RECORDINGS of debt-collection calls directed at Atty. Rogers’ wife which, like the others above, were the subject of a lawsuit. She can be reached through Atty. Rogers.
• Consumer Brenda Johnson – lead plaintiff in a class-action lawsuit against a major debt-collection firm.
  Reach her through Atty. LESTER PERRY in Salt Lake City, 801-272-7556
• Consumer Shawn Wright -- work:  216-295-2700, ext. 356 -- home:  216-283-4545
  Her attorney is KATHRYN HARLOW in Cleveland -- 216-361-9975 
• Consumers Cathy Jo and Jerry Adkins 312-372-8822 (Ms. Adkins’ work number)
  Their attorney is O. RANDOLPH BRAGG in Chicago -- (312) 372-8822 – (Ms. Adkins works in Atty. Bragg’s office – he may have other clients willing to speak with the media as well)

The following attorneys are willing to speak and may have clients willing to speak:

• Atty. LIBBY MERCER in Oklahoma City, 405-525-8858
• Atty. DALE PITTMAN in Petersburg,Virginia – 804-861-6000
• Atty. CARY FLITTER in Narberth, Pa. – 610-822-0782
• Atty. MARY FONS in Madison, Wisconsin 608-873-1270
• Atty. GEOFF ADALIAN in Visalia, CA, 559-733-8990

ABOUT NCLC: National Consumer Law Center is a 35-year-old, non-profit consumer advocacy organization with a special focus on consumer issues affecting low-income people. NCLC works with thousands of legal-service, government and private attorneys, as well as organizations representing low-income and elderly consumers.