Dateline NBC and Chris Hansen aired a segment on Friday night that highlighted the growing debt problem in the United States and focused specifically on debt collection agencies and their shady collection tactics.
Harvard Law Professor and Debt Expert Elizabeth Warren
This episode is a must see for anyone interested in debt and debt collection. So, if you had better things to do on Friday night than sit around and watch TV shows about debt collection, the complete episode in 6 segments is below with a summary of content of each section.
The first two sections feature profiles of debt and an interview with Harvard Law Professor Elizabeth Warren. Professor Warren says in this segment that credit card debt is a huge problem in the U.S. today and is destroying the middle class. She sites the “tricks and traps” that credit card companies use to lure consumers into debt: “Credit card companies have put the loan sharks out of business… [they] would make Tony Soprano blush.” Pretty strong words against the credit card industry, but Professor Warren has never been afraid to take credit card debt issues on head on.
SEGMENT 1
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SEGMENT 2
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The next section begins the focus on debt collection agency abuses. First, Chris Hansen focuses on Academy Collection Service. Academy Collection Service, Inc and its owner Keith Dickstein (appropriate name) were ordered by the Federal Trade Commission to pay a $2.25 million fine late last year. According to the FTC Press Release: “its collectors misled, threatened, and harassed consumers; disclosed their debts to third parties; and deposited postdated checks early, in violation of federal law. This is the largest civil penalty the FTC has obtained in a debt collection case.”
Well, it seems that Dickstein and his crew are likely to be back in court as Dateline claims to have obtained a recorded message of someone calling from their offices threatening to rape a female debtor. That’s right, not a typo. The caller clearly threatened to rape the debtor and then laughed.
Additionally, Collection Attorney Pete Barry, who has tried many cases against debt collectors is interviewed and overs some insight as to why these collection agencies break the law so often. He states, as I have here often, that for many of these rogue collection agencies, settling lawsuits is simply a cost of doing business.
SEGMENT 3
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The next 3 segments focus on Lewis Hastings Receivables and their wonderful employees. Dateline catches these employees using a hidden camera outside of a bar near LHR’s offices, and they don’t have to work too hard to get every one of them to admit to violating Federal Collection Laws. LHR subsequently issued a comment that those employees had been fired, but it is obvious that this was not an isolated issue, but rather a consistent method of operation for Lewis Hastings.
Chris Hansen also has an interesting piece on Final Claims Asset Locators of New York. They seem less like a renegade collection agency and more like a fraud ring or crime syndicate. Although they are being investigated by the New York AG and the FBI, they are still open for business.
SEGMENT 4
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SEGMENT 5
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SEGMENT 6
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I have to commend Dateline NBC for reporting on this important issue facing Americans. Although others will complain that this is a one-sided view of the collection industry and collection agencies, they are completely missing the point.
First, agencies like LHR are not the victim of a handful of rogue collectors. It is clear that they allowed and rewarded this behavior despite what they may claim once they are aired on national television, and it is a collection agency’s ethical responsibility to insure that its employees do not break the law. When you have these employees flagrantly bragging about breaking the law to deliver results, its obvious that their actions are condoned by their collection agency employer.
Second, it does not make sense to blame Dateline NBC for presenting a one-sided story as collection industry guru Mike Ginsberg does here:
“The comments shown on Dateline are not representative of the ARM industry as a whole,” said Mike Ginsberg, CEO of ARM advisory firm Kaulkin Ginsberg. “Dateline’s approach was to over-exemplify the renegade practices of a few individuals rather than portraying the ethical, law-abiding practices of the masses of collection professionals every day.”
The Dateline NBC story clearly shows that this is not an issue of a “few renegade individuals,” but rather the industry is plagued by many bad actors at the owner level. In fact, the representative of the Collection Agency Trade Association, ACA International, even admits that enough is not being done to stop the bad actors when interviewed for the show. How can the story be one-sided when Dateline NBC interviewed a representative of the industry and she admitted there is a problem?
NOTE: Dateline NBC has a wealth of resources on their website.
Tags: Add new tag, Collection Agencies, Dateline NBC, LHR
In the UK, harassment by debt collection agencies is illegal. The Financial Services Authority is cracking down and handing out large fines. Perhaps you need to enact similar legislation in the USA?
DIYDM – harassment is illegal in the United States too, but unfortunately enforcement is the problem. Except in the most egregious cases, debt collection harassment is left to plaintiff’s attorneys to handle with civil suits by the FTC. The issue with that is that both the attorneys and the debt agencies want a quick settlement, so it’s not that big of a deterrent.
Just recently my prenant daughter became a victim of these dept collectors..They said they were sending the police to arrest her. She had seen this video and told them they were breaking the law. They proceded to call her names and threaten her..the agency is world wide records..
Bill – unfortunately, that’s all too common. In my experience, unethical debt collectors are often using carefully chosen words to make consumers believe that they are going to be arrested or go to jail. A common one I’ve heard is “you will be located and addressed in accordance with city and state law… so you might want to get a lawyer.” Technically, this means that they are going to send you a collection letter, but we all know what they are trying to lead you to believe.
In this industry too much attention is put on the ones who break the law.. Instead of trying to get companies in trouble, shouldn’t more attention be brought to the consumers who WANT to pay? Shouln’t more attention be put the people who don’t know how to negotiate terms with collections agencies. Most of what I witnessed in this report is zeroing in on the people who have had bad experiences. I saw nothing on how to negotiate payoffs, payment plans, or the most important thing in debt collections, time. More often than not thats all a consumer needs to pay bills, is time. Just because someone offered $20/month on an account ie: example, doesn’t mean the creditor would accept the offer as a payment plan. More often than not it wouldn’t resolve the account. I agree credit card companies are predatory lenders. However the debt still needs to be addressed. Caller id, answering machines, and goverment required scripted messages are all ways to get out of the call. I’ve rarely seen any reports on education for consumers on how to pay back the debt. More education goes into what a collector can and cannot do. I’m not speaking on generalities. I’m speaking on 10 years on collections experience. As long as this continues debtors will not know how to negotiate terms, good agencies will continue to close up shop, and lenders will continue to go under. Unfortunately cheap employment is the norm in this industry. Education isn’t required, just training. However the same goes for becoming a debtor; no education is required just training to avoid the debt by reports like this. This report doesn’t do anything to the people who WANT to pay. It just tells them what to be afraid of. THank you for reading.
Tim – I definitely see your point. However, I see things a little differently. Blog like mine should not have to report on how to pay off your debt or what payment options might work – that should be the job of legitimate debt collectors.
The problem as I see it is that consumers have no knowledge of how illegal or at least unethical these collection companies are. So, they pay them FIRST and leave the legitimate collection agencies who do not harass debtors for last! This in turn rewards the bad collection agencies and frustrates the honest collectors.
So, sites like mine try to educate people on the abuses and prevent the bad actors in the collection industry from “getting away with it.” In turn, this should help legitimate debt collectors to collect more money.
We have LHR calling our house on a DAILY basis… they even called my sister in laws house looking for the deceased me, almost giving her a heart attack thinking I was dead. My husband has a credit score of over 800 and mine is like 780… I receive our credit report in the mail every year. We do not owe anyone anything we don’t know and pay for. How do we get these people to stop?????
Joan – this sounds like a typical case of an invalid debt being collected. This could be due to someone with a similar name owing a debt or simply to shoddy record keeping or in the worst case, a total scam. My advice for LHR is to send them a Validation of Debt letter. This should force them to tell you who and what they are collecting on and you can proceed from there. You may also want to send them a Cease and Desist letter.
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I work for Academy Collection Services. My manager Crieg Shmugger ( unsure of spelling ) would tell his collector ( Say what ever you want, just get the money ). Mr Shmugger is still working there. He would use his collector to do the dirty work and fire them when they were caught. This was the cost of doing business. It cost him nothing but it cost his worker there jobs