Just wanted to update everyone today on the Payday Loan Collection Fraud that is still going strong, unfortunately. This fraud company continues to prey on former customers who got online payday loans.

The newest development is that they are usually calling themselves “Law Office” instead of “American Credit Services” and claim to be in New York, Texas or California. We have found that the best way to identify them and fluster them is to ask them what state they are in and then subsequently ask them who the governor of that state is or what their state bar number is.

Also, they are consistently using very “American” sounding names such as Mark Green, Ethan Cross and John Smith. We have also noticed that they are starting to use female fraudulent collectors, which we had not seen/heard previously.

Here are some recent comments from our readers describing their very typical experience with this payday loan fraud:

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Major credit card lender HSBC has been hit with a class action lawsuit over it’s collection practices and dealings with debt settlement companies. The complain was filed in New Jersey by plaintiff Chastity Bradley on behalf of the entire affected class. HSBC offers Visa, American Express and MasterCard credit card products and operates a large subprime unit under the brand name Orchard Bank.

The complaint centers around the HSBC Collection Department’s dealings with customers who have enrolled in debt settlement programs. According the the complaint, HSBC engaged in a systematic process of agreeing to settlements with debt settlement companies and taking installment payments to satisfy those settlement agreements.

Despite agreeing in writing to these agreements, HSBC would refuse to accept the FINAL settlement payment. Then, they would proceed with collecting on the full balance owed, less the payments received in the course of the payment plan.

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A former JP Morgan and Chase employee is reportedly blowing the whistle on Chase Bank’s credit card collection and debt sale practices, among other things. Linda Almonte is a former Chase mid-level manager, who was fired by Chase. She is currently pursuing a lawsuit against Chase relating to her firing.

However, she has now also filed a whistle blower complaint with the Securities and Exchange Commission. The allegations made in her complaint charge Chase with blatantly unethical and illegal practices involving its credit card debt processes. Chase, of course, denies her claims.

Excerpts from the letter sent to the SEC on Ms. Almonte’s behalf are very interesting. This passage lists the claims being made by Ms. Almonte:

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We have posted some new and updated Debt Collection Letters to help you with different collection agency situations that may arise.

Debt Validation Letter
This letter will help you validate a debt if you aren’t sure you owe the debt, aren’t sure the amount is correct or think the statute of limitations may have expired on your debt.

Cease and Desist Collections Letter
This letter will help when you want a 3rd party collection agency to stop calling you and/or your references and family members.

Wage Assignment
Payday Lenders use wage assignment often, and I am pretty sure they are the only ones still using it. The reason is that the FTC has declared this practice virtually illegal and only shady online payday loan companies are still using this tactic to collect on debt.

Wage Garnishment
A court ordered Wage Garnishment cannot be stopped. This letter will do nothing for that situation unfortunately and you should contact a lawyer.

Payday Lenders claim to garnish wages often, but they are most often just referring to a wage assignment (see above). So, we refer you again to the wage assignment letter.

I hope you enjoy and use these letters to stop harassing debt collectors and as always, if you have any questions please Ask Brent.

Today, we are grateful to have a guest post from Jason Holmes, a regular writer for Debt Consolidation Care. Jason will provide us with some helpful tips for Credit Card Debt Settlement. After the New Year, I will be posting some tips for Payday Loan Debt Consolidation, so be sure to look out for that.

Are you getting calls from debt collectors to collect an unpaid amount from you? Are you thinking of making the payments to get rid of harassing collection calls? If yes, then before you make any payments, check whether or not the Statute of Limitations (SOL) on that debt has expired. If it’s not, then you can think of paying back the debt.

If your financial condition doesn’t permit you to repay the outstanding balances in full, then you’ll have to negotiate for debt settlement with the collector. Read this article to know how to negotiate in order to get the best debt settlement deal.

How to Negotiate with Debt Collectors

Here are some tips you should follow while dealing with debt collectors.

DO NOT negotiate for settlement over phone – It is better to avoid negotiating over phone. However, if they call you, then at first ask who has called you on behalf of the collection agency. You should also note the time when you got the call. Keep the record as if required, you can refer to the time and the person you’ve talked to. Always follow up telephonic conversation by sending mails with return receipt request.

However, if a debt collector calls you at odd hours that is, before 9 am or 9 pm, then you should inform him that you’re aware of the Federal Debt Collection Practices Act (FDCPA). Tell them that you can take necessary actions if they violate FDCPA.

DO NOT show your eagerness to settle debt – You may be eager to settle the debt by reducing the payoff amount as much as possible so that you can pay it back and get rid of it quickly. However, don’t show your eagerness to settle the debt fast as otherwise, you’ll never be able to get the best deal. The debt collector may reduce your debt to about 40-60% of the outstanding balance if you keep patience.

DO NOT start paying without a written agreement – The collector may later deny about the verbal agreement if you start paying without a written agreement. In this regard, you should also know that even if the SOL on the debt has expired, it may start all over again if your start making payments on that debt.

DO negotiate for removal of negative listings – Before you start paying, make sure you negotiate for removal of negative listings from your report. Negotiate with the collector to update the account status as “Paid in full” or “Paid as agreed”. If you can negotiate for a “Paid in full’ status on your report, then it’ll have positive effect on your report and help you in improving your score by a few points.

Often the debt collectors threaten the debtors to sue them in court. Though they can take this action, yet they rarely do so as the process is time consuming and expensive. Instead, they usually agree on a reduced payoff amount if they understand that you cannot repay the unpaid balance in full.

Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like ‘Credit Score The Quintessential Therapy for a Happy Pocket’, Take Creditors and Collection Agencies to Small Claims Court’ and, My Story- From Depression To a Smile’.

The FTC has settled a case against a payday lender that illegally garnished consumers wage, among other illegal debt collection tactics. According to the FTC’s complaint, Ecash and GeteCash, offered loans to be paid back using borrowers’ future paychecks. Online loan applicants were required to check a check box indicating their agreement with the terms of the loan, including a hard to find “wage assignment” clause that said that their wages would be garnished to cover delinquent loan payments. Then, using the name LoanPointe, the defendants attempted to collect on delinquent payday loans by sending garnishment notices directly to consumers’ payroll departments.

Federal law allows federal agencies to require employers to garnish employees’ wages without a court order when the employees owe the government money, for tax debts for example. In letters to employers that sought garnishment of their employees’ wages, GeteCash and LoanPointe tried to pass themselves off as having the same collection rights as the government. The FTC’s complaint also alleges that GeteCash and LoanPointe falsely stated that consumers knew their pay would be garnished and had an opportunity to dispute the debt. In addition, GeteCash and LoanPointe allegedly violated the law when they told employers and co-workers about consumers’ debts without their consent. (See the complaint HERE)

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There are many debt collection videos on YouTube, so I thought I’d take the time today to share my Top 5 of these videos. Some have strong language so be careful watching these at work. Please share your thoughts and favorites in the comments section.

5. Premier Credit of North America – Calling on Federal Student Loans
In this recorded call, I debt collector yells into a voice mail machine. What makes this noteworthy is not the message itself, but the fact that they are (supposedly) collecting on behalf of the U.S. Government. It should be noted that the IRS ended private debt collection over a year ago, but private collection on Federal Student Loans continues.

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In an amazing story, a Pennsylvania debt collection company has been sued by the Pennsylvania Attorney General for using a fake courtroom to attempt to collect debts from consumers. According to the AG the company used a fake courtroom “to mislead, confuse or coerce consumers.” The main issue in the complaint is that bogus “hearings” were 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’.”

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Maryland has suspended the license of Smith Haynes and Watson LLC, a debt collection company that was collecting on payday loans from a payday lender that was served with a cease and desist order from the state earlier this year.

The Maryland Collection Agency Licensing Board, a division of the Office of the Commissioner of Financial Regulation, decided last week to suspend the collections license of the Kansas-based collection agency that specializes in payday loan collections. The agency also issued a cease and desist order covering all collection activity by the company. As a part of the order, the company must turn over all information regarding its payday loan debt collection activities to the state of Maryland.

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As promised in my update on this scam last week, I am posting today a list of all known fraud phone numbers this company is using. Obviously, this list may not be exhaustive, but it is very likely you are dealing with this scam if you get a call from any of the following phone numbers.

The list is rather long (there are over 70 phone numbers), so a useful trick is to select the entire list with your mouse and press Control-F. Using the “Find” function, you can see if the number you are getting called from is on the list.

Also, keep in mind that this scam company uses MANY phone numbers to harass people, so it could easily be that you are getting calls from them if the number is not on the list.

I also ask that you use the comments section to add any phone numbers that these guys may have called you from.

Here is the list:

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