Robo-Call Debt Collection Practices under Fire

Bank of America was hit this week withrnanother civil penalty, this time for making what are termed excessive andrnharassing mortgage debt collection calls.  A federal court judge has ordered the bank tornpay over $1 million to Nelson and Joyce Coniglio who received, according torncourt documents, over 700 robocalls over a four year period.</p

The calls were made to every number therncouple had, home and cell, and came at all hours of the day and night.  The automatic system left messages eachrntime.  The bank also sent numerousrnletters threatening foreclosure.  </p

The couple fell behind on their mortgagernpayments in 2009.  The bank said in courtrndocuments that the calls were meant to be helpful, not threatening and madernbecause the bank was concerned that the couple might lose their home.  </p

This wasn’t the first time debt collectorsrnhave gotten into trouble in recent weeks. rn</p

Arncollector who calls himself John Anderson while plying his trade was ordered tornpay over $33,000 last month to Jessica Burke who said “Anderson” had called herrnseveral times a day and sent as many as 15 text messages in a single day overrn$350 in late payments on a used car. In addition he contacted her employer andrnreleased information on her debt, a violation of debt collectionsrnstatutes.   Burke claims that therncollector said he was a private investigator and made derogatory remarks aboutrnher weight.</p

Andersonrnsaid he was being blamed for many infractions done by thernfinance company for whom he worked. rnBurke had sued the company as well. rnShe claimed that even after she sold the car and settled the debt thernharassing calls continued.</p

Alsornin November federal authorities filed fraud charges against a Georgia debtrncollection company and arrested seven of its employees.  The company, Williams Scott & Associatesrn(WSA) is alleged to have collected more than $4 million from over 6,000 peoplernby claiming to have been hired by the U.S. government to collect debts and feesrnfor nonexistent offenses.  </p

WSArn(victims were told the name stood for “Warrant Services Association”) allegedlyrnthreatened the people they called with jail time for such offenses asrn’Depository Check Fraud” and “theft by deception.”  Federal authorities said these phonyrngovernment collectors are operating in all 50 states.rn</p

Norrnwas the Coniglios’ judgment the first time Bank of American has been accused of<bheavy-handed debt collection.  Last yearrnthe bank paid $32 million to 8 million customers who claimed they too werernharassed by robocalls.  The bank ofrndenied the allegations but settled the class action lawsuit it said to avoidrnfurther legal costs.</p

ABCrnnews, which featured the Coniglio’s suit on GoodrnMorning America Friday, quoted several other customers about Bank ofrnAmerica’s collection practices.  One saidrnhe and his wife had received over 600 calls even though she had surrendered thernhouse through bankruptcy.  An elderlyrnCalifornia couple claimed they received 2,000 calls and a woman in Arkansas 350.</p

NewrnYork State is cracking down on collection activities with new regulations effectivernnext year.  One will allow consumers tornrequest email communication.  This willrncut down on phone calls and allow the consumer to maintain a record ofrncollection contacts.   A secondrnregulation requires written confirmation to the consumer regarding any debtrnsettlement agreement or satisfaction of the debt so that consumer hasrndocumentation of the transaction.</p

Thernnew laws also require a new debt collector to provide general information onrndebtors’ rights, and any collector attempting to recover on a charge-off tornspecifically identify the debt.  Where arndebt is past the statute of limitations the collector must also notify therndebtor of that fact.  All of these takerneffect on March 3, 2015.</p

A<bfinal provision becomes effective August 30, 2015 and will require a collectorrnto substantiate that a debt is owed if it is disputed at any time in therncollection process.

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