Robo-Call Debt Collection Practices under Fire

News

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

The calls were made to every number the
couple had, home and cell, and came at all hours of the day and night.  The automatic system left messages each
time.  The bank also sent numerous
letters threatening foreclosure. 

The couple fell behind on their mortgage
payments in 2009.  The bank said in court
documents that the calls were meant to be helpful, not threatening and made
because the bank was concerned that the couple might lose their home. 

This wasn’t the first time debt collectors
have gotten into trouble in recent weeks. 

A
collector who calls himself John Anderson while plying his trade was ordered to
pay over $33,000 last month to Jessica Burke who said “Anderson” had called her
several times a day and sent as many as 15 text messages in a single day over
$350 in late payments on a used car. In addition he contacted her employer and
released information on her debt, a violation of debt collections
statutes.   Burke claims that the
collector said he was a private investigator and made derogatory remarks about
her weight.

Anderson
said he was being blamed for many infractions done by the
finance company for whom he worked. 
Burke had sued the company as well. 
She claimed that even after she sold the car and settled the debt the
harassing calls continued.

Also
in November federal authorities filed fraud charges against a Georgia debt
collection company and arrested seven of its employees.  The company, Williams Scott Associates
(WSA) is alleged to have collected more than $4 million from over 6,000 people
by claiming to have been hired by the U.S. government to collect debts and fees
for nonexistent offenses. 

WSA
(victims were told the name stood for “Warrant Services Association”) allegedly
threatened the people they called with jail time for such offenses as
‘Depository Check Fraud” and “theft by deception.”  Federal authorities said these phony
government collectors are operating in all 50 states.

Nor
was the Coniglios’ judgment the first time Bank of American has been accused of
heavy-handed
debt collection.  Last year
the bank paid $32 million to 8 million customers who claimed they too were
harassed by robocalls.  The bank of
denied the allegations but settled the class action lawsuit it said to avoid
further legal costs.

ABC
news, which featured the Coniglio’s suit on Good
Morning America
Friday, quoted several other customers about Bank of
America’s collection practices.  One said
he and his wife had received over 600 calls even though she had surrendered the
house through bankruptcy.  An elderly
California couple claimed they received 2,000 calls and a woman in Arkansas 350.

New
York State is cracking down on collection activities with new regulations effective
next year.  One will allow consumers to
request email communication.  This will
cut down on phone calls and allow the consumer to maintain a record of
collection contacts.   A second
regulation requires written confirmation to the consumer regarding any debt
settlement agreement or satisfaction of the debt so that consumer has
documentation of the transaction.

The
new laws also require a new debt collector to provide general information on
debtors’ rights, and any collector attempting to recover on a charge-off to
specifically identify the debt.  Where a
debt is past the statute of limitations the collector must also notify the
debtor of that fact.  All of these take
effect on March 3, 2015.

A
final provision
becomes effective August 30, 2015 and will require a collector
to substantiate that a debt is owed if it is disputed at any time in the
collection process.

Leave a Reply