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100,000+ New Yorkers Scammed By Debt Collectors – Why Doesn’t the FTC Do Anything?

posted on 2009-07-22 by Allen Harkleroad

You just gotta love New York Attorney General Andrew Cuomo. He is a living legend after my own heart. Too bad the Federal Trade Commission (FTC) refuses to do what Mr. Cuomo is doing, namely protecting US consumers from illegal and predatory debt collectors. No wonder why President Obama is so gung-ho about creating a new consumer agency, mainly because FTC employees sit around collecting government (tax payer funded) paychecks and lets abusive debt collection companies abuse consumers.
One hundred thousand New Yorkers were scammed and almost 7,000 are from the Rochester area. Now, Attorney General Andrew Cuomo is doing something about it. Cuomo says it's the largest debt collection scam he's ever seen and starting today, the victims are being notified. Cuomo says his office has sued 35 different law firms and two debt collectors in New York State alone in relation to this scam. Three of those firms are in the Rochester area. The firms were led by a company called American Legal Process (ALP) which illegally placing leans and repossessing people's assets. Read the full story on WHEC-TV
I personally hope President Obama, snatches consumer law issues away from the Federal Trade Commission and hands it over to an agency that might actually protect consumers. The FTC has failed consumers time and time again. Hey, Federal Trade Commission, want to keep your consumer law enforcement privileges? Then try protecting consumers from abusive debt collectors. Another words stop resting on your laurels and get your a$$ to work protecting consumers.

Open Letter to All Members of ACA, International

posted on 2009-07-10 by Jerry Greenblatt

  Open Letter to All Members of ACA, International       July 9, 2009           Dear Fellow ACA Member,   Is it the role of ACA International to act as an advocate of the Collection Industry, or to regulate the Collection Industry? Is ACA leadership spending our money wisely?   I am writing this letter as an individual dues paying member of ACA, International and not as a member of any other association or board, in order to convey my concerns and questions as to the direction our association is taking.   I am concerned with several recent initiatives undertaken by the ACA Executive Committee, including the association’s recent dues increase, change of fiscal year and attempt to force individual state units to change their membership year, reluctance to limit budgetary votes by its Board of Directors to in person meetings, and its attempt to regulate the collection industry through its own Dispute Resolution Program and SRO turned Debt Collector Registry.   I must first question the dues increase. Last year at the Annual Board of Directors meeting the budget was presented by ACA Staffand included the $1M purchase and $300K in refurbishing costs to purchase a office condo in Washington D.C..   Within 60 days of the BOD approving that budget a special telephonic meeting was called to increase dues. I am quite concerned as to why this increase was not addressed in an open forum at the in person meeting of the BOD, where members could have been made aware of the proposed increase and voiced their concerns.   I must ask myself: did staff know at that time that the increase was necessary? If they did not know at that time, why didn’t they know? Most of all, if the BOD knew a dues increase was necessary, would they have voted for the $1M cash purchase of the D.C. Condo?   I have been unable to ascertain as to where the increased revenue from the dues increase will be spent. It has been cited that the dues increase is necessary to bolster reserves, which have not been in compliance since enacted by the BOD. It appears ACA would have had adequate reserves had they not purchased the condo. Shouldn’t this have been considered prior to making the purchase in D.C.? Did ACA consider other alternatives to purchasing the condo for cash?     The ACA Leadership Committee has cancelled the Association’s Unit Leadership Conference citing “financial pressures of the current economy”. Leadership is already cutting programs while raising dues, due to the economy. Perhaps they should consider what effect this dues increase will have on us as members.   There is a motion to be brought before the BOD next week to roll back the dues increase. This is not water under the bridge, but an opportunity to correct an ill informed decision. I encourage you to contact your National Director and urge them to vote in favor of rolling back the dues increase.             I now move on to the Fiscal Year/Membership Year change, cited by ACA leadership as necessary because we as members are too confused in dealing with a calendar and membership year. Leadership also states this will help with approval of the budget and will alleviate the need for the BOD to take up time considering and debating the budget at the annual meeting.   In my opinion, the primary and most important fiduciary responsibility of the BOD is the consideration and debate of the annual budget which is approximately $8M per year.   Changing the fiscal year accelerates dues and results in, us as members, paying 19 months of dues in a seven month time period. What’s worse is paying our dues in December, the worst month for revenues in our industry.   We must ask ourselves, is changing the fiscal year really in our best interest as members? We will have an opportunity to question this Fiscal/Membership Year change and why it is really necessary, at the General Membership Meeting next week. I encourage a no vote on this change.   I am equally confused as to why ACA Leadership would be opposed to the idea of limiting votes and approval of budgetary and fiscal matters to in person meetings of the BOD, wherefair and open discussion and consideration can take place, with the benefit of the input of members like us.   I am equally concerned with ACA undertaking the endeavor of administering a mandatory Dispute Resolution Program/Collector Registry and must question how well thought out these programs are and how they will affect our industry.   Last year the dispute resolution program went from being administered by the National BBB to being administered by a separate entity to be formed by ACA. As presented it would require an agency’s to consent to a conciliation period and I as understood it mandatory arbitration to be paid by the collection agency. The program does not guarantee that it would eliminate traditional remedies such as law suits available to the consumer but would only add a layer to the mix. The program also did not guarantee the protection of information acquired within the Dispute Resolution process which could later be used against the agency.   Along with the Dispute Resolution Program, the BOD was presented a brief summary of a proposed Self Regulatory Organization (SRO). It is important to remember that only a presentation took place and no action was taken by the BOD on the SRO.   Subsequently a task force was formed and met approximately ten times by telephone conference and just recently, citing the fear of President Obama’s formation of a new government entity to protect the financial rights of consumers, theyturned the SRO into a mandatory Debt Collector Registry. This Registry, to be formed by ACA with our money, will be considered and voted on by the BOD at the annual meeting next week.   This registry as I understand it would require all agencies to register each collector, and may include finger printing, background checks, testing and on-going training.                   I have heard that this registry could add upwards of $10M to ACA International’s already $8M annual revenues and will not preempt any local or state regulatory agencies, but will instead only add another layer of government and expense to our already challenged industry.   While many of us do background checks, finger printingand training we are able to do this within a competitive market and are not limited in doing our pre-employment screening through ACA, International or some subsidiary it will form.   I read an AP article today, Frank backs plan for a consumer protection agency By ANNE FLAHERTY which it appears the majority of lawmakers are resistant to the idea and have doubts as to its success.   How many of us thought the sky was falling with the enactment of the FDCPA, FCRA, GLBA, HIPPAA,and other acts and laws that govern us. We are already regulated by a federal agency, and those of us that work within the law will most likely not be affected by a new federal agency if it is even formed to regulate us.   This item has been put on the BOD agenda through a placeholder and will be considered with only a few minutes debate without the benefit of prior review of its structure, mamangement, feasibility, budget, revenue or affect on the industry, just as the $1M D.C. condo purchase was voted on last year.   The fact is we do not know if and when this new government agency will be formed or if it will change the regulation of the industry. There is no need to rush a decision which could have devastating effects on our industry.   A smart agency owner once said something to the effect, “I could be shot on the way into my office, so maybe I should just shoot myself first, before it happens” This seems to be the approach our leadership is taking on this issue.   I have asked the national directors that represent my state unit to either table the motion to create a National Debt Collector Registry until more information is obtained and the proper time for debate and discussion is allotted or in turn vote NO on its formation.   Once again I ask, should it be the role of ACA to advocate for us or for ACA to regulate us?   It is incumbent on us, as dues paying members to question our leadership and the direction they are taking our association. Is it really in the best interest of us as a membership body and our industry.   I invite your comments as fellow association members to     Sincerely, Jerry Greenblatt Inland Capital Services 663 Greenfield Dr. El Cajon CA 92021 619-291-8520

Check Yourself - Consumers Pay the Price for Congress' Poor Decision

posted on 2009-03-03 by Jay Gonsalves

  When a bounced check for $14 ends up costing a consumer nearly $300 to pay back and leads to harassment and scare tactics from the company trying to recoup the debt, somebody needs to say something.   Our trade association, ACA International, has been doing exactly that for the past three years in an effort to get an unwise amendment to the Fair Debt Collection Practices Act (FDCPA) repealed.   You don’t have to be a debt collector – as more than 3,500 of our member agencies are – to know that the check diversion program Congress agreed to exempt from the FDCPA back in 2006 spelled trouble from the beginning. Along with forcing consumers to pay more than $150 out of their own pocket to attend a financial management course, the amendment essentially gave collection companies like American Corrective Counseling Services (ACCS) a free pass when it came to adhering to the FDCPA. This is rather ironic considering the FDCPA was designed to protect consumers from the very type of unethical and illegal harassment ACCS has been repeatedly accused of by consumers in numerous lawsuits over the years.’s March 2 story, Bounced-check collection deals draw fire, is only the latest example of why check diversion programs such as the one being run by ACCS should never have been exempted from the FDCPA in the first place.   ACA International has stood in accord with consumer advocacy groups and others in opposing Congress’s 2006 decision to change federal law and allow district attorney’s offices to contract out bounced-check collections to private collection firms like ACCS.   Not only does the current arrangement lead to mistreatment and needless financial hardship for consumers whose only crime may have been accidentally bouncing a check for a large pizza, but it also takes away the level playing field created by the FDCPA for ethical debt collectors.   Our association will continue its efforts to ask Congress to repeal this ill-conceived amendment to the FDCPA, and in the meantime our association is unveiling a brand new, completely free consumer education Web site called Ask Doctor Debt. One of its many financial literacy tools is a free financial literacy Web course that district attorneys and companies like ACCS are currently forcing consumers to pay $160 to take.   Contrary to the negative stereotypes so often associated with our industry, the members of ACA International – representing thousands of agencies and tens of thousands of individual collectors – strive to treat each consumer with dignity and respect, along with making available – free of charge – the financial literacy and education tools consumers need in order to make informed choices.   It is our sincere hope Congress makes the same informed choice and repeals the check diversion program amendment to the FDCPA before more consumers suffer the same fate as those described in CNN’s recent story.   Gonsalves is the President of ACA International, The Association of Credit and Collection Professionals and President of Action Collection Agency of Boston.

The FTC Report on Updating the FDCPA

posted on 2009-03-01 by Credit and Collection News

The FTC just released their report on the FDCPA. Go to:

to review their report.

What are your thoughts on the FTC's recommendations for the industry?


posted on 2008-05-12 by Michael Flock
RECENTLY, Flock Advisors spent several days in New York holding meetings with lenders and investors. Walking past the Bear Stearns building through the pouring rain, we couldn’t help but contemplate the effects of the credit crunch on the collections and debt buying industries. In the final analysis, we wondered, would the contraction of credit and the economic slowdown be good news or bad news for an industry already weakened by historically high prices?

Assuming that the slowdown and the current contraction is not deep and prolonged, Flock Advisors believes the current economic storms are good for the industry and will reignite industry growth, particularly in the world of debt buying, which has been frustratingly stagnant during the last few years due to stratospheric prices.

FIRST, THE BAD NEWS: A few large banks like Merrill and CIT are no longer financing consumer debt portfolios. Every lender we spoke with has become more cautious in the current environment. Some have decreased advance rates. Some have increased coupon rates. More want participation in the residuals.

NOW THE GOOD NEWS: All the lenders we know are very bullish about the future of the debt buying market. They all see prices falling 10% to 20% (or even more) to more conservative levels. Although liquidity is falling too, its decline is generally perceived to be slower than the price declines, thereby improving returns.

AN INDUSTRY LEADER COMMENTS: Former President of OSI Portfolio Services and current Principal at Briannaco Investments Stacey Schacter told Flock Advisors: “This is the time industry veterans have been waiting for. For those that have been patient with their capital will be rewarded with the ability to pick up a variety of assets at relatively good prices amid decreased competition. The type of shock that occurs during a recession or market turmoil is generally good for the industry unless the recessionary period is too long or unusually deep. At this point, while I don't see a quick recovery in the economy, prices should remain within a more sensible band, leading to increased profits.”

THE BOTTOM LINE: We believe that as long as there are no major bank failures or additional credit tightening, 2008 has makings of a good year for debt buyers. The convergence of price declines and flexible financing with a wider range of offerings spells opportunity and growth.

CAPITALIZE YOUR UNIQUE POSITION NOW: Timing has never been more important. If you want to leverage your debt buying investments, start shopping ... and have fun negotiating!

NOW FOR A LITTLE SELF PROMOTION: If you don’t have the resources or lender relationships to arrange financing yourself consider giving us a call to explore your options.

For additional information, please contact either Michael Flock or Don Hilbert at Flock Advisors: at 404-419-2247 or or

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