Seven Debt Collectors Sued For Allegedly Impersonating Law Enforcement

Debt collectors in West Virginia, watch out. The state is coming for you.

West Virginia Attorney General Darrell McGraw filed suit against seven unlicensed debt collection companies in his state, according to a news release. The suits allege that the companies impersonated law enforcement, repeatedly harassed borrowers over the phone, made false threats and collected nonexistent debts or debts that were already paid.

"In recent years, my office has been flooded with complaints against companies making unlawful threats of arrest or legal action to coerce consumers to pay nonexistent debts or debts that have already been paid," McGraw said in the release. "These companies refuse to become licensed in West Virginia and often go through great lengths to keep their whereabouts hidden in order to evade regulation."

McGraw has a history of aggressively taking on debt collectors. He sued two units of a debt collection company last month, alleging that they robo-signed affidavits when they were trying to get judgments against West Virginia borrowers.

His actions come as Americans are struggling to deal with both the debts and the collectors. The number of debt collector complaints to the Federal Trade Commission spiked 17 percent in 2010 from the year before, USA Today reports. Today, one in seven Americans is being pursued by a debt collector, according to Matt Stoller, a fellow at the Roosevelt Institute.

The increased aggressiveness of collectors is in part the result of Americans struggling to repay past debts. Millions of Americans are out of work and, of those do have jobs, many more are getting by on stagnant wages.

In this climate, debt collectors are allegedly cursing and threatening people who they're trying to get to pay up, according to market research firm Marketdata Enterprises. In addition, they may be telling lies that violate the law. Those tactics have helped to push the firms' revenues to record highs.

In response, officials are cracking down. A Michigan-based debt collection agency paid $2.5 million in January to settle allegations of misconduct brought by the FTC. In addition, the FTC temporarily froze the assets of seven California debt collection companies in December, accusing them of using lies, threats and intimidation to pay up.

Another government watchdog, the Consumer Financial Protection Bureau, has also taken a hard look at the debt collection industry. The agency is cracking down on debt collectors as part of its increased scrutiny on “nonbanks.”

Comments

[middleoftheroad53]

12:57 PM on 04/20/2012

What about "jail time" for these lawbreaking debt collectors? The last time I knew if you threatened or harassed someone you were arrested.

If a Company does this the perpetrator AND the CEO should be incarcerated ... that would take care of the problem!

[MeinNH]

09:14 AM on 04/20/2012

I had a debt collector tell me that my case was going to the district attorney in my area for fraud. I later called the district attorney's office and inquired and was told that they were much too busy with real crime to deal with debt collection. The next time the debt collector threatened, I told him that was fine as I had already spoken to the DA and at that point he hung up on me and never called back. By the way, the debt had been paid 5 years before this call and no matter what I said, they wanted money, not paperwork saying that I had paid up.

[Realist2011]

04:35 AM on 04/20/2012

Wait...they get SUED? It's a crime to impersonate a law enforcement officer. Charge them criminally and throw them in jail.

[NealHib]

02:13 AM on 04/20/2012

Someone keeps leaving a message asking if I know who is responsible for the debts of my late brothers estate.
My brother isn't dead.

[CrnkyOldMan]

12:23 AM on 04/20/2012

Dang people. Learn the FDCPA and FCRA laws, When they call, act stupid and scared, record the calls (know your state laws about this) and even "legitimate" collectors will hang themselves with multiple violations. You can often sue for $1000 per violation, or use as leverage to get debt discharged.

[loki]

11:36 PM on 04/19/2012

if someone called and said they were the police and I owed money, Id tell them to come and prove your the police and I owe the money, or shove it. Dont ever let a bill collector harass you. Hang the phone up. Period. Turn on the answering machine, or worst case, turn off the ringer or unplug the phone. Do something, but dont hang on listen to their BS. and the police will never call you saying you owe money. Thats not their job. They might serve you court papers in person, but they are not collections police.

[June25]

10:35 PM on 04/19/2012

Some guy who called from Colo. had my wife in tears saying he was a police officer and we owed 500 dollars.He was telling her that if wshe didn't send them the money he was going to send the police to her place of work.Since he knew where she worked and where in Colo.we lived she believed him.I got on the phone and he just didn;t talk like a trained police officer so I pushed for more info and he got angry and hung up.

[loki]

11:37 PM on 04/19/2012

Im waiting for them to start showing up at doorsteps harrassing people. Going to see some collectors face down in the gutters then I would bet

[NC Democrat 12]

07:52 PM on 04/19/2012

The situation will only get worse as more and more financial institutions sell their debt to unscrupulous companies in order to balance their books. When these debt collection companies engage in unlawful practices, they should be closed down and everyone involved should be jailed.

[blukazoo]

07:34 PM on 04/19/2012

Lock them up and throw away the key. Debt collectors suck.

[Ed Baker]

06:09 PM on 04/19/2012

If you can't play the game the right way - don't play.

One of my first jobs in finance was as a collector. The best way to get paid is to be NICE.

Be rude, or dishonest, and you're going to be the last debt they pay, if they ever pay it.

[Americanwoman55]

06:52 PM on 04/19/2012

These are not debt collectors!!!
Debt collectors have offices and operate within the laws of each state they operate in.

These are hoodlums!!
Good for the D.A I wish more states would do this!!

[mcmutter]

05:06 PM on 04/19/2012

S>C>U>M>B>A>G>S>

[clearthinker16]

04:33 PM on 04/19/2012

I got a call from an agency attempting to collect from me for a bill a company I used to work for. They say that since I signed for a shipment, I was responsible for payment. I said nice try.

[Ed Baker]

06:11 PM on 04/19/2012

When someone tries that stuff on you, start asking them a lot of questions. Ask for their telephone number first, tell them that you need to ask someone for the money, and you need to call them back after you have it. Then make sure to get their name, and the name of the firm they work for. Then, report them to the authorities in your state.

Signing for a shipment does not constitute a credit contract.

[clearthinker16]

07:29 PM on 04/19/2012

they pulled something like that on my buddy in Vegas. He was a partner in a business with two other guys. They opened a second business but tied one of the bills to the first business. When the second one failed there was this huge invoice for a business he had no part of. His partners were not the kind of guys to mess with, they pulled all the money out of the business and walked away. My friend had to get a lawyer to straighten it out, while his partners laughed all the way to the bank.

[Americanwoman55]

06:54 PM on 04/19/2012

Also if they say they are recording you!!
Say hang on and then tell them you are recording them!!

If someone is recording you, you have a RIGHT to record them back.
If they are dishonset they will hang up!!

[jwilson1]

04:28 PM on 04/19/2012

"In recent years my office has been flooded with...." What took you so long one complaint is not enough for you?

Good job getting around to it! How many others are out there?

[soariation]

04:27 PM on 04/19/2012

No brainer here.

[Joe Bigg]

05:34 PM on 04/19/2012

Its West Virginia.

[mcmutter]

05:56 PM on 04/19/2012

if you're wearing shoes you get a 33% discount .....

[percheron1]

04:22 PM on 04/19/2012

Great...:(...these debt collectors just created another reason that people will claim when there is a confrontation betwenn them an reall police...:(