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2008 FCRA / FDCPA proposed changes

Saturday, September 27, 2008

InsideARM (collection) did NOT approve my comment about FDCPA and FCRA amendments

My polite and constructive comment at InsideARM with the WIN - WIN solution, drastically lowering the need for collectors to abuse and harass debtors while INCREASING payments by debtors was NOT approved.

My InsideARM comment is posted here:

My post at InsideARM (collections) about FCRA and FDCPA amendments

It’s a NO BRAINER:

Amend the FCRA to require DELETION of paid collections.

Of course there will be people who won’t pay their debts because they have no money.  And some take my advice to STOP paying their credit cards because they are essentially judgment-proof and/or their credit is shot anyway and/or it’s too much of a hassle to try to get the credit they deserve because the CRAs won’t correct and the “justice” system is a giant cesspool with little chance of justice for consumers unless they are wealthy.

So, yes, there will still be abuse and harassment.

That’s why I also propose FDCPA amendments such as limiting the number of calls and MINIMUM statutory damages for EACH violation, similarly to the TCPA (junk fax/telemarketing law).

I’m very disappointed to see that InsideArm chose to censor my comment.

From the InsideARM commenting guidelines http://www.insidearm.com/go/comments-policy:

Why might my comment not be approved?

Comments of all varieties are encouraged. However, we reserve the right to reject your comments if they are deemed offensive or fall out of convention for what is appropriate for blogs (e.g. off-topic, aggressive, promotional, etc).

Is my comment OFFENSIVE?  It certainly wasn’t promotional, aggressive or off-topic.  I responded to an article about collection related FTC complaints.

The collection leadership is not only interested in cash.

They’re in the collection business not just to make money, but they are psychopaths feeding off misery.  I’m NOT talking about the individual collectors, but the EXECUTIVES, the leadership.  People like Mike Ginsberg who wrote the article on the FTC complaints.  From his bio:

… Mike is a member of the board of the Institute of Merger and Acquisition Professionals (IMAP), a member of the Association for Corporate Growth (ACG), and a member of the American Collectors Association(ACA). He also serves as an expert witness, and sits on the advisory boards of several industry associations and publications. Mike was previously employed by a prominent investment firm, where he was a marketing specialist. ...

Mike Ginsberg should serve life in prison for the atrocities he promotes and defends.

They relish the power to destroy lives.  That’s what it’s all about.

Last night I watched and rated all ACA (collection industry association) youTube videos:

Blatant lies in the videos:

$354 will buy me 100 gallons of milk?  Yeah right.  I pay about $3.25 for HALF a gallon of milk on sale. 

It is simply not true that the money collected will save you $354 a year. 

In fact, money collected for corporations will go to the executives and shareholders.  Corporations are NOT owned by the customers.

Of course they also did not approve my comment at youTube.  I wish they would put a notice with the comments when they’re subject to approval.  I’m tired of wasting my time writing censored comments.

Debt Collectors Giving You Free Gasoline?

This video documents how IMPORTANT it is to change the FDCPA and FCRA.  A paint store owner explains how it’s getting tough to stay solvent and how they have to assign delinquent accounts to attorneys and collectors sooner.

It doesn’t occur to the owner of Abbott Paint that his contractor customers are paying their accounts late because they have fewer jobs with lower profits?

He advertises COLLECTORS instead of opposing the bailout, supporting candidates with SOLUTIONS and actually doing something to help the PEOPLE. 

http://www.abbottpaint.com/about.htm

He might learn the hard way that you can’t squeeze blood out of turnips.

Debt Collector Stories: Episode 1

Is this an actress or a debtor who got paid many $$$ for this pathetic performance? 

Ask Doctor Debt on FOX 9

Fox news interviewing a collection industry association executive giving HORRIBLE advice to consumers. 

ALERT: FALSE information about FICO scores:

1) Your FICO score will NOT go up if you pay your credit cards a week early.  Neither the payment date nor the due date are reported to the credit bureaus. DUH!

2) Getting a credit card EARLY in life does NOT lower scores, but increases scores.

A CreditFactors subscriber has a 710 FICO score only 13 months after filing for bankruptcy.  That’s primarily because of old accounts.

It’s UNBELIEVABLE that they dare to spew these lies.  “Doctor Debt” should go to jail for malpractice. 

Thursday, September 25, 2008

My post at InsideARM (collections) about FCRA and FDCPA amendments

I usually do NOT post at any other credit/collection sites, but when I saw the comment by John Nemo, ACA Public Relations Director, about consumer complaints to the FTC, I couldn’t resist.

Because comments are subject to approval (as here) and we need to get the word out, here’s my comment as submitted at Accurate Or Not, Consumer Complaint List Needs to be Addressed:

I totally agree that consumer complaints need to be addressed and the FDCPA needs to be amended ASAP.

I’m hoping to take my case against IC System over telephone harassment to trial and to generate lots of publicity to get legislative changes.  Here’s one of the recorded messages:

http://ic-system-collection-suit.info/2008/7-1708-ic-system-automated-voice-mail/

*** The FDCPA needs to be amended to limit calls to ONE call per MONTH or as per the debtor’s express permission and messages are NOT to be left on VMs/answering machines.

*** Statutory damages need to be changed to PER violation and provide for minimum damages (similar to the TCPA) and PUNITIVE damages must be available for individuals.  The cap for class actions must be removed.

*** The right to dispute must be disclosed in the INITIAL communications, NOT 5 days later after the debtors were tricked into paying bogus debts.

*** NO collection can be reported to the credit bureaus until 30 days after the debtor’s receipt of the initial letter, sent by restricted delivery with signature confirmation.

*** If disputed, collections can not be reported until 45 days after validation was mailed to the debtor and a letter with the original creditor’s info or a printout are NOT validation.  FICO scores IGNORE the dispute notation currently required by the FDCPA, so they must be deleted.

*** No credit report is to be obtained unless the address on file is no longer valid and the initial letter was returned undeliverable.

As the government commits to gift TRILLIONS of TAX PAYER dollars to the bankers, the working people have been lied to and exploited by the bankers and instead of bailouts, they get harassment by collectors.

It should be the other way around.  The bankers should go to prison and the PEOPLE should get bailed out.

Valid debts SHOULD be collected, but not through harassment and extortion.  It is not appropriate to harass debtors until they agree to a payment arrangement just to stop the calls.  Collectors and creditors HAVE the legal right to sue and that’s the proper way to collect debts in a civilized country.

I have been publicizing for many years how unfair it is that FICO scores don’t give debtors a single point for the payment of collections.

Why do I have to advise readers/clients to NOT pay valid collections they CAN and WANT to pay because they will lose their rights under the FDCPA and their FICO scores will NOT increase after payment?

Why doesn’t the ACA lobby legislators to amend the FCRA to require DELETION of paid collections?

After all, the original creditors are probably reporting the accounts, so it’s not like consumers don’t have incentive to pay their bills on time.

Don’t you think that payments to collectors would increase by at least as much due to FAIR credit reporting and deletion of PAID collections as is lost if the telephone harassment is prohibited?

There is NO reason whatsoever to continue to report collections after payment OTHER than to destroy the credit.

Mr. Nemo with the ACA posted a propaganda video at http://www.youtube.com/watch?v=VAUNP_1tj-0 and rather than addressing PROBLEMS that need to be resolved, well, it almost made me puke.

I also submitted a comment with the video, but it hasn’t shown up yet. YouTube is often slow.  Please do me a personal favor and post your collection rants at youTUBE and NOT at InsideARM.

The ACA has MILLIONS of dollars to lobby Congress and to produce videos.

As regular readers know, I’m struggling to keep up with litigation and I’m trying to finish my house before winter.  I wish I could produce a video response for youTube with some of the recorded collection calls, excerpts of the Focus Receivable extortion call and an explanation of what needs to be done.

I don’t have the time and money (it’s been a long time since I got a donation) and quite frankly, the only thing that even keeps me motivated is the continued exposure to abuse and illegal collection techniques.  I recently posted the transcript of the Afni vile lies. 

You’re not going to finish my house and you’re not going to bring me food and gasoline. 

Can YOU make or at least help make a video for youTube?

I truly believe that collectors would NOT have to resort to abuse and harassment if they could LEGALLY delete for payment.

We all know that it is possible to get deletion, usually requiring extra payment (extortion) or settling FDCPA and/or FCRA violations.  The InsideARM article touts how so many BBB complaints are resolved.  They do NOT say how they are resolved and most likely that’s DELETION from the credit reports and closing the account.

I hope to get a constructive response from Mr. Nemo.

I’m sure he’s aware that collection revenue will decrease as the economy worsens and no matter how badly they harass debtors, people can’t pay if they have no money.

Since Congress decided to totally sell out the American people to the bankers, maybe there is just a LITTLE compassion for the tax payers who will pay for the bailout and as so many people are delinquent, it is absolutely necessary to act NOW.

I’m not YET demanding that all consumer debts be forgiven or that all collection efforts be suspended.

To avoid just that, the ACA might want to consider my proposal.  They’ve got the power, influence and cash to make it happen.

Friday, September 12, 2008

New category on proposed credit and collection legislative changes at CreditFactors

As I finally got to post another entry on how to analyze myFICO reports, I ran across the “consumer statements” the credit bureaus promote when they refuse to correct / delete their reporting.

This blog has too many categories as it is and the Credit Legislation site software stopped working after a server upgrade and I can’t edit / add anything. So I decided to add a new category to the new CreditFactors for Pros blog.  Who knows, maybe we’ll see some changes if credit repair people pick up on these issues.

Consumer statements on credit reports are IGNORED by most creditors:

… It’s a lot like demonstrating at a political convention.  The protesters have to remain in a “free speech” zone where nobody hears and sees them.  Similarly, these “statements” are your right to free speech on your credit report, cleverly designed to be ignored.  You’re wasting your time and resources. ...

The FCRA would be a LOT shorter if we removed all the worthless crap.

Friday, December 28, 2007

20 reasons to STOP paying your credit cards

I picked up the Experian appeal response brief today and on the way home I thought about my reply.

And I thought about how much time and money I wasted on this litigation, the depos, and finally the agony of knowing that my unredacted credit reports were available for download by anyone willing to pay 8 cents/page—until I settled my claims with prejudice for nothing but the removal of my credit reports from PACER.

I’ve also been thinking about a title for my book.  And there it was:

“50 reasons to STOP paying your credit cards.”

I suppose I should narrow it down to the 20 most important reasons. 

Probably the most important lesson learned after 7 years of litigation and many more years of credit research:

It’s just not worth the hassle.

There really are many reasons, but that’s for another day.  Here is a very interesting article about credit card defaults:

Americans Falling Behind on Credit Card Payments at Alarming Rate

Monday, December 24, 2007

SAN FRANCISCO — Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.

An Associated Press analysis of financial data from the country’s largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.

Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.

“Debt eventually leaks into other areas, whether it starts with the mortgage and goes to the credit card or vice versa,” said Cliff Tan, a visiting scholar at Stanford University and an expert on credit risk. “We’re starting to see leaks now.”

The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP. That represented more than 4 percent of the total outstanding principal balances owed to the trusts on credit cards that were issued by banks such as Bank of America and Capital One and for retailers like Home Depot and Wal-Mart.

At the same time, defaults — when lenders essentially give up hope of ever being repaid and write off the debt — rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission.

Serious delinquencies also are up sharply: Some of the nation’s biggest lenders — including Advanta, GE Money Bank and HSBC — reported increases of 50 percent or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago.

The AP analyzed data representing about 325 million individual accounts held in trusts that were created by credit card issuers in order to sell the debt to investors — similar to how many banks packaged and sold subprime mortgage loans. Together, they represent about 45 percent of the $920 billion the Federal Reserve counts as credit card debt owed by Americans.

Until recently, credit card default rates had been running close to record lows, providing one of the few profit growth areas for the nation’s banks, which continue to flood Americans’ mailboxes with billions of letters monthly offering easy sign-ups for new plastic.

Even after the recent spike in bad loans, the credit card business is still quite lucrative, thanks to interest rates that can run as high as 36 percent, plus late fees and other penalties.

But what is coming into sharper focus from the detailed monthly SEC filings from the trusts is a snapshot of the worrisome state of Americans’ ability to juggle growing and expensive credit card debt.

The trend carried into November. As of Friday, all of the trusts that filed reports for the month show increases in both delinquencies and defaults over November 2006, and many show sequential increases from October.

Discover accounts 30 days or more delinquent jumped 25,716 from November 2006 and had increased 6,000 between October and November this year.

Many economists expect delinquencies and defaults to rise further after the holiday shopping season.

Mark Zandi, chief economist and co-founder of Moody’s Economy.com Inc., cited mounting mortgage problems that began after this summer’s subprime financial shock as one of the culprits, as well as a weakening job market in the Midwest, South and parts of the West, where real-estate markets have been particularly hard hit.

“Credit card quality will continue to erode throughout next year,” Zandi said.

Economists also cite America’s long-standing attitude that debt — even high-interest credit card debt — is not a big deal.

“The desires of consumers to want, want, want, spend, spend, spend — it’s the fabric of our nation,” said Howard Dvorkin, founder of Consolidated Credit Counseling Services in Fort Lauderdale, Fla., which has advised more than 5 million people in debt. “But you always have to pay the piper, and that can be a very painful process.”

Filing for bankruptcy is no longer a solution for many Americans because of a 2005 change to federal law that made it harder to walk away from debt. Those with above-average incomes are barred from declaring Chapter 7 — where debts can be wiped out entirely — except under special circumstances and must instead file a repayment plan under the more restrictive Chapter 13.

Personal finance coaches say the problem is most grave for individuals who are months delinquent or already in default — like Kenneth McGuinness, a postal clerk from Flushing, N.Y.

His credit card struggles began nine years ago, when he charged his son’s college tuition and books. He thought he was being clever: His credit card’s 6 percent “teaser” interest rate was lower than the 8.6 percent interest on a college loan.

McGuinness, 61, soon began using Citibank and Chase cards for food, dental work and copays on doctor visits and minor surgeries. Interest rates surged to 30 percent. Now he’s $37,000 in debt and plans to file for bankruptcy in February.

“I tried to pay what I could and go after the high-interest accounts first,” McGuinness said. “But it just kept getting higher and higher, and with late charges and surcharges I was going backward.”

In the wake of the jump in defaults on subprime mortgage loans made to borrowers with poor credit histories, banks have been less willing to allow consumers to consolidate credit card debt into home equity loans or refinanced mortgages. That is leaving some with no option but to miss payments, economists said.

Investors also are backing away from buying securitized credit-card debt, said Moshe Orenbuch, managing director at Credit Suisse. But that probably has more to do with concerns about the overall health of the U.S. economy, he said.

“It’s been getting tougher to finance any kind of structured finance — mortgages, automobile loans, credit cards, student loans,” said Orenbuch, who specializes in the credit industry.

Capital One Financial Corp. reported that delinquencies and defaults are highest in regions where troubled mortgages are concentrated, including California and Florida.

Among the trusts examined, Bank of America Corp. had the highest delinquency volume, with overdue accounts valued at $5 billion. Bank of America defaults in October were almost 200 percent higher than in October 2006.

A spokesman for Charlotte, N.C.-based Bank of America declined to comment.

Other trusts — including those linked to Capital One, American Express Co., Discover Financial Services Co. and those containing “branded” cards from Wal-Mart Stores Inc., Home Depot Inc., Lowe’s Companies Inc., Target Corp. and Circuit City Stores Inc. — also reported striking increases in year-over-year delinquency and default rates for October. Most banks and other financial institutions holding credit card debt on their own books also reported double-digit increases in delinquencies.

The one exception in October was JPMorgan Chase & Co.’s credit card trust, which reported declines in both delinquencies and defaults. A Chase spokesperson attributed this to its focus on prime borrowers and aggressive account management.

By contrast, Capital One executives told analysts last month that the company projected 2008 write-offs of credit card debt to be at least $4.9 billion. This projection, analysts were told, took into account growing delinquencies and potential effects if the housing market continued its downward slide.

Capital One spokeswoman Julie Rakes said the increase in delinquencies could be due to an accounting change last summer, which shortened the grace period between when statements were issued and the due date.

Capital One also reported that the number of accounts 90 days or more in arrears had increased between October and November. More than 1.2 million of Capital One’s 30 million accounts were either delinquent or in default.

Many personal financial coaches expect this trend to accelerate in 2008 — particularly among people who took out untraditional loans whose interest rate has risen, requiring owners to pay mortgages several hundred dollars more than just a year ago.

“You’re looking at more and more distress — consumers desperately trying to preserve their credit lines, but there’s nowhere else to go,” said Robert Manning, director of the Center for Consumer Financial Services at Rochester Institute of Technology. “It’s like a game of dominoes.”

Just opened my mail and it looks like I have 0% offers for 6 months for 3 of my Cap One accounts.  The max fee is $50, not bad!  Since it looks like I’ll have $15k next week, I’ll pay 2 cards, then transfer to another card where I can then transfer to the 3rd Cap One account.  And I’ll have $22K at 0% for 6 months for $150.

Actually, I won’t have the full $22k for the 6 months at 0%, as I’ll have to make my minimum payments, it is work to do the transferring and there are some other issues I’ll talk about in another posting.  But it’s not a bad deal. 

Sunday, November 25, 2007

Budget ran hard inquiry for car rental

My client was actually only the driver of the car, but they charged a $100 deposit to HIS card and then somebody else paid for the rental.  They never even MENTIONED the credit check.

I see rental car inquiries about once a year, don’t remember if it previously was also Budget.  I’ve rented from Enterprise and Hertz since 2006 and they didn’t run my credit.

Unfortunately, they can legally run your credit and not even tell you about it.

The FCRA should be changed to require written notification.

They should also have to disclose in all their advertisements that a credit check will be required so that we don’t have to waste our time on them.  Disclosure AFTER we made the arrangements and are standing at their counter to sign the contract is TOO LATE.

Most people would rather rent their car elsewhere than have their credit scores lowered by Budget.

UPDATE: According to a subscriber, Avis and Hertz ALSO run the credit when you’re paying with a DEBIT card and it’s disclosed somewhere in the small print of the contract that nobody reads.