Wall Street Banks Prove they Have Too Much Political Power

Back in December, Senator Elizabeth Warren, a Democrat, said that the big Wall Street banks should be broken up. Here are her remarks in the Senate:

Instead of passing laws that create new bailout opportunities for too-big-to-fail banks … let’s pass something — anything — that would help break up these giant banks. … Teddy Roosevelt said ‘we should break them up because they have too much political power.’ Teddy Roosevelt said ‘break them up because all that concentrated power threatens the very foundations of our democratic system.’

Proving her point exquisitely, Wall Street banks including Citigroup, JPMorgan, Goldman Sachs, and Bank of America are apparently considering withdrawing their campaign contributions to Senate Democrats as a form of protest. According to Reuters, the banks are also getting together to “discuss ways to urge Democrats … to soften their party’s tone toward Wall Street.”

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How to Record Collection Calls

You should record all collection calls if it is legal for you to do so.

You need to keep a record of any agreements you make with the debt collector (like a payment plan) or promises the debt collector makes (like stopping collection activity while you are current on your payments). Without a recording, any agreements or promises will be difficult, if not impossible, to prove.

You also need to protect your legal rights. If a debt collector violates the Fair Debt Collection Practices Act during a call, you need to be able to prove what they said or did to violate the FDCPA. And if a debt collector does violate the FDCPA, you are entitled to up to $1,000 — or even more for egregious violations. A jury in Texas awarded [$1.5 million for 8 especially racist voicemails](](http://caveatemptorblog.com/3627/jury-awards-1-5-million-to-consumer-abused-by-debt-collector/). While that sort of verdict is far from ordinary, the point is this: it can be well worth your time and a little bit of money to record your calls.

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Debtors’ Prison Making a Comeback

Yes, it is technically illegal to put people in jail for not paying a debt. However it is perfectly legal to put people in jail if they don’t pay a court fine, which isn’t technically a debt because a court isn’t technically a creditor. Even though you owe money to it. Make sense?

No, not really. Because whatever you call it, you can end up in jail if you don’t pay it.

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Herbal Supplements at Major Retailers Contain Houseplants, Little Else

Yesterday the New York Attorney General reported the results of its tests on herbal supplements purchased at GNC, Target, Walgreens, and Walmart:

The authorities said they had conducted tests on top-selling store brands of herbal supplements at four national retailers — GNC, Target, Walgreens and Walmart — and found that four out of five of the products did not contain any of the herbs on their labels. The tests showed that pills labeled medicinal herbs often contained little more than cheap fillers like powdered rice, asparagus and houseplants, and in some cases substances that could be dangerous to those with allergies.

You read that right. Houseplants.

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Tax-Related Identity Theft Complaints Increased 2300% in 2014

From the FTC, here’s what tax-related identity theft looks like:

Tax identity theft typically happens when a scammer files a fraudulent tax return using a consumer’s Social Security number in order to receive a refund. The year 2014 marks the fifth consecutive year in which tax-related identity theft topped the list of identity theft complaints, with tax identity theft accounting for nearly a third of all identity theft complaints to the FTC.

To avoid falling prey to the scam, file your taxes as early as you can. The scam won’t work if you have already filed. And be on the lookout for callers posing as the IRS. The FTC says “The IRS will never call a consumer about unpaid taxes or penalties – the agency typically contacts consumers via letter.”

If you think you were contacted by a scammer or a scammer filed a tax return in your name, file a complaint with the FTC right away.

14.4 Seconds is Not a Reasonable Inquiry Under Any Circumstances

Last week, in an article for the New York Times, Jessica Silver-Greenberg included this tidbit:

In a 2009 deposition, an employee of a large debt-buying company testified to signing roughly 2,000 affidavits a day.

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Encore Capital Group Must Vacate 4,500+ Judgments in New York

I have a quibble with this quote from the New York Times‘s Jessica Silver-Greenberg, which she uses to set the stage for her reporting on the Encore Capital Group settlement:

The same problems that dogged the foreclosure of homes — and prompted public outcry and a multibillion-dollar settlement by some of the nation’s biggest banks — are increasingly showing up in the practices of large buyers of bad consumer debt.

Debt buyers were engaging in assembly-line litigation long before the foreclosure firms started. I’ve been writing about it here for years, but it’s just never gotten the same kind of exposure as the foreclosure industry’s callous disregard for the courts briefly did.

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Skiplagged.com Creator Sued for “Hidden City” Ticketing

Hidden-city ticketing is a way of “gaming” air travel.

The idea is that you buy an airline ticket that has a layover at your actual destination. Say you want to fly from New York to San Francisco — you actually book a flight from New York to Lake Tahoe with a layover in San Francisco and get off there, without bothering to take the last leg of the flight.

This travel strategy only works if you book a one-way flight with no checked bags (they would have landed in Lake Tahoe).

It’s not like these tickets are the cheapest all the time, but they often are.

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Congress Redirects $303 Million from Pell Grant Program to Debt Collectors

From the Washington Post:

The measure, championed by Senate Democrats, would cut Pell Grants in order to free up money to pay companies that collect student loans on behalf of the Department of Education.

Sounds like robbing the poor to give to the rich.

ABA: It’s Unethical for Debt Collectors to Use Prosecutors’ Stationery

That title is a little over-simplified, so here is the ABA’s actual summary from Formal Opinion 469:

A prosecutor who provides official letterhead of the prosecutor’s office to a debt collection company for use by that company to create a letter purporting to come from the prosecutor’s office that implicitly or explicitly threatens prosecution, when no lawyer from the prosecutor’s office reviews the case file to determine whether a crime has been committed and prosecution is warranted or reviews the letter to ensure it complies with the Rules of Professional Conduct, violates Model Rules 8.4(c) and 5.5(a).

Basically that says prosecutors who just hand off their stationery to a debt collector (to collect parking fines or fines for bounced checks, for example) are engaging in unethical conduct. If they want to do this, then a lawyer from the prosecutor’s office has to actually take the time to review each file to determine whether a threat of prosecution is actually warranted.

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