Today, the Consumer Financial Protection Bureau announced that it would finally start taking a good, hard look at the debt collection industry. It’s about time. Few industries need the attention more.
The CFPB also released 3 resources (all in PDF format):
Read Consumer Financial Protection Bureau to oversee debt collectors from the CFPB.
For as often as I represented people sued by Gurstel Chargo or sued Gurstel Chargo for FDCPA violations, I’m shocked at how little I wrote about one of Minnesota’s busiest debt collection law firms. I actually know the marketer (a lovely person, actually) who came up with Gurstel’s current marketing campaign, and I chuckled when I saw it for the first time. Accountability Matters as a debt collector slogan is the height of hubris. I’m just grateful I’m here to see Gurstel take its own medicine.
Fuck you! Pay us your money! You can’t afford an attorney. You owe us. I hope your wife divorces your ass. If you would have served our country better you would not be a disabled veteran living off social security while the rest of us honest Americans work our ass off. Too bad; you should have died.
PayPal is the latest to join a growing list of companies (including eBay) who want to keep consumers out of courts and class actions. You can opt out of mandatory binding arbitration, at least, but you’ll be stuck with the class action ban either way. Opting out is not easy. Here’s what you have to do:
You can choose to reject this Agreement to Arbitrate (“opt out”) by mailing us a written opt-out notice (“Opt-Out Notice”). For new PayPal users, the Opt-Out Notice must be postmarked no later than 30 Days after the date you accept the User Agreement for the first time. If you are already a current PayPal user and previously accepted the User Agreement prior to the introduction of this Agreement to Arbitrate, the Opt-Out Notice must be postmarked no later than December 1, 2012. You must mail the Opt-Out Notice to PayPal, Inc., Attn: Litigation Department, 2211 North First Street, San Jose, CA 95131.
It’s not surprising that debt collectors are always trying to figure out new ways to cloak themselves with the appearance of authority. That’s why the Fair Debt Collection Practices Act doesn’t allow debt collectors to pretend to be affiliated with the government:
The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.
Of course, that’s not very effective when the government — in the form of prosecutors — essentially deputizes debt collectors to send collection letters on official letterhead. It’s attractive for the district attorneys involved. They get to farm out bad check collection, putting it out of sight and out of mind, while raking in a profit.
Prosecutors’ job is to enforce the law. One important part of that job is exercising some discretion over who to prosecute. That’s especially important in bad check cases. People bounce checks all the time, usually unintentionally. That doesn’t make them crimes. So a prosecutor’s job is to sort out the crimes from the accidents. Under the new arrangement, everybody gets contacted by a debt collector, which then demands even more money for a budgeting class — the profit from which goes into the collector’s pocket.
But, as Jeff Sovern points out at Consumer Law & Policy, the collectors are walking a thin line, at best. Not to mention what has to be horrible PR for the district attorneys involved, who should be doing their jobs, not farming out their discretion — and their letterhead — to debt collectors.
Among the for-profit colleges targeted by a Senate committee led by Senator Tom Harkin are Minnesota schools Capella University, Walden University, and Rasmussen College. While the committee won’t investigate every for-profit school MPR reports that Globe University and the Minnesota School of Business are engaged in similar practices.
[The] allegations paint a picture of schools that target students eligible for subsidized loans and grants, but who have low prospects for academic success. They also raise questions about whether students at those schools — and the taxpayers who subsidize them — are getting their money’s worth.
“The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public two- and four-year colleges and universities.”
Arithmetically, it makes the most sense to pay down your highest-interest debts first. But psychologically, it helps to feel like you are making progress. I linked to a calculator for using the “snowball” debt reduction method before, but I’ve never really discussed how to use the snowball method. Here’s how it works.
Yesterday, Paul Ryan and his campaign put themselves firmly in the bullshit category, at least when it comes to bankruptcy statistics. Ryan said:
In 1980 under Jimmy Carter, 330,000 businesses filed for bankruptcy. Last year, under President Obama’s failed leadership, 1.4 million businesses filed for bankruptcy.
Read Paul Ryan’s Bullshit About Bankruptcy Data at Credit Slips.
When “fashionista lawyer” Carolyn Kellman returned shorts she bought from Forever 21 for $14.46, she received just $14.45. And sued. As Scott Greenfield observes, although this looks at first blush like much ado about nothing, it is actually a perfect example of what a class action lawsuit is for: small damages spread out across a huge swath of consumers.
(It’s also possible that Kellman was the only person ever shortchanged, but as the article in the Daily Business Review points out, rounding receipts to make it easier to make change is done at other retailers, like Chipotle.)
All Kellman and her lawyers have to do now is find another 749,999 customers who were shortchanged, in order to make it past the Miami-Date threshold of $15,000.