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Holiday season tips from our Texas Consumer Rights attorney, Dana Karni.
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Local 2 investigates abusive debt collectors

Published On: Mar 23 2012 01:44:49 PM CDT   Updated On: Mar 23 2012 10:36:23 PM CDT

Local 2 investigates abusive debt collectors.

The Federal Trade Commission received a record number of complaints about debt collectors last year nearly 181,000. There are laws in place to protect you from collectors who go too far, but you may be surprised at who we discovered may be on the other end of the line.

"Currently there is an affidavit being filed against your Social Security number with the last four numbers ending with ..."

That's the way one of the messages left on Charisma Anderson's voice mail went. She remembers the call like it was yesterday.

"I felt very threatened. I felt stressed," Anderson said. "I couldn't get out of my head what this man said he could do."

Anderson says the man calling her from Cole, Tanner and Wright told her she could lose her job or go to jail  if she didn't pay $1,400.

"I think they wanted me to panic," she said. "I think they wanted me to say 'Here, take the last of what I have. Just leave me alone.'"

Susan Schade of the Houston Better Business Bureau says complaints to the agency reveal a pattern of collectors with Cole, Tanner and Wright harassing, threatening and intimidating consumers over and over again.

"They're told that their driver's license could be taken away," Schade said, recalling some of the complaints against the collection company. "The person calling has said they're from the sheriff’s dept or they're a federal officer of some sort. Those are totally against the rules. The law says you can't harass people and you can't misrepresent who you are."

The collector who called Anderson said just enough to make it sound as if she would be charged criminally for an old debt she no longer owed.

"The affidavit is being filed under a priority 1 for willful evasion and theft of services," the collector said into her voice mail messaging system.

"This telephone call had a number of issues that raised a red flag," said consumer attorney Dana Karni.

She sued Cole, Tanner & Wright for the calls made to Anderson from an office building off Harwin. The business has since closed its doors, but the BBB says the owner, Gerald Wright, is still in Houston dealing in debt and is affiliated with a new collection company - this time called Goldman, Schwartz, Lieberman and Stein.

"Unfortunately this company tends to move so much that we've gotten returned mail from the company," said Schade.

Gerald Wright didn't answer his door or return our repeated phone calls, and the most recent address for Goldman, Schwartz, Lieberman & Stein is actually to a UPS Store where the company has a post office box.

His attorney told us the case with Anderson has been resolved, but the terms of the settlement restrict him from discussing the details.
"I don’t even know who these people are," Anderson told Davis. "And they have your personal information, banking information."

Anderson refused to provide the collectors with any new information and that may have been a smart move. We discovered the woman listed as the Operations Manager at Cole, Tanner & Wright and the Director at Goldman Schwartz is a convicted thief. She served 5 years probation for welfare fraud. In Texas, there is no criminal background check required for collectors who amass the personal financial information of hundreds of consumers.

"Paying somebody over the phone when you don't know what you're paying and what you're paying for, and you have no confirmation in writing, you might as well take your money and throw it in the trash," said Karni.

The Fair Debt Collection Practices Act says that collectors must send you something in writing within 5 days of their first call to you that explains what you owe and the details of the debt. If you're not sure you owe a debt, be careful not to pay any amount until you're certain. Paying a small amount on an old debt could restart the clock, meaning you could open yourself up to a lawsuit on a debt that was too old to collect anyway.
If you have a news tip or question for KPRC Local 2 Investigates, drop them an e-mail or call their tipline at (713) 223-TIPS (8477).
Copyright 2012 by All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Houston-based debt collector shut down
FTC: Company lied, bullied & harassed
Author: Amy Davis, Investigative Reporter/Consumer Expert,
Published On: Feb 01 2013 06:00:21 PM CST   Updated On: Feb 01 2013 06:02:14 PM CST

Bullying, lying and harassing - that's what federal investigators say one Houston man and his debt collection company were doing.
The Federal Trade Commission has shut the business down and seized all of its assets.

The company used several different names including Cole, Tanner & Wright, Debtcom, Inc, Goldman, Schwartz, Leiberman & Stein and Harris County Check Recovery.

Consumer expert Amy Davis first exposed the company last year.
Representatives of Cole, Tanner & Wright told consumers they would be arrested or their wages would be garnished if they didn’t pay up.
Charisma Anderson recorded one of the calls she received from the collection company.

"There is currently an affidavit being filed against your Social Security number," said the man on the recording.

"I felt very threatened. I felt stressed," Anderson told Davis.

She said the man calling her told her she could lose her job or go to jail if she didn't pay $1,400.

"I think they wanted me to panic. I think they wanted me to say, 'Here, take all the money I have.'"

Anderson called consumer attorney Dana Karni.

"With this particular collection agency, I've had quite a few consumers call my office with that sort of complaint," Karni said.

It is against the Fair Debt Collection Practices Act for collectors to harass consumers or misrepresent who they are.

"A lot of the consumers who called me didn't know it was a collection agency. They thought it was the authorities," said Karni.

The company’s owner, Gerald Wright, lives in Houston. He is named as a defendant in the FTC's suit along with company director Starlette Foster. A temporary restraining order bans them from collection activities until the case is resolved. The FTC has also frozen the company’s assets.

If you get a call from a debt collector about a debt you don't recall, ask the company to put something in writing and send it to you to prove you owe that amount.

You should file complaints about abusive debt collectors with the Federal Trade Commission, the Better Business Bureau and the Texas Attorney General's Office. All of those agencies helped in this investigation.
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Watching for debt collection scam red flags
Author: Amy Davis, Investigative Reporter/Consumer Expert,
Cody Schultz, News Producer
Published On: Feb 18 2015 07:10:53 AM CST

Harassing debt collectors are one of the top complaints for federal investigators.

In many of the cases, the person on the other end of the line didn’t even owe money. Some collectors hope the consumer can’t remember, and scare them into sending them a payment. In 2013, the federal trade commission received more than 204,000 calls about debt collectors, like this one.

“My name is Clair Johnson,” the call begins. “I’ve been retained to serve you with a summons to appear in court for two charges that are being filed against you. I’m required to state your rights. Prior to speaking with your HR Director or supervisor, to get the proper protocol for serving you on the property of your employer since we have been unsuccessful serving you at your residence.”

According to Houston consumer attorney Dana Karni, there are a number of violations in the call.

“There is no subpoena,” Karni explained. “There is no affidavit. There’s no record. None of these buzzwords that are used that sound like lofty legal terms are actually implemented by the District Attorney’s Office, the U.S. Attorney’s Office or the local police.”
Failure to pay a debt is not a crime; a debtor can’t be charged or arrested. Under the Fair Debt Collection Practices Act, debt collectors can contact people like an employer to try and find the debtor, but they can’t go into detail about the money.

“If a collection agency’s calling and talking to your employer, supervisor, colleagues, and friends and mentioning that you owe a debt, they have violated your rights,” Karni said.

The collector from the call above threatened to take action if the debtor didn’t call them back.

“Failure to do so will result in forfeiting your rights and your employer will be issued a wage garnishment order,” Karni said.

In Texas, employers can only garnish wages for back taxes, child support and student loan debt.

“If this scare tactic didn’t work, debt collectors wouldn’t use it,” she said.

For anyone who receives a threatening phone call, Karni suggests contacting the company and asking them to send the information about the owed debt in writing. By law, they have to do that. Consumers shouldn’t offer any new information until they know who they’re dealing with.
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Fighting mistakes on your credit report

Author: Amy Davis, Investigative Reporter/Consumer Expert,
Cody Schultz, News Producer
Jenelle Shriner, News Executive Producer
Published On: Feb 04 2015 06:45:30 AM CST   Updated On: Feb 04 2015 06:49:18 AM CST

It’s the three-digit number that can affect how much someone pays for a car, a house, even insurance. Credit scores dictate an incredible amount in our lives, yet errors can be hard to fix.

The website Annual Credit Report is key to deciphering credit problems. Experts recommend checking each item on a credit report. If any errors are found, consumers can dispute them by writing a letter to the bureau. The Federal Trade Commission even has a sample letter form to help people get started.

Proof is imperative when it comes to disputing a claim. Consumer attorney Dana Karni says if the dispute is denied, it can hurt a person’s credit more than the original bad debt.

"I would encourage a consumer to add every bit of information that they can to support their claim,” Karni explained. “If you do not have a good basis for a dispute, you’re much better off just letting that listing on your report age. It will have much less of a detrimental effect on your credit score over the years.”

After seven years, that old debt will fall off the credit report. If a consumer doesn’t have that much time, like if they’re buying a house, there’s still a way to recoup money lost on a higher interest rate.
“If you feel like you’re going to lose the home of your dreams because of this credit reporting dispute, go ahead with the closing and then turn around and assert your rights in court,” Karni said.

In court, a judge could force the credit bureau or the company responsible for the bad information to cover the extra costs incurred because of the error. It’s always best to consult an attorney before going through with a closing to ensure the case is strong enough to pursue.

Lastly, Karni suggests avoiding credit repair companies. They can stir up things on a credit report that were about to expire anyway. For instance, if there’s a debt that’s six years old, the credit repair company may try and dispute it, and the creditor can renew that debt, which would keep it on the record for another seven years.
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Getting Abusive Debt Collectors Off Your Back
By CBSNews CBS May 5, 2010, 10:56 AM

When bills go unpaid, it's a debt collector's job to get the money.

But a growing number of consumers are complaining that debt collectors are going too far.

The Federal Trade Commission, "A debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them."

Federal law prohibits debt collectors from harassing or threatening you, and from using profanity.

But, reports "Early Show" Consumer Correspondent Susan Koeppen, the number of grips about them went up as the economy tanked, and now, the FTC says it's fining debt collectors to the tune of millions of dollars for breaking the law, with more complaints coming in about the debt collection industry than any other -- 100,000last year alone.

And the number of lawsuits against them is up, too. More than 8,200 suits were filed against debt collection agencies last year, up 60 percent over the previous year.

One person who sued a collection agency is Monica Johnson, of Houston. She accused it of harassment.

She was at work when a debt collector called saying there was a warrant out for her arrest.

"So, at that moment, my heart is dropping," Johnson said.

Then, while her daughters were home alone, a debt collector left a message: "I'm over here by a truck stop finishing up my coffee, and then I'll be stopping by. … I'll see you in the next couple of hours or so."

"You're scared," Johnson says, "because how far is someone willing to go to get this money."

In reality, says Koeppen, there was no warrant and no one was stopping by.

They were simply scare tactics to get Johnson to pay.

The FTC's Joel Winston says, "That is entirely inappropriate and entirely illegal," adding that, "in too many cases, (debt collectors) go over the line."

Violators should know, he stresses, that, "If you use abusive tactics, you're running a serious risk that you're going to be prosecuted."

Such as debt collectors -- caught in the act - saying things such as, "You're a loser. Why don't you just jump in front of a train?" "You a f***ing thief, you know. "I'm gonna find you and you gonna be walking like a b***h on the side of the street." "I'm the guy who's gonna end your life. That's who I am"

Rozanne Andersen, CEO of CBS News the debt collector who left her the threatening message was terminated. And, after our call, the company settled with the Johnson family.What Can Consumers Do if Debt Collectors Break the Law?Koeppen says:File a complaint with their state attorney general's office, and with the FTC.And know your rights: know what debt collectors are allowed to do, and barred from doing.Click here for word on this from the FTC.

You can also file a lawsuit if you feel a debt collector has done something illegal in pursuing you.
Copyright 2010 CBS. All rights reserved.
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