A stark lesson about buying and selling debts

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A complaint filed by the FTC and the Illinois Attorney General against an operation that used names like Stark Law, Stark Recovery, and Capital Harris Miller & Associates alleges a veritable smorgasbord of debt collection violations. But the Stark Law lawsuit includes an additional allegation that should send a stark warning to those in the debt buying business.

According to the FTC and AG, in an effort to collect purported debts, the defendants unleashed a campaign of intimidation and harassment against consumers. They called incessantly, lobbed bogus threats to have people “charged” with “passing bad checks,” and yacked to third parties that consumers supposedly owed money. Even the business name “Stark Law” was a trick to make people think they faced imminent legal action.

The complaint challenges conduct that in and of itself violated federal and state law, but here’s the kicker: The victims of the defendants’ relentless barrage either didn’t owe any money or didn’t owe anything to the defendants.  In other words, the outfit was a phantom debt collector.

So how could they convince people to pay up? According to the FTC and AG, a lot of folks were understandably intimidated by their aggressive tactics. But the defendants had something else up their sleeve. They typically targeted people who had applied for payday loans online and in the course of that process, had turned over lots of personal details – account data, Social Security numbers, employment, and the like. The complaint alleges that the defendants acquired that information and used it to convince consumers they were legitimate debt collectors.

The lawsuit lists a host of violations of the Fair Debt Collection Practices Act, the FTC Act, and Illinois law. But there’s an additional count that should make debt buyers and sellers sit up and take notice. The defendants also are charged with marketing and selling debt portfolios that they knew or should have known were bogus. The portfolios purport to identify consumers who have defaulted on payday loans of third-party lenders and include detailed data, such as names, contact information, Social Security numbers, loan amounts, repayment histories, and unpaid balances.

But according to the complaint, they’re fiction and the defendants knew or should have known that. They list loans that lenders never made to the identified consumers. What’s more, the defendants don’t even have a legal right to collect on legitimate debts from those lenders. 

A United States District Judge in Illinois has put a temporary halt to the defendants’ operations, but even at this preliminary stage, there are takeaway tips for consumers and businesses.

If you have a friend or family member who’s been a target for illegal debt collection practices, lend a hand by sharing guidance on how they can exercise their legal rights, including steps to take to protect themselves from phantom debt collectors.

If you’re in the business, we offer a variation on a classic adage: Caveat emptor debitum. (Let the buyer of debt beware.) To avoid law enforcement consequences, keep your head in the game – and not in the sand – when selling or acquiring portfolios.



Is it not identity theft when personal and pertinent info is sold to a re-debt collector by a data broker who doesn't receive a consumer's permission to "share" or sell their info, nor seeks permission from them to use their SS#s, birth dates, home address, phone, work numbers, bank/savings/checking acct info? Also, all the information collected on individuals listed as references by the original creditor are compromised, too.

Years of twice daily robocalls by Portfolio Recovery resulted in a class action lawsuit against them in which they were penalized millions of dollars, court ordered to pay the named participants out of a judgment worth millions, and to cease all contact with the petitioners, including cessation of all robocalls.

They have NEVER stopped robocalling my 2 phones twice daily and they continue to mail nonsensical demands. I have NEVER spoken to, responded, or initiated contact with them by phone or mail. I don't answer their calls and never reply through the mail or use any other means of communication.

To be so arrogant to totally ignore and continue prohibited actions against lawful orders of a court is how they treat the consumers they harass, without regard, respect, or fear of recompensed sanctions.

I've read the recent yearly articles concerning comments about robocalling, yet the intrusive action continues, often with rotation of different numbers. A Google search predominately matches the number to Portfolio Recovery Associates.

Comments are fine as a measure to discover a process that ultimately resolves robocall extinction, but what about now, next year, 2-3 years from now?

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