(Sen.) Franken moves to curb abusive debt collection

[sabra]

Source: Star Tribune

The senator seeks to increase and improve protections for consumers who owe money.

Alarmed by abuses in the debt collections industry, Sen. Al Franken said Sunday that he will introduce legislation to ban the use of arrest warrants by private firms and other practices he says are unfair to consumers.

"I was shocked when I read the Star Tribune series about this," said Franken, D-Minn. "... Sometimes you pick up the paper and you say, 'Holy moley, we have to do something about this.'"

Hounded, a Star Tribune investigative series published over the summer, exposed debt collectors' aggressive tactics, including the increasing use of arrest warrants and the seizures of paychecks and bank accounts.

Franken would make it an unfair practice under federal law for private firms to use arrest warrants in debt collections, according to a summary of his proposed bill. Consumers would have the right to sue collectors over the practice. Franken said the bill won't limit judges' authority to issue arrest warrants against debtors who can pay, but don't show up in court when a creditor sues.

Read more: http://www.startribune.com/politics/national/103834553.html?elr=KArks7PYDiaK7DUdcOy_nc:DKUiD3aPc:_Yyc:aUU

[ck4829]

1. Very good. And this should be an obvious thing to do.

I remember hearing of a possible link between aggressive collection tactics and bankruptcy.

K&R.

[Uncle Joe]

2. Kicked and recommended.

Thanks for the thread, sabra.

[SomeGuyInEagan]

3. Holy Moley! That's *MY* Senator.

It's a good day to be a Minn-e-soooooooootan. Perhaps some of him will rub off on Klobachur, our other Senator (who needs to be replaced).

[Iowa]

27. I'm from Iowa, but I feel like he's my Senator too. If only he were my President...

[mzmolly]

46. He's done an outstanding job.

:hi:

[myrna minx]

4. I love my Senator.

:loveya:

[xchrom]

5. Recommend

[loudsue]

6. Well, this will be a boon for republicans in my county.

Since contractors are not hiring people as "employees" (i.e., withholding & paying social security & medicare) they are hiring carpenters and masons & plumbers as "independent contractors" and then failing to pay them for labor & materials... keeping all the money for themselves. Then, they buy boats, expensive wine every week (we see them at the stores doing this) and go to the beach for long fishing charter weekends, and leaving the laborers with no money. This is the m.o. of the local republicans who feel they are somehow above the law. I know a lot of local dems who have been stiffed in this way by the contractors. Usually toward the end of a job.

The only recourse has been to take them to a judge and slap a judgement on their ass, and attach to their checking accounts or their future payments on the job. If Franken is successful with this, the locals here will never get their money.

I love Al Franken, and I KNOW he is trying to protect people from predators, but in this case, and in this economy, it could backfire on the people he is trying to help.

edited for typos

[Jefferson23]

8. Sounds like a legitimate concern you have, do you think what Franken

states here: "Franken said the bill won't limit judges' authority to issue arrest warrants against debtors who can pay, but don't show up in court when a creditor sues.", would cover that possibility?

[Edweird]

9. That's a construction lien and completely different.

[loudsue]

15. No, it's not a construction lien

Not if it is piece work done by a local yokel who has someone else working with them. The property owner is not involved in the issue between the guy who they hire -- often without a contract -- to, say, replace some windows, and the guy who helps the carpenter by cutting the boards on an hourly basis to assist.

It's totally different than a construction lien. Besides, what good would it do for the hourly dude to have a lien? It wouldn't really be collectible, under Franken's proposed solution, until the property owner decided to sell his house -- which in our area would be in the year 2525, at the rate we're going. I personally know 3 people right now who have been stiffed in our area, and one in Corpus Christi, TX, and one in Arkansas. This economy is looking like the carpetbaggers are back. Franken may unwittingly help them out.

[Edweird]

19. Yes, it is, and yes the property owners are involved. If any subs or suppliers are not paid

they ultimately can end up on the hook for it. With or without a contract. In fact the homeowner has greater exposure to liability without a contract. Here is a sample release of lien - they are pretty much universal http://www.lni.wa.gov/Forms/pdf/625029a0.pdf

Also, here is a straight forward "Facts about construction liens" pamphlet for you. http://www.lni.wa.gov/IPUB/625-017-000.pdf

[loudsue]

21. you make my case: that is for employment

and at what point, if Franken prevails, can the offended party COLLECT the money from the homeowner/contractor/anyone unless the house sells?

My friends needed the $500.00 they were owed in order to pay their own mortgage/light bill. He was working for $8.00 per hour. It represented 1 1/2 weeks of his time, and the repug won't pay him. He already took him to small claims court, and my friend can now attach to the repug's account. Under Franken's bill, my friend couldn't recover that money.

As I say, in this economy, repugs are doing this a lot. My experience is Dems pay their people, and it's the fully-entitled repugs that don't. The Mexican laborers are even less inclined to take the repugs to small claims court.

[Edweird]

23. It's not my fault you or your friends don't know about the business they are working in.

Even with Franken's bill, your subcontractor friends could still recover their wages if they knew what they were doing. When a sub files a lien for nonpayment it gets people's attention. The homeowner and lender will take whatever steps are necessary to avoid foreclosure - which is the last resort of the lien. This will also bring the contractor's unscrupulous behavior into the light.
Illegals are part of the reason your friends are making $8.00/hr and not a living wage. I have zero sympathy for them.

[loudsue]

26. So you assumed the Mexicans were illegals?

I sure didn't say that.

In the south, repuke unscrupulous contractors are considered clever for getting away with stiffing people.

Why does the stereotype hold that everyone who owes money is a poor democrat railing against the big credit card companies?? In my experience, there are already curbs on collection techniques in place to stem abuses by big companies. It's when INDIVIDUALS are OWED money (they have money coming TO them) that nobody is there to help them collect....except the courts, and now Franken is poised to tie their hands. These methods have been in place for many years, and THIS part of the system isn't broken...it doesn't need fixing.

[pattmarty]

31. No, what it needs is an amendment to the fucking bill. This hasn't......

.........even been entered yet, much less bought to the floor for debate AND amendments. How's about YOU and YOUR friends pushing for some type of labor legislation? No, I didn't think so. I live in Ar and it is HORRIBLY against unions and any type of labor reform, afraid it will get in the way of their "independent contractor" status which works extremely well for them here (and I don't necessarily begrudge them this). Change the fucking labor laws, that is the ONLY fair way to resolve regional long held issues/problems like this. Al Franken is one of the maybe 20 US Senators that is one of the fucking "good guys".

[loudsue]

40. What do you mean answering your own questions, and then

blaming me for your answer?

I do work for changing labor laws....I live in a so-called "right to work" state, so you had damned well better believe I work against that. And if you had read what I've been writing, you would already see that I totally approve of Franken as a senator. It is this bill that he is proposing that may not cure what he hopes to cure with it.

Please read more comprehensively before getting so nasty with people who may, after all, be on your side?

[pattmarty]

42. Didn't sound like you were on "my" side (whatever side that is)..............

.........What, am I supposed to read all your pieces? I got shit to do. The, one above, that I did read sure sounded like a slam on Franken about a bill that HAS yet to be entered in the Senate much less had ANY amendments added to. You and I both know this bill has fucking zero chance with the balance of power the Dems have NOW much less after Jan 2011.

[Edweird]

62. You framed it as a contractor issue which happens to be an area I know a lot about.

You were wrong. If you want to change your framing, go right ahead. Subcontractors and suppliers are covered by lien law - Franken's bill would not affect licensed and or qualified construction professionals.

[lumberjack_jeff]

61. +1 n/t

[Matariki]

32. As someone who freelances -

ALWAYS have a contract. When reasonable, get up to 50% paid up front. AND - Small Claims Court is your friend.

[The Uncola]

60. Bingo!

I'll second that. I don't put on my toolbelt without a signed contract and half down. Friends, family, whoever. No down, no contract? No work, period. Got burned once, never again.

[Moonbat2]

38. How do you know

that all the tradesmen are dems and all the contractors are repubs?

[loudsue]

39. I never said such a thing, and I doubt that that is even possible.

I said that the people in my area that I know who are guilty of doing this...

THE PEOPLE I KNOW (that is a specific subset of "all people" ) who are guilty of doing this, and the case in Corpus and the case in Arkansas... are dem friends of mine.

[Deep13]

7. Al, you're aw-w-w-wesome. nt

[Jefferson23]

10. One thing is for certain Al, there's a lot of " Holey moley " going on out there.

Kudos to Al, go get them.

[Deep13]

11. How to Stay in Office, by Al Franken

Not a real book, but it could easily be one.

[gkhouston]

51. "Do stuff that helps ordinary people".

When I get disgusted by what the conservadems are doing or other Dems aren't doing, I check in on what Franken's up to. It's good to remember that there are some Senators in DC that are actually trying to do the job they were elected to do.

[davidinalameda]

12. I've never heard of an arrest warrent being sworn out

against someone who fails to appear in court unless it's for something like a debtor's exam

[blondeatlast]

13. A freshman Senator is showing us how to do it. Reach out to the people for strength.

And I remember when some on this board thought he was too RW.

Pardon my smug, but I earned it by defending him, I think.

[avaistheone1]

20. +100

[LynneSin]

14. Have your read some of those vile replies to the article

I mean this is legislation that would benefit everyone and yet people have such blind hatred that they wouldn't see that.

I love this response to a poster who claimed Franken was an embarassment to Minnesota:

What bill is it he sponsored that you disagree with? Was it the amendment to a defense bill increasing the level of protection for women who have been raped while working for the US government? Was it getting therapy dogs for veterans (which is a scientifically proven effective therapy)? Is it that he has sponsored more bills that have been passed than any other freshman senator? I'm trying to figure out why he would be embarrassing… unless you think rape victims shouldn’t have rights or that our veterans don’t deserve every effective treatment available to them. Our perhaps you just don’t like senators that actually get something done.


BTW, I would love to see something in this amendment that would disallow debtors from harassing family members of those who own debt. My mother has a stepson that has creditors calling them AND calling my parents too. My parents are getting up there in age and really don't need the stress of creditors calling them when it's not even their issue. I respect perhaps the creditors might make one phone call to verify the address of the debtor. But some of those calls they've sent are horrible and not deserved by my mother and her husband - who have paid cash for everything the last decade +.

[dflprincess]

17. The lastest installment of the series in the Star Tribune that Franken refers to

talked about debt collectors harassing the relatives of debtors who had recently died - most the time relatives, like elderly parents, who have no responsibility for the debt. It was beyond disgusting & hopefully the state legislature will act on this as well.

I'm imagine the series can still be found at the Strib's website http://www.startribune.com

[Joe Chi Minh]

25. I'd only just been thinking, before I read this, how spreading premature death through a

whole range of stressful means (always connected with money and greed) is more a speciality than even a stock-in-trade, of Western capitalism; and not just abroad, but domestically, also.

When empires collapses, their Haves always have their own general public to fall back on, to flog harder. And with a life spent, innured to sin, behind them, they will carry on as best they can, even flogging a dead horse. In these cases, it seems the relatives of a dead human being just having to serve in lieu.

[Amaril]

29. It took me two years...........

.....TWO YEARS.....to get Verizon off my back over my mother's last phone bill -- and I PAID it.

Mom had a direct debit set up with them -- I called them THREE WEEKS before the date they were scheduled to debit the money from her checking account and explained that she had passed, I was the administrator of her estate, her checking account had been closed and I was mailing them a check that day (and I did -- sent it via certified mail).

So what did these a**holes do? When they got the check (that had copies of my mother's phone bill, my letter of administration AND a letter from me instructing them AGAIN to NOT attempt to direct debit from her closed checking account STAPLED to it), they stuck it on somebody's desk for two weeks, and then tried to direct debit payment from her account..........when that didn't go thru, THEN they cashed my check.........and then sent me a bill for $30 for the NSF charge they incurred by trying to do a debit on a closed account.

Ok, should have been simple enough to clear up, since I had record of my phone call to them as well as a signed certified card showing they received MY check 10 days before they attempted the direct debit.....right? WRONG! Three phone calls to the head of customer service later, I finally told her "That's it, I'm done. This is so beyond stupid that I'm starting to lose brain cells trying to explain YOUR error to you. Best of luck in getting $30 from a dead woman."

Then the collection letters / calls started........four different companies that I had to explain the entire stupid story -- and provide proof -- to again and again. They finally gave up after the 4th one -- probably because they ran out of collection agencies willing to take the account.

All of that over $30 that was their error to begin with. That kind of stupid just hurts.

[Mnpaul]

16. I just love it when Franken get good press

and is shown to be an advocate for all. It drives the wingnuts completely bonkers.

[defendandprotect]

18. Debtor's prisons .... ????

[Joe Chi Minh]

22. If the debt collectors are still ignoring at least parts of the '75 law, they

need their wings clipped but good, if they don't wise-up and start behaving. Really draconian sanctions should be imposed for failure to comply.

A clear distinction should be made by the courts, between the merit of most, though evidently not all, of the creditors concerned, in terms of the merits of their claim(s) , in general; and the nature of the debt collection outfits; these, perhaps partly by reason of the nature of their work, and as reported in the article, not always being disposed to operate according to canons of lawful behaviour. Rather like your often borderline paranoid and taser-happy police.

[RUMMYisFROSTED]

24. "...seeks..."

All you need to know.

[melm00se]

28. there will be 2 responses to this

1) Banks will keep more and more collections "in house" as the FDCPA only applies to 3rd party debt collectors.
2) Creditors will move far more quickly to file suit and obtain judgments for past due payments which will then allow for levies against bank accounts, paychecks (if allowed by state law) and other assets and judgments have far longer life spans than "normal" statues of limitations (again, this depends upon the state's law but in most states that is the case).

One of the problems is that most debtors, even after being served with a summons and complaint, decline to appear in court to defend themselves against these actions and, if there is a case of fraud or whatnot, by the time they act, they are outside the window to appeal the judgment. The 1st inkling that they have that something horrible has happened is when they get their paycheck and it's a lot less than what it normally is, they complain and then are told that their employer has been served with a valid notice of judgment and seizure.

(former collections manager for a super-regional bank in the northeast)

[Mad_Dem_X]

30. Sen. Franken is truly a man of the people!

Minnesota is fortunate to have such a man as Senator!

[grahamhgreen]

33. If they can't afford to lose the money, they should not lend it!

Which, of course, they can afford to lose, because if they go bankrupt, we'll be forced to bail them out again....

[dotymed]

34. What about the universal practice of

running a "Pre-Employment Credit Check?" How can a person get a decent job and mend his credit (usually medical bills) if they can not get a decent job because of past bills? In this economy especially, it is ridiculous.

[fascisthunter]

35. I'm Liking Franken More and More

never disliked him, but wasn't sure about him.

[sam sarrha]

36. how about doing something about the predatory interest rates..!!

[PoliticAverse]

37. Enforcement...

You can pass all the laws you want, but unless they're enforced it doesn't matter...

[JanusAscending]

41. This is something all elected officials should be REQUIRED to do.

Read their local newspapers(what few are left) and keep up on "current events" like we used to have to do in High school!!

[Sen. Walter Sobchak]

43. "Sewer Service" needs to be a felony prosecution

This shouldn't be a civil matter, this calls for the harshest criminal prosecution. I'm not usually one to joke about men being raped in prison - but I can make an exception in this case.

The primary tactic in these lawsuits is deliberately serving court documents incorrectly (or not at all) and then having the alleged debtor arrested for not appearing in court when they didn't even know they had been sued.

It isn't that people are deliberately not showing up in court, it is that they don't even know they are being sued. Which is just great for the collection agencies, they get a default judgment and when the person doesn't show up for subsequent hearings they also don't know about they can either garnish or even better when the unknowing victim is arrested judges will usually set bail at the sum of the judgment. The collector can then make a claim against the bail.

The collector has their claim satisfied, which may or may not have been legitimate and the alleged debtor never had their day in court.

[PoliticAverse]

57. Sewer Service

I believe "sewer service" is much more common than most people believe
(it happened to me).

Many states requite no proof that documents were served other the party
filing an affidavit saying they were.

Suit Claims Fraud by New York Debt Collectors:
http://www.nytimes.com/2009/12/31/nyregion/31debt.html

Long Island Process Serving Company Owner Arrested Today for “Sewer Service”:
http://longislandbankruptcyblog.com/long-island-process-serving-company-owner-arrested-today-sewer-service/

[VioletLake]

44. I got a call once from "Cardmember Services",

looking for my next door neighbor!

[Canuckistanian]

49. I hope you told them to pound sand

These bloodsuckers have ZERO rights to persecute people whose only crime is that of not having enough money.

I fuckin' HATE these opportunists who prey on the needy to squeeze the maximum amount of bucks out of them before they go homeless.

[VioletLake]

53. I did tell the caller that what he was doing is wrong.

Although I wasn't sure that it was a debt collector, because he refused to identify himself or tell me why he was looking for my neighbor. After I told my neighbor about the call, I googled the phone number and found out that it belonged to a company called Cardmember Services.

I had a bad experience with a debt collector some years ago, and as bad as it was, at least they didn't call my neighbors.

[Canuckistanian]

54. Good for you

I NEVER give these bastards any information. And I've even had them call me for former tenants and acquaintances that I've known and despised.

Nobody deserves the abuse they dish out.

[Change Happens]

45. Love this Senator......nt

[depakid]

47. Now there's your red meat

Why the administration's not jumping all over stuff like this is beyond me.

Too "partisan" and "divisive" perhaps.

[Canuckistanian]

48. Oh, yes

I remember. Certain collection agencies used the courts to have arrest warrants sworn out for ridiculously small amounts of debt.

I always wondered how they were able to do that.

[totodeinhere]

50. How can they use arrest warrants? I thought that debt collection was pursued in civil courts, not

criminal courts. So have we brought back debtor's prisons? Are you saying that if I don't pay a bill I can be arrested and thrown in jail for it?

[PoliticAverse]

58. Arrest warrants for not showing up to court

In jail for being in debt:
http://www.startribune.com/investigators/95692619.html

Collection Tactics Lead Some Debtors To Jail:
http://www.procollectionjobs.com/arm-industry-news/collection-tactics-lead-some-debtors-to-jail-603/

Also although debtors prisons have been abolished, you can be thrown in jail for not paying
court-ordered child support even if you don't have the money to pay because you're unemployed.

[melm00se]

59. they weren't jailed for a debt

they were jailed for declining to appear before the court on a valid summons and complaint.

it's like not appearing at your court date for a speeding ticket. If you blow one of those off you will have a warrant issued for your arrest.

Do I agree with it? no, but a judge decided to sign the warrant, he or she didn't have to but she/he did.

As a former collections manager for a bank, I'd can any company that pulled that crap.

[pleah]

52. K&R

[laughingliberal]

55. K & R for Al! nt

[RavensChick]

56. Good for him!

I hope it passes because these companies have gone insane! Don't they realize we're in a recession and a lot of people need jobs? I have had 2 companies call my number constantly looking for people I don't know! Trust me, I hope this bill passes because my next move is suing the companies because it's harassment, plain and simple!