Oct 20

By Associated Press

A California businessman pleaded guilty Tuesday to mail and wire fraud involving more than $5 million that his company collected from consumers with pending loans by impersonating authorities in threatening phone calls, federal prosecutors said.

Kirit D. Patel of Tracy entered the plea to four counts of mail and wire fraud, the U.S Attorney’s office in Sacramento said.

The 71-year-old man was the owner and president of Broadway Global Master, which pretended to be a debt collection company, according to court documents.

From 2010 to 2012, Patel’s workers outside the U.S. called consumers with online payday loans and threatened to arrest them if they didn’t immediately pay their debts, which the callers claimed were delinquent, prosecutors said. [read more]


Oct 20

By Winston McGregor – insideARM

Debt collectors breathed a collective sigh of relief after the Eleventh Circuit reversed a district court ruling in the case of Mais v. Gulf Coast Collection Bureau Inc.1 This case coupled with the FCC’s seemingly business-friendly declaratory rulings of GroupMe2 and Cargo Airline Association3 make matters appear to be on the upswing for creditor representatives with regard to the TCPA.

But don’t be deceived: the relief brought by the positive developments must be tempered by the amicus curiae brief filed by the FCC in Nigro v. Mercantile Adjustment Bureau, LLC.4 A quick overview of the various matters may shed light on where the FCC and courts are headed.

The Mais Saga

In 2009, the plaintiff Mark Mais sought emergency room treatment where he was admitted and treated at a hospital based radiology provider. On behalf of her ill husband, Laura Mais completed and signed the admission forms providing personal information, including a cell number. The hospital forms contained notice statements that the information provided may be used by others in circumstances like further medical care and bill payment issues.

When Mais did not pay the medical bill, Gulf Coast was hired to collect the debt. Gulf Coast used an automated dialer to call Mais at the cell phone number provided. Mais then sued the collection agency citing violations of the TCPA for using the automated dialer without prior express consent. [read more]


Oct 17

By Michelle Conlin – Reuters

Many thousands of Americans who lost their homes in the housing bust, but have since begun to rebuild their finances, are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets.

By now, banks have usually sold the houses. But the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees. The two big government-controlled housing finance companies, Fannie Mae and Freddie Mac, as well as other mortgage players, are increasingly pressing borrowers to pay whatever they still owe on mortgages they defaulted on years ago.

Using a legal tool known as a “deficiency judgment,” lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come. Before the housing bubble, banks often refrained from seeking deficiency judgments, which were seen as costly and an invitation for bad publicity. Some of the biggest banks still feel that way.

But the housing crisis saddled lenders with more than $1 trillion of foreclosed loans, leading to unprecedented losses. Now, at least some large lenders want their money back, and they figure it’s the perfect time to pursue borrowers: many of those who went through foreclosure have gotten new jobs, paid off old debts and even, in some cases, bought new homes.

“Just because they don’t have the money to pay the entire mortgage, doesn’t mean they don’t have enough for a deficiency judgment,” said Florida foreclosure defense attorney Michael Wayslik.

Advocates for the banks say that the former homeowners ought to pay what they owe. Consumer advocates counter that deficiency judgments blast those who have just recovered from financial collapse back into debt – and that the banks bear culpability because they made the unsustainable loans in the first place. [read more]


Oct 17

By Ken Tumin – DepositAccounts.com

The Consumer Financial Protection Bureau (CFPB) has started to take action against banks for deceptive practices on deposit accounts. On Thursday the CFPB took action against M&T Bank for deceptively advertising free checking accounts. The full CFPB press release is available here. Thanks to DA member Shorebreak for posting on this news in the DA forum. According to the CFPB:

M&T lured in consumers with promises of “no strings attached” free checking, without disclosing key eligibility requirements. When consumers failed to meet the requirements, M&T automatically switched them to checking accounts with fees.

This resulted in a total of $2.9 million in monthly maintenance fees during the period in which CFPB reviewed (from Jan. 1, 2009 to Sept. 25, 2012). CFPB issued an order to M&T to refund $2.9 million to consumers, update credit reports in the cases where M&T closed an account due to a negative balance, end all deceptive advertising and pay a $200,000 fine. [read more]


Oct 16

By Leo Hohmann – WND

Those who run watchdog news websites are scratching their heads and trying to make sense of the latest data released by a California company that measures website traffic.

According to data for July through September, almost every major website – from WND to the Drudge Report and Breitbart – saw its rankings drop on Alexa.com while pro-government sites mostly went up.

Alexa Internet Inc. is a subsidiary of Amazon.

Familiar names in alternative media like the Drudge Report, Breitbart, Infowars, the Blaze, Newsmax, WND, FoxNews.com, and the Daily Caller all saw their rankings plummet while sites such as NPR.org, the Daily Kos, Democracy Now!, Media Matters and ThinkProgress all rose in the rankings.

The lower the number on the graph the higher the ranking, with 1 being the best.

Alexa purports to measure the traffic of thousands of websites around the world and then assigns a ranking to each site. The lower the number the higher the ranking of the website.

The data can be important because it is used, along with that collected by a handful of similar companies like Comscore, Quantcast and Google Analytics, to determine placement of advertisements that websites rely on to pay the bills and keep running. [read more]


Oct 16

By ACA International

Debt collector’s calls using a dialer to call a residential telephone landline with VoIP service violated the TCPA because the consumer was charged for each call.

On Oct. 2, 2014, the U.S. Court of Appeals for the Fourth Circuit issued an unpublished opinion in Lynn v. Monarch Recovery Management, Inc., No. 13-2358, 2014 WL 4922451, — Fed.Appx.— (4th Cir. Oct. 2, 2014), a case involving the Telephone Consumer Protection Act. The appeal in Lynn centered on whether the “call charged” provision of the TCPA applies when the call is exempt from TCPA liability pursuant to the TCPA’s “residential line” provision.

In Lynn, the debt collector placed 37 calls to the consumer’s number. The calls were made using an ATDS as defined by the TCPA. The consumer’s number was originally a residential line but, prior to the debt collector’s calls, had been converted to a Voice over Internet Protocol service.

The consumer was charged a monthly rate by the VoIP service provider, and also for the incoming calls and for the transmission of caller ID information on incoming calls. The consumer did not give the debt collector permission to call him or his number. Also, the consumer called the debt collector twice to advise the debt collector that he received per-minute charges for phone calls. The debt collector called the consumer three more times after that notice.

The consumer filed suit against the debt collector arguing that the debt collector violated the TCPA provision that prohibits any person from placing an autodialed call to “any telephone number assigned to … any service for which the called party is charged for the call (the “call charged” provision.) The debt collector argued that the calls it made to the consumer were properly exempted from TCPA liability because the calls were made to a residential telephone line for a commercial purpose without any solicitation (the “residential line” provision.) [read more]