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Why You Should Not Pay Debt Collectors Part 3

In Economy, Uncategorized on April 2, 2011 at 10:36 pm

Part 1 Part 2

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Let’s face it: there are humans out there who live to take advantage of other humans in adverse situations. Debt collectors have been handed a financial windfall due to the massive unemployment precipitated by the Great Recession. Due to consumers’ unwillingness to defend themselves against collection lawsuits and with the cooperation of state courts, third-party debt collectors are raking in the cash.

The big explosion in (collection) lawsuits is coming not from lenders but from firms who buy debt. The four largest publicly traded debt buyers-Encore, Asta Funding Inc., Asset Acceptance Capital Corp. and Portfolio Recovery Associates Inc.-purchased $19.6 billion in distressed debt last year (2009). They typically recover three times what they spend buying debt, according to the Association of Credit and Collection Professionals, a trade group.

Nice payday for collectors = screwed consumer.  Yep, you just might owe the debt however that doesn’t mean collectors should not be held responsible for proving that you them the money.  Especially considering third-party collectors routinely employ scurrilous tactics in their attempts to score a payday for themselves: trying to collect time-barred debt, knowingly filing lawsuits with  no standing and supplying mocked-up affidavits that are robo-signed by the thousands.

Everyone is hysterical about robo-signing by a mortgage company worker who testified that he signed foreclosure documents without reviewing details of each case, says Ira Rheingold, president  of the National Association of Consumer Advocates. What’s overlooked is that…the scale in collection cases far exceeds what we’re focused on now.

Of course appearing in court to defend yourself isn’t for everyone although it should be; many people are too intimidated by the process and thereby give the collector permission to screw them. If you do decide to defend yourself you will most likely be forced to make 2 or 3 appearances in court: judges seem perfectly willing to play the game and turn their courtrooms into cashcows for debt collectors. You will need to answer discovery requests by the plaintiff and submit requests of your own.  Until consumers decide that they don’t want to be taken advantage of anymore debt collectors will continue to get rich by filing lawsuits that have no standing and the courts will continue, with few exceptions, to support the broken debt collection system (pdf).

I’m not advocating that consumers become deadbeats. I’m advocating for consumers to grow a pair. The third-party debt collection racket is just one more indication of the attempt to mold the American middle-class  into a homogenous entity by corporations and their paid-for political puppets.  An entity that must be satisfied with a lesser quality of life so that the top 1% of Americans who control most of the wealth can continue to do so. (must read).

The middle-class of course is expected to pay their debts or be sued and pay their taxes in full yet corporations like General Electric and Bank of America pay zero taxes and  Wall Street is evidently too big to prosecute for nearly destroying our economy.

Do you see the problem?


Repairing A Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration

Federal Trade Commission Annual Report: 2010 Federal Debt Collections Practices Act

Boom in Debt Buying  Fuels Another Boom : in Lawsuits 

Chase Hit  With SEC Whistleblower Complaint Over Credit Card Practices

Release: Tax Time? Not for Giant Corporations

Why Isn’t Wall Street in Jail?


copyright 2011 XtraOpinion C.D. Book


Fails (Some Epic)

In Fails, People, Politics, Uncategorized on March 30, 2011 at 10:17 pm

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Too Big to Prosecute

How Wall Street Crooks Get Out of Jail Free

“If you could employ an associate who pretends to be sympathetic to the unions’ cause to physically attack you (or even use a firearm against you), you could discredit the unions,” the email said.”
Says it all.

Indiana Prosecutor Encourages”False Flag” Assault on Walker to Discredit Wisconsin Unions 

“In southeast Florida last week, first-term GOP Rep. Allen West, a tea party favorite, called for changes that some might consider radical: abolish the Internal Revenue Service and federal income tax; retain tax cuts for billionaires so they won’t shut down their charities; stop extending unemployment benefits that “reward bad behavior” by discouraging people from seeking new jobs.” Just stupid: and actual people voted for this guy.

GOP Seems Poised to Take on Entitlements

“For billionaires to see themselves as the True Victims, to complain that the President and the Government are waging some sort of war against them in the name of radical egalitarianism, is so removed from reality — universes away — that’s it’s hard to put into words.  ”

Billionaire Self Pity and the Koch Brothers

“Would you like some salmonella with those budget cuts?”

These GOP Budget Cuts Might Make You Puke (or Worse)

“This is what it has come to for the Republican Party: The lead-off contest for its next presidential nomination — an event that has played a vital role in winnowing GOP fields since 1980 — will be utterly dominated by voters with ravenous appetites for  attacks on gays, Muslims, President Obama’s “otherness” and godless liberalism in general.”

The GOP’s Iowa problem

Attack on the rights of women: just another day for the GOP

The GOP’s Plan to Fund Anti-Abortion Activists

Your GOP Big Brother

American Thought Police

Charities Don’t Need No Money

Tax break for charitable giving targeted 

Class War:  its what’s happening

Bipartisanship Gained: Tax Cuts for the Rich, Shared Sacrifice for Everyone Else;

Anchor Babies and Terror Babies

Campaign to Rewrite 14th Amendment is About Politics, Not Facts

copyright 2011 XtraOpinion C.D. Book

Why You Should Not Pay Debt Collectors Part 2

In Economy, Uncategorized on March 27, 2011 at 12:11 pm

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Read Part 1 here

Part 2

The FTC titled a report issued in July 2010 Repairing A Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration. The agency responsible for administrating the Fair Debt Collection Practices Act (FDCPA) cited several reasons for their assessment:

  • Very few consumers defend against debt collection litigation.

In 2009 the 16th Circuit Court in Jackson County, Missouri disposed of 122 lawsuits filed by one third-party debt collector, CACH LLC alleging Breach of Contract. Of those 122 cases, 49 or 40% ended with a default judgement for CACH because the consumer didn’t appear in court.  The remaining 73 cases were dismissed by the court or CACH for various reasons: the defendant couldn’t be located, had died, filed bankruptcy or had moved to another jurisdiction. Notably only 3 (2%) of the 122 defendants appeared in court to participate in their defense.  All three of those cases were dismissed by CACH; none of the three defendants hired an attorney.

Source:  Missouri State Courts Automated Case Management System

  •  Frequently information regarding the alleged debt is incomplete: the petitions and attachments offered as proof of debt by the collector aren’t sufficient.

When third-party collectors purchase debt they do so in bulk. The debt portfolios don’t include the original contract,  most of the time the only information included in a petition is a computer printout that offers no real proof of debt. The FTC acknowledges the little  information that is offered by the collector could be incomplete, incorrect or out of date and recommends that states require collectors to include additional information regarding the debt in their petitions. Debt collectors like to intimidate consumers with a slew of affidavits that profess to validate the debt however the signatories to these affidavits probably have no personal knowledge of the debt.  So called robo-signing is as prolific in the debt collection universe as it is in the mortgage foreclosure business and has been occurring for years.

See this link detailing a JPMorgan Chase former employee’s SEC complaint that Chase commits “grotesque and illegal practices involving its credit card debt processes, including robo-signing”.

  • State statutes of limitations on filing a lawsuit to collect debt is often complex and not understood by most consumers.

 State statutes regarding the collection of time-barred debt varies. Many consumers aren’t aware that a collector can’t legally sue to recover a debt that has passed the statute of limitations. The FTC recommends that states take steps to make it less likely that collectors will sue on time-barred debt and that consumers are made aware of their rights in these cases. States should develop more uniform statutes of limitations, debt collectors should have to prove that debts are not time-barred and should disclose that they can’t lawfully sue the consumer when a debt is time-barred. Furthermore, in many states if a consumer makes a partial payment on a time -barred debt the entire debt becomes eligible for a new statute of limitations: collectors in these states should disclose this information to consumers.

  • Frequently consumers suffer hardship when assets in personal bank accounts that are exempt from garnishment under the law are frozen pending a court decision  as to their exemption.

The FTC recommends that federal and state laws should be changed to prevent the freezing of funds in consumers’ personal bank accounts that are exempt from garnishment (for example Social Security payments).

 Part 3 coming soon

copyright 2011 XtraOpinion C.D. Book

Al Jazeera: Real News?

In Media, Politics, Uncategorized on March 23, 2011 at 7:42 am

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Hillary Clinton recently praised the Al Jazeera  news network for offering   “real news” to its viewers as opposed to the excess commercials,  arguments between talking heads and  lack of  content offered by US media outlets. At the time I couldn’t  have agreed with her more: the AJE live blogs regarding the disasters in Japan and the ongoing revolutions in the Middle East and Libya are timely and informative. The in-depth reports and analyses are mostly well written and provide a perspective one doesn’t get when exposed to Western media alone.

Recently however AJE has published and featured at the top of their home page opinion pieces that pander to anti-Western sentiment. These “analyses” aren’t informative or well-written; instead one pictures the authors sitting before their keyboards mulling possible topics that would appeal to the West bashing crowd. Since AJE viewership and web hits are most likely enjoying a surge due to world events a legitimate question would be: Did AJE procure these opinion pieces?

Of course Al Jazeera doesn’t want to offend Western viewers or readers too much since they are currently campaigning for and asking Westerners to appeal to their cable TV providers to carry AJE. 

While reading these “analyses” I imagine that the authors view the West as homogeneous; we are all overzealous, hypocrites, arrogant, imperialists and colonists.

And no the West doesn’t deserve to be stereotyped just as the Middle East, Muslims and Islam don’t deserve the assaults leveled almost daily from some Westerners. It is ironic that AJE publishes opinion pieces depicting the West as a homogeneous entity yet describes the revolutions in the Middle East and Libya as popular uprisings. Behind the governments of Tunisia, Egypt. Yemen, Bahrain and Libya are people tired of the status quo; they are individuals who don’t agree with their rulers. The same can be said for the West including the United States: we the people don’t always stand behind our government.


West overzealous on Libya

Published the day of the UN vote to enforce a no-fly zone over Libya, Marwan Bishara, senior political analyst discusses the pros and con of  “Western intervention”. Wow! The man can’t even wait to see what happens before questioning motives.

America’s Saudi air war

That the author chose the title of this article to inflame and pander is evident after reading. The title and the content have no relationship. The piece concerns the plan to train Saudi pilots in Idaho. In the author’s opinion,  congressmen from that state are hypocrites when they support the pilot training program yet were vocal opponents of building the so-called “ground zero mosque” in New York.   The perpetrators of the 9/11 terrorist attacks were Saudi and the pilots – who will be trained on American soil – are Saudi as well. Huh? The premise of this piece is not logical: everyone should realize that not all Saudis are terrorists. And where is the “war” mentioned in the title?

The globalisation of revolution

This author is dripping and foaming with ani-western resentment.  The article’s borderline racist tone should be unacceptable to any reputable news service. The author believes that the West has taken credit for the revolution in Egypt due to our invention of the internet and social networking web sites.  Quote:

Most narratives of globalisation are fantastically Eurocentric, stories of Western white men burdened with responsibility for interconnecting the world, by colonising it, providing it with economic theories and finance, and inventing communications technologies.

(Westerners are homogenous: we are all “white men” with the same goals).  While there have been quite a few articles detailing the usefulness of Facebook and Twitter with the organization and communication of the Egypt revolution certainly any reasonably intelligent person realizes actual humans *make* a revolution.

copyright 2011 XtraOpinion C.D. Book

Why You Should Not Pay Debt Collectors Part 1

In Economy, Uncategorized on March 18, 2011 at 10:10 pm

Part 1

According to the Wall Street Journal “roughly 94% of collection cases  (XO: lawsuits) filed against borrowers result in default judgements in favor of the debt buyer”. You may think this is because the consumer actually owes the debt and is obligated to pay. You would be wrong.

In their 2010 Annual Report to Congress  regarding the Fair Debt Collection Practices Act (FDCPA)  the Federal Trade Commission (FTC) stated that consumer complaints about  third- party debt collectors had risen to 88, 190 in 2009 from 78,925 in 2008.  Complaints filed with the FTC about in-house, or original creditor collectors rose from 26,652 in 2008 to 32, 076 in 2009. In the report to Congress the FTC admits:

Based on the FTC’s experience, many consumers never file a complaint with any organization other than the debt collector itself.   Others complain only to the underlying creditor or to enforcement agencies other than the FTC. Some consumers may not be aware that the conduct they have experienced violates the FDCPA or that the FTC enforces the FDCPA. Therefore, the total number of consumer complaints the FTC receives may understate the extent to which consumers have concerns about the practices of debt collectors.

The report further acknowledges that third-party debt collectors contact millions of consumers per year and “the number of complaints the FTC receives about these collectors is therefore only a small percentage of the overall number of consumers contacted. Nevertheless the FTC receives more complaints about the debt collection industry than any other specific industry. ”

The above indicates an underreporting by consumers of complaints regarding debt collectors. Reasons for this may include:

  • Consumers are intimidated by third-party debt collectors and their hired guns: lawyers.
  • Consumers believe they have to hire a lawyer themselves to answer a lawsuit filed by a third-part collector.
  • Consumers are unaware of the FDCPA and its’ protections afforded to them.
  • Consumers are unaware that the FTC enforces the FDCPA.
  • Consumers are unaware that a third-party can legally purchase their debt from an original creditor and attempt to collect that debt. Consumers therefore may not recognize the new “creditor”.

Third-party debt collection is big business and big money especially in the past several years’ declining economy.   Encore Capital Group, Inc , a publicly traded company that purchases distressed debt files hundreds of thousands of lawsuits a year. The debt is purchased for pennies on the dollar and the third-party collector attempts to collect the original debt plus interest plus court and attorney fees if they decide to file a lawsuit. And they will file that lawsuit; this is not your father’s debt collector. According to the Wall Street Journal article mentioned above:

Debt collectors used to harry nonpaying borrowers for months with letters and phone calls. But those tactics are less effective now that many more borrowers are deeply in debt. So the new breed of debt collectors turns much more quickly to court to squeeze money out of distressed paper.

The WSJ  article cites two judges, one in Cook County, Illinois and the other in Indianapolis who are overburdened by the number of debt collection cases filed in their courtrooms. The Illinois judge stated “There exists a real danger that the courts will be perceived as mere extensions of collection agencies”.  The Indiana judge was forced to impose a limit of 500 new debt collection cases that could be filed in her courtroom every two weeks on a local law firm.

As stated at the beginning of this post, overall roughly 94% of lawsuits filed by third-party debt collectors end in a default judgement for the collector. Default judgement means the defendant (consumer) did not appear in court to answer the summons.  When the defendant doesn’t show a judgement is awarded to the plaintiff and an information subpoena is issued to the defendant; the consumer must then hand over employment and bank account information  for garnishment. Done deal.

To be continued…

copyright 2011 XtraOpinion C.D. Book

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