Saturday, May 28, 2016


June is Consumer Rights Awareness Month
A major violator of American’s Consumers Rights is the Junk Debt Collections
By: Mark and Carol Fairall
May 28, 2016
The JUNK DEBT COLLECTION INDUSTRY of firms buying debts for pennies and aggressively collecting from consumers started in the late 90’s. The problem is that not only the debtors are being attacked but many consumers are being attacked that never owed or had already paid the debt. Arizona is considered “Industry Driven (favored)” by passing laws that soften the burden to produce less documents and lengthening the Statues of Limits to six years. Arizona has laid out the “welcome mat” to the Debt Collector Industry.
Some facts about this despicable industry are:
1. Four Million Americans had their wages garnished because of a consumer debt in 2013.
2. Americans earning $15,000 to $40,000 a year were mostly likely to be garnished.
3. Black communities are hit harder by debt collectors.
4. One out of three Americans are being hassled by debt collectors
5. The debt collector industry is dominated by large stock trading companies.
6. Most of the lawsuits in the U.S. are filed by debt collectors.
7. Over 97% of the consumers being sued by debt collectors do not have an attorney.
8. Debt collection company file more lawsuits where state laws are industry driven with low court fees, no limits on interest rates with excessive extra charges, and have a long Statute of Limits for debt collections.
9. An improved economy does not resolve the consumer debt problems. It continues with high interest rates and “Rubber Stamping” granted debt collector lawsuits in the courts.
10. Junk Debt Collector have very active Lobbyists that influence state lawmakers.

In 2011, the Arizona lawmakers extended the Junk Debt Statute of Limitations from three years to six years. In 2012, the Arizona lawmakers passed HB 2664 which allows the uncontested court action to be established for a Junk Debt Collector with one single copy of a bill. This allows the easy collection on bills already paid. Arizona has one of the highest number employees of Bill Collectors with 9,310 working in the industry. Arizona richly profits from licensing debt collection companies where other states do not charge a license fee. It costs $1,500 a year to license the more than 400 Arizona Debt Collection Companies. Arizona has limited authority to regulate and prosecute bad debt collectors only through the Arizona Attorney General. Arizona is the “Wild-Wild West” for not protecting consumers’ rights.
The Consumer Financial Protection Bureau (CFPB) was established in 2010 after the last major financial disaster. Its purpose is to identify, regulate, and educate consumers about unfair financial practices. This is the agency that protects the public from unfair debt collectors with the CFPB’s prosecution. The Consumer Financial Protection Bureau (CFPB) reported 74,000 complaints were filed for improper debt collection in 2015. The Number One Arizona Consumer Complaint filed with the Federal Trade Commission (FTC) for 2015, which is DEBT COLLECTION. The FTC had 10,211 complaints about debt collection abuse and violations filed by Arizonans in 2015 and most of the complaints were filed by the elderly The Debt Collectors industry earns an estimated $13 billion profit a year industry in sales and employs 140,000 people in 6,000 companies. The Federal Debt Collection Protection Act (FDCPA) spells out what is allowed and not allowed by debt collectors The Federal Trade Commission (FTC) focuses on scams, unfair business practices, and deceptive advertising.

A study by Urban Institute shows 35% of adults have experience debt collectors. The CFPB shows the following data:
1. Third-party or junk debt collectors often lose information when transferring the debt from one party to the next.
2. Collecting paid debts with 42% of the debts they are collecting have already been paid.
3. Multiple aggressive calls during the day outside the 8 am to 9 pm window to call the debtor.
4. Credit card companies received the most complaints.
5. Having many lawsuit threats and reporting many fake lawsuits against the debtors.
6. Misleading you by saying debt validation is impossible until court.
Keep a copy of all the correspondence and time when contacted by debt collectors. When you receive debt
collectors letter for the first time you have 30-days the DEMAND A DEBT VALIDATION. Mail your letter CERTIFIED MAIL WITH A RETURN RECEIPT to the debt collector within 30 days. Over 80% of the time the debt collector does not respond. You can file a FDCPA debt collection violation with the CFPB. They are fined $1,000 if the debt collector continues to harass you. You receive the $1,000 fine paid by the debt collector and often the debt can be dismissed in a lawsuit.
Often consumers are contacted by many junk debt collectors on the same account. That is because the past due credit card account can be sold to many junk debt collectors for less and less money. Too many times important information is lost in the debt collection “hot potato” method of collecting. This often results in several collectors calling on the same debt that was paid off or is not yours. Many courts forgive the debt owed when the junk debt collector is unable to provide the chain of title of the debt. When you demand a validation of the debt also demand all documents for the authority to collect and the Chain of Title (ownership of the debt).
Junk Debt Collectors break the FDCPA laws by:
1. Attempting to collect that is not owed.
2. Using harassing and verbal abuse of threats on the phone.
3. Trying to collect the same debt twice.
4. Attempting to collect an expired debt by “re-aging” it by changing when the debt occurred to a later debt.
Over 70% of credit card debt is bought by Junk Debt Collectors for 6% of the credit card debt or less. The average amount the Junk Collector will settle for is 55% of the debt. On a $10,000 debt their cost is $600 and their profit margin is $4,900 (over 800% profit margin). This is a very profitable industry that is rapidly growing by defrauding the poor.

Arizona’s worst junk debt collector is ENCORE CAPITAL GROUP (ECG). ECG is located in California is the largest Junk Debt Collector that is publicly traded on the stock exchange. The CFPB just won a lawsuit against ECG. ECG has to refund $42 million to consumers, pay $10 million in fines, and stop collecting on $125 million in junk debts. The second worst junk debt collector is PORTFOLIO RECOVERY ASSOCIATES (PRA). PRA, located in Virginia, is the second largest Junk Debt Collector traded on the stock exchange. The CFPB just won a lawsuit against PRA. PRA has to refund $19 million to consumers, pay $8 million in fines, and stop collecting on $3 million in junk debts.
Junk Debt collection is big business due to the huge profit margins and increased consumer debt non-repayment. The attorney firms can simply be collectors for credit card companies but they also buy the junk debt. An Arizona leading attorney for FDCPA violation lawsuits, John Skiba, just wrote on 05/03/2016 about PRESSLER & PRESSLER law firm. The CFPB just won a lawsuit against this junk debt buyer for $2.5 million. This law firm filed lawsuits just to deceive or intimidate consumers without proper verification of the debt.
It was found that many debt collecting law firms violate the FDCPA laws with the following illegal actions:
1. Made false allegations about the consumer’s debt,
2. Filed lawsuits based upon unreliable or false information, and
3. Harassed consumers with unsubstantiated court filings.
One of the major problems in the Junk Debt Collector Industry is the failure of their lawyers to properly review the evidence before filing a lawsuit. It was noted that many debt collection attorneys spent less than a minute, often less than 30-seconds, reviewing a case before initiating a lawsuit. Their volume is so great and the attorneys are so greedy that they rush to illegal lawsuits. The Consumer Financial Protection Bureau requires the debt collector’s lawyer to contact the consumer to verify the debt and the consumer has 30-days to respond. Failure to allow the consumer 30-days to dispute the debt can lead to an unfair and costly lawsuit for the consumer to fight and it could cost the lawyer a $1000 fine plus repayment for the consumer’s costs and damages incurred. (On a personal note this just happened to us and we nearly lost our home in an illegal foreclosure.)
In 2013, over 21,000 new junk debt collector Arizona lawsuits were filed by five large companies which represented 15% of the year’s total lawsuits. An Arizona judge admitted he processed 60 cases in four hours which was one every four minutes. The Arizona courts are full of errors and abuse by junk debit collectors and the consumer often fails to appear because they feel despair and hopelessness. These “Box Load” of lawsuits are overwhelming both the courts and consumers. However, Arizona lawmakers are making the state richer with fees for very profitable Junk Debt Collectors License that have no real oversight and control of the industry. The 80-page 2016 report “RUBBER STAMP JUSTICE: U.S. COURTS, DEBT BUYING CORPORATIONS AND THE POOR” was researched and written by an international human rights organization, HUMAN RIGHTS WATCH, and can be found online at: 

The states that are favoring junk debt collectors are: Arizona, Arkansas, and Tennessee. The states that are passing stronger laws to protect the consumers from this devastating and greedy industry are: California, Maryland, Missouri, New York, and North Carolina. The Federal Government is looking at passing laws that have consistent rules of evidence required from junk debt collectors and better support for the debtor’s rights.

Don’t ignore junk debt collectors and don’t let them bully you. Fight back and keep your money and Consumer’s Rights!




  1. Excellently written article, if only all blogger offered the same level of content as you, the internet would be a much better place. Please keep it up!.Great tips, I would like to join your blog anyway.Waiting for some more review.Thank you
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  2. Margaret Harvey: We have monthly articles posted in the ARIZ0NA REPUBLIC NEWSPAPER in our column "The Aging of America." We also post daily on our Facebook "Mark Fairall" to protect the elderly. Thanks for your kinds
    words. C & M

  3. "Prior to entry of judgment in an action against a debtor relating to a consumer credit agreement, the creditor may not attach unpaid earnings of the debtor by garnishment or like proceedings"...see Utah's Consumer Credit Code 70C-7-102. US Supreme court authority case related to garnishment due process rights, which created Code 70C, is Sniadach v. Family Financial Corp, 1969, U.S. Supreme Ct. contact me at: Thanks!