For Release: August 24, 2000 California Debt Collection Agency Settles FTC Charges Of Fair Credit Reporting Act Violations The Federal Trade Commission today announced a proposed settlement with a California-based debt collection agency, Performance Capital Management, Inc. (PCM), under which the company would be fined $2 million and enjoined from what the FTC called "serious violations" of Section 623 of the Fair Credit Reporting Act (FCRA). According to the terms of the proposed settlement, payment of the fine would be waived due to the company's poor financial condition. The FCRA regulates the collection and dissemination of sensitive information about consumers by credit bureaus and other types of consumer reporting agencies. Section 623 was added by Congress in the 1996 amendments to increase the accuracy of consumer reports by imposing specific duties upon any entity that furnishes information to a consumer reporting agency. The settlement announced today is the Commission's first enforcement action under Section 623. PCM is a California corporation with headquarters in Irvine, California. It specializes in buying and collecting consumer debt that has been charged-off by the original creditor as uncollectible. PCM is currently in bankruptcy, and the Commission has waived the $2 million civil penalty based upon the financial condition of the company. In its complaint against PCM, the Commission alleges that PCM violated a number of requirements imposed by Section 623. First, the complaint alleges that PCM provided credit bureaus with inaccurate "delinquency dates" for its accounts. Section 623 defines the delinquency date for an account as the month and year that an account first became delinquent. This date is important because it is used by credit bureaus to measure the seven-year period that negative credit information may be reported under the FCRA. According to the Commission, PCM systematically reported accounts with delinquency dates that were more recent than the actual date of delinquency, resulting in negative information remaining on consumers' credit reports long beyond the seven-year period mandated by the FCRA. The Commission's complaint also alleges that PCM violated Section 623 by ignoring or failing to investigate consumer disputes referred by credit bureaus, and by failing to notify credit bureaus when consumers disputed collection accounts with PCM. The proposed settlement would require PCM to provide correct delinquency dates when reporting collection accounts to credit bureaus. The agreement also mandates the proper investigation of disputes. Where PCM learns during an investigation that account records no longer exist for a disputed debt, the company must delete the information from credit bureau files within five days. Finally, the agreement would require PCM to report as "disputed" all accounts where consumers have disputed the information with PCM. The Commission vote to file the complaint and proposed settlement was 5-0. The proposed settlement will be presented to the U.S. Bankruptcy Court for the Central District of California, which is overseeing PCM's bankruptcy. If approved, the agreement will be filed in the U.S. District Court for the Central District of California. NOTE: The agreement referenced in this release is for settlement purposes only and does not constitute an admission of a law violation. So let's see we have a crooked, lying, immoral collection agency screwing and destroying ten's of thousands of individuals lives and make a killing doing so until finally after a number of years the amount of complaints to the FTC becomes sufficient for them to get off their lazy, fat asses and investigate wherein the company in question realizing "the jig is up" promptly proceeds to declare bankruptcy so it doesn't have to pay a dime AND to what has become common practise with all crooked companies' caught red-handed does not admit to any guilt and everybody gets off scot free. Its not that I didn't expect this as this company is deemed the second worst collection agency in the country at http://www.budhibbs.com/worst.htm and http://www.budhibbs.com/avoid.htm and they had lost every single time they were brought before a judge. But the message sent is very VERY CLEAR, if an absolutely scum of the earth scam operation caught dead to rights and guilty as all sin gets away with bloody murder with virtually no repurcussions then you can be damn sure that many hundreds of other low-lifes will be copying these actions secure in the knowledge that at worst after a lengthy period of time the worst they'll get is a 'slap on the wrists' Meaning, that while currently these companies make up a minority of the collection agencies it won't be too long before that percentage shifts drastically perhaps making them the majority. My advice to anybody in this sort of position, screw the USELESS FTC and other time wasting manuevers and sue bastards like these at the first opportunity as that is the only satisfaction and recourse your going to get. You'll find this government 'slap on the wrist' at FTC File No.: 982-3542 (http://www.ftc.gov/opa/2000/08/performance.htm)
Very True, But Not Quite Steven: I agree with about 99 percent of your statements, PCM is the scourge-filth of the collection business and the FTC often doesnâ??t act fast enough! The only part I donâ??t completely agree with, and this may be just a matter of perspective. Is that you seem to suggest PCM filed BK to evade paying the FTC fine, which is factually not accurate. (So the following is submitted for FYI more than debate.) Unfortunately confidentiality rules prohibit me from disclosing how I know the following, so letâ??s just sayâ?¦ I know a guy (wink) who was on the State AGâ??s resolution board, assigned to deal with numerous (weâ??re talking tons) of consumer complaints â?? all in a short period. Anyway, this â??guyâ? investigated the company and hereâ??s the real reason why they went BKâ?¦ An ex-construction contractor who took a course on buying non-performing assets started PCM, after a construction accident forced him out of work. Even though he didnâ??t have a strong collections background, the company started off pretty good (clean-cut, following the rules). Soon after he realized selling stock would be a way of generating capital to buy more loans (many CC accounts from Citibank I might add), so they approached a group of investors. But from there the company went downhill in a hurry, hiring the dregs of the collections biz to manage the place (weâ??re talking ULTRA-Looooossssers!). Long and short of it is, PCM filed for Chapter 11 (me thinks) around mid-96 perhaps early 97 and again more recently before the FTC hit. They never really managed to pull out of the slump and, because of the way they did business, couldnâ??t attract enough investors. So there you have it, PCM was actually in BK well before the FTC got around to doing its thing. Truth is, the company never really did any major business; never truly made any huge profits. Hay if itâ??s any consolation, a friend of mine used to manage Universal Fidelity Corpâ??s western office just down the street from PCM. Even his collectors, which were pretty aggressive, thought PCM was scum! Now thatâ??s low when people in oneâ??s own profession consider your employer, a disaster waiting to happen, swine of a major order! Keep The Faith, Anthony Villaseñor
RE: The Consumer is left betwe place. True, considering PCM is under Chapter 11 it stands to reason that this has been going on awhile, it just fit so much 'neater'. But also demonstrates to other 'scum of the earth' a practical means of weaseling out of paying any fines and I expect this to be a common tactic with other collection agencies the FTC has its eyes on. Hmm, if PCM is the scourge-filth of the collection industry and staffed by Ultra-loosers what does that make Great Lakes Bureau/North American Capital which is listed as the worst in America? !! In your personal opinion considering the FTC just let PCM get away with murder just how many of the majority 'normal' collection agencies (many of who already use illegal tactics such as sending letters claiming a confirmation of a non-existant payment arrangment and then following it up with a phony threat to fraudulently report negative info such as a 30-day late based again on a non-existant payment arrangemnt) will start using these blatanly illegal and heinous tactics deeming that they have nothing to fear. If, as I truly believe, a goodly percentage of the collection agencies start using these tactics and the FTC having demonstrated conclusively they are far too slow and then ineffectual what recourse(s) does the 'average person' have.
Fines and Bankruptcy To those better informed than I: Please correct me if I'm wrong, but wouldn't fines, taxes, etc., be excluded from a personal bankruptcy settlement? And wouldn't the bankruptcy remain on a personal credit report for 10 years? If these assertions are correct or even close, then the aforementioned cockroaches should still have to pay their fines, and IN ADDITION they should be ostracized by the business community for 10 years due to their bankruptcy. Collectors calling them every day would just be the icing on the cake. These self-righteous parasites should experience exactly what they want us to experience.
I Agree, Yetâ?¦ RichGuy: Unfortunately the PCM deal was a different sort. This company isnâ??t long for this earth anyway, and Iâ??m confident the Feds realized this before cutting the waiver. But if itâ??s any consolation Iâ??m certain PCM collectors will find resistance when seeking new positions, simply by listing this firm on their resumes. Fact is one collection agency I know of has a standing policy NOT to hire anyone from PCM, given its sterling and upright reputation. So in this sense there is justice after all. Keep The Faith, Anthony Villaseñor RichGuy wrote: ------------------------------- If these assertions are correct or even close, then the aforementioned cockroaches should still have to pay their fines, and IN ADDITION they should be ostracized by the business community for 10 years due to their bankruptcy. Collectors calling them every day would just be the icing on the cake. These self-righteous parasites should experience exactly what they want us to experience.
Agency Collections Steven: LOLâ?¦ Thanks for the chuckle (with not at you)â?¦ But to address your first question I believe the answer is obvious, NAC comparisons to PCM probably wouldnâ??t yield much of a difference. Letâ??s face it every â??collection agencyâ? trips over the law sometime or another, but in many cases itâ??s inadvertent â?? not purposeful. Yet these two are among those you mentioned that disregard law, willfully seeking to side-step measures and give collectors (generally) a bad name. Now as to your second comment/question, and suggestion of other agents duplicating such acts? Iâ??d frankly have to say that while following the NAC/PCM scheme is possible, I donâ??t see such abuses becoming widespread in a deliberate attempt to do like PCM. In the long run it is simply unprofitable to tangle with the FTC or consumer class actions â?? even (to a certain extent) individual consumer litigation. Plus the â??agencyâ? collection field is acutely aware that if they abuse the system too much, additional regulations are possible. That is at least according to ACA dogma or propaganda as one sees it. But hereâ??s part of the problemâ?¦ IMHO far too many agencies hire unsophisticated staff (collectors) and fail to train them properly, which leads to many problems in and of itself. Plus many agency collection managers are control freaks, and donâ??t give their more experienced staff autonomy to cut reasonable deals. Using PCM as an exampleâ?¦ In itâ??s hay-day the firm employed between 125 and 175 collectors working two shifts; 6:00 am to 1:00 pm and 3:00 pm to 9:00 pm, Pacific Time, and alternating Saturdays (one shift on, the other off). Of these collectors approximately 60 to 70 percent were â??NEWâ? to the collection biz, working within it less than a year. Roughly 80 percent of these were hired and specifically trained by PCM, at one time by the Wife of a supervisor (and she had only been in the business 6 mosâ?¦ Hello!). Whatâ??s more, the PCM turnover rate was (and may still be) very high. Bottom-line Steven, is that agency work is vastly different than original creditor collections. Collectors working for the latter finesse payment and cure arrangements, while the former hammer for them! Agency collectors tend to have more aggressive behavioral profiles, are less emotionally stable, and consequently are more reactionary in conflict situations. Plainly agencies seem to attract this type, those more personality than character driven. My point being is that any profession that attracts and caters to dysfunctional staffing is bound to have opportunistic tendencies, overshadowing those dissimilar. Not all collection agencies will follow the NAC/PCM models, albeit Iâ??m certain some (but not the majority) may continue to stretch the limits. Of course Iâ??ve been generalizing here only to give you some broader sense of the business as a whole. Yet I think you get the idea. Keep The Faith, Anthony Villaseñor Steven Z wrote: ------------------------------- Hmm, if PCM is the scourge-filth of the collection industry and staffed by Ultra-loosers what does that make Great Lakes Bureau/North American Capital which is listed as the worst in America? !! In your personal opinion considering the FTC just let PCM get away with murder just how many of the majority 'normal' collection agencies (many of who already use illegal tactics such as sending letters claiming a confirmation of a non-existant payment arrangment and then following it up with a phony threat to fraudulently report negative info such as a 30-day late based again on a non-existant payment arrangemnt) will start using these blatanly illegal ....
RE: Is this too simple? You always maintain that you get better results with honey rather than with vinegar but as you are aware this view is certainly not shared by the collection agencies. Now everybody is aware the collection agencies #1 focus is money and some will go to virtually any means to get it. Naturally, this results in recriminations, threats, complaints, lawsuits and probably the worst reputation this side of used-car salesman. Speaking of such, why is it that the owners of these companies have not seen fit to even entertain alternate methods and options and try to "make a deal" instead of non-stop antagonism. It would be so simple for an individual from a collection agency to come unto sites such as these (which like the rest of the financial community they are certainly aware of) and propose something like this; "Sick of being turned down for loans and mortgages, tired of being excluded for prime credit cards, fear of future claims and lawsuits keeping you up at night WE CAN HELP we are a company of venture capitalists who have purchased a block of charge-offed accounts from the following financial institution(s) mainly from the dates of XX XXXX to XX XXXX. If you are or have reason to believe you that one of the accounts is yours then this may be your lucky day we are happy to announce that for a limited time only we are willing to settle for %35, but thats not all, if you so decide that you want us not to verify any further challenges from the CRA's then just plunk down your 65% and you will immediately recieve a signed letter on our letterhead promising to do so, but wait there's more, we are most proud to offer a change of rating, we'll take your nasty R9 and change to an R5! an R3! in fact all the way to an R1 (paid as agreed) thats right turn the clock back and instantly reclaim a good tradeline and your good name all for the incredibly low price of 95% of the original debt, thats right, no interest, no fees, all is taken care of thanks to your friends at ABC Collection Service. DON'T HESITATE! DON'T LET THIS ONCE IN A LIFETIME OFFER SLIP BY! RECLAIM YOUR GOOD NAME AND GOOD CREDIT BY CALLING US AT 1-800XXXXXXX or by contacting us at the following address." And yes, I have on some very rare occasions seen some companies make some offers on the boards but it completely bewilders me why this isn't a common practice. I mean EVERYBODY advertises except for the collection agencies who insist on remaining in the dinosaur age as far as their methods are concerned. That way they have the debtors come to them which invariably will remove the conflict-filled approach we see now and lead to far more resolutions.
RE: Is this too simple? Steven, shame on you! Don't you realize that this would result in people's actual credit histories being inaccurately reflected in their credit files? David D would find this thought appalling. You should be sanctimoniously scolded for even thinking such a thought, much less actually typing it.
RE: Tsk Tsk J. Edgar you haven Yes, I humbly bow my head properly chastised. How dare we mere consumers think we can follow in the path so boldly blazed by the creditors to report whatever they damn well feel. Though its doubtful David D will do any more preaching ("its all you deadbeats who refuse to pay your bills on time that are responsible for the increase in my APR's") forgive him for his ignorance as the rest of us (excluding More Facts) are aware that those who pay their bill in full every month as he asserts are truly the 'deadbeats' in the creditors eyes. For after going through a 'boatfull' of alias changes he's settled on 'just' Dave and now spends his time obsessed with applying for every last credit card on the market; which makes him the 'shining boy' of creditors everywhere who would see us devote our lives to their cause and sing their praises.
