REPORT: Debt Collectors Profit From Aggressive Tactics

For Immediate Release
January 26, 2016
Contact: Kathy Mulady, (206) 992-8787
kathy@allianceforajustsociety.org
REPORT PROFILES COMPANIES WITH THE MOST COMPLAINTS ABOUT
ABUSIVE AND DECEPTIVE DEBT COLLECTION TACTICS

Consumer Financial Protection Bureau should write strong rules to protect
consumers from abusive collection practices

SEATTLE – Companies engaging in debt collection activities use abusive and deceptive practices that include harassing people for debts not owed, threatening illegal actions, calling people at work, and contacting their employers and neighbors.

These are among the findings of a new report, Unfair, Deceptive & Abusive: Debt Collectors Profit from Aggressive Tactics, released today by the Alliance for a Just Society. Researchers analyzed 75,000 consumer complaints filed during the last two years with the Consumer Financial Protection Bureau.

The report profiles the 15 companies with the most complaints. The list includes:

  • Encore Capital Group – San Diego, CA
  • PRA Group – Norfolk, VA
  • Enhanced Recovery Company – Jacksonville, FL
  • Citigroup – New York, NY
  • Expert Global Solutions – Plano, TX
  • JPMorgan Chase – New York, NY
  • Navient (the student loan servicer) – Wilmington, DE
  • Wells Fargo – San Francisco, CA

The CFPB is considering whether new rules are warranted to protect consumers from deceptive and aggressive collection practices. Next steps in a rulemaking on debt collections are anticipated as early as February.

About 35 percent of adults in the U.S. with a credit file have a report of debt in collections, leaving a broad swath of households vulnerable to abusive collection tactics.

“This analysis makes it clear that debt collectors routinely engage in unfair, deceptive and abusive practices to maximize their profits,” said LeeAnn Hall, executive director of the Alliance for a Just Society. “We need the Consumer Financial Protection Bureau to stand up for consumers and write strong rules that ends these abusive practices.”

The report includes detailed recommendations to end abusive collection practices.

Meanwhile, secretive groups with undisclosed funding sources have launched a series of dubious attacks on the Bureau since November, seeking to undermine its work to strengthen consumer protections in the financial sector.

“We need the CFPB to stand strong in the face of these deceptive attacks from dark money groups with financial industry ties,” said Hall. “It’s time to rein in abusive debt collection practices and we need strong leadership and a strong rule from the CFPB to do it.”

Findings from the report include:

  • More than 40 percent of the complaints were about continued attempts to collect debts consumers said they did not owe.
  • Nearly 20 percent of complaints were about collectors’ communication tactics; 8 percent cited false statements and 7 percent cited the collector taking or threatening an illegal action.
  • Complaints tied to credit card debt were most common, followed by medical debt, payday loans, student loans, mortgage debt, and finally auto debt.
  • The two companies with the most collection-related complaints, Encore Capital Group and PRA Group, each more than doubled their profits from 2010 to 2014.

The report’s recommendations for the CFPB’s rulemaking include:

  • Apply the new debt collection rules to original creditors – such as payday lenders, credit card companies, and banks – along with third-party collectors and debt buyers.
  • Strengthen remedies and increase penalties to stop abusive debt collection practices.
  • Require debt collectors to have complete documentation before initiating collection actions.
  • Set specific limits on phone calls from debt collectors to prevent harassment.
  • Prohibit the sale, purchase, and collection of time-barred debt (also known as “zombie debt”).

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The Alliance for a Just Society is a national organization that focuses on social, economic and racial justice issues.

The full report can be found here: http://allianceforajustsociety.org/wp-content/uploads/2016/01/2016.01_Debt.Collectors_FINAL.pdf

Instead of Building Walls, Build an Economy That Works for All

The Supreme Court announced Tuesday that it will take up a case that challenges President Barack Obama’s executive actions that deferred the deportation of 5 million undocumented immigrants.

News coverage of this development naturally was dominated by the two words that are sure to make any news story go viral: “procedural battle.”

Okay, perhaps such a phrase doesn’t rise to the level of virality as the groundbreaking revelation that Kim Kardashian washes her hair twice a week. But that’s exactly what’s wrong with this system — with so much at stake for so many families, it is a shame that people aren’t paying more attention.

While it can be easy to get lost in the alphabet soup of “SCOTUS,” “DACA” and “DAPA,” debates over the technical merits of the President’s executive actions should not detract from what’s truly at stake here — that families are being separated by outdated, arcane and draconian immigration laws.

So far during this presidential campaign, the immigration debate has been front and center. And, with the Supreme Court taking on this case, we’ll be assured that it will continue.

The anti-immigrant message focuses again on fear – fear that there aren’t enough jobs or enough money to go around, and it resonates, not because it is true, but because we know the majority of people in this country are struggling. They call it the 99% movement because, unless you’re among the filthy rich 1%, you are probably struggling.

The Job Gap Economic Prosperity Series research by the Alliance for a Just Society shows people quite simply aren’t making ends meet. And so, by cranking up the fear of scarcity, people are more likely to perceive others as a threat to their own economic security. When people are drowning in debt and can’t find a decent-paying job, they see immigrants as competition in an already-tight workforce.

The reality is that immigration strengthens our workforce.

“This case is profoundly impactful not just for the Latino community, but for the entire nation,” said Janet Murguía, president and CEO of the National Council of La Raza. “The expansion of DACA and the creation of DAPA could potentially help more than 4.4 million eligible immigrants, create nearly 30,000 new jobs and grow our GDP by $230 billion by 2025.”

And so the conversation we really need to be having is not about how to keep immigrants out of the country, but how we can shape our economy so that it works for everyone. The answer to the scarcity mentality is not to build walls, but to build the economy and equitably share our resources.

We do that by increasing an embarrassingly low minimum wage, making higher education affordable and accessible, providing health care to everyone who needs it, and stop giving tax breaks to large corporations that drain local economies of good-paying jobs and replaces them with bad jobs.

But tearing apart families, living in the politics of hate, and rejecting those yearning to breathe free is not our way.

Promising Practice: Moving from Coverage to Care

Since passage of the Affordable Care Act, millions of people in the United States have gained health coverage, often with the help of professional enrollment assisters. But getting people signed up for insurance is just the first step toward ensuring that they get needed health care. This Promising Practice Policy Brief discusses the role that assisters can play in helping people understand their coverage and put it to use.

Promising Practice: Making Medicaid Part of the Welcome Home

Thanks to the Affordable Care Act, many adults are now eligible for health care coverage, such as Medicaid, that had been closed to them before. Among these newly eligible adults are many people leaving prison — and Medicaid can make a big difference in helping them transition back home. This Promising Practice Policy Brief discusses options for states.

Promising Practice — Making Medicaid Part of the Welcome Home

Winning the Fight for $15 in 2016

Millions of low-paid Americans rang in 2016 with a raise, as a handful of state minimum wage increases went into effect on the first day of January.

Many of those raises are a barely noticeable 15 or 20 cents an hour — little comfort to people struggling to make ends meet. But workers in the cities and states that voted for more robust wages last year saw much more significant gains.

Minimum wage workers in Alaska, California, Massachusetts, and Nebraska, for example, are finding a dollar-an-hour increase in their paychecks. Workers in Hawaii are enjoying an extra $1.25 an hour. In Seattle, some workers at bigger companies are seeing a substantial $2 hourly increase as the city’s $15 minimum wage is phased in.

The national campaign for a $15 minimum wage emerged as a leading economic justice issue last year. It’s also a critical racial justice issue: Half of all African-American workersand almost 60 percent of Latino workers make less than $15 an hour.

The momentum to raise the minimum wage will only increase in 2016 as public support grows. Yet too many states — 21 of them, concentrated mainly in the South — haven’t budged from the federal minimum wage of $7.25 an hour, unchanged since 2009.

Many of these holdouts have deep pools of poverty. Most deny poor families health care by refusing to expand Medicaid, and nearly all have held the sub-minimum wage for tipped workers to $2.13 an hour for 25 years.

The problem with efforts to raise the wage city by city and state by state is that it leaves out workers in states without a citizen initiative process, or in communities without strong unions or leadership. Millions of low-wage workers are at risk of becoming a left-behind underclass.

That means it’s time for Congress to increase the national minimum wage — and to abolish the lower, sub-minimum wage for tipped workers. If they aren’t sure how to do it, leaders from New York to Los Angeles have provided plenty of examples.

Research from my organization, the Alliance for a Just Society, shows that a living wage for a single adult ranges from $14.26 in Arkansas to $21.44 in Hawaii. On average, a worker would have to put in 93 hours a week just to get by on the federal minimum wage of $7.25 an hour.

The numbers underscore the crisis facing families in our country.

Often, low-wage workers are told that the solution is to go get a better-paying job, but the reality is there are nowhere near enough jobs that pay a living wage. The occupations with the most job openings — in retail and restaurants — pay the least, and they’re most likely to be part-time.

We’ve become a low-wage nation, with implications that reach far beyond just low pay. Low-wage jobs also mean part-time hours, unpredictable schedules, and no benefits or paid sick leave — making it impossible for workers to break even.

It’s unacceptable that anyone who works full-time in our country should go hungry, homeless, or without care for their child. This is the year to make all wages living wages. Without action, Congress is endorsing the creation of a new class of poverty among our workers.

Jill Reese is the associate director of the Alliance for a Just Society, a national organization focusing on economic and racial justice. AllianceForAJustSociety.org
Distributed by OtherWords.org

This article first appeared in OtherWords.org
http://otherwords.org/winning-the-fight-for-15-in-2016/

Today in Medicaid: Big Win in Louisiana

Today, Louisiana’s new governor, John Bel Edwards, made the most of his first full day in office.

Through an executive order, Gov. Edwards expanded Medicaid to about 300,000 uninsured Louisianans, many of whom will be eligible for health coverage for the first time. This move makes Louisiana the 31st state to extend the benefits of the Affordable Care Act (ACA) to its lowest-income residents.

Edwards’ action marks a big win for community leaders in Louisiana – and the culmination of a long fight for health care justice.

The battle began in 2012, when the Supreme Court ruled that states could opt out of the Medicaid expansion. Emboldened by this decision, former Louisiana Governor Bobby Jindal dug in his heels and refused federal funding rather than make health care available to his constituents.

This intransigence resulted in Louisianans going without a potential 7,600 mammograms and 28,000 cholesterol screenings each year, according to one estimate. The state was also losing out on an average $1.5 billion in federal funds annually.

There were also grave racial justice implications to Jindal’s refusal to expand Medicaid, with African Americans accounting for more than half of those shut out of health coverage as a result. (Almost two-thirds are people of color.)

A diverse coalition of organizations fought back. A Community Voice and Southern United Neighborhoods – partners of the Alliance for a Just Society – joined this fight, knocking on hundreds of doors, holding community meetings, and rallying in Baton Rouge, New Orleans and elsewhere. As the issue played out in the legislature, they showed up again and again, undeterred by setbacks.

In 2015, with Jindal’s term coming to an end – and his popularity plummeting – A Community Voice and their allies made a final push to place Medicaid front-and-center as the race for governor was taking shape. Meanwhile, they kept the heat on the legislature.

These efforts bore fruit in the spring, when lawmakers passed a resolution allowing the incoming governor to pick up the Medicaid expansion without further legislative action.

From there, it was a matter of keeping attention focused on Medicaid as the candidates vied for governor. When Bel Edwards won in November, he assured Louisianans that Medicaid would be one of his top priorities.

His executive order makes that promise a reality. Louisianans eligible for Medicaid expansion should begin receiving their coverage by July.

Community leaders have a lot to celebrate.

“Years of base-building, actions, and skirmishes have led to the day when the people have won health care for another 300,000 Louisianans,” said Lanny Roy, ACV president.

“A Community Voice is proud to have been a part of it, and we’re proud of our new governor John Bel Edwards. Now to the task of effecting it and making our people healthier.”

Meanwhile, millions of other low-income people, disproportionately people of color, remain without coverage in the 19 states that have yet to expand Medicaid. Today, Louisiana points the way.