BUFFALO, N.Y. (WIVB) – A worker experienced in the debt collection field says only one thing matters to many in charge of debt collection businesses — paying up.
Ella Moore says that is all that mattered to the bad debt collectors she has worked for, and of the five collectors that have hired Moore, she said two of them were bad.
“Get the money at all costs,” Moore said. “We don’t care, whatever we got to do. Get that money!”
Western New York has seen more than its share of debt collectors getting busted. A raid at a Cheektowaga call center showing call center agents carting out the records of a Buffalo business accused of strong arming consumers into paying up.
In fact there are so many collection firms in Upstate New York, you could call the region the “Center of the debt collection universe”.
“They tell them they are going to jail, they tell them they are going to be served,” Moore said. “Everybody in that whole place had a fake name except me.”
They also use technology to spoof someone’s Caller ID–to make them believe the call is coming from a judge, or the police. Moore said the threats might also be aimed at family members, or even employers.
“If they had, like a reference they would tell them that their reference is going to be subpoenaed to court, if they did not pay the debt,” Moore said.
Buffalo native Jake Halpern, a writer for The New Yorker magazine, just finished a book about western New York’s debt collection industry called, Bad Paper.
For Halpern, it is a personal issue.
“A debt collector was hounding my mother over a debt that she didn’t owe, and eventually she just paid it because they kept calling her work and calling her at home,” he said.
There are more than 300 debt collection companies in western New York and Halpern said they are mostly debt buyers, who purchase packaged debt–known as “paper”– for pennies on the dollar, collect as much as they can on the old debts, then re-sell those accounts.
“It is kind of a wild west,” Halpern said.
The most notorious of those collectors was Tobias Boyland, known as “Bags of Money”–an ex-con– whose associates would use false threats of arrest to get their money, false phone threats like this.
“Ma’am, we got an email from Jordan Hamilton which means you are going to cause your mother to go to jail,” Halpern said while explaining how many of the calls started. “We can get it fixed.”
Halpern said it is all about the money. “There definitely are some bad actors in this business that are knowingly breaking the law, and using whatever means necessary,” Halpern said.
Federal officials just announced they’re cracking down on the fringe debt collectors–specifically those who sell outrageously expensive “payday loans” or title loans–where a consumer borrows against their car title.
Those loan companies are on New York Attorney General Eric Schneiderman’s radar screen, too.
“These short term loans that carry sometimes more than a 100% interest rate, sometimes as high as a 600% interest rate,” Schneiderman said.
They are illegal in New York, and Schneiderman has forced several of those predators to walk away from more than $16 million in illegal payday loans.
“The bad actors, the really aggressive debt collectors are not just hurting the consumers, they are also undercutting the good actors,” Schneiderman said.
Schneiderman also says the actions of the bad actors can sometimes overshadow the good ones.
“They are at a competitive disadvantage with these folks who are really just financial thugs,” Schneiderman said. “This is financial thuggery.”
Joel Castle is a co-founder of a legitimate collection agency, the Northstar Companies in Cheektowaga. His call center staff take their jobs seriously, the pay is good, and Castle says bending the rules can cost a worker their job, and the company a big time client.
“This is a highly regulated industry. All of our calls are tape recorded. We must keep all of our calls for 7 years–every tape recorded call,” Castle said.
If you are being harassed by a debt collector, Castle says it could be a ripoff.
“Somebody that is being abusive to you on the phone, is trying to be hard on the phone with you, or demand payment by Friday or else, typically that should raise a red flag,” Castle said, advising people to hang up on them.
But if the call is about a debt you actually owe, Castle advises you to work with the collection agency, or there could be consequences, such as a big hit against your credit score, or even a lawsuit.
Why are there so many debt collectors in western New York? Some in the industry believe it is because of the lack of good jobs, and a collector can make good money legitimately, even more bending the rules.
Schneiderman added, the law is designed to protect you from abuse.
“Being broke is not a crime, having hard economic times is not a crime, and you should not feel like you have to sneak around. Call this in, report it to our office,” Schneiderman said.
If you feel harassed by an abusive or overly aggressive debt collector, you can call the Attorney General’s Consumer Hotline at 853-8404.