

Better Off Deadbeat: Getting Bill Collectors Off His Back. He Sues Them. - shrike
http://www.dallasobserver.com/2010-01-21/news/better-off-deadbeat-craig-cunningham-has-a-simple-solution-for-getting-bill-collectors-off-his-back-he-sues-them/

======
grellas
This fellow's quest for "justice" against debt collection agencies has brought
him to a point where he is suing the latest agency "and twenty-seven (27) of
its employees in their individual capacities" for $200K.

I have dealt professionally in one way or another (mostly incidentally) with
debt collection agencies, and they truly are revolting in the tactics they
routinely use to pressure debtors for collection. Indeed, the _whole industry_
is set up to win through psychological intimidation and to avoid the court
process. That is the only way this industry makes economic sense. Need to
collect an $80 bill? It is impossible to do this realistically through a
convoluted court system with its costs and delays. If you have thousands of
such bills, however, and hire extremely cheap labor to harass the debtors to
the point where such debtors see it as easier to pay than to put up with the
continual harassment, and, viola, an industry is born that lets vendors sell
their otherwise uncollectable receivables wholesale for a fraction on the
dollar rather than simply writing them off while giving the participants in
that industry a (sordid) method of realizing value from the receivables so
purchased. It was always something of a devil's bargain but it worked in
practice so long as the harassment techniques could be used without penalty.

For a couple of decades, at least, various laws have existed to enable
consumers to defend themselves against sleazy collection techniques. As long
as the mass of consumers were ignorant of such laws, however, and had to hire
attorneys to pursue claims based on violations of such laws, there was still
no effective recourse for consumers - it simply was too expensive and
complicated to try to fight back with lawyers for any given violation.

It now seems that the web has supplied the final piece to enable those who are
sufficiently motivated, such as Mr. Cunnigham, to both educate themselves and
to have the wherewithal to file _pro se_ lawsuits seeking recourse.
Ironically, this has exposed the soft underbelly of this particular industry,
to wit, if you hire exceedingly cheap workers and pay them to harass debtors
into paying, you are dealing with a class of employees who are perhaps the
least trainable you could imagine for avoiding the traps that the law now
imposes upon those who overstep its highly technical bounds. Thus, for debtors
who are sufficiently motivated, it is a bit like shooting ducks in a gallery:
little downside, and little upside for that matter (at least for anyone who
wants to have a life), but a fairly high percentage of hits.

That said, Mr. Cunningham seems to be about as unscrupulous as the industry he
is challenging. At best, he seems to be a vexatious litigant (what else does
it mean to sue 27 undoubtedly minimum-wage employees of the agencies in their
individual capacities for technical violations of laws just because he has a
gripe with their employer and, not only sue, but also bombard them with
endless oppressive discovery requests?); at worst, he appears to be someone
who has no scruples whatever about stiffing anyone and everyone who has had
the misfortune ever to deal with him. It reminds me of a matter years ago
where a franchisor had cheated so many innocent franchisees through fraud and
misrepresentation that the franchisor bolted up its headquarters and armed it
with second-floor security cameras trained at the front entrance as a full-
time means of dodging process servers. That particular scammer had it all
rationalized and in the end got slammed - a fate which may ultimately await
Mr. Cunningham as well as he becomes increasingly reckless and sordid in his
conduct.

------
Seiwynn
I have really mixed feelings about this article.

I really feel like this guy, Craig, who is suing the debt collectors is a
hacker for finding the information about possible violations and pursing it
legally.

I am also all for punishing debt collectors for actions that abuse debtors.

However, there are several things that rub me the wrong way.

1) The fact that it is easier (less expensive) for a company to settle a case
for $1K, rather than fight and win a case while costing themselves $10k gives
the companies no incentive to fight back. Also, The plaintiff is already in
debt and is having trouble paying, so what would a company get out of counter
suing?

2) Statements like - "Katz doesn't believe that people are morally obligated
to pay back their debts." and "People are brainwashed to think that paying a
credit card is more important than paying for the necessities of life." -
Maybe if people spent more time worrying about the necessities of life and
less about luxury they wouldn't be in debt in the first place.

~~~
wildjim
_Statements like - "Katz doesn't believe that people are morally obligated to
pay back their debts."_

I'm not sure I disagree -- "Usuary" used to be thoroughly illegal/immoral/etc
didn't it?

 _... and "People are brainwashed to think that paying a credit card is more
important than paying for the necessities of life." - Maybe if people spent
more time worrying about the necessities of life and less about luxury they
wouldn't be in debt in the first place._

I definitely believe credit cards are less important than basic necessities.

~~~
angelbob
Usury was forbidden by the Bible, if memory serves. Still, that doesn't make
accepting the loan moral and offering the loan immoral. Presumably both sides
are breaking the old Biblical prohibition.

~~~
ars
The bible prohibits any interest, not just excessive interest. A loan is
supposed to be charity, not a money making opportunity.

If someone needs money to open a business or the like, then the lender is
supposed to partner/go into business with him, not just lend at interest.

You can get around the prohibition by structuring the partnership into
something that acts like interest, but the intent of that is for business,
it's not intended to replace charity loans.

------
DanielStraight
Given that collectors have called me repeatedly looking for someone else and
refused to listen when I told them it was a wrong number, I have no trouble
believing they are violating laws in dealing with people that actually have
debts. If suing them will get them to change, I'm all for it.

~~~
nkassis
I've had that problem alot with my last phone number. And now it started
happening with my new number. I dunno what to do other than change the damn
number. It's stupid, and I had a guy call twice just to make sure. And I have
to keep this phone on for emergency calls (I'm a sysadmin). I put this number
on the no-call list which didn't do anything. They can probably get away with
by saying they had no clue the number was reassigned and that they already had
dealing with the person. This is a loophole of the no call list.

~~~
paul9290
Use Google VOice or a similar service and only calls you allow will get
through. ALl others could go to a voicemail that's the sound of a disconnected
phone.

------
briancooley
As someone who is financially conservative, I frown upon people intent to
avoid debt they willingly incurred.

On the other hand: "Usually it's settled because the agency says, Uh, we
didn't intend to do that. Our collector said the wrong thing and we fess up
and say, 'I didn't mean to do it but I did it..."

Really? That's the collection agency's defense? I didn't mean to do it?

If it's your business to get debtors to pay their debts, you deserve to get
busted when the debtor knows the law better than you. It's your _business_ for
Pete's sake.

Add to that the complaints about all the technicalities and about individuals
filing lawsuits without the need for a lawyer, and it's pretty clear that
collections agencies thrive on and exploit the ignorance of debtors, which is
ashame.

~~~
nkassis
Their defense seems to me like a lie. By the sheer amount of occurrence of
these lawsuit, you'd think they would make sure their employees don't break
the law. Except they probably don't think their business could work without
breaking the law. This business is as scrupulous as the mafia. They have no
way of making money without breaking the law. How many people would pay if you
told them all we can do is wreck you credit that is already wrecked.

On the other hand, they do bring in a balance that allows us all to have cheap
unsecured debt. So.. these evil guys are necessary for the system to exist the
way it is today.

------
michaelcampbell
I can see both sides of this story, and I'm quite sure collection agencies
break the rules, and they deserve to get called on it.

But... "I don't have to do anything but stay black and die." That sort of
behavior is where I draw the line. You made the bad calls, you got into debt,
pay your damn debts. And sue the collectors too if you like, but that they are
doing wrong things doesn't obviate your responsibilities.

~~~
dnsworks
At the scale of a small-time investor, you must pay your damn debts. But do
you feel that holds true going up the food chain? GM will never have to repay
all of it's debts that were coerced out of the american public against our
will. The bankers at the large banks who coerced almost ONE TRILLION DOLLARS
worth of debts are getting their fattest bonuses ever, and will likely not
fully repay those debts.

But the little guy has a moral obligation? Yeah, his only mistake was only
borrowing $100k. If he had been a slick stanford or harvard MBA he would have
borrowed $250million, and gotten a congressional pat on the back when he
defaulted.

~~~
michaelcampbell
I'm...not sure where you're going here other than possibly using my comment as
a springboard for your soapbox, but since you asked; I never implied in any
way I feel that just the little guy has a moral obligation. I think GM and
your "slick Stanford or Harvard MBA" toting strawman should have to pay their
debts too. <shrug> Now if doing that would cause even greater grief, say to
the hundreds (of thousands?) of employees who'd lose their jobs? It's a tough
call, and one I'm glad I'm not making.

The correct response to elected officials not doing what you want is to vote
someone in who will.

------
davidblair
This article is about a FatWallet member named codename47. If you want to read
a more complete discussion about the article you can at
<http://www.fatwallet.com/forums/finance/984518/>

------
samd
What a great hack. Nobody should feel any unease at using perfectly legal
methods to fight back against a system that is designed to screw people over.
Who exactly deserves our sympathy in this article? Verizon? Time Warner? Bank
of America? They would steal candy from a baby and charge the parents a
service fee.

------
blahedo
I have mixed feelings about this guy, but it's telling that a lot of the
objections are to this guy _acting_ like a lawyer. I mean, how dare he! What
does it mean when they object more, as if morally, to the people who are
filing pro se---and winning anyway? Hmm.

------
synarch
The fact is, credit needs to be tightened up. People like Cunningham get in
over their heads. That's on them. The onus of extending risk to such borrowers
is on the lenders. These lawsuits are just going to be another factor in
calculating risk, which will ultimately, one would hope, tighten up credit.

Rampant, aggressive debt collection is just the flipside of loose credit and
lending.

------
leelin
I'm fine with legit collections calls as long as a human collector has to
waste equal or more time trying to reach me.

This recent invention of automated collections calls seems to shift an
enormous amount of abusive power to the collector. Now I can receive random
calls at almost any hour of the day, nearly every two or three days, only to
have a recording spew a number I need to call back to talk to a collector.

The worst part is, I'm not the one they are looking for, it's whoever (had my
phone number previously | gave my phone number as a fake).

I wonder if Craig from this article will take my case for a referral fee :P

------
Sukotto
Wow, this guy epitomizes the concept of defeating your enemy by becoming them.
He's just as nasty as the collection agencies. The fact that he's attacking
them, instead of a defaulter is a mere technicality.

------
wendroid
> Investors like Cunningham fell the fastest.

One man's investor is another man's parasite.

