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Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back (bloomberg.com)
527 points by jseliger on Dec 6, 2017 | hide | past | web | favorite | 270 comments

It's quite possible to do more via lawsuits, especially in California. One guy got a judgment against Bank of America and showed up at a branch with sheriff's deputies and a moving van to seize property.[1] He was paid very quickly.

I once had a business refuse to pay me after a small claims judgment. I paid the sheriff's office for a "till tap" and an "8 hour keeper".[2] That means a sheriff's deputy (usually two of them) goes to the business, shows the court order, and takes the money out of the cash register, arresting anyone who gets in the way. If there's not enough money on hand, the deputies stand behind the register and take in money during the business day until the judgment is paid. The fee for this is about $85, which gets added on to the judgment. It worked for me.

[1] http://business.time.com/2011/06/06/homeowner-forecloses-on-...

[2] http://www.dca.ca.gov/publications/small_claims/collect.shtm...

For a till tap, do deputies compel the business owners to open the till, or is there some kind of skeleton key that law enforcement use?

I assume that's where "arresting anyone who gets in the way" comes in

I think it is the courts that have compelled the business owner to open the till. The deputies are just enforcing the court's judgement.

Skeleton keys are a plot device in children's cartoons.

Not for warded locks [1]

They're more common that you'd think.

[1] https://en.wikipedia.org/wiki/Skeleton_key

And the TSA.

The seller who sold the doctored database in the article though... Looks like he really had nothing left to take. No business left = no cash register, no cash.

The people calling the victim up had paid for the loan database and the uncollected debt, so they legitimately think that they are owed money. They are victims themselves.

Still, the initial guy who threatened to rape his wife needs to go to prison. Even their belief that the debt is legitimate is wishful thinking at best. What kind of honest person would choose a career like that? Buying questionable debt and then threatening people for it? They've got to know that they're part of a scam, and even if they don't, they do know that threatening people is bad.

If the debt is legitimate, you take it to court, get a judgement, and if necessary, show up on their door with police. I have no sympathy for people who willingly make themselves tools of such a scam.

The businesses around here have signs to the effect that employees do not have access to the cash, and at least one won't let the employee touch cash (as in they physically can't). I wonder how the till works in that case.

That's the "8 hour keeper". The deputy stands behind the counter, with the cashier, and takes in the money. Checks are written to the county, rather than the store. As one law firm writes "Installing a keeper can be an effective way of opening up settlement dialogue with the debtor. For example, we recently installed a keeper at a tutoring center in Orange County. The business does not collect many payments daily, but the keeper levy was nonetheless very effective because the debtor was forced to explain to its customers why the sheriff was at the business. It caused the debtor to quickly come to the table to discuss resolution."

Only once have I ever seen a sheriff's deputy doing a keeper. They were explaining to each customer that the business had failed to pay its debts and had a court judgment against them, so all payments had to be made to the country to settle the debt. Most business owners will pay up within minutes rather than have a day, or a week, of that. Even if they have to take out a loan.

I've had multiple encounters with debt collection agencies that all ended up being for medical bills that were never processed correctly in the first place that I had never seen before. In every single case so far it's been a legitimate, state-licensed debt collector, they have not fulfilled the requirements set by law to prove the debt, and the have just used scare tactics and bureaucracy to avoid a fair confrontation. I've filed complaints with the state regulator, at which point token (but inadequate) documentation has been provided and my complaint "resolved".

I have little sympathy for most cases in which people rack up debt and try to escape the consequences, but Good Lord, the other side of that equation is shady as Hell, even when done far more legitimately than this.

You should contact a bankruptcy attorney. I used to work for one and he loved cases where debt collectors violate collection laws. Getting a settlement was almost always easy and he split it 50-50 with the client.

Thank you for the suggestion. I just dug up documentation of the most recent case and left a message with a local bankruptcy attorney :)

Alas - it's been just over a year, and the statute of limitations is up. Next time.

Wow, even ambulance chasing personal injury attorneys only take 30-35%.

Same situation here, except I mildly suspect the debt may be legitimate, in that the onus is probably on me to fight my insurance company to have covered the money they decided not to, not the hospital.

In either case, first the hospital kept sending me bills with an account number that didn't match mine, and when I legitimately tried to pay it, they couldn't find me through account number lookup. This set off my suspicion, so I just kept asking for "proof of debt." Every time they sent it, some detail would be off, and I'd call them and tell them, and about a month later they'd send a new one with some new error.

This kept on, until the (fairly new) hospital moved its accounting office or something that caused them to really fuck up their records. I didn't hear from it for about 4 months until I got my first call from a debt collector. They really tried to hammer me on how they could work out a "deal" with me for reduced cost (I'm sure they probably paid 10% or something for my debt), so as usual, I asked for proof of debt.

It never came.

3 months later, another call, different agency. Proof of debt, never arrived.

3 months later, another call, ANOTHER DIFFERENT AGENCY. This time I just asked to be "added to their do not call list." They did.

Haven't heard from this bullshit in 5 months. I've checked my credit twice since then (once routine, once as a result of the equifax debacle), no sign of the debt. I guess I'm finally free?

Yeah in my cases the debt has actually always been legitimate - but I didn't believe it until I got documentation of what the actual charge was and how it differed from what I had already paid FROM THE ORIGINAL CREDITOR (the healthcare provider) as a result of my own proactive investigation. I have always paid the debt directly to the healthcare provider after they re-process it correctly. But that's precisely my point: even when it's a legitimate debt, the proof exists, and I'm willing to pay once I've seen the proof, the debt collectors are still scum about it. I'm glad I've always had the original creditor reprocess it correctly and bill me for the remainder directly: none of my money has ever actually gone to a shady debt collector.

Interesting, I noticed a hit on my credit report for a legitimate debt caused by an urgent care who sent the bill to the wrong address and eventually sold the debt to a collector (despite me writing my current info on the signin documentation they gave us!). I have offered to pay-for-delete with them but they have not responded at all. I'm thinking about what to do next.

If you have proof you provided the correct information to them it's probably time to talk to an attorney.

An attorney's would cost more than an urgent care visit

The way debt collection works in the US is the debt collector has to prove you owe the debt, not the other way around.

Pay to delete is a sensible option in the case where you know the debt is legitimate.

I filled out the paperwork (and they submitted it to my insurance which also knows my info), but I did not keep a copy of that. So I've no proof that would be admissible in court.

Could you claim that they failed to send you a bill, and therefore are falsely claiming the debt? Then they'd have to show that they did send you a bill, and to what address, and include a copy of your original paperwork. That would get you the evidence you need.

My friend went through this, and went to court over it.

In court, he claimed the hospital never provided proof of debt. The hospital claimed it did. The judge asked if they had proof of debt with them, right now. They did. The judge asked my friend if he was willing to pay it with proof of debt presented. He said he was.

Done and done. Orders were guarantee the debt is deleted upon payment, bunch of other weird legal stuff protecting my friend if it should appear on his credit report ever, etc.

I have little sympathy for most cases in which people rack up debt and try to escape the consequences

You might want to empathize a bit more. Most debt is racked up because those medical bills you mention are legitimate, but can't be covered due to lack of insurance.

The other way is to make a purchase and then lose your job, at which point you can no longer sell your purchase and no longer sustain the payments.

As I learned from my wife's first pregnancy -- you get bills from 12 different parties with vague names like Northern New York State Physicians Group LLC, which in aggregate are way over the co-pay limit. Try calling one, you cant reach them. Most are probably legitimate, but clearly they are incorrect in aggregate. We hired a billing consultant to reconcile all the bills, I imagine most people give up and either pay them all or just let it all go to collection.

I've made no comment about medical bills or people who legitimately lack the money, who have other legal protection. I'm talking about people who rack up debt and try to escape the consequences just because it is advantageous to themselves to do so. I personally know more of them than I care to. I apologize if the wording implied this was "most cases" of debt in general.

I wasn't calling you out. It was just a different perspective, mostly for readers' benefit. There are many people who feel that the poor are poor because they are incompetent or malicious, rather than because it's a self-sustaining cycle.

It's a good reminder to write less pointedly, though. If you have any tips on writing style or favorite authors, I'd love to hear them.

You yourself pointed out a way in which my own post could have been written less pointedly, so I'm probably not the one to be giving tips :)

Yep, same here. I got hounded by a collector for a fee that was incorrectly applied to a paid-off medical bill from three years prior. The only way I was able to fend them off was by sending a copy of a statement that I managed to find in the back of a folder buried under hundreds of pages of miscellaneous medical stuff. Moral of the story? Keep all medical paperwork for at least seven years. I've always done this and once in a blue moon it saves a massive amount of headache. You have to assume these days that someone will try to make money off you for not having records.

Debt has a statute of limitations?

If you have not made a payment in 7 years and they don't sue you then it goes away.

I think there may be a couple other actions that can reopen the statute of limitations, might be worth double checking. I know for libel, having a public timestamp get updated on a news story can reset the clock for that story.

Credit reports do...

This NY Times article that got a fair bit of attention a couple years ago details just how shady it is:


I'd be surprised if this article didn't get discussed here on HN at the time.

It's discussed here: https://news.ycombinator.com/item?id=8182953. I don't believe it was that particular thread, but HN has been the source of some very helpful advice on how to fight this: always using registered mail (costs a bit of money, but helps you keep a paper trail of dates they can't simply deny without more proof), staying calm and collecting as much written evidence as possible, etc.

This is probably what you refer to, right? https://news.ycombinator.com/item?id=7135833

(or if not, it's very helpful and worth a read)

I have a debt from a hospital right now which two separate insurance companies told me they would pay.

Last time I talked to the hospital, I told them to please bill the insurance I had supplied them, and not continue sending me letters demanding I pay them $1250 for a procedure that the cash clinic across the street said they would do for 380 (that's including the 'uninsured discount').

The guy on the phone said it was too late because it had been nearly 90 days and 'the computer is sending it to collections in a couple days'. According to him, he couldn't do anything about that.

What I learned from my recent experience is that if you've given them insurance information, and they haven't billed the insurance, it's not your bill yet. They have a year to do so, after which neither you nor the insurance are responsible. Now, I am not a lawyer and there may have been state laws in play that don't apply to you, BUT - that's worth keeping in mind. I ended up having to pay a co-pay after mine was reprocessed. Had I not been so proactive and persistent and a couple more weeks had passed, they would have had to swallow the debt.

> They have a year to do so [...]

This actually is highly dependent on state laws. In Colorado for non-emergency the doctor/hospital has 6 months to file the bill with the insurance company. If they fail to do so, or file after that time period, the bill is null and void (it's an agreement they have with the insurance company).

If it is an emergency (such as you got taken to the ER) then they have a year to file with the insurance company.

I know this... because the insurance company denied a claim that was made by the hospital due to an emergency because it was filed outside the 6 month time window because the hospital failed to mark it as being billed due to an emergency.

I only found out about the debt though when I got served and there was a lawsuit against me because the hospital (even though they had a copy of my drivers license) had been sending it to an old address I hadn't lived at which they had on file somehow.

I got it all sorted, and the insurance company paid, along with a fine the state requires for failing to pay on time... however the lawsuit still dragged on for one more year.

The original company that had made the claim, had sold the debt to debt collection company. That debt collection company had never sent me a shred of proof, so their calls went straight to the round file, so the lawyers for the debt company were the people I was dealing with.

They wanted to get paid for the debt, so that they could then send it to the debt collector, who would then send it to the original creditor, or at least, that is what I understood. However my insurance company just sent it to the original creditor.

So now the original creditor had to notify the debt collection company who had to notify the lawyers office that the debt was paid.

That took over a year. Each time I'd get a continuance to show up in court 3 months later, because the debt was paid, so they weren't getting a cent from me. I'd gladly lay it out to the judge, but instead they kept filing a continuance. Eventually the court in Colorado denied their request for a continuance.

Now the best part is that the debt was for approximately $300 dollars. In combined costs of lawyers fees/court fees/debt collection time/all that fun stuff I am sure they spent WAY more money trying to collect. Didn't cost me a penny, other than my time.

I'm definitely not paying them - the imaginary bill is their problem. I just think it's ridiculous that they are so incompetent.

This will probably not end well for you if you value your credit score. The bill is your responsibility. I almost guarantee you signed something saying you would be responsible for the full amount. If they haven’t billed your insurance, yes it’s incompetent and frustrating, but the correct way to handle this is to pay it off yourself and then work directly with your insurance company to get reimbursed.

Edit: I’m assuming you’re in the US.

The great thing is I'm not concerned at all about my credit score. I could see how this would be inconvenient for other people. Like the Equifax hack, to me this is another indicator of how ridiculous the entire credit score system is.

Simply on principle, there is no way I would ever negotiate with or pay people this incompetent.

Credit score affects more than credit. It affects your ability to rent an apartment and it affects your insurance premiums in all but three states.

This is true, too. I can see how that might be inconvenient for some other people, but thankfully I'm not concerned about my need to do the first or my ability to pay the second.

It's definitely ridiculous how unaccountable third parties can affect one's life in such a way, leaving the consumer scrambling to set the story straight about themselves.

Same here. I had months of calls from the agency and I think only because I was extremely forceful that I would never pay them a penny that they finally backed off and told the medical provider to bill the f'ing insurance. This was all complicated by the fact that I didn't see any bill for > 9 months (while they were billing the wrong insurer).

This is more or less how spam was almost solved in 2006 by Blue Frog [1]. Instead of trying to fight the spam distribution, they fought people who buy spam by contacting them directly for every email sent to them by users. The resulting DDoS and shutdown of the service was sad but inevitable. Still makes me feel nostalgic for the brief moment of hope some human behaviour might get better as the internet evolves, and makes me wish some corporation which claims to be socially responsible picked it up, supported and defended it.

[1] https://en.m.wikipedia.org/wiki/Blue_Frog

If he managed all this on top of a full time job and maintaining family life, just for the love of setting a wrong right, imagine what he would have achieved if this had been his full time job. Someone needs to give this guy a job and pay him to do this. There aren't enough people in the world that will stand up and do the right thing instead of just paying it lip service. For that alone, this guy is a hero to me.

I was thinking just this as I read the article. If I had the money I'd just pay this guy to chase these people down.

Likewise. Needs to be a crowd-funded fight-the-man where the patrons can vote on the cause and watch progress.

I'd chip into that pot just for the pure entertainment of it all.

Me too. Both for the entertainment and because I dislike debt collectors. In my experience, they're all lying pieces of shit.

I love it. Make it a platform and call it something hip like vicarious.ly

I could totally get into that.

There is an awesome podcast episode of Planet Money on how vicious these debt collectors can be and why they are “allowed” to be that way. Listen to it here: https://www.npr.org/sections/money/2014/10/08/354591198/epis...

There's another one about how to fight these types of loans in court, I can't seem to find it now though.

Could it be Ralph Nader on Small Claims Court? I successfully, based on this video took Verizon to court over an overcharge of just $12 and I won.


Wasn't that, but that's pretty informative as well.

The gist was that some of these lenders will try to garnish your wages by filing a lawsuit alleging that you owe them the money. About 60% of the time the defendants don't show up to court and so there's a default judgment in favor of garnishment. Even if the defendant does show, they'll usually ask to settle out of court or try to claim it wasn't them. The one thing most people don't know is that if you just say "show me the proof" the case will be dismissed by the prosecution because they don't have any proof. You then quickly counter sue for them to remove it from your credit file and/or lost wages if you think you can prove they were filing frivolously.

I suspect you're thinking of this This American Life episode:


The money shot:

Show me the evidence. In other words, show me where you got this number $3,762.20. The Georgia Legal Services lawyer told Jake that if you're standing before a judge, and you say, OK, I don't recognize this amount that you say I owe and I want to see some documentation, I want to see account statements or whatever, because I have no way to know with certainty that this debt is really mine, the judge will usually turn to the other side and ask for the evidence. And, in all likelihood, they'll have no documentation and they'll drop the case.

And as in the radio episode on NPR and this article, a lot of times, that "proof" is nothing more than a list of names, addresses and amounts in an Excel spreadsheet, and the original statement is long gone, or 5 steps removed.

Used to be that judges would take such Excel spreadsheets as gospel, but a lot more often, especially recently, not so much so, often due to the shenanigans we see here.

Yes thank you! The other NPR show I listen to religiously!

It's frustrating that a private citizen had to do this all himself.

It reminds me of the problem of robocall scammers. If the government really cared, the problem would be fixed.

I think the robocallers started calling members of Congress which is why they got shut down.. Now they just need to be called by the your windows computer is infected guys.

Don't say "Hello" when you answer the phone. Anything other than "Hello" is treated as "reached answering machine", and the predictive dialer hangs up and sometimes takes that number off the call list.

I was getting hit hard by robodialers for over a year. After a few weeks of picking up then immediately muting the call until it disconnected it's gone from one or more calls a day to about one a week. It could have been a coincidence, but it seems to have worked for me.

When did robocalls get shut down? Was it recent?

I think there are probably several times that could be said to be "the time robocalls were shut down".

Currently, I'm living in one of the times they are not shut down. Apparently student loan refinancing is quite lucrative now. I neither know much about it nor (personally) care, since mine have been paid off for a while, but apparently every state in the union has someone who is desperate to let me know about their services. In the last couple of weeks they've started leaving voice mails instead of just ignoring them when I hang up.

(I'd be slightly less frustrated at the amount of advertising targeting and surveillance done if "the system" (scare quoted because I know it's not really one thing) would figure out that, say, I don't need to hear about student loan refinancing.)

Yup, they seem to be coming in waves. In the past week, I received several robo-calls on how the IRS is suing me, after months or years of not getting any. Before that, it was the "you won an Expedia gift card" wave.

My business phone number is called 2-3 times a day by these student loan robocallers. I just work the menu to get to someone and then try to waste their time by drawing the conversation out. They're pretty good at hanging up as soon as they realize I'm not a mark.

Perhaps if we all called a congressman and claimed he owes us money...not condoning it...

Definitely. John Rogers, who wrote Leverage, a whole TV series about vigilantes striking back against the crooked, makes some excellent points here:


Seems like an opportunity to setup a one-man non-profit, crowdfund it, and have him spend the rest of his life working on something he clearly has a passion for. I imagine many netizens would chip in a few $...

I've been dealing with this for years. Every once in a while I get a call from some random debt collector looking for a guy with my name who skipped out on his college loans. I've gotten letters threatening wage garnishment. One time they even called my Mom's cell phone saying they needed to serve me papers.

The conversation ended when it got to S/Ns(which didn't match) and me demanding they never call again. Eventually the conversations got real quick when I'd stop them before they got to begin saying, "No I didn't live at XXX, No I didn't go to college at XXX, No I don't have XXX in student loans."

Luckily I've never had to deal with the level of threats that this guy went through. It's been a while since I've gotten a call looking for this guy with my name. Maybe there's no one left who wants to try to collect this debt.

I'm very surprised that they stopped bothering you. I got debt collector calls for years for someone who used to have my number. For a while I tried to get them to stop calling me by asking for the name of their collection agency (75% hang up) or by asking that they don't contact me in any form again (compliance with the Fair Debt Collection Practices Act). The latter works, but they are legally allowed to resell your debt so the next day I'd get a call from a different collections agency. You'll never get them all to stop calling you so it's easier to deal with the one that you know.

Overall it's been an interesting experience. As someone who grew up middle class, had a scholarship, and lives frugally I would have otherwise not realized how predatory debt collectors are. Instead I've written my representatives many times asking that they create stronger consumer protections in this area.

Edit: Oh, also they aren't legally allowed to share the collections detail of the individual, so I couldn't research his debts further without claiming to be him, which I actually considered but decided against.

> You'll never get them all to stop calling you so it's easier to deal with the one that you know.

Actually there is a way. I've posted this here before, but can't find it now. Basically you call the police and file a report saying you're getting harassing calls. They'll give you a case number and tell you to call your phone company. You then call the phone company and give them the information from the police. They'll give you a phone number. Every time you get a call from the harasser, you call the number they gave you and it makes a note of where the call came from. (It's not clear if they have information that caller ID doesn't - like whether they can track down spoofed calls. I'm not sure.) After 3 or 4 calls, the phone company calls the police and gives them the information about the harasser. The police call the harasser and tell them to stop or there will be consequences. In my experience, the harasser then stops.

I meant "them" as a category (debt collectors) not "them" as a specific company. Your debt is trivially transferable; getting one company to stop is just engaging in a perverse game of whack-a-mole.

> It's not clear if they have information that caller ID doesn't - like whether they can track down spoofed calls. I'm not sure.

Yes and no. CID can be spoofed. But there's another ID (I want to say CNA, but not sure) that cannot.

VOIP is a different matter, but even there they can at least get to the originating provider (though they may not be in the US, and may have varying degrees of cooperation).

Pretty sure you're thinking of ANI.

You're right, ANI.

Yeah, middle class isn't as much of a target since they push back more than the poor. I read a great quote from John Rogers on twitter that put it in perspective for me:

"you're life's not good because you worked hard. Plenty of good people work hard & their life is still shit. Your life's good because you haven't been judged a sufficiently delicious morsel by someone higher on the economic food chain."

Just curious, this guy is obviously not getting payed for his heroic effort. But is there anyway that we can (or should) incentivize this behavior, either for lawyers or for others? Im guessing lawyers dont make a career out of hunting these people down because it doesnt really pay because so many are small potatoes? Can a lawyer comment?

I say we crowd fund it and turn it into the feel good reality TV (internet?) hit of the year

Reminds me of the time Optimum continued charging me for SIX MONTHS after cancelling their ISP service. Couldn't get it resolved and ultimately got collections notices for the debt. I had to get the city (NYC) involved and threaten to sue before I got to someone who was willing to resolve it.

I had the same thing happen with Comcast. I filed a complaint with the FCC online for erroneous billing and the inability to cancel my account.

Forwarded the FCC complaint in an email to comcast and within a day got a response .A few days later they acknowledged that I was erroneously billed 600 bucks and that they actually owed me 10 bucks.

Good thing these people are now going to be our internet gatekeepers.

I had a similar issue with Comcast.

Thats strange, they swore it was a unique incident?

LOL , it has a happened with numerous friends and family members of mine, that have tried to cancel their service.

I incorporated an LLC through Legalzoom a few years ago that I didn't end up using for its intended purpose, so I logged in to cancel the renewal. After spending about 15 minutes combing through all of the account settings and reading the fine print I couldn't find any way to cancel the renewal (they must have forgotten to add that functionality to their UI), I gave up since the card they had on file was expired anyway, so I figured they would just cancel the service when they realized they didn't have a valid card on file anymore. Instead I got a bill from Caine & Weiner Commercial Collection Division for $160; no warning or notification from Legalzoom. I'm still super pissed about this and I definitely won't use or recommend Legalzoom to anyone anymore.

> I gave up since the card they had on file was expired anyway

An expired credit card is not the same thing as one locked for fraud/lost card/etc.

It is possible to charge an expired credit card, many banks will just roll the charges onto the new card instead.

Huh? In my experience at least that is not the case. If a vendor no longer has your correct card details on file (which would certainly be the case if your old card expired and you were issued a new one), then the vendor's charges will be denied by your issuer whether you had a long standing recurring payment or not. I know this because I sometimes receive a 'payment overdue/problem processing your payment' notice from some subscriptions I forget to update when an old card expires.

Auto-updating expired card info is absolutely a thing: https://www.creditcards.com/credit-card-news/recurring-charg...

In my personal experience, as someone who has been taking credit card payments on the web for over 20 years, no. Charges to expired cards are not accepted.

Charges to expired cards are not accepted.

Charges that are both flagged as recurring, and set up before expiry can be accepted.

Existing recurring charges can roll over.

i got hit with fraudulent charges from abcmouse.com . i had never even heard of them before .

So you thought the website that caters lawyer services would just drop the case? Bold move Cotton.

I think if you ever get to the point where you feel like you have to threaten to sue in order to get something fixed, you should probably just visit your local small claims clerk or civil lawsuits lawyer and actually do it.

The other thing that might work is social media shaming. Calling ordinary customer service reps has become increasingly useless over the last 40 years.

This. Nothing like a lawsuit to get a company to actually respond; even if they win it, the cost of sending someone to address it is almost guaranteed to be more than if they just settled the issue.

Besides that, if you threaten to sue, you're just giving them time to construct a defense strategy instead of addressing the actual issue at hand. With the threat, the burden is still on you to take action. With an actual lawsuit, they must act within a certain interval, or you win by default.

I know a guy who had same happen to him with Verizon wireless. He had cancelled the service but they kept billing him which he didn't see (I think he moved?).

This was when most bills were still sent in physical mails.

They sent the unpaid bills to collection agency and it was a huge hassle. He still refuses to do anything with verizon wireless.

It is off-putting how this story starts with the sort of morally-loaded rhetoric used to denigrate the indebted. Rhetoric that only is applied to the lower class, it should be noted.

He was offended at being labelled a "deadbeat" -- a term they use more than once -- and then a company wrote him a letter saying he never borrowed from them (despite the paragraph before saying he did, in fact, borrow from them [edit - my misreading on that. He doesn't know who he borrowed from]). Okay.

This was a company/group trying to criminally defraud people. Even in the legitimate debt realm there are criminal tactics to attempt to recover debt, usually after it has been written off and gone through multiple hands. The whole debt industry is a scumbag, shady industry, preying on the vulnerable. The debt/credit industry has an enormous number of punishers, from credit scores that can prevent you from getting a job to court-ordered remedies. They don't need the lobsters repeating their nonsense.

> then a company wrote him a letter saying he never borrowed from them (despite the paragraph before saying he did, in fact, borrow from them). Okay.

You misunderstood that paragraph.

He got a payday loan from an online lender, and paid it back promptly. The online lender was not Vista, the company to which his alleged debt purported to be owed.

*edited so I don't end a sentence with a preposition. I have no idea how by that slipped me.

N.B. ending an English sentence with a preposition is fine, c.f. https://en.oxforddictionaries.com/grammar/ending-sentences-w... - it's just aping Latin style

I'm sure you didn't mean it, but your sentence could be interpreted that ending with a preposition is aping Latin. That particular tradition comes from English's Germanic roots. Latin languages typically have non-compound verbs which cover the same concepts.


Yes, you're right. I wrote hurriedly and was ambiguous. I meant to say that the rule about not ending a sentence with a proposition is aping Latin style. Thanks!

I recently cancelled Met Life Car Insurance. My new insurance policy was paid in advance so my old one probably was too. Met Life sent me to collections for a $180 bill they say I owed after cancelling. My agent, a broker, cannot explain why I owe the $180 since I had likely paid in advance. I also can't prove that I don't owe because I'd have to go back through nearly 10 years of statements to balance everything out. I'm buying a house and can't have the debt show up on my credit so I pay the bill. Obviously I'm still a little pissed about it. This article is making me wonder if Met Life or my agent released my details to a similar company when I cancelled.

As a side note, I wrote a letter to the president of Met Life insurance on another policy that they had failed to cancel. The president's office responded with a letter that said they corrected the date and that I had no balance. That letter came on the same day as another letter showing that it had been cancelled retroactively but that I owed a remainder of $25. Their letters were in conflict with each other.

Every time you write a check for a recurring service, in the memo field include "services through X", so you will always know that you were paying for services through a given date, and it won't matter if it's paid before or after the services are rendered.

Similarly, every invoice you got from Met Life should also have a coverage date range on it. Shouldn't ever be ambiguous.

Not sure about the US but in the UK you should never pay over money to see where it goes. Paying a debt is an admission, and resets the clock on the time bar (6 years from last payment a debt is statute barred)

I read that as well, and I'm pretty sure that's still the case in the US as well. You never pay "debts" unless you're sure it's legitimate. NEVER.

And I say that as a person who has actually done some of the same things as the man in the article. Not to the lengths he has...but, yeah, I've spooked quite a few debt collectors. It's one of the few times in life you can unleash against all the wrongdoing in the world and aggressively berate/hound/harrass some scumbag who completely deserves it, and has no idea when they've crossed the wrong person.

Wow... that was a cathartic read. I wish I could meet Andrew, shake his hand, and buy him a beer or something.

I, too, can enjoy a good revenge story, especially in the current climate of credit uncertainty after the Equifax breach.

I expect this will become a much bigger problem.

It's been a problem for a long time with which I've had first hand experience. Years ago when I was in college a collector called my parent's house after being rebuked by me and convinced them to pay off the "debt" by appealing to their parental instincts. The very next day they called back asking for more stating it wasn't "paid in full". This despite the fact that they had told my parents the "debt" would be satisfied upon the requested payment. It was literally an outright lie, no room for interpretation, no grey area.

These people are the scum of the earth and I hate to say it, but all the misfortune the perpetrators suffered in the article is well deserved (in my candidly vengeful opinion).

This may not be the soundest advice, but IMO once you've gone to collections, the credit damage is done, and it's not worth paying them off strictly for the risk that they may be scamming you. It's sad that that murky corny of the industry has been allowed to continue harassment of consumers relatively unabated. I see people in this thread getting down-voted for calling out the FTC and other agencies for lack of action, but they are dead on.

If one man in his free time during the evenings can bring down a $1bn+ fraudulent operation, how can you possibly think the government is doing enough? Perhaps Andrew should be hired by the FBI.

If you encounter a problem with agencies collecting on illegitimate debt, it may be reported to the credit bureaus, which can be a big deal for you (buying home, etc).

The bureaus wont help you; I went through an 18-month ordeal figuring out how to clear these things, and heres what I suggest:

-get up to speed on FDCPA rights -officially dispute the collection -pursue the original debtor, and get a resolution in writing. sue them in small claims to get a judgement in your favor if you need to. -send a copy of the resolution to the debt collector and the credit bureau dispute centers

Hope this helps in case anyone is dealing with this kind of stuff.

And yet we are letting the president neuter the CFPB.

John Oliver covered predatory lending in an episode of Last Week Tonight https://www.youtube.com/watch?v=PDylgzybWAw

And bought a massive amount of student loan debt, which was immediately forgiven, giving his show the record for largest TV giveaway (taking the record from Oprah).

It was actually medical debt that at one point may have been worth $15M, but was bought for about $60,000, which is less than one half of one percent of that value. This was essentially worthless non-recoverable and out-of-statute debt. Out-of-statute debt is debt that collectors cannot legally sue for. Lots of symbolism, but no actual relief for debtors.


Considering that people are still harassed for out-of-statue debt, and some even pay, there is actually some relief. Of course, not $15M relief that's certain.

They are also harassed for debt that never actually existed, so it might not be any relief at all.

That's a different episode [0] but indeed pretty epic.

[0] https://www.youtube.com/watch?v=hxUAntt1z2c

Do the people who owe the debt get hit with a tax payment on the portion forgiven? Because if not, that may be a highly effective form of charity.

It is interesting that we live in a world where everything is recorded, companies and even mobile applications collect everything they can, NSA listens to every international call, but when it comes to catching real criminals, this system just doesn't work.

"He who fights with monsters should look to it that he himself does not become a monster. And if you gaze long into an abyss, the abyss also gazes into you."

Why won't the FTC pursue jail time? I think Andrew is right in not stopping, this guy perpetrated a huge fraud, just telling him to pay back money he'll never have isn't enough, he should be behind bars.

The FTC isn't a law enforcement agency and has no power to file criminal charges. However they do notify federal law enforcement when they find evidence of criminal activity.

Does anybody know if this kind of thing is as common in other countries as it is in the US? Are there stronger controls in, say, Germany or France, or Norway and Denmark, that make abuse on this scale impossible? Or is the situation as bad in those countries as here?

I'm from the Netherlands, in my fifties, but haven't heard of anything like this here. A quick Google of the Dutch internet also turned up nothing.

There are similar shady companies in Germany that try individual scams surrounding phantom bills, sometimes for phantom services, but it generally stops at that company and selling dept is not a thing. Most countries also don't have central credit scoring entities like Equifax which scare people into avoiding bad credit history and more likely to just pay.

This is what happens when you make debt collection a for profit endeavour.

What other kind of endeavor could it possibly be?

>What other kind of endeavor could it possibly be?

Debt collection begins its life as a cost of doing business for the lender or service provider. It could be forced by law to remain that way by disallowing the sale of original debt.

Fair enough, but it seems arbitrary and capricious to single out debt collection as the one and only business function that you're not allowed to outsource. Just like accounting, payroll, advertising, lawyering, etc., it requires a specialized body of skill and knowledge that many businesses would rather not have to develop in-house.

>Fair enough, but it seems arbitrary and capricious

In the current context of super-widespread collections abuse, I'd say such a suggestion is anything but arbitrary.

> it requires a specialized body of skill and knowledge that many businesses would rather not have to develop in-house.

If that specialization and skill was a real thing, then we wouldn't see widespread abuse committed by the agencies like we do today. After all, virtually every abuse involves inaccuracy on the part of the agency.

Preventing selling debt wouldn't prevent outsourcing of collections, I can pay someone to collect debt without selling them the debt.

I can even make their fee contingent on their success in collection.

>I can pay someone to collect debt without selling them the debt.

True. Legislation designed to reduce collections abuse could make contracting illegal or strictly limit outsourcing to companies with operational records that are free of abuse.

$150 interest on a $500 loan over two weeks does not annualize to 700%. It's closer to 92,000%!

Great story and something I had to help my parents deal with as well (though not to this extent).

I personally think payday lending should be banned nationwide. The thing is, there are people that depend on that sort of resource or small loans so what is a better way to do this that doesn't lead to bad outcomes?

There was all the hoopla over Muhummad Yunas and microloans back in the day and P2P lending now. I assume there will be some sort of blockchain P2P lending soon as well.

Also, I used to watch Dirty Jobs every now and then and sometimes the environment or role would look pretty gross but I can't imagine having to be one of these people as a job. Swimming in real filth is probably better for the soul than swimming in this immoral filth.

> I personally think payday lending should be banned nationwide.

The problem is that this just moves the lending into the black market, and victims get even less protection.

That's why I wrote a sentence that followed that one asking:

The thing is, there are people that depend on that sort of resource or small loans so what is a better way to do this that doesn't lead to bad outcomes?

Payday lending itself isn't the problem. It's the usury that's the problem. Unfortunately, that was deregulated, so states are unable to enforce their own anti-usury laws.

I didn't know there had been regulations. It sounds like there might still be some in place but maybe they aren't adequate enough or as enforceable (or politically chosen not to enforce):


In the following country analysis, I was surprised to see Canada set a limit of 60%/yr, which seems incredibly high. Japan seems to have a decent policy.

Well, as it says, there's no national law. However, the law followed is not the law where the borrower resides, but the law where the lender is headquartered. Which is why so many of the payday lenders are headquartered in New Jersey and South Dakota; those states were willing to gut their consumer protection laws in order to lure jobs.

It just seems that there other better jobs, at least in New Jersey. I would rather work on a fracking site in SD than sell my soul but to each their own I guess.

Me too, but there are some incredibly shitty people out there.

Blockchain P2P lending would solve this particular issue very well, since its all recorded on a public ledger.

That's one thing I've been curious about when trying to read up on blockchain this week.

I think the tech may be there but being able to make it publicly accessible and understandable will be the major hurdle.

If a single paid employee at the FTC was this vigilant, there might be no scamming in the US. Time to replace the agency.

Federal watchdog agencies and underfunded, understaffed, and overworked.

The people need replacing are the nitwits that have long since been purchased by the companies they are supposed to be protecting us from.

I would like to see your data for this.

In 2012, the FTC put on their Robocall Summit. It was livestreamed, so I watched it. One thing I took from it was that there were many smart and dedicated people at the FTC, but that it was a hard problem.

One thing they didn't say, but I suspect is true, is that the FTC is not well supported by Congress. Look at how hard it was to ban telemarketing in the first place. Look at how energetically the CFPB is being undermined.

Dedicated people aren't enough. You need institutional support, including money, resources, and laws that actually let you put the criminals in jail.

Generally speaking an ineffective agency is the result of certain political blocs in Congress trying to limit it or cripple it... Either out of political philosophy or to satisfy some donors.

That's why the IRS is underfunded despite basically being a revenue center. That's why the ATF is forced to do manual searches of paper files.

If all one does is call to replace the agency, that just provides even more opportunity to the saboteurs in charge.

Or they're all busy working on other equally important issues. Or they actually are working on busting other scammers. Or any one of a billion things that are invisible to you as a "civilian".

Make all loans signed by an private key, all payments toward the loan signed by a private key. If the signatures don't match then credit reporting agencies should not be allowed to use it. I did more in 1 minute of thought than the entire ftc just now.

Who issues the private keys? What happens if the keys are compromised? What happens to the debt if a key is lost? How do you migrate older debt to the new system? How would this solve the issue of proving the person you are talking to actually owes the debt? There are soooo many questions and things to figure out in such a big and complicated system. It's easy to criticize, especially when you aren't actually responsible for execution.

No, you just armchair quarterbacked a "why don't you just" solution.

You posted a comment on a website. You have not done a single thing to implement that, nor a single thing to tackle the immense logistics of getting everyone, including people who might not have a computer, a private key, securing that key, or dealing with the fallout that happens when people's private keys inevitably get leaked.

Why would a central agency even have everyone's private key? All they ought to have is a record of whom a given public part of the key pair belongs to.

If you lose your private key or leak it you don't go to the government to get it back you just pay some money to have a second key issued and the original declared to be invalid.

All debt assigned to the original public part of the key pair would be transferred to the new one unless you could show that it is fraudulent much like you would if your debit card number was stolen.

Additionally the private key shouldn't ever be shared it should be stored on a physical device and proof of having the public key ought to be the only thing transmitted.

Its true that there are logistical challenges involved but they are the boring and tedious kind. Work that nobody wants to do.

> Why would a central agency even have everyone's private key?

Why would people store the majority of their cryptocurrency on an exchange?

Besides, a leak can happen without a big centralized repository - a flaw in the software used to generate and locally store these keys could be exploited, or a flaw in the generation algorithm itself, or any of a number of things.

> Its true that there are logistical challenges involved but they are the boring and tedious kind. Work that nobody wants to do.

I think that was part of s73ver_'s point, and what coding123 completely glossed over.

Replace it with what exactly?

It’s not like there’s a secret reserve of smart, dedicated people who know what they are doing.

You seem to be under the mistaken impression that the US government cares about ordinary people.

Given that the US Supreme Court made the obscene mistake of saying that 3rd party debt collectors don't fall under the Fair Debt Collection Practices Act, expect harassment like this to become more common.

Can you show a citation for this? last I looked into this, all debt collectors are abound to the FDCPA


They were simply confirming the plain meaning of the FDCPA, which applies to people who collect debt that is owed to another person. Junk debt buyers buy their debt outright, so they're not collecting on someone else's behalf, so FDCPA doesn't apply. If people are upset about this, they should direct that toward Congress for not having amended the law.

I believe directing ire at the SCOTUS for being that bone headedly idiotic in that decision, especially in a political environment where they had to have known there would not be a legislative solution anytime soon is also warranted.

This was a very compelling read. We need more poeple like Therrien to make a stand.

The fact that this sort of injustice is allowed to thrive really makes my blood boil. It makes me wish I had become a lawyer or some other legal professional instead with the authority to prosecute these predators and scammers.

Shameless plug: That's exactly why we started TrueAccord (www.trueaccord.com).

1. People in debt aren't "deadbeats" and deserve to be treated well 2. Using technology to make the process about financial health and treating people like regular customers makes a huge difference

You might want to remove Yelp from your featured clients, they aren't exactly known as a moral company.

Banks and other institutions are willing to sell debt to collection agencies for pennies on the dollar, but aren't willing to make those same concessions to the debtors themselves, regardless of circumstance. The whole system isn't just unfair, it's vindictive.

Solution: become a debt collector, and buy your own debt!

Sweden has this construct that you should probably just copy:


The US seems like it's stuck in the wild west ways of doing things.

Interesting concept, though the Wikipedia article itself seems to indicate this system has its flaws:

"In Sweden, even with the existence of the Enforcement Authority, it is still considered complicated, so most companies use debt collection companies for the process anyway, similar to in other countries."

Huh? I mean, if you don't pay a bill, it'll usually go to a private company trying to collect it at first. But they simply send out another bill with an additional charge added. After a few attempts they will in turn hand it over to the Enforcement Authority. I've never heard of anyone using anything but the Enforcement Authority as a last resort to claim a debt.

In Australia, the government has been issuing debt notices[1] to some of the poorest citizens (beneficiaries) without first confirming the debts actually exist.

It's been called the 'Robodebt scandal' and it's been going on for a year now.


[1] Not strictly speaking debt notices, but the gist is the same: "We think you owe this money. If you can't prove otherwise, we will issue a debt notice."

This is just one reason I'm wary of Basic Income.

Currently there's almost no-one so poor that they can't be scammed or threatened out of what little they have.

Basic Income could just enrich the predators.

If you're in the US, file a complaint with the Consumer Financial Protection Bureau. They will at least try to get a point of contact for the business to respond to the complaint. In general, there are a number of good answers to questions and strategies here when responding to collectors: https://www.consumerfinance.gov/ask-cfpb/category-debt-colle...

The CFPB is being intentionally attacked by the Republican Party. I suspect we'll see it completely destroyed in the near future. It helped the common person too much against banks and false debt. As long as that party maintains any power, do not expect much anymore out of the government protecting you or your fellow citizens against abuse from false collectors.

* http://money.cnn.com/2017/11/28/news/economy/cfpb-trump-mulv...

Reading the many comments on this story, I've got to say that the whole debt and collection situation in the US looks like a complete mess. I almost never hear these kind of stories from European countries. I have seen companies mess up their administration, but rarely, and usually with some reason. Never does it result in thugs calling you and threatening you.

The whole idea that debt gets repackaged and resold to multiple parties is bizarre.

Ditto taxes.

I moved to California in 2014. In 2016, I got a letter saying I owed back taxes (state) for 2012 on an estimated income. Took quite some time to clean that one up :-/

It's 2017 the solution to this problem is never answer a call from an unknown caller. Problem solved especially if this guy, his wife and other family members followed this mantra. A mantra Im sure all of us follow on Hacker News.

I only pick up the phone from those in my phone book or have a call scheduled with someone new. I then add them to my contacts or make note of their number.

That's not really good advice in this situation. There's a decent chance that the collectors would then ding their credit report or possibly sue.

Well if it’s legit send paper mail.

"Sometimes, Therrien would make a small payment on the fake debt"

Can't do that in my country because that's admitting the debt was right. Also, debt collectors can't overreach like that here. Need to go to court to get your money back.

Just bring the proof and normally everything should be OK. At least tha's what happend with me ;)

Is there a way technology can better be leveraged to verify debt? Would such a centralized system be dangerous? What about a decentralized one? It scares me that someone can put my name in a spreadsheet with 300 next to it and it can cause so many to be fooled

It would be funny if the ultimate use of a blockchain was to validate debt and put debt scammers out of business instead of being used as a currency replacement.

Well, we have a national ID here in my country that significantly reduces the bizarreness that is the U.S. system of not being able to verify who actually owes a debt.... (not that we don't have annoying debt collectors, but not in this scale and with those errors).

In my opinion, a national ID's benefits SIGNIFICANTLY outweigh their theoretical downsides (I mean, the NSA already exists). It makes my life easier (but I still end up developing systems for the U.S. and I have to assume they don't have IDs :P )

The guy is a f.n hero!

I don't get it, why was he reluctant to go public?

The body count in this article is unreal.

> If it’s just about me, I don’t particularly give a f---. You call my wife, and you call my grandparents? You just opened up a door that got really f---ing ugly, and now I’m going to make sure that I just ruin your life.

This guy is a hero.

Actually, for a person who considers themselves a good Christian ("he takes pride in being a more responsible person than his parents—paying his bills on time, going to church on Sunday, and taking care of those close to him") that threat is kind of hypocritical.

The truly correct outcome would have all the stolen money back to the victims (together with their wasted time and moral damage), and safeguards placed to make sure this never happens again. Ruining someone's life would serve no purpose in that direction.

EDIT: Since people have trouble understanding my point: it's not justice (morally or legally) to ruin someone's life. This guy isn't a hero for making a threat. He's a hero for making a change which would actually help other people.

The Lord our God is hardly a stranger to raining down holy vengeance upon those who defy His will. "Vengeance is mine; I will repay, saith the Lord." (EDIT: I'm an atheist, but there's wisdom in the Bible.)

EDIT: "This guy isn't a hero for making a threat. He's a hero for making a change which would actually help other people." Please don't downvote this person.

Just FYI, the line "vengeance is mine saith the Lord" specifically advocates against vengeance. It means that only God is allowed to exact retribution, not people. The next verse is "Therefore if thine enemy hunger, feed him; if he thirst, give him drink: for in so doing thou shalt heap coals of fire on his head."

There's a lot of fucked up shit in the old testament, including stoning your children if they misbehave.

How about the New Testament when Jesus cleaned the temple by over turning the tables of money changers and accusing them of turning the temple into a den of thieves.

Interpret the threat of ruining lives however you like, but at the end of the day the man conducted a factual investigation and turned over the information he collected to proper authorities. Seems proportional to someone threatening to rape his wife in the attempt to collect a non-existent debt. But tell us what a good Christian in your eyes is supposed to do?

Surely you understand I was referring to the actual threat as being hypocritical.

> the man conducted a factual investigation and turned over the information he collected to proper authorities.

And I agree, he is a hero for that, regardless of what religion he fancies.

> Seems proportional to someone threatening to rape his wife in the attempt to collect a non-existent debt.

Well, it's not actually the same guy who threatened his wife, that guy went unpunished. Moreover, it wasn't necessary to ruin Joel Tucker life. If Tucker had enough money to pay back everyone he stole without having to suffer crippling depression that would've been sufficient.

The old testament describes a time when life was very cheap, and the KJV is a beautiful piece of literature. I take them as what they are.

Please don't start a discussion about religion on HN. It's just flamebait.

>safeguards placed to make sure this never happens again

Safeguards are great but there should be a penalty for bypassing them, we need to take people who commit crimes like this and throw them in prison.

If they don't work, they're not actually safeguards.

Haha, what?

Please explain how ruining someone's life, which he believes deserves to be ruined due to their taking advantage of the poor, is 'hypocritical'.

Christians are supposed to turn the other cheek not slap back. You either take a vengeful stance and declare you want payback, or you take a pious stance and abide by whatever your religion tells you. Taking both is hypocritical.

The verse deals with insult, not injury.

>Striking on the right cheek refers to a back-handed slap to the face. In Jesus' time, and still today in the Middle East, such a gesture is one of the highest forms of contempt.


"But if there is serious injury, you are to take life for life, eye for eye, tooth for tooth, hand for hand, foot for foot, burn for burn, wound for wound, bruise for bruise."

I don't think anybody here really understands what you're arguing for. Maybe you can rephrase it?

don't forget Jesus' rage at the tax collector.

You've got your stories a little mixed up - Jesus ate with a tax collector and showed brotherly love for one whom society saw as evil. He expressed his rage at the money changers and merchants in the temple, those who commercialized a place of worship.

How much do you know about Christianity?

"Think not that I am come to send peace on earth: I came not to bring peace, but a sword."

"But I tell you, do not resist an evil person. If anyone slaps you on the right cheek, turn to them the other cheek also."

See, I can throw quotes from the bible too.

It's a Roscharch test. You get what you want out of it.

Okay. Now do you get my point?

You don't get to call someone a bad Christian if they don't hold up to your idea of Christianity. Especially when (guessing here) that OP is not a Christian but an atheist.

Someone can be Christian and imperfect, that doesn't make them a hypocrite.

You know, if we switched our law enforcement priorities from low level drug offenses to getting rid of these scumbags, our prisons might be just as full (appeasing the private prisons lobby), but at least they'd be full of people who actually have done wrong, and we'd be making life better for everyone else.

Feels like block-chain authentication could resolve parts of this.... If we required that all debt be digitally signed in a central ledger, either nationally or by state, and then all payment transactions were also recorded there, it'd be a lot harder to fake this stuff... first though we need someone in gov to understand bc tech.

I know that most big banks and FI have a few devs working on some sorta blockchain ledger for internal transactions, and apparently the big exchanges are very seriously considering using them as well, so it shouldn't be too difficult to make the leap to loans.

ugh, I know we hate just saying throw current fad at this problem, but I'd like to know more why people are against this idea.

I know the idea isn't perfect and would require a lot of work shopping but the current model of lenders selling each other spreadsheets with just a $$$ amount and phone number simply isn't sustainable.

Why blockchain?

If you have a trusted entity (the government) you just need a public database.

Because that trusted entity kinda sucks at these things. Also it'll mollify the people who don't wanna cede all control to the government.

Some central database controlled by the government doesn't solve the issue that all databases have, which is that you need to have absolute trust in the people who admin that db, the beauty of blockchains is that trust is no longer needed, as long as the there are a reasonably diverse number of entities involved no single person can make unilateral changes.

Also this would mean that we could go from each lender and predator having all my personal info to just retaining my public key which can unlock more info with their private one, but means they are no longer selling my phone # and ssn because they don't need to store it.

I truly believe that the power of blockchain tech isn't in $1200 btc but in powerful and secure logging.

> Because that trusted entity kinda sucks at these things. Also it'll mollify the people who don't wanna cede all control to the government

In your top level comment you said:

top> If we required that all debt be digitally signed in a central ledger, either nationally or by state, and then all payment transactions were also recorded there, it'd be a lot harder to fake this stuff

If we make it required, we've already ceded control to the government, since it is the government that would control enforcement of the requirement. Even if the government decides to use a block chain, they still have control because they get to pick which block chain is used, and they can change that choice at any time.

Also, who signs this digitally signed debt? If you mean that the debtor signs it, then I don't see why you even need a public record of the debt as far as validating debt collection attempts goes. All that needs to be public is the alleged debtor's public key.

> Some central database controlled by the government doesn't solve the issue that all databases have, which is that you need to have absolute trust in the people who admin that db, the beauty of blockchains is that trust is no longer needed, as long as the there are a reasonably diverse number of entities involved no single person can make unilateral changes.

That doesn't require a block chain. All it requires is that more than one entity keeps a copy of the database.

    >That doesn't require a block chain. All it requires is that more than one entity keeps a copy of the database.
And maybe we should give a few different people copies of the db and every 30 minutes or so they could sync up and add any transactions that happened in the meantime, and it would be best if they all used some sorta signature to ensure that all the transactions are legit...

    >If we make it required, we've already ceded control 
    >to the government, since it is the government that 
    >would control enforcement of the requirement. Even if
    >the government decides to use a block chain, they still 
    >have control because they get to pick which block chain
    >is used, and they can change that choice at any time.
We also cede control to the government by using USD but no one (serious) is suggesting that the government should also be everyone's bank. It's question of how much control to give up in exchange for what. I see real benefit in a central loan ledger that doesn't have a single point of failure.

> I see real benefit in a central loan ledger that doesn't have a single point of failure.

Sure, but you can get that with a conventional database replicated between several instances hosted by different entities (which do not have to be government entities).

Think about how records of loans would be used. All the use cases that are coming to mind for me don't involve any of the things that block chains do better than conventional replicated databases.

(I'm assuming that the records would be signed by the borrower, and would contain unique identifiers so that recording the same loan more than once would be detectable and could be ignored).

For example, block chains are good at dealing with double spending when they are used to track currency or commodity balances. But I don't see anything analogous to double spending for a loan existence tracking system, so that strength of block chains is not relevant.

I may not understand what you mean by double spending because this whole article appears to me to be about double spending: different lenders are claiming the same loan is owed to them even long after the original loan has been paid off. A central ledger that clearly tracks loans and repayments and is publicly accessible could be a solution to that problem.

That doesn't actually fix anything, it just replaces one problem with a set of worse problems. There's no good way to manage the private keys. Many borrowers will inevitably lose control of their keys, either accidentally or by hacking. Then what?

That problem isn't a whole lot different than what happens today when you lose control of your SSN. I'm not advocating for your private key to become your ID, in fact it'd be best if each time you took out a loan you used a new key. How is a private key any harder to manage than a all the myriad of personal and private info we are required to manage today. At least this way you're the only person responsible for managing it, not every single FI and bank.

Nobody really has "control" of their SSN anymore; most have been leaked one way or another. The only effective control is locking your credit files.

Even if you generate a new private key for every loan it wouldn't help much. A significant fraction of borrowers will still lose control of their keys during the life of the loan. So the reality is that to make such a scheme workable would require one or more trusted central authorities to perform identity management and key recovery. Who would do that work and what's the funding model?

Certainly, none of those people deserve to be taken advantage of like that.

But, for those who are willing to pay 150$ interest on a two-week 500$ loan, they've got even bigger problems. In a world where money is everything, people must learn how to use it. Basic Personal finance should be taught k-12 as a primary subject, it's far more important than anything else you could possibly learn.

Predatory loans can't really be solved with education, at least not a simple "personal finance" course. People don't get loans like that because they're dumb, they get loans like that because they're stuck and desperate:


'...they get loans like that because they're stuck and desperate.

In the UK we have what's known as 'doorstep lenders' who offer these kinds of extortionate loans to people who are on benefits (welfare) and who can not get credit by any other means.

It is fashionable to sneer at their victims as irresponsible and feckless but these companies have spent years perfecting a methodology that is difficult to resist.

If you're living hand to mouth and someone offers you a cash loan of £500 there and then it can take a lot of self-control to pass.

A friend of mine has mental health issues and has a real problem with the word 'no'. As a consequence he's found himself a target of these people on numerous occasions.

It is the common and, for some, so very morally upright, to castigate people for not being proof against practiced, refined methods specifically designed to take advantage of them. Payday lending in the US or doorstep lending in the UK is exactly that.

These people are practiced. They have built strategies on exactly how to get the most out of disadvantaged people: the poor with payday lenders, addictive personalities with casinos or mobile games, all of it. They have bigger guns and much, much more data about how to aim--but John Q. Public is supposed to be able to ward all of it off?

Here's an example. Here in Massachusetts we're plagued with scumbags who want you to sign up for an "alternative energy provider" or whatever. Still uses your normal electric company but they "source the power" from a company you select. "It's green," they cry! "It's cheaper," they cry! Of course, what they don't tell you, as they literally knock on your door and fast-talk you, as they imply-but-don't-say that they're from your actual power company, into signing up. Then they jack your rates a few months later, expecting you to not notice, because the bill comes from National Grid anyway. And there's also a big cancellation fee after 48 hours, too, so they get you that way too.

The reason I know about these bastards is because one day, a little confused, a little hungover, and not wanting to look stupid, I got suckered by these assholes. Some dude knocked on my door, was super duper friendly, and explained his upsides and not his downsides; sure, this sounds fine, I'll sign up. Was it stupid? Yeah, it really was. But hey, I messed up. It happens to everyone. For me, the risk is pretty small. It would've been twenty, forty, sixty bucks extra a month. But I'm in tech! I might not have noticed. What about the barely-speaks-English immigrant who lives two doors away from me and works at the 7-Eleven down the street? What about the elderly people in my building? They're not gonna know what happened, they might not even remember doing it by the time it goes down.

I'm in a more privileged place than most people, in that I'm comfortable with legalese and how to operate with regards to contracts and that sort of thing. So, after the high-pressure sales were no longer clogging my brain, I was able to go "wait, what did I just agree to?". I read the papers left to me, went "this is awful" and "wow, fuck those guys" respectively, canceled it within the cancel window, and called my state senator saying "hey, this is totally bad up, you need to do something about it". I did, what's it called--civic engagement, something that actually still works in Massachusetts. And his office is on it, they've co-sponsored a bill to give the state AG authority to deal with these scams, and I called my rep and rep-at-large afterwards to make sure that they're aware of it and are going to vote for the bill. But it's not just civic engagement, it's community engagement: ever since, because I am fortunate and I can do it safely because I'm a pretty tall, pretty broad white dude who has no reason to be intimidated by these people and knows the rules they have to operate under, any time they come in the building and I'm around, I make sure they leave, or I call the cops.

This is not something solved merely by education. This is something solved by the communities in which we all live grabbing the metaphorical torches and keeping the wolves at bay rather than letting them take the weak. Not allowing wolves to eat the least of us is why we invented society in the first place, isn't it?

Yes. I know bright, competent people with PhDs who have fallen victim to professional scammers. Education does not solve the problem. Scammers make use of information and power asymmetries, ruthlessly exploiting weaknesses.

I guess in theory we could educate every single person on every single scam and give them all enough regular practice in spotting and dodging scammers. But it's far, far cheaper to just vigorously enforce the laws we have, and to update the laws as needed.

Understanding personal finance would give people the tools to help avoid becoming stuck and desperate in the first place (obviously not in every case)

Most of the predatory lending industry is built on top of people who are born stuck and desperate.

Well not knowing how to manage your own finances is one sure way to guarantee that everyone "born stuck and desparate" will stay there indefinitely!

But hey, might as well give no one the tools to help their situation if it won't help everyone all at once, right?

I hear this a lot, but everyone I know who had debt trouble did so because they made a dumb purchase (or 20) with debt, not because they had no other options. I have trouble believing the maximally charitable explanation.

None of the people I know are in massive debt, therefore I have trouble believing that anybody is in massive debt.

Does that sound like a reasonable assertion?

It is very easy for us to say one should be unwilling to take those terms. And they are unwise terms. When you have, or can see, no other options aside from "your kid starves", perhaps they are suddenly less unwise. Desperation exists and it is not solved with personal finance courses.

personally, I would fast for the long term before I took on terms like that. Fasting is actually quite good for your health and many of us would benefit from it.

in the US with frugal living, you live of 2-3$ per day, using the oatmeal plan.

And, if your so poor you can't afford that, then it's irresponsible to have kids.

At least not until you get back on your feet.

That's nice that you say you would do that. It is also divorced from reality; what you're describing as "fasting" is what normal people call fucking starving, dude.

People don't get to decide that suddenly they were laid off and the economy sucks so it's been a long time since they had steady work beyond the very-part-time job at the convenience store and they don't get to decide that their seven-year-old, born when things were great and when Dad was still around and your family had a second income, needs to not go hungry.

You are representing a callous, gross viewpoint and I genuinely hope it never comes back to make you regret it.

the point is, with the appropriate education, early enough, we can avoid these situations.

by taking on these loans, it's only going to make their situation even worse.

"We should close the barn door after the horse is a county away" is not a useful, meaningful, or insightful point. So why make it?

And, worse, it's wrong besides. Plenty of well-educated people screw up. Plenty of well-educated people are suckered by scams of all types, even people who literally do know better. Life is complicated, it comes at you fast, and one mistake, when you are not so fortunate as to have the kind of (tech) jobs that let you make mistakes, can be profoundly destructive.

See my post elsewhere in this thread for more: https://news.ycombinator.com/item?id=15863152

The solution is not to educate people to starve or go homeless instead of taking loans. It's to ensure that nobody is placed in a position where they're stuck between starving/going homeless/etc and taking out a payday loan. If the current system is not ensuring that, what changes would ensure it? That's the question.

Sure, but the situation is already dire. What's the difference if it gets worse in three weeks? It might get worse in three weeks anyways, and at least if you take the predatory loan you'll have some money to keep the electricity on for another few days. The loan won't improve your situation, but not taking the loan sure as hell isn't going to improve it either.

You are right on neither point. Education is neither necessary nor sufficient to keep people from desperate situations. And taking a payday loan often makes the situation better. Always in the short term, sometimes in the long.

Expecting somebody to let their family starve or become homeless rather than taking a payday loan is ridiculous.

We have a word for "fasting for the long term": starving. You are saying you would starve before taking out a loan on unfavorable terms. How long would you starve? One month? Two? At what point would you decide you'd rather deal with debt collectors than die of starvation?

> Fasting is actually quite good for your health and many of us would benefit from it.

We've reached peak HN, folks. Pack it in.

> And, if your so poor you can't afford that, then it's irresponsible to have kids.

So what happens if you had kids while you were prosperous, but then become poor? You might be willing to fast for a week (have you tried?), but it's an entirely different thing to make a six year old fast.

I wonder what's the longest period of time you've ever fasted for?

Many years ago I was homeless and broke for a period of time. At one point I didn't eat for 2 days, it wasn't easy and not something I'd be willing to do again voluntarily.

2 days sounds easy, right?

Fasting for even a week is no problem when you have been well fed before. It's not so much fun and not so healthy when you are already underfed or malnourished when you start.

Recommending fasting to poor people is pretty arrogant.

I've fasted for 3 days. Day 1 was kinda rough, day 2 was easier imo. Day 3 was the easiest of the 3 days. That said, I fasted from a place of luxury. Not eating because you literally have no food available is a completely different psychological experience.

"And, if your so poor you can't afford that, then it's irresponsible to have kids."

Hindsight is 20/20. What do you do if you already have kids?

> no other options aside from "your kid starves"

This hypothetical scenario has no basis in reality, at least in the US. Besides the fact that children in the US have access to free meals on a daily basis through public schools, food in the US is dirt cheap. Food deserts basically no longer exist in the US thanks to stores like Walmart. You can easily supply a nutrient-filled 2500 kcal diet for under $3/day in the US. For most people who are desperately poor and unable to do this, it is an educational problem; a lot of people just don’t know how to eat healthily.

About a sixth of NYC families are food-insecure (https://www.foodbanknyc.org/wp-content/uploads/Meal-Gap-Tren...), and food deserts absolutely still exist (https://www.foodsystemsjournal.org/index.php/fsj/article/vie...).

Please don’t make shit up off the top of your head.

Perception is reality at the points we're talking about. Being unable to see the way out means there is no way out. You underestimate the psychological toll being at the bottom of the barrel causes.

Your car breaks down. You have absolutely zero money in savings; you work two jobs to pay rent and put food in your children's belly and clothes on their backs. You absolutely must have your car in order to get to your jobs; public transit in most areas is spotty at best. You cannot get a loan any other way, and you need money now.

What do you do?

While I don't particularly agree with OP's premise that only education can solve this problem, it can also be argued that the situation you describe is a result of a set of choices made that directly correlate to bad personal and financial desicions.

Barring physicial or mental health reasons, being a victim of criminal activity (rape, theft, et. al.), or "acts of god" (natural disasters), a person ending up in this situation most certainly screwed up somewhere along the line.

This is in my opinion the first place where taxes should go. To help out people that have been screwed by chance and bad luck so they don't have to rely on predatory lending.

"While I don't particularly agree with OP's premise that only education can solve this problem, it can also be argued that the situation you describe is a result of a set of choices made that directly correlate to bad personal and financial desicions."

It could be. Absolutely does not matter. You're in that situation. What do you do?

"Barring physicial or mental health reasons, being a victim of criminal activity (rape, theft, et. al.), or "acts of god" (natural disasters), a person ending up in this situation most certainly screwed up somewhere along the line."

Or got screwed. Take a single parent, for whom the other parent skipped town, and due to needing to take care of the child, was unable to complete school. Or take someone who just got cancer, and then was laid off from their job. Why should they continue to be punished for one screwup that may or may not be their fault?

"This is in my opinion the first place where taxes should go. To help out people that have been screwed by chance and bad luck so they don't have to rely on predatory lending."

I do not disagree in the slightest. However, given the current political climate in the US, it's not going to get any better. In fact, the safety net is likely to get worse.

Buddy you seem to think I don't for the most part agree with you. That couldn't be more far from the truth!

Yes if you are in that situation that might be your only choice, or at the very least the only choice you believe you have. That being said, there's an argument (OP's argument) that if not most of this situations at least a big chunk of them would be avoidable via financial education.

And yes if your partner skipped town or got cancer the government should be helping you out IMO. A person shouldn't be punished for any of it, but that doesn't mean that those situations are not at some level influenced by making bad financial desicions.

Don't be in that situation. No seriously. I even went so far as emigrating and moving to a country with a better welfare state partly to avoid this ever happening.

Not everyone has the luxury of being able to move countries+. Which is why we should all vote and lobby for better welfare systems - so that we and our loved ones never have to take these types of decisions.

Edit + It usually takes marketable skills that allow a well paid job such that welfare doesn't seem like a priority.

Edit Would down voters care to chip in with a comment? Drive bys don't really lead to good discussion.

"Don't be in that situation."

That is not an answer.

If you are actually trying to discuss in good faith, then please respond to the topic at hand. Playing Captain Hindsight helps absolutely no one, especially the people in the situation, and really just serves as "I'm better than you!"

I absolutely agree that better welfare systems would be excellent, and would alleviate these problems quite a bit. But here in the US, that is not going to happen anytime soon. In fact, given the government in power now, I would expect the welfare system to get even worse. So please, do not offer "Don't be in that situation" as a suggestion.

Please read with good faith and also appreciate that we don't all live in America.

The original situation is horrible. No one should ever be put into it. There is little point answering the question - it has no good outcomes. Instead we need to think about how to prevent it happening. I suggest that we should strive to build societies where it does not happen. I offered a concrete suggestion for how an individual can help themselves and another for how they can try to help everyone.

In terms of the USA - Lobbying by the public has slowed attempts to decrease healthcare provision in the USA. People like you that care and live there need to continue pushing.

I did read with good faith. Regardless of where you are, "Don't be in that situation" is not, nor never will be an appropriate response.

"There is little point answering the question - it has no good outcomes."

That's exactly why there is point in answering the question. It is a very real, very common situation that does actually occur. And that decision needs to be made many times.

"I offered a concrete suggestion for how an individual can help themselves and another for how they can try to help everyone."

You really didn't, as your suggestion is not applicable for the situation.

My point is that instead of standing around crying about how terrible it is that people need to take predatory loans (and it is terrible) we should work out how we can change things so that they don't have to. My suggestion is to work with a proven mechanism - the welfare state.

"Which is why we should all vote and lobby for better welfare systems - so that we and our loved ones never have to take these types of decisions."

Pretty sure that is an answer even if its one that is unlikely to work for America this decade.

Poor people are poor, not necessarily stupid. There's an art to "paying bills" when you don't have the money to pay in full. You have to know the payment and delinquency policies of every last one of your utilities, just like you have to know the discount, coupon, and return policies of every store you visit.

It's almost a full-time job in itself. You have to work every system to the bone and have a side-hustle in order to get past the current crisis until your next windfall.

You have kids? Give them a box of $0.05 things and tell them to sell them each for $1.00 . They'll have to learn how to live as poor folk sooner or later, and sales is a marketable skill, whereas panhandling is not. If you can work two jobs, they can work one and still go to school.

Being poor sucks. Don't be poor. If you find yourself being poor, stop as fast as you can. Don't fall for the traps that keep you poor. Don't let the crabs drag you back into their bucket. And never take out a loan in your own name unless the money you take is going to make you more money than what it will cost you to take it.

And for the sake of your mother's honor, if you take a job as a debt collector, tell everyone that you sell heroin and mug people instead.

>Being poor sucks. Don't be poor. If you find yourself being poor, stop as fast as you can.

Damn, if someone had just told the poor people this sooner, they wouldn't be poor! /s

I guess maybe everyone just assumes they already know?

That was really more for people who have never been poor, and can't quite fathom what it's like.

So... "Only the sophisticated need protection from scams. The rubes deserve what they get." ... ?

That's pretty vile. Yeah, the world is filled with people with poor finance skills. They aren't marks to be exploited.

Couldn't we have something like the "Accredited investor" concept for a certain class of loan? E.g. if interests are above a certain rate?

I can't buy certain financial products even if I'm educated because I'm not an accredited investor, but anybody can lose more than what they have freely.

Freakonomics did an interesting episode on this http://freakonomics.com/podcast/payday-loans/

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