Posts Tagged ‘Credit (finance)’

Recording scam calls a defense against fraud

CONSUMER FORUM

By Russ Van Arsdale, Executive Director Northeast CONTACT
Posted Sept. 15, 2013, at 1:22 p.m.

If you want to turn the tables on someone who calls on the phone who you suspect is a scam artist, tell the caller that you are recording the conversation. Better yet, wait until after the pitch is complete before making your announcement.

That’s a suggestion we received last week from William Lund, superintendent of Maine’s Bureau of Consumer Credit Protection. He suggested that, at the very least, it would bring the call to a rapid end. At best, it might provide incriminating information that could help authorities track down and prosecute telephone fraud artists.

“Recordings are the only things that make these collectors nervous,” Lund told us. He said a recording negates charges of “my word against yours.” Also, it is far more reliable than one’s memory which could be clouded by a less-than-friendly discussion.

Lund said recording could be useful in cases where a caller threatens legal action to force a Maine consumer to hand over money, claiming the consumer has not paid an outstanding debt. He said a threat of legal action is almost always an empty one, since authorities will not act on complaints from unlicensed, out-of-state payday lenders. In civil court, such firms must be represented by a local company employee (there are none) or an attorney. Not many lawyers will stand up to represent unlicensed, out-of-state payday lenders.

On that point, Lund says Maine law is clear. If a lender is not licensed to do business in Maine, that lender cannot collect interest on a loan. While that provision of the law is not a loophole to avoid paying back a legitimate debt, Lund said, “Neither should Maine residents be scared by illegal phone calls.”

Superintendent Lund is not a fan of internet-based lenders. He said they collect too much personal information when making loans, including data on a borrower’s workplace and family members. “All this information is used — and misused — in the collection process,” he said, adding that a borrower’s stress level can soar through threats of disrupting a workplace or pestering elderly parents.

Lund suggested turning the process around on unlicensed collectors. As soon as they state their business, tell them you’re recording the call. Maine law states that recording calls is legal, as long as one party knows the recording is taking place, so you don’t have to tell the caller right away. If you catch the caller violating the law and he or she slams down the phone, you can stay on long enough to identify yourself for the recording and note the time and date; you’ll have a piece of evidence that speaks for itself.

Scammers often use automated calls to generate lists of working phone numbers. You might be urged to press a number to prevent further calls, but that’s just part of the scam; pressing a button just verifies that the scammer has reached a working number. If you don’t want to record the call, don’t press anything; just hang up.

Recording calls won’t make them stop all at once. You can help by reporting the number you see on caller ID. Even though many of those numbers are “spoofed,” Federal Trade Commission regulators say that if they get enough reports they can trace certain calls. File complaints at http://www.ftc.gov/complaint. See who’s licensed to make collections in Maine and get other information about your credit at the Maine Bureau of Consumer Credit Protection (www.credit.maine.gov).

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

 

Debt settlement firm settles with Maine for six figures

CONSUMER FORUM

By Russ Van Arsdale, executive director, Northeast Contact

Posted Dec. 22, 2012, at 2:10 p.m.

Here’s a short, sad story of a consumer from southern Maine who ran up more than a quarter million dollars in debt on 10 credit cards.

He hoped for a happy ending when he hired a debt settlement company called Legal Helpers Debt Resolution LLC. He paid the firm an upfront fee and monthly payments, believing its claim that it was effective in “helping consumers resolve their debt problems.”

Legal Helpers website trumpets that it is “the nation’s largest debt resolution law firm” with “offices in 50 states.” When Eric Wright went looking, he found an office in Thomaston but had a lot of trouble finding the attorney who was supposed to be there.

Wright is staff attorney for Maine’s Bureau of Consumer Credit Protection. He was looking for the attorney on behalf of our southern Maine consumer, who was less than pleased with the iceberg-like progress Legal Helpers seemed to be making.

Wright investigated complaints from about two dozen Mainers, most of whom had dropped their business dealings with Legal Helpers.

“They didn’t appear to have done anything,” Wright told me last week. “There never seemed to be a method to the madness of what they were doing” in terms of getting clients’ debts reduced.

As other Mainers complained, Wright advised them to cease doing business with Legal Helpers. To that firm — and apparently a number of others in what Wright terms an “awful industry” — doing business means keeping a large chunk of clients’ money and putting some in accounts to be used for debt settlement. Problem was, Wright said, it might take two or three years to get enough money in those accounts to make debt settlement a reality.

By then, creditors got tired of waiting, and so did many of Legal Helpers’ estimated 15,000 to 20,000 clients nationwide. The firm did negotiate deals on two of our consumer’s accounts, which he paid off at 35 cents on the dollar. He did almost as well on his own, negotiating a rate of 45 cents on seven other accounts.

There was also the matter of registering to operate in Maine, which the company refused to do even though Maine law requires registration by debt settlement companies. Attorneys are exempt, unless those attorneys’ sole activity is settling debts. Legal Helpers claimed it had “partnerships” with attorneys who were licensed in Maine, and so should be exempt.

Wright turned the whole matter over to Maine’s attorney general, William Schneider. Last week, Schneider and Will Lund, superintendent of the Bureau of Consumer Credit Protection, announced a settlement with Legal Helpers and with The Mortgage Law Group LLP, a sister company of Legal Helpers that claimed to have a national reputation for representing homeowners in danger of losing their homes to foreclosure.

Under the agreement, the firms will pay $250,000 to be equitably distributed among more than 300 Maine consumers. The companies also agreed to stop charging monthly fees to present clients and will pay the state $15,000 to cover part of its administrative and investigative costs.

“These settlements send a strong message to others in the debt relief business that the state of Maine will not tolerate those who take advantage of Maine consumers in financial distress,” Schneider said in a news release.

In July, the state of Illinois reached a $2.1 million settlement with Legal Helpers.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Follow

Get every new post delivered to your Inbox.

Join 72 other followers

%d bloggers like this: