Elizabeth Warren, the junior senator from Massachusetts, threw some more well-deserved shade at counsels for the National Comptroller and Federal Reserve regarding their persistent unwillingness to help the more-than-a-million who lost their homes in the throes of the foreclosure crisis.
During yesterday's Financial Institutions and Consumer Protection Subcommittee hearing, Senator Warren grilled two federal attorneys for both their weak settlement with the banks for the tens of thousands of illegal foreclosures that returned very little money to those affected and their refusal to provide information about the banks' illicit actions to the public. "Without transparency, we can't have any confidence either in your oversight or that the markets are functioning at all," the Senator remarked after receiving a series of non-committal half answers regarding the independent oversight process. Here is an annotated transcript of the video.
"Over the last few months Congressman Elijah Cummings and I have requested documents from your agencies regarding the basic data and the processes of the independent foreclosure review. We made 14 specific requests to you in January, and despite multiple letters back and forth and multiple meetings, you have provided only one full response, three partial or minimal responses, and no responses to nine of our requests.
The video is the first listed below. Following it are several other videos of Warren questioning regulators in Senate committee hearings.
Warren, an outspoken Harvard law professor who worked on the Troubled Asset Relief Program (TARP) prior to her election in 2012, gained prominence during Occupy Wall Street as the national attention turned to the misdeeds of the national banking and lending institutions deemed "too-big-to-fail." Senator Warren sits on the Senate's Banking Committee, and has created a Congressional splash by taking regulators to task for wholesale failing to represent the interests of the American public. She's a real treat to watch in action.
MSN Money ran an article last week called "9 Ways to Silence Debt Collectors," promising ways to "turn the tables on the most annoying an intimidating collection agencies." The article was written by Gerri Detweiler who for lack of literally any other term is a "Celebrity Credit Expert." Let's take a look at her tips.
1. "Don't wait for them to call. Consider picking up the phone and calling the debt collector yourself." This is not awful advice. Calling them yourself lets you get a recorder ready from the beginning of the call which is good practice in general, especially if you've been harassed by this collector in the past. If you want to record your calls even when they call you, tell them to wait a second when you first pick up. Next.
2. "Check them out . . . At a minimum, you want to make sure you are dealing with a legitimate company and not a debt collection scammer." This is great advice. I am regularly blown away by how often I come across a collection agency that isn't licensed or, occasionally, doesn't even exist. Search the collector on your state Secretary of State's business search website to see if they are licensed to conduct business in the state. Many states require certification by their Department of Commerce as well, which can also be searched. Google them to see if they have a website and contact information. Be sure you're not dealing with a shady, unlicensed business or a scam before you consider giving them any money or information.
3. "Dump it back on their lap . . . Asking for proof how the debt was calculated and to demonstrate it is a valid debt you owe will put you back in the driver's seat by asking them to support their claim." Asking a collector to validate a debt is always a good idea, but the collector does not have to give you proof of how the debt was calculated or really even demonstrate that it's valid in a meaningful way. All they need to do under the Fair Debt Collection Practices Act is confirm the amount, list the debtor's name, and provide contact information for the original creditor. This may clear up any knucklehead mistakes, but saying that it will "put you back in the driver's seat" is an overstatement.
4. "Stick to business . . . The key is to try not to get swept up in the emotions." This is good advice that Detweiler inexplicably follows by boasting that she knew someone "who was able to settle $250,000 of credit card debt for less than 50 cents on the dollar." Settling for less than half the amount of the original debt barely qualifies as uncommon, say nothing of noteworthy. Debt collectors generally buy debts for pennies on the dollar, so their bottom line is quite a bit lower than 50% of the original amount. That aside, keeping a straight head makes you a better negotiator.
5. "Show them the money . . . You may want to send the collector a payment, such as $100." Take this advice with the giant grain of salt she adds at the end, which is that "making a payment could extend the statute of limitations on an older debt, and it doesn't prevent a collector from suing you to collect." The statute of limitations (the law stating how long something is valid for) for debts in Minnesota is six years, and if the last payment or your last signature on the account was more than six years ago you cannot be sued for it (this length of time all depends on your state-- here is a list of the statute of limitations for every state (If you live in Kentucky and don't like getting sued on debts from the 90s you may want to consider writing a strongly-worded letter to your state representative)). If the debt is past its limit, paying the collector anything at all will restart the clock and make you liable for the debt all over again.
6. "Ask to speak to a supervisor." Do this if you're getting verbally abused or threatened. Detweiler suggests you "write down those threats;" as I mentioned in Number 1, recording calls with debt collectors is better practice.
7. "Call their bluff . . . For example, you can say, 'If you have to sue me, your company will have to hire a lawyer and you'll lose out on your commission. Why not accept my proposal of $XX.'" This is where it's important to note the difference between a debt collector that collects for someone else and a debt collector that buys debts. If the debt collector owns your debt, trying to call their bluff based on a loss of commission won't work, since they own the debt and aren't getting paid commission by someone else. Their commission will be they sue you themselves and win, and might only end up owing some debt mill law firm 80 bucks or so, which would be a better bargain than settling with you for less. That would be bad. Be sure to ask them who owns the debt before you try this, and use it with caution.
8. "Tell them to take a hike. Under federal law you have the right to ask a debt collector to stop contacting you. It's best to put this request in writing, either by mail or by fax." Actually, under federal law it's required that you put this request in writing. Also note that they can still sue you for it even after you tell them to stop contacting you, so this could just be a stick in the beehive.
9. "Talk with an attorney." My only complaint with this tip is that it's not the first on the list. Because lots of attorneys doing federal consumer protection work on commission, talk is free. A consumer protection attorney can vet your situation for any federal claims-- an abusive debt collector, or one that's misled you or lied to you or lied about the debt, can be liable for damages and all your court and attorney's fees under the Fair Debt Collection Practices Act. They can also help you with debt settlement or bankruptcy, though those generally cost money since they can't sue the debt collector for attorney's fees. Incidentally, we do all of these things.
Bennett Hartz is an associate attorney at Drewes Law, PLLC who specializes in defending against debt collection and foreclosure. He can be reached by email at firstname.lastname@example.org.
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