March 2, 2012
50-State Campaign to Reform Debt Collecting Practices Moves into Kansas
OPEKA, Kan.--(BUSINESS WIRE)--Only two weeks after Oklahoma lawmakers filed the Bartmann Ethical Debt Collection Act (SB 1430), the champion of the legislation moved north to the Kansas capital where he met with representatives of the Kansas Attorney General's office. An industry insider and consumer advocate, Bill Bartmann is CEO of CFS II and the leader of a 50-state campaign to curb rampant consumer abuse by unregulated bill collectors.
"The Consumer Financial Protection Bureau and its director Richard Cordray are targeting this problem at a national level, but Kansas is a long way from Washington D.C. and consumers deserve local protection by their state's authorities"
"The Consumer Financial Protection Bureau and its director Richard Cordray are targeting this problem at a national level, but Kansas is a long way from Washington D.C. and consumers deserve local protection by their state's authorities," said Bartmann. "With 30 million Americans facing debt collectors, there's a good chance you or someone you know has been harassed by these scumbags."
AARP Oklahoma has endorsed the Oklahoma Senate Bill 1430, which comes following a wave of scandals that illustrate the need for reform in the debt collection and debt buyer industries. Across the country, state legislatures and state attorneys general are cracking down on collection agencies who trick consumers into paying debt that is past the statute of limitation and who submit fraudulent documentation to support lawsuits against consumers
In Kansas, the average debt per consumer was more than $15,000 in the second quarter of 2011, according to the Federal Reserve Bank of Kansas City. The explosive growth of debt buyers, companies that purchase charged-off debt from banks, has led to increasingly more aggressive strategies on the part of these companies. As consumers struggle to pay ever-mounting credit card bills during these hard times, complaints against collectors have soared.
Consumer complaints against debt collectors in 2010 reached 140,036, up 17 percent from a year earlier, according to the Federal Trade Commission. More than 50,000 people contacted the FTC to complain about harassment. Another 18,000 reported that a collector used obscene or otherwise abusive language and more than 4,000 consumers said a collector threatened them with violence.
"With about 30 million Americans facing late bills, the collection industry is being thrown into the national spotlight and not for good reasons," said Bartmann. "Complaints against debt collectors are skyrocketing because the industry is overrun with scum bag collectors who harass consumers and practice illegal tactics to collect on late bills."
On Wednesday in Topeka, Bartmann shared his proposal that serves as a model for Kansas and other states to reform debt buyer and debt collection laws and curb abusive and harassing practices. The 10-point model outlines critical reform ideas, including:
Establish a program for state supervision and licensing of debt buyers and employees.
Ban collection of "zombie debt" -- debt that has passed the statute of limitation.
Require debt buyers to provide proof of the debt before filing litigation.
Require debt buyers to prove that consumers receive notice of litigation.
Require that debt buyers provide proof of the debt to consumers upon demand.
Authorize consumers to record phone calls from debt collectors.
Authorize the Attorney General to impose fines and prosecute violators.
Increase the penalties for debt buyers and debt collectors who violate the law.
Discourage the filing of frivolous lawsuits by awarding costs to the prevailing party.
Require that debt buyers, when transferring a debt, transfers all information about the consumer.
Bartmann launched the 50-state campaign, "Stop These Criminals," nearly one year ago. The initiative is intended to reform the debt-collection industry and has proven successful, spurring the adoption of new regulatory law in Oklahoma. Since the legislation's passage there in May, Bartmann has presented his recommendations for reducing debt collection abuse to more than two dozen state attorneys general, members of Congress, and federal consumer protection agencies.
"I built my career around the debt collection business and I know there is a right way and a wrong way to collect debt," said Bartmann, a best-selling author who also wrote "Out of Control," that exposed widespread criminal activity in the collections industry. "Unfortunately, our current regulatory system is not stopping criminal debt collectors from abusing helpless consumers."
In the 1990s, Bartmann built CFS, the world's largest debt collection agency, and became recognized as a national authority on fair debt collections practices. In fact, Inc. magazine credited CFS with "remaking one of the ugliest industries" due to the zero-abuse policy Bartmann demanded of his staff. His firm helped 4.5 million consumers resolve over $15 billion in credit card debt, without initiating a single lawsuit.
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