Consumer Watch: Fake Collection Agency
(CBS) NEW YORK As more and more Americans rack up increasing debt, others are capitalizing on the financial pain. And you'd be surprised to find out who's behind it all. With so many cashing in on the debt collection industry, it's an industry rife with fraud.
They arrive in the mailbox at countless homes everyday, collection notices. Lee Gold's 82-year-old mother-in-law recently received one for $600. "I just thought it was a little strange," said Gold, because he pays all her bills and had no record of this outstanding debt.
"They put on the paper that it would be reported to her credit agencies," explained Gold, who started investigating and called the company. "He said it was a debt from 1992-1993 and that he bought it from this record service," said Lee. It's all part of the latest "get rich quick" business with anyone able to cash in.
They simply buy lists of consumers' names, phone numbers, social security numbers, which at some point may have been linked to a debt. But this is an unregulated industry, leaving critics to charge that debt buying is really a free for all, filled with fraud.
"The debt buying industry in the United States right now is akin to the stock market pre SEC," said Long Island attorney, Joseph Mauro, who specializes in fighting abusive and illegal debt collection activities. At the very least, he says, it's bottom feeding, or worse, illegal. "The debts are usually very stale or very old, that is past the statute of limitations," said Mauro. Which is the case with Gold.
CBS 2 called the collection agency. "Hello, this is Kirstin Cole calling from Channel 2 News." They wouldn't comment on this bill or on any of their collection practices. "I think they are preying on the elderly," said Gold. If a bill collector is looking for you to pay a debt, you know nothing about, you are entitled to ask for details and demand documentation.
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