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Expert: Finance Guy Date: 3/26/2008 Subject: payday loan
Question QUESTION: I received a call from someone threatening me that I was going to be arrested for fraud and theft because I did not pay back totally a pay day loan I received in 2006. The company is Arrowhead. I remember this company and my bank at that time closed my account after so many overdrafts because Arrowhead continued to try and get themoney any date without contacting me. I do not know what to do.
ANSWER: What state are you in?
---------- FOLLOW-UP ----------
QUESTION: Pennsylvania
Answer What you describe violates both state and federal law:
I have listed both the PA state's debt collection info (immediately below) and the FTC's info (following).
Debt Collection
The Fair Credit Extension Uniformity Act regulates the debt collection activities of debt collectors and creditors in Pennsylvania. This law, effective as of June 26, 2000, prohibits debt collectors and creditors from engaging in certain unfair or deceptive acts or practices while attempting to collect debts.
Communications with Debtor
Debt collectors and creditors may not communicate with you unless they have your prior consent or the express permission of a court. Examples of improper communications include:
Contacting you at unusual times and places
Contacting you before 8 a.m. or after 9 p.m.
Contacting you at work if they know your employer disapproves of such contacts
Contacting you when they know you are represented by an attorney
Communications with Third Parties
Debt collectors and creditors may communicate with third parties only for the purpose of acquiring location information about you. During these third party contacts, debt collectors and creditors may not reveal that you owe any debt.
Harassment
Debt collectors and creditors may not harass, oppress or abuse you or any third parties while collecting a debt. Examples of this include:
Threatening you with violence or harm
Publishing a list of consumers who refuse to pay their debts (except to a credit bureau)
Using obscene or profane language
Repeatedly using the telephone to annoy
Unfair or Unconscionable Practices
Debt collectors and creditors may not use unfair or unconscionable means to collect a debt. Examples of this include:
Collecting any amount greater than your debt, unless permitted by the agreement creating the debt or by law
Depositing a postdated check prematurely
Using deception to make you accept collect calls or pay for telegrams
Contacting you by postcard
False Statements
Debt collectors and creditors may not use any false or misleading statements when collecting a debt. Examples of this include:
Falsely implying that they are vouched for, bonded or affiliated with the government
Falsely implying that they are attorneys
Falsely implying that you have committed a crime
Falsely implying that documents sent to you are legal documents
Falsely implying that documents sent to you are not legal documents
Misrepresenting the amount or legal status of your debt
Misrepresenting their name
Threatening to file a lawsuit when they cannot or do not intend to do so
Click here for our online and printable complaint forms.
File a complaint with the Bureau of Consumer Protection:
If you are unable to resolve a complaint yourself, below you will find two options to fill out the Consumer complaint form. The first option is an online form, which allows you to complete the form and submit it to our office online. The second option, the PDF form, allows you to print and complete the form and mail it along with any attachments to our office at the following address:
Office of Attorney General
Bureau of Consumer Protection
14th Floor, Strawberry Square
Harrisburg, PA 17120
File a Consumer Complaint using our online form
Print a Consumer Complaint form which can be sent by mail
Complaint Process
When we receive your completed complaint form, it will be reviewed by our staff. Depending on the nature of the complaint, one of the following courses of action may be taken:
In order to expedite the processing and resolution of your complaint, it may be referred to a local consumer group or to another state or federal agency. When your complaint is referred, you will be notified by mail of the name and address of the referral agency or group, so that you may contact them for information concerning your complaint.
If your complaint is appropriate for this office, we will attempt to mediate your dispute through the services of our Consumer Mediation Unit, and you will be sent a letter with your complaint file number. Please keep your file number for future reference when contacting this office.
Please note that, because of the volume of complaints received by the Bureau of Consumer Protection, it may take some time before we can thoroughly review your complaint. We ask for, and appreciate, your patience during this time.
If your complaint is suitable for mediation, an agent will contact both you and the business or individuals with whom you are having a dispute and attempt to mediate and resolve your problem. Please note that most contact is by letter.
When contacting this office, always do so in writing so your file may be kept up to date. It is not necessary to call and check the status of your complaint; you will be notified by mail when we receive information regarding your case. TO HELP US HELP YOU, PLEASE REFRAIN FROM CALLING ONLY FOR "STATUS REPORTS."
If mediation efforts are not successful, you may be advised to seek relief either through a private attorney or through small claims court. The Mediation Unit cannot act as your private legal counsel or offer legal advice. The Bureau of Consumer Protection represents the public at large by enforcing laws prohibiting fraudulent or deceptive trade practices.
In certain instances, when there is a compelling public interest or where there are a number of complaints against the same business, the Bureau may file a lawsuit in state or federal court seeking relief on behalf of consumers.
How You Can Help Yourself Right Now
If your claim involves a dispute of charges placed on your credit card, or billing statement or if a merchant has promised to reverse or credit your charge card but has failed to do so, you must act quickly to preserve your right to challenge a charge.
Under the Federal Fair Credit Billing Act, your credit card company must receive a written dispute notice from you with 60days after the first bill containing the disputed charge was mailed to you. We cannot dispute this charge for you. Look at the back of your credit card statement for specific information regarding the procedure for filing your dispute. You must file your dispute with your credit card company; a complaint to the merchant or company that made the charge is not sufficient. Even if you file a credit card dispute, you can still file a claim with our office.
It is preferable that you try to resolve your own complaint before contacting the Bureau of Consumer Protection. Instruction to do so follows. However, if you have exhausted your efforts to resolve the problem without success, contact the Office of Attorney General immediately for assistance.
Identify the Problem
Before you complain to a company, be sure to identify the problem, what (if anything) you have already done to resolve the problem and decide what you think is a fair settlement. For example, do you want your money back? Would you like the product repaired? Do you want the product exchanged?
Gather Records
Start a file about your complaint. Include copies of sales receipts, repair orders, warranties, canceled checks, and contracts which will back up your complaint and help the company solve your problem.
Go back to where you made the purchase. Contact the person who sold you the item or performed the service. Calmly and accurately explain the problem and what action you would like to have taken. If that person is not helpful, ask for the supervisor or manager and restate your case. A large percentage of consumer problems are resolved at this level. Chances are yours will be too.
Allow each person you contact time to resolve your problem before contacting another source of assistance.
Keep a record of your efforts and include notes about whom you spoke with any what was done about the problem. Save copies of any letters you send to the company as well as letters sent to you.
Writing A Complaint Letter
The letter should include your name, address, home and work telephone numbers, and account number, if appropriate.
Make your letter brief and to the point. Specify all the important facts about your purchase, including the date and place you made the purchase and any information you can give about the product, such as the serial or model number. If you are writing to complain about a service you received, describe the service and who performed it.
State exactly what you want done about the problem and how long you are willing to wait to resolve it. Be reasonable.
Include copies of all documents regarding your problem. Be sure to send COPIES, not originals.
Don't write an angry, sarcastic, or threatening letter. The person reading your letter probably was not responsible for your problem, but may be very helpful in resolving it.
Type your letter if possible. If it is handwritten, make sure it is neat and easy to read.
Keep a copy of all correspondence to and from the company as well as a copy of your complaint.
Other Assistance
If you are not satisfied with the response, don't give up. If the company operates nationally or the product is a national brand, call or write a letter to the person responsible for consumer complaints at the company's headquarters, i.e., the company's public relations representative or president. Many companies have toll-free telephone numbers, often printed on the product. Before phoning a company long distance, it might be worthwhile to see if the firm has an "800" number you can dial toll free. To find an 800 number contact "800" directory assistance at 1-800-555-1212. If you have questions concerning the specific application or interpretation of the law, you should consult a private attorney. If you do not have an attorney you can call your county lawyer referral service or your county bar association. Other agencies may be accessed through the blue pages of your telephone directory.
Our office looks at establishing patterns of business practices. Even if you have resolved your complaint you can forward a statement regarding your experience with the attached documents for our office to use for future reference.
We hope we can be of assistance to you.
IN addition:
New Jersey Debt Collectors Charged with Illegally Threatening Arrest and Prosecution of Consumers
Multiple Defendants Charged with Violating FTC Act and Fair Debt Collection Practices Act
The Federal Trade Commission sued and obtained a temporary restraining order against three corporate defendants and their principals, all based in Secaucus, New Jersey, to halt an alleged nationwide scheme to extract millions of dollars from consumers by falsely threatening them with arrest and prosecution unless consumers immediately pay them amounts that the consumers do not owe.
The complaint alleges the six defendants violated the FTC Act and the Fair Debt Collection Practices Act (FDCPA) by: 1) threatening to initiate civil and/or criminal charges against consumers if they failed to pay the debt, when the defendants had no intention to do so; 2) making harassing telephone calls and using abusive techniques to collect or attempt to collect purported debt; 3) falsely claiming that consumers owed up to $130 more than the amount of the actual debt; and 4) stating or implying that certain communications were from an attorney, when often they were not. The complaint also charges the defendants with misrepresenting the amount of the debt when they added extra charges without telling consumers. In addition, the defendants allegedly failed to inform consumers of their right to receive more information about the debt or to dispute the defendants' claims prior to payment.
The following defendants are named in the complaint: 1) Check Investors, Inc., d/b/a National Check Control (NCC), a New Jersey Corporation with its principal place of business in Secaucus, New Jersey; 2) Check Enforcement, Inc., d/b/a Goldman Check Systems, of Secaucus, New Jersey; 3) Jaredco, Inc., d/b/a Goldman & Co., of Secaucus, New Jersey; 4) Barry S. Sussman of Fort Lee and Secaucus, New Jersey, principal of Check Investors, Jaredco, and Check Enforcement; 5) Elisabeth M. Sussman (a.k.a. Elisabeth Rabin), wife of defendant Barry S. Sussman and a principal and sole director of Jaredco; and 6) Charles T. Hutchins of Farmingdale, New Jersey, an attorney who has been general counsel to corporate defendants Check Investors, Check Enforcement, and Jaredco.
"Threats, lies, and harassment are never legitimate debt-collection techniques," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "In this case, they were the foundations of a fraud. These defendants not only extracted money that consumers didn't owe, but also falsely threatened them with criminal prosecution."
The Defendants' Alleged Business Practices
According to the Commission, between 1995 and the present, the defendants operated Jaredco, Check Enforcement, and Check Investors (the NCC defendants), firms designed to collect consumer debts for checks returned for non-sufficient funds (NSF checks). Since at least January 2001, the companies employed defendant Hutchins as their general counsel.
According to the FTC, NCC first buys NSF checks at a substantial discount from large commercial retailers and others. It then collects payment on the checks - most of which are more than two years old - on their own behalf. NCC contends it holds more than three million NSF checks and makes initial contact with more than 150,000 consumers per month nationwide in order to collect payment.
NCC collects the debt through letters and telephone calls to consumers. The FTC alleges that for every purported NSF check, NCC demands immediate payment of a total sum that includes the face value of the NSF check and additional fees of $125 or $130, regardless of the amount of the original NSF check. While most states limit the amount a debt-collector can charge for an NSF check to about $30 per check, NCC typically charged consumers three to four times as much, according to the FTC. For example, one woman allegedly wrote an NSF check for $22 to a pizza delivery company in 1999. Although she had already paid the debt, NCC contacted her in 2002 and demanded $152.
In its letters and phone calls to consumers, NCC does not explain the basis for the additional charges, the FTC alleges. NCC's letters to consumers lump together the amount of the initial check and the additional charges, identifying the debt as "Total Due," "Amount Due," or "Amount Required." These additional charges are illegal in many states.
According to the FTC, the letters also represent that NCC, or commercial clients of NCC, will bring civil and/or criminal action against the consumers unless they pay the full amount NCC claims they owe. For example, one form letter sent to consumers under the letterhead "Charles T. Hutchins, Attorney at Law" warns that Hutchins' "client" is considering criminal and civil action against the consumer for issuing "fraudulent checks." Another form letter identifies itself as a "NOTICE OF INTENT TO RECOMMEND CRIMINAL PROCEEDINGS," stating, in part: "YOU ARE HEREBY ADVISED THAT CRIMINAL CHARGES ARE BEING RECOMMENDED AGAINST YOU."
Along with the threatening letters, the Commission alleges that defendants often called the purported debtor and his/her relatives as well, threatening arrest for check fraud if they failed to make immediate payment to NCC for the full amount demanded. These phone calls continued for up to six months, during which time the defendants allegedly failed to inform consumers of their right to verify the debt or file a dispute of the charges as required by the FDCPA. Despite NCC's alleged threats to prosecute, the FTC is aware of no consumers who were ever arrested for failing to pay NCC.
The Commission's Complaint
The FTC complaint charges defendants with numerous violations of the FDCPA, which protects consumers from unfair or threatening debt collection practices, and the FTC Act, which prohibits unfair or deceptive acts or practices in or affecting commerce. The complaint contains seven separate counts:
Alleged FDCPA Violations -
Count I - communicating with third parties without permission;
Count II - harassing, oppressive, or abusive debt collection;
Count III - false threats of criminal and civil prosecution;
Count IV - unfair and unconscionable practice of collecting amounts not authorized by law; and
Count V - failing to notify consumers of their right to dispute and obtain verification that debt is actually owed.
FTC Act Violations -
Count VI - falsely representing the debt owed which is not due; and
Count VII - falsely representing that: a) communications are from an attorney; b) nonpayment of the debt will result in imprisonment, garnishment of wages, or attachment of property; c) NCC will take legal action, and; d) the consumer has committed a crime.
In filing its complaint, the FTC seeks injunctive relief to stop immediately the alleged activities, disgorgement of ill-gotten gains, restitution and consumer redress as deemed appropriate by the court.
The Commission vote authorizing the staff to file the complaint was 5-0. It was filed in the U.S. District Court for the District of New Jersey on May 12, 2003. The court verbally granted the FTC's request for a temporary restraining order on May 15, 2003. The FTC would like to thank the U.S. Postal Inspection Service; Postal Inspectors from the North Jersey/Caribbean Division; the U.S. Attorney's Office for the District of New Jersey; the Secaucus, New Jersey Police Department; and the following states for their invaluable assistance in investigating this matter and bringing the complaint: Colorado, Idaho, Maine, Minnesota, New Jersey, North Dakota, Washington, and West Virginia
NOTE: The Commission authorizes the filing of a complaint when it has "reason to believe" that the law has or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law.
Copies of the Commission's complaint are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Media Contact:
FTC Office of Public Affairs
202-326-2180
Staff Contact:
Staff Name,
Name of Bureau or Office
Phone Number (000-000-0000)
Staff Name,
Name of Bureau or Office
Phone Number (000-000-0000)
