Debt Collectors Use Fake Courtroom on Debtors
Even if you read this story after the Halloween holiday, the costumes as well as the actions in it will spook you. A Pennsylvania debt collection agency was sued for holding phony debt hearings in a room decorated to look like a courtroom. The phony hearings came complete with phony judge, but the money they took was real.
The Pennsylvania Attorney General has filed a lawsuit against Unicredit America Inc., also known as the Unicredit Debt Resolution Center, according to the Associated Press. The suit seeks restitution for consumers who lost money in the alleged phony hearings held by the debt collectors. The suit alleges that sheriff's deputies (fake) delivered notices of hearings (fake) to debtors before bringing them to the courtroom (fake) for a hearing (fake).
As Attorney General Tom Corbett said in his statement regarding the case, "This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection."
The company's actions have also got to be one of the more creative, if egregious, violations of the Fair Debt Collection Practices Act to date. Recent warnings regarding debt collectors friending debtors on Facebook in order to prove solvency pale in comparison. In general, The Fair Debt Collection Practices Act governs how debt collectors may act when they attempt to collect on personal, household, or medical debt.
While fake courtrooms, bailiffs and judges are not specifically mentioned by the Act, there is a prohibition against making false statements. Specifically relevant to the alleged behavior of Unicredit America, a debt collector may not use any false or misleading statements when collecting a debt. Some examples include falsely implying that the collectors are attorneys or government representatives, or falsely implying that the debtor has committed a crime. It appears that the fake court hearing encompasses these prohibited acts, and much more.
According to the AP, the state of Pennsylvania has asked the court to immediately freeze Unicredit America's assets and order the company to stop holding fake hearings, among other things. A (real) hearing on the request is scheduled for Dec. 13.
- Team 4: Debt Collectors Accused Of Fake Courtroom, Judge (ThePittsburghChannel)
- Debt Collection - Overview (FindLaw)
- Credit & Debt Collection: Forms and Contracts (FindLaw)
- Not so Friendly: Debt Collectors on Facebook (FindLaw's Law and Daily Life)
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