Debt Collection Practices Result in Arrests; Spotlights Flaws in the System

debt collection agency arrests

Photo: Jason Taellious

For most people, it’s not a surprise that borrowing from a payday or title loan company is going to come with ridiculously high finance charges and interest rates. A recent report by the Utah Department of Financial Institutions illustrated exactly how exorbitant these rates can be. For someone who is already at the point that many would call a “last resort” when they need to take out such a nontraditional loan, perhaps the last thing they need is additional fees and finance charges, and when they are unable to repay those loans, debt collection enters the picture. A practice that brings to mind mafia loan sharks with lead pipes, debt collection has come into the spotlight recently with the arrests of the owner and six employees of a Georgia-based debt collection agency which misled thousands of people nationwide. Several government agencies are collaborating on a larger scale investigation of abusive debt collection practices.

More than just Shady Debt Collection Practices

The debt collection agency in question is based in Georgia. According to U.S. Attorney Preet Bharara of Manhattan, who is overseeing the case, the collectors at Williams, Scott & Associates were using intimidating and illegal bullying tactics to get people to pay millions of dollars between the years of 2009 and 2014. These tactics included falsely identifying themselves as a “detective” or “investigator” either for local law enforcement or government task forces such as the U.S. Justice Department or Marshals Service. Threats by the debt collection agents for Williams, Scott & Associates included activating felony warrants for check fraud or suspending driver’s licenses.

Bharara stated that a larger investigation is being conducted by the Consumer Financial Protection Bureau, The Federal Trade Commission, the FBI, and federal prosecutors. To date, this would be the first time all of these agencies have worked together on such an investigation.

“We are far from finished looking at the seedy side of debt collection,” Bharara said. “It affects too many people.”

Is Debt Collection Inevitable with Nontraditional Loans?

According to an article from CNN Money citing a recent Urban Institute study, approximately one in three adults with a credit history have some form of debt that has been put into collections. That is approximately 77 million U.S. citizens.

As far as individual states are concerned, Utah’s neighbor to the southwest, Nevada, has the highest percentage of residents with debt in collection. This has been largely attributed to the population of Las Vegas, where roughly 49 percent of residents are being sought for debt collection.

Regarding Williams, Scott & Associates, investigators have said many of the targets of debt collection harassment had taken out payday loans. According to the report from the Utah Department of Financial Institutions, while payday loans’ average annual interest rate percent is down from 2012, it was still averaging 466 percent in 2013. The report found the highest percentage rates to be as much 1,546 percent annual interest. While many Utah legislators are working on regulation legislation for these companies, currently Utah has no cap on the amount of interest that can be charged.

In an article from the Salt Lake Tribune, David Parkinson, spokesman for the Utah Consumer Lending Association of payday loans, said that reporting annual percentage rates are misleading, given the fact that most payday loans are short term, limited to ten weeks. However, critics and advocates for the poor say that people are often pressured into taking out new loans at the end of that period to avoid default.

George Venizelos, the New York FBI assistant director, confirmed this idea regarding Williams, Scott & Associates. “This scheme took advantage of our poorest and most vulnerable citizens from all fifty states.”

Know Your Rights Regarding Debt Collection

While Utah legislators are working toward payday and title loan regulation, certain laws are already in effect when it comes to debt collection practices.

In 1977, the Fair Debt Collections Practice Act was passed. It is currently enforced by the Federal Trade Commission. In addition to the Fair Debt Collections Practice Act, the Consumer Financial Protection Bureau was given the authority to monitor the country’s largest debt collection agencies in 2012. Their powers include the ability to go into the offices of those agencies to make sure customers are being treated fairly, including assuring debt collectors properly identify themselves.

Under the Fair Debt Collections Practice Act, the customer is additionally protected. These protections include not being contacted by a debt collector at unreasonable hours or locations such as work if notified as such. Harassment such as threats of violence, use of obscene language, or repeated phone calls are not permitted, nor are the use of false statements such as those used by Williams, Scott & Associates.

Payday loans and title loans aren’t a great idea, but for some people, they are unavoidable. Going into debt isn’t something people normally choose, but sometimes life has other plans. If you default on your debt and it goes to a collections agency, they do have certain legal rights in which to collect that money and your credit can be negatively affected, but you are also protected from unsavory debt collection practices.

Man Sought for Security Camera Vandalism in Salt Lake City

video camera vandalism

Photo: Leon Brooks/Wikimedia Commons

In a random act of vandalism, a man destroyed a security camera in a parking garage. The Salt Lake City Police Department is hoping the public will be able to help identify the man.

Take THAT, Stupid Security Camera

According to a report from KSL News, the vandalism occurred on Saturday, Nov. 8, when a man entered the parking garage of the Salt Palace Convention Center. Apparently practicing for when he’s rich and famous and has to fend off the paparazzi—or outright assault them, like celebrities Alec Baldwin or Sam Worthington—the man punched a security camera off the wall, then proceeded to pick it up and throw it to the ground.

Even though police don’t know his identity, they know what the suspect looks like. Before being assaulted, the video camera was able to grab an image of him. He is described as being white, approximately six-feet tall and 200 pounds. Police are guessing his age to be in his twenties.

At Least it was just Vandalism

When the man is caught, he will be lucky not to be Alec Baldwin or Sam Worthington. Well, at least as far as criminal charges are concerned. The vandalism charges in this case would most likely be less than assault charges.

According to Utah Code 76-6-106, vandalism is considered “criminal mischief.” Vandalism ranges from a class B misdemeanor, resulting in up to six months in jail and a fine of up to $1,000, up to a second degree felony, resulting in up to fifteen years in prison and a fine up to $15,000. The different levels are based on the following criteria:

  • if the vandalism occurred to “critical infrastructure” such as information, transportation, banking or public utilities
  • if it is insurance fraud
  • if it endangered life
  • the value of the property

For example, a second degree felony results when a person “recklessly causes or threatens a substantial interruption or impairment of any critical infrastructure” or if the property damaged is over $5,000 in value. The lowest conviction, the class B misdemeanor, results when someone’s actions endanger human health or safety (but not life) or if the property is less than $500 in value.

Vandalism, or criminal mischief, has a wide range of interpretation and potential subsequent punishments. If you or someone you know has been charged with criminal mischief, make sure to contact an experienced criminal defense attorney who will look out for your best interests.

Kansas, U.S. Sixth Circuit Delay Same-Sex Marriage Progress

Sixth Circuit delays same-sex marriage progress

Photo: Jeff Belmonte/Wikimedia Commons

A little over a month ago, in a move that seemed to be opening the floodgates for legal same-sex marriages nationwide, the United States Supreme Court declined to hear an appeal from the State of Utah and four other states regarding their bans on same-sex marriage after those bans were ruled unconstitutional by the U.S. Court of Appeals for the Tenth Circuit. The Supreme Court declined without comment, but it was generally understood that they declined to hear the case because at that time, there was consensus among the federal appeals circuits.

However, a recent ruling by the U.S. Court of Appeals for the Sixth Circuit to uphold bans in four states and an application to the Supreme Court from the State of Kansas to delay the issuance of licenses for same-sex marriage may just force the Supreme Court’s hand to finally weigh in on the issue. While many members of the LGBT community celebrated the rulings against bans on same-sex marriages, many are also in agreement with the opposition that the only way to truly settle this issue is for the nation’s highest court to address it.

Same-sex Marriage in Utah

While the ABA Journal is calling the Kansas case “one of the fastest same-sex marriage cases to develop,” here in Utah, it has been a 10 year battle. In 2004, voters in Utah approved Amendment 3 to the Utah State Constitution. This amendment defined marriage and its subsequent benefits as strictly between a man and a woman. The constitutionality of Amendment 3 was challenged based on the Equal Protection Clause of the 14th Amendment of the U.S. Constitution, and ultimately on Dec. 20, 2013, U.S. Fifth District Judge Robert Shelby ruled Amendment 3 unconstitutional.

During a 17-day period between Shelby’s ruling and the State of Utah issuing an appeal to the Denver-based 10th Circuit Court of Appeals resulting in a stay, approximately 1,300 same-sex marriage licenses were issued. In June 2014, in a three-judge panel review, the Court of Appeals upheld Shelby’s ruling.

The State took their appeal to the U.S. Supreme on two issues: whether states should have the ultimate right to make decisions regarding issues of marriage, and if an actual right existed in the U.S. Constitution protecting same-sex marriage.

The Supreme Court’s refusal to hear the case upheld the 10th Circuit Court of Appeals decision that Amendment 3 was unconstitutional.

How Kansas Believes They are an Exception

Kansas also falls into the 10th Circuit, which means the same ruling would apply to them. Federal courts in Kansas are bound by the ruling. After a federal judge in Kansas struck down the state’s ban on same-sex marriage, state officials cancelled their plans to hold a hearing regarding marriage licensing and instead put a temporary hold on all marriage licenses via the Kansas Supreme Court while they could call for new briefs on the issue.

The Kansas federal judge’s striking down of the ban on same-sex marriage was supposed to go into effect on Tuesday, Nov. 11, but on Monday, the state filed an application with the U.S. Supreme Court for a delay in same-sex marriages. Kansas stated they are different than the other cases which the Supreme Court refused to hear because they believe the move by the federal judge interfered with the state supreme court’s review of the matter which was already underway.

The application was filed with Supreme Court Justice Sonia Sotomayor, who also handles emergency legal matters for the 10th Circuit, and on Monday, Sotomayor granted the request to delay issuing same-sex marriage licenses while the state appealed to the 10th Circuit.

How the 6th Circuit Decision Delays Same-Sex Marriage Progress/h3>

When submitting their application to Sotomayor, the state of Kansas relied heavily on the decision on Nov. 6, 2014 by the U.S. Circuit Court of Appeals for the Sixth Circuit to uphold the ban on same-sex marriage in four states: Kentucky, Michigan, Ohio, and Tennessee.

Previous to this decision, the cause of same-sex marriage was moving forward without many hitches. In the past month, the freedom to marry was awarded to same-sex couples in 16 different states. The decision by the Supreme Court to refuse to hear the appeal case paved the way for same-sex marriage in the 10th and 4th Circuits. On October 7, one day after the Supreme Court decision, the 9th Circuit affirmed the freedom to marry via cases from Idaho and Nevada, setting the stage for same-sex marriage in that district as well. Previous to the 6th Circuit ruling, only 15 states remained that didn’t have the freedom to marry for same-sex couples.

According to the Kansas application, with the 6th Circuit ruling, there is now “irreconcilable conflict” among the appeals courts, so “the final resolution of these important constitutional questions by [the U.S. Supreme Court] will certainly be required.”

Speculation puts this action by the Supreme Court as early as before the end of their term in June 2015, however, it is also likely that it will be pushed to the beginning of their next term in October. Regardless, both sides of the issue believe they have a right to be heard. For supporters of same-sex marriage, they believe their freedom to marry should still be protected by the 14th Amendment. Meanwhile, opponents maintain their argument that ultimately this is a state’s rights issue and that the Supreme Court should step out of the way.