Debt collection

West Virginia Attorney General Darrell McGraw sued credit card issuer Capital One Bank and four other companies for deceptive, unfair and "unconscionable conduct in connection with their credit card lending and collection practices," according to his office's Consumer Protection Division.

Maryland regulators, in the wake of collection law firm Mann Bracken LLP's closing, mailed letters to 1,400 licensed collection agencies in the state this week, instructing them to help connect debtors with the companies they owe.

An estimated 260 different collection agencies and creditors were named in 396 consumer statute lawsuits filed nationwide between Jan. 1 and Jan. 15, according to data from U.S. District Court complaint dockets compiled by research firm WebRecon LLC.

Weinstock, Friedman & Friedman P.A. in Baltimore, a large legal collection firm, is reviewing “huge volumes” of former Mann Bracken cases that were dismissed last week by Maryland District Court Chief Judge Ben Clyburn, Sidney S. Friedman, a managing partner at Weinstock, Friedman & Friedman, tells Collections & Credit Risk.

Wells Fargo & Co. yesterday reported a fourth-quarter profit of nearly $3 billion, but said chargeoffs also crept higher during the period. Chargeoffs totaled $5.4 billion, or 2.71% of average loans, up from $5.1 billion, or 2.5% of average loans, in the third quarter.

A mortgage broker who allegedly dumped 40 boxes of consumers’ financial records into a public trash bin paid a $35,000 civil penalty to settle Federal Trade Commission charges that he violated the Fair Credit Reporting Act, the FTC's Bureau of Consumer Protection office said today.

Editor's Note: Collections & Credit Risk has a 15-year tradition of honoring outstanding industry performers. In our series "Industry Champions" we look at those who have worked tirelessly to improve their field in a meaningful way. Nominations for this series are accepted and encouraged.

The financial services industry has witnessed mergers and acquisitions of the country’s largest banks, the collapse of some of the most trusted financial icons, the mortgage meltdown and government bailouts - namely TARP. All of this has taken place in the past 18 month.

Quick Collect Inc., a collection agency in Portland, Ore., did not violate the Fair Debt Collection Practices Act (FDCPA) while trying to collect from a consumer, a U.S. Court of Appeals ruled this week. The decision upheld an opinion issued by a U.S. District Court judge in Washington.

An estimated 20,000 to 25,000 collection lawsuits filed in Maryland will be dismissed as a result of the collapse of legal collection giant Mann Bracken LLP, Maryland District Court Chief Judge Ben Clyburn's office confirmed today. Clyburn made the decision to dismiss the lawsuits after learning the firm had notified district court clerks across the state that it will shut down by the end of this month.

Here’s a sobering economic indicator: freshly charged off consumer debts are now selling for what tertiary debts — those previously placed with two collection agencies — commanded just a few years ago.

The average credit score for U.S. consumers dropped six points to 671 at the end of December from 677 at the beginning of the year, according to a report released this week by Credit Karma Inc., a San Francisco-based company whose Web site tracks credit scores. Credit Karma based its data on some 87,000 Credit Karma users. Average credit scores have remained stable since October, the firm notes.

Nearly three million homeowners received at least one foreclosure filing in 2009, setting a record for the number of people falling behind on their mortgage payments, according to RealtyTrac, an online marketplace for foreclosure properties, and its Foreclosure Market Report.

Several companies in the collectio and debt-buying industries made large contributions to charities in 2009 and, specifically, during the holidays. The following is the start of a roll call listing those companies and their efforts. This list, with the detailed information following, will grow as more information is sent to Collections & Credit Risk. Contact Darren Waggoner at darren.waggoner@sourcemedia.com.

The Federal Trade Commission's study of nine of the largest consumer debt buyers has industry participants concerned the investigation will be one-sided and lead to an unfair industry clampdown. Ultimately, some insiders believe the fallout will cause delinquent debt prices to drop.

U.S. revolving credit, 98% of which is credit card debt, fell to $874 billion in November from a revised total of $887.7 billion in October, the largest dollar-value drop since records began in 1968, according to a Federal Reserve G.19 report on consumer credit released Friday.

The Federal Trade Commission today identified the nine debt-buying companies that it has ordered to turn over information about their purchasing and collection practices.

The Federal Trade Commission has concluded a case against collection agency Academy Collection Service Inc. (ACS) and alleged Fair Debt Collection Practices Act (FDCPA) violations by imposing civil penalties totaling $675,000 against Albert S. Bastian and Keith L. Hurt III.

Lawsuits citing alleged Fair Debt Collection Practices Act (FDCPA) violations reached an all-time mark in 2009 at 8,287, easily topping the record of 5,188 set a year earlier, according to data from U.S. District Court complaint dockets.

Financial services companies currently face the highest card default and charge-off rates in more than 20 years, and uncollected debt is expected to grow through the end of 2009. As debt rises and internal resources shrink, the job of collections increasingly falls to customer care.