Bank of America was hit this week with another civil penalty, this time for making what are termed excessive and harassing mortgage debt collection calls. A federal court judge has ordered the bank to pay over $1 million to Nelson and Joyce Coniglio who received, according to court documents, over 700 robocalls over a four year period.
The calls were made to every number the couple had, home and cell, and came at all hours of the day and night. The automatic system left messages each time. The bank also sent numerous letters threatening foreclosure.
The couple fell behind on their mortgage payments in 2009. The bank said in court documents that the calls were meant to be helpful, not threatening and made because the bank was concerned that the couple might lose their home.
This wasn't the first time debt collectors have gotten into trouble in recent weeks.
A collector who calls himself John Anderson while plying his trade was ordered to pay over $33,000 last month to Jessica Burke who said "Anderson" had called her several times a day and sent as many as 15 text messages in a single day over $350 in late payments on a used car. In addition he contacted her employer and released information on her debt, a violation of debt collections statutes. Burke claims that the collector said he was a private investigator and made derogatory remarks about her weight.
Anderson said he was being blamed for many infractions done by the finance company for whom he worked. Burke had sued the company as well. She claimed that even after she sold the car and settled the debt the harassing calls continued.
Also in November federal authorities filed fraud charges against a Georgia debt collection company and arrested seven of its employees. The company, Williams Scott & Associates (WSA) is alleged to have collected more than $4 million from over 6,000 people by claiming to have been hired by the U.S. government to collect debts and fees for nonexistent offenses.
WSA (victims were told the name stood for "Warrant Services Association") allegedly threatened the people they called with jail time for such offenses as 'Depository Check Fraud" and "theft by deception." Federal authorities said these phony government collectors are operating in all 50 states.
Nor was the Coniglios' judgment the first time Bank of American has been accused of heavy-handed debt collection. Last year the bank paid $32 million to 8 million customers who claimed they too were harassed by robocalls. The bank of denied the allegations but settled the class action lawsuit it said to avoid further legal costs.
ABC news, which featured the Coniglio's suit on Good Morning America Friday, quoted several other customers about Bank of America's collection practices. One said he and his wife had received over 600 calls even though she had surrendered the house through bankruptcy. An elderly California couple claimed they received 2,000 calls and a woman in Arkansas 350.
New York State is cracking down on collection activities with new regulations effective next year. One will allow consumers to request email communication. This will cut down on phone calls and allow the consumer to maintain a record of collection contacts. A second regulation requires written confirmation to the consumer regarding any debt settlement agreement or satisfaction of the debt so that consumer has documentation of the transaction.
The new laws also require a new debt collector to provide general information on debtors' rights, and any collector attempting to recover on a charge-off to specifically identify the debt. Where a debt is past the statute of limitations the collector must also notify the debtor of that fact. All of these take effect on March 3, 2015.
A final provision becomes effective August 30, 2015 and will require a collector to substantiate that a debt is owed if it is disputed at any time in the collection process.
