Monday, November 7, 2011

Zombie Debt Buyer Ordered To Release All Liens, Stop Collection Efforts Stemming From From Judgments Obtained Without Valid WV State License

In Charleston, West Virginia, The West Virginia Record reports:

  • Kanawha Circuit Court has entered an order preventing three Cavalry Company debt-buying businesses from collecting debts in West Virginia without a license.

  • The order also required Cavalry to stop all wage garnishments and to release all liens filed against West Virginia consumers' property stemming from judgments obtained by its companies before they became licensed.

  • The court granted West Virginia Attorney General Darrell McGraw's motion for a temporary injunction against Cavalry. It is also ordered the New York-based debt buyers-Cavalry SPV I, Cavalry SPV II and Cavalry Investments plus a collection affiliate, Cavalry Portfolio Services-to fully comply with the attorney general's investigative subpoena.

  • Testimony from McGraw's staff during a series of hearings disclosed that Cavalry debt buyers had filed at least 1,300 collections lawsuits prior to becoming licensed in October 2010. Of those lawsuits, 743 resulted in judgments totaling more than $3 million against West Virginia consumers, with 369 entered by default when the consumers failed to appear or contest the suit.

  • In conjunction with the attorney general, the circuit court also ordered Cavalry to send written notices to all consumers affected by the order. After the notices are sent, Cavalry may accept payments made voluntarily by consumers but must first place them into escrow and report all payments received to the attorney general's office. McGraw's office first subpoenaed Cavalry's West Virginia account records in January 2010.

  • Cavalry objected to complying with the records request and later asserted that the investigative subpoena could not be enforced once the lawsuit was filed. The circuit court disagreed. There has not been a trial date scheduled yet.(1)

Source: McGraw gets order to stop three debt businesses.

(1) Failure to register their business with the state appears to be a major 'Achilles' heel' for some of these zombie debt buyers. Earlier this year, a ruling by an Illinois appeals court indicated that a debt buyer's failure to register with the appropriate state administrative agency was enough to allow a debtor to undo the damage created by an improperly-obtained judgment, finding that said judgment was absolutely void, and not merely voidable. See:

See generally Repairing A Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration for an FTC report on dealing with bill collectors & zombie debt buyers.

1 comment:

RBDC said...

How to reverse boycott debt collectors.

When a debt collector/debt collection/debt buyer company can repeatedly call with the intent of getting money their customers can repeatedly answer or call back with the intent of not giving them any. They need people to pay with as little talk as possible. They don't want to talk with people who know they are never going to pay. Be all talk and no pay. Answer when convenient. Call back. Give no information. Verify nothing. Ask as many questions as you can. Answer none.

Don't ignore/block/report them. It doesn't work. These folks want you to ignore them for as long as you can stand to or until you give them something valuable like money or information. Ignoring them is being their good customer. Sending a cease and desist is giving information. It lets them know you are still alive and remain their good customer. Preparing to initiate unlikely individual legal battles is being their good customer.

Be their bad customer. Make them talk to you fruitlessly for as long as they can stand to or until they stop selecting you as their customer. These companies cannot spend seconds much less minutes on the phone with every person who will never send them a dime. But they don't know who that is. You do. That knowledge is power. Every second you can keep their staff on the phone will render their business less profitable giving them a reason to never call you again.

Calling will not reset your SOL. Making a partial payment will.

One person who does this likes to ask general questions they should but usually won't answer, "May I have the name and address of your agent for service of process?" Calmly and slowly ask them to spell every word in the address. Read it back for verification. Control the pace. If they are rushing then politely ask them to slowly repeat. "Are you a corporation and if so in which state are you incorporated?" Repeat your questions when you don't get direct answers. When they won't answer a question ask, "Would you like to comply with the business and professions codes of your state?" That is usually the point when they hang up on me but if they say they want to comply then begin your questions again.

Repeat while you have the spare time. These folks have many victims and few operators. If everyone calls back but pays nothing the mass auto-dialer business model becomes unprofitable. Don't aid and comfort the enemy by ignoring them. Call! Have a nice long slow friendly chat! Make them hang up first.

Press 2 for Spanish.

There are certainly enough victims to take down debt collectors so ignoring/blocking seems downright Orwellian. Really? We're just going to passively submit and go with a block list or however we manage ignoring an endless stream of unwanted phone calls day after day? No! Unite or remain conquered. Answer/return every call - become well practiced at keeping these folks on the phone - or count yourself not amongst the free.