All posts by Charles Phelan

One-Year Anniversary of the New Bankruptcy Law: What Have We Learned?

The one-year anniversary of the new bankruptcy law was October 17, 2006. What have we learned in the year since the new law went into effect? The National Foundation for Credit Counseling recently released a report after one year of experience in counseling consumers under the new mandatory provision that requires a credit counseling session prior to filing bankruptcy. The first obvious effect of the new law was a...

The Illogical Nature of Debt Elimination Scams, and How to Convince a Potential Victim that it Really is a Scam

Regular readers of this blog know that I often write about bogus “debt elimination programs.” I’m mainly referring here to those “legally walk away from your credit card debt” scams, where the perpetrators claim they have discovered a magic loophole that allows you to erase your debts. Supposedly, it’s all based on the theory that the banks “monetize” your signature when you apply for a credit card, so you’re...

Government Report on Credit Card Interest Rates, Fees, and Consumer Disclosures

The United States Government Accountability Office (GAO) has issued a report that examines the interest rates, fees, and penalties of major credit card issuers. The title summarizes the conclusion of the report, “Credit Cards: Increased Complexity in Rates and Fees Heightens Need for More Effective Disclosures to Consumers.” The basic finding of the report is that the average consumer does not understand the interest rates and fees associated with...

Catching Up on Industry News

There have been several interesting developments recently in the debt industry: 1. A large debt settlement company in California was targeted by the Federal Trade Commission and put under receivership, and the principal owner’s personal assets were frozen pending litigation by the government. A federal judge has granted the FTC a temporary restraining order against Homeland Financial Services and four other companies. (The multiple companies were really all part...

More Debt Collection Madness

In a follow-up to a recent 4-part series on debt collection insanity in Massachusetts (see my blog entry for August 10, 2006), the Boston Globe has published a new article, “Debt Collectors Hunt the Innocent.” The focus of this latest article is on the growing problem of collection agencies targeting the wrong person. As the debt purchasing industry grows, the sloppiness and ineffiency of the system becomes increasingly apparent....

Fed Report on Fair Credit Reporting Act

The Federal Trade Commission and the Board of Governors of the Federal Reserve System have released their joint “Report to Congress on the Fair Credit Reporting Act Dispute Process.” The report makes for some pretty dry reading, even for someone like me who’s really into this stuff. But there are also some fascinating tidbits of information, and if you know anything at all about “credit repair” there is some...

Consumer Credit Spikes Upward in June 2006

Consumer credit jumped by $10.3 billion in June 2006, according to the latest figures released by the Federal Reserve. Of that amount, $6.65 billion was in the form of revolving (credit card) debt. With most analysts predicting an increase of just $4 billion in June, these figures were much higher than expected. In addition, the May numbers were revised upward from $4.4 billion to $5.88 billion. Total U.S. consumer...

Debt Collection Madness in Massachusetts

The Boston Globe recently ran a scathing 4-part special report on abusive debt collection practices in Massachusetts. Part One, “No Mercy for Consumers” describes the tactics of two area collection agencies that purchase old delinquent debts and enforce collection by filing lawsuits in small claims courts. The preferred method of forcing payment is the repossession of vehicles under court order, a tactic which often leaves distressed consumers at their...

Is the Collection Industry Good for the U.S. Economy?

The debt collection industry is good for the U.S. economy! I’ll bet you didn’t know that, right? This conclusion was reported recently in a study commissioned by ACA International, the trade organization for the collection industry. Surprisingly, there has been very little media attention about the report. Given the mountain of bad publicity that the collection industry has received in recent months, it’s interesting that this report didn’t receive...

Buffalo Collection Industry in the Cross-Hairs

The Buffalo News has run two articles highly critical of the local debt collection industry. The first article, “Merchants of Debt,”focuses on the large collection industry presence in the area. Many of the complaints made by consumers about collectors are against firms located in Buffalo, which is a major hub of the collection industry. The article quotes Federal Trade Commission official Peggy L. Twohig as saying, “The whole nature...