All posts by Charles Phelan

Why I Recommend Against Sending Cease Communication Letters to Creditors

Imagine that you loan someone $10,000 with the understanding that they will pay you back on a monthly basis with interest. After a while, they fall behind on their payments, so you call them to discuss their financial status and encourage them to make a payment. But they dodge all phone contact and you’re not sure they are even getting your messages. No return phone calls. No contact. Nothing....

Check Diversion Programs to be Made Exempt from Debt Collection Laws

If you’re in a type of business that’s subject to government regulation (designed to protect consumers from some of the more abusive practices of your business model), and you don’t like one or two of the laws, just spend a bunch of money lobbying Congress and presto — no more pesky consumer protection laws to worry about. That appears to be what’s going on in the latest Congressional chicanery...

Who Supports the New Bankruptcy Law? — Just Follow the Money

An interesting article appeared last week under the title, “Bankruptcy Law Does Have Supporters.” Well, no kidding. Of course the new law has supporters. How else would it have passed Congress? I’m sure most of the executives in the credit card industry think it’s a pretty good bill. They should know. Collectively, they spent millions of dollars lobbying to get it passed. Basically, the article in question is a...

Debt Collectors Want Your Cell Phone Number

In my previous post, I discussed the annual report on the Fair Debt Collection Practices Act issued by the Federal Trade Commission. As noted, the FTC receives more complaints about debt collection than for any other industry. We can expect it to get worse, however, if the collection industry gets it way on a key issue currently under review. Since sweeping changes to rules for telemarketing went into effect...

Debt Collection Industry Still #1 Source of Complaints at FTC

The Federal Trade Commission has released its annual report on the Fair Debt Collection Practices Act for 2006, which documents complaint patterns and enforcement actions by the FTC during calendar year 2005. Consistent with recent years, the latest report shows that consumers complain more about debt collection than any other industry. “Last year, consumer complaints to the Commission about third-party debt collectors increased both in absolute terms and as...

Debt Elimination Scammers Get Bolder

In several recent articles and blog posts, I have taken a strong position against bogus “debt elimination” programs. Unfortunately, these scammers seem to be getting bolder by the day. In the past few weeks, I’ve actually seen some of the perpetrators issue press releases. Talk about a fast track to getting on a “world’s dumbest criminals” show! It’s only a matter of time before authorities shut down these clowns...

“Maxed Out” — An Early Look at an Important Documentary

“Maxed Out” is the name of a new documentary by James Scurlock that takes a hard look at our credit card culture. I haven’t yet viewed the film, and will post a review after I’ve had a chance to see it. For the moment, I’m basing this post on the recent Newsweek interview with Scurlock. (Note: This article is so old it no longer appears on Newsweek’s website or...

32% Credit Card Interest Rates — Brought to You By South Dakota and Citibank

Today (April 12, 2006) is the 25-year anniversary of Citibank’s move to South Dakota. Why should you care? Well, if you’re paying excessively high interest rates on your credit cards, you can thank South Dakota and its sweetheart deal with Citibank. Believe it or not, 25 years ago Citibank was bleeding red ink all over the place. The problem, you see, was that they could only charge 12% interest...

Mortgage Elimination Scammers — One Down, Dozens to Go

In recent posts I’ve discussed the debt elimination scam in the context of unsecured debt. That’s where the con artists claim you can magically erase unsecured debt (credit cards, etc.) based on the absurd “no money lent” argument. Would you believe the same scam is being perpetrated for secured debt? We’re talking home mortgages here, and yes, believe it or not, there are dozens of websites promoting this dangerous...

Chinese Not Racking Up Enough Credit Card Debt

Americans have a lot to learn from the Chinese when it comes to managing credit cards. Recent articles about use of credit cards in China are actually quite amusing. It’s pretty funny to hear bank executives whining about the Chinese paying off their balances every month. Sure, people are using the credit cards for everyday purchases in increasing numbers, but they aren’t rolling over the balances from one month...