Auburn woman, 94, helps break case against harassing N. J. bill collectors.
The letter from a Secaucus, N.J., company sounded menacing, especially to the 94-year-old Auburn woman who received it.
Pay up, it instructed. Make good on the bad check, as well as the collection fees and penalty, $350 in all.
Or else.
That or else – the possibility of facing a criminal complaint – crossed the line. Especially since the check in question wasn’t hers.
Now the company and two like it, also Secaucus-based, and the businesses’ operators are under a court order to halt their unscrupulous tactics in a decision handed down Friday by the Federal Trade Commission.
FTC investigators said Maine’s Office of Consumer Credit Regulation, which took up Mae Young’s case, played a significant role in its filing of complaints against National Check Control, Check Enforcement Inc. doing business as Goldman Check Systems and Jaredco, doing business as Goldman & Co.
The companies and those who run them face five counts of violating the federal Fair Debt Collection Practices Act and two FTC Act violations.
‘Unconscionable’ practices
The charges allege harassing, oppressive or abusive debt collection methods, false threats of criminal and civil prosecution, falsely representing the amount of debt owed and other “unconscionable” practices.
Will Lund, who directs the Maine office, noted it had issued a cease and desist order against National Check Control in December after the company refused to respond to the state’s demand to prove its claim was valid.
Lund’s office was tipped to the fraud by Lewiston lawyer Ed Rabasco. Young had called Rabasco for help after getting two dunning letters, one clearly threatening criminal action, over a check she hadn’t written.
“She was distressed,” Rabasco said. “She feared going to jail. She considered sending the money” before deciding to enlist his assistance.
Rabasco said the New Jersey company wouldn’t accept telephone calls from Young or him, and refused to accept a registered letter he sent inquiring into the claim against Young. He later sent the letter by regular mail, and faxed a copy to the company, demanding it send him a copy of the check and notifying it he planned to initiate a suit on Young’s behalf for emotional distress.
He’s still waiting to see a copy of the check. He’s not even certain of the actual amount that was bounced. He only knows it was made out to a store, Gadzooks.
Caters to teens
Dallas-based Gadzooks has stores in metropolitan and mid-level markets 41 states. It specializes in casual clothing and accessories for teenage girls.
Young hadn’t visited a Gadzooks store, Rabasco said, let alone written the company a check.
“She was quite upset,” he said, over the thought of criminal prosecution for something she didn’t do.
The thought of that also got him fuming.
“It’s illegal,” Rabasco said. “You can’t threaten criminal prosecution for a debt.”
Besides Young’s case, Lund said his office found other instances of attempts to defraud Maine people of their money. In one case, he said National Check Control added $130 in fees to a bad $63 check that Lund says National purchased for pennies on the dollar. Similar fees were added to $20, $30 and $40 checks, he said.
The company also tried to collect on checks against other consumers who hadn’t issued them. One threatened a Maine consumer with six months in jail if they didn’t pay up.
“Threat of a jail term is highly illegal,” Lund said, as are attempts to inflate consumer debt without justification. Even threatening to bring civil action in a credit case is illegal, he added, unless the creditor can prove it’s not an idle threat and the creditor intends to pursue a suit.
Howard Beales, the FTC’s director of the Bureau of Consumer Protection, affirmed that.
“Threats, lies and harassment are never legitimate debt-collection techniques,” he said. “In this case, they were the foundations of a fraud. These defendants not only extracted money that consumers didn’t owe, but also falsely threatened them with criminal prosecution.”
dfletcher@sunjournal.com
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