A recent New York Times article talked about how a debt collection agency ridiculed debtors and a judge at Halloween costume party. It is unfortunate that in these troubled financial times debt collectors have to resort to such disrespectful antics. Indeed, people in states like California and cities like San Jose, are trying harder than ever to make ends meet.
The debt collector's employees dressed up as debtors down on their luck. The debt collector, Steven J. Baum, is the largest of its kind in the State of New York, and takes care of foreclosures for such national banks as Citigroup, JP Morgan Chase, Bank of America and Wells Fargo.
The article also showed photos of the debt collector's employees in Halloween costumes poking fun at those who lost their homes through foreclosure. One photo shows two employees dressed as homeless people. One debt collector is holding a bottle of liquor and another has a sign around her neck saying, "I lost my home and I was NEVER SERVED!!!"- a common cry from many Americans who have been complaining they were never properly served with the lawsuit that eventually led to them losing their house.
Another photo showed a coffin and a corpse with her eyes cut out. A source told the New York Times the photo is meant to depict a consumer lawyer that had filed a class action lawsuit against the debt collector for wrongful foreclosure practices. Yet another photo shows a corner of the debt collector's office dresses up to look like an auction for distressed homes in foreclosure. Another photo showed a woman living out of a shopping cart, begging with a sign that says will "worke" for food (misspelling "work", and criticizing those consumers who may not be as fortunate and educated as the rest of us).
What may be more shocking is that when asked to comment about the photos the company reportedly said, "It has been suggested that some employees dress in ... attire that mocks or attempts to belittle the plight of those who have lost their homes…Nothing could be further from the truth."
Perhaps the debt collector's comments shouldn't be much of a surprise, considering the fact that Arthur Schack, New York Supreme Court Judge, described the firm's foreclosure practices as, "operating in a parallel mortgage universe, unrelated to the real universe." As a further sign of mocking the judicial system one employee dressed up as that very New York Supreme Court judge!
The debt collector's tactics have come at a price. The U.S. Attorney's Office for the Southern District of New York issued a press release on October 6, 2011, detailing an agreement for the collection agency to pay a $2 million fine relating to its mortgage-foreclosure practices. As the press release indicated:
"The Agreement resolves an investigation into BAUM's mortgage foreclosure-related practices, specifically whether the firm, on behalf of its lender clients, filed misleading pleadings, affidavits, and mortgage assignments in state and federal courts in New York."
These national banks, like Citigroup, JP Morgan Chase, Bank of America and Wells Fargo, should beware- the California Fair Debt Collection Practices Act goes beyond the federal Fair Debt Collection Practices act and also regulates how original creditors collect debts. Teaming up with collection agencies like Baum may come at a price, unless they clean up their act.