Debt collection can be a dirty business

Buying a Range Rover on a tight budget was a mistake.

Anthony Zoda acknowledged as much.

"It was totally my fault," he said.

The airbags in his work truck had to be fixed and the cost put him in the red.

Once Zoda's financial situation worsened, he knew he would be unable to make monthly payments on his recreational vehicle. He knew he would have a blemish on his credit record and face the embarrassment of having his Range Rover seized.

He just didn't expect the extreme lengths to which a collection agency would go to make him pay, he said.

Zoda, who lives in Weeki Wachee, owed money to Wachovia. He bought the vehicle in the summer of 2009 for $14,000. He still hoped he could work something out.

Then his phone rang. The caller told him Wachovia Bank no longer wanted anything to do with him, Zoda said. She said Zoda had to send a check to her; that she was a collector with Hudson Valley Collection Agency, according to a lawsuit Zoda later filed in U.S. District Court in Orlando, seeking $1,500 in damages from the agency.

Zoda said he logged calls the company made to him during a 36-hour period in July 2009. Hudson Valley contacted him roughly three dozen times, he said in an interview.

The same employee called him each time, sometimes late into the night, according to an affidavit included in the lawsuit he filed earlier this month. She also called his mother and stepfather in California. She threatened to send him to jail on a charge of grand theft auto, Zoda stated in the affidavit.

During one late-night call the woman told Zoda she looked at his MySpace page and found names of his friends, court records show.

"In or around July 15, 2009, [the] plaintiff received phone calls from his mother, his stepfather and two friends, each stating that they had been informed that the plaintiff was going to be arrested for stealing his truck if he didn't turn it back in," wrote his attorney, Timothy Healy, in a separate court document.

Healy is with Kaufman, Englett & Lynd, a law firm based in Orlando.

In his filings, Healy accused Hudson Valley of violating the Fair Debt Collection Practices Act and the Florida Consumer Protection Practices Act.

In his court affidavit, Zoda stated the caller made derogatory comments about his mother because she would not lend him money.

"What kind of a mother wouldn't help her son?" the caller asked, according to Zoda's affidavit. "She sounds like she has issues."

She demanded a payment and insisted he mail it to her, Zoda said.

Zoda instead followed his stepfather's advice and did not mail a check. He demanded a letter in writing from the collection agency.

Zoda said he told the woman from the collection agency where the Range Rover was parked. It was picked up the following morning. The telephone calls continued for a few more hours, he said.

Eventually they stopped. Once the vehicle was taken, the case was closed. He no longer was required to pay, Zoda said.

Still, Zoda said, he was angered by the experience. When he heard a radio advertisement from a law firm specializing in debt-collection harassment, he called the number.

A 'dirty' business, attorney says

"You're talking about a bunch of guys in boiler rooms," said lawyer Jeff Kaufman, a partner at Kaufman, Englett & Lynd. "These people do whatever they want. ... It's pretty dirty."

Kaufman said debt collection has soared in the last two years. A recession means more people owe money. Large companies sign contracts with smaller, upstart businesses to do their collections for them.

Their tactics often are suspect, Kaufman said. They sometimes make threats and call late into the night.

Some companies resort to showing a phony number on a caller ID, he said. People often don't answer when the screen reads "unknown," but they are more likely to do so if it looks like a valid number.

The method is called "spoofing," Kaufman said.

A spokeswoman with the Utility Consumers' Action Network referred calls to Daniel Benson, a consumer attorney for the Legal Aid Society of San Diego.

Benson said debt collectors call "all times during the day and night" and commonly use vulgar language.

Millions of people in the current economy have huge debt and collectors see the market as first come, first serve. That's why they try to hit victims early and often, Benson said.

Eric Najork is president of Hudson Valley Collection Agency, which is based out of Newburgh, N.Y.

He would not comment on Zoda or any other specific collection case.

"We try to treat everyone respectfully, fairly and professionally," Najork said.

He added there always is the chance of hiring a "bad apple," but said every employee is thoroughly trained on the dos and don'ts of the industry.

People in debt considered easy prey

Kaufman said 25 percent of the U.S. population is in debt, so debt collection companies are dipping into a large well.

"They're preying upon the weak," Kaufman said. "This has been going on for a long time, and it's happening a lot more because there's more debt out there."

He said banks and other companies that hire aggressive debt collectors can be culpable.

"They're using these very creepy human beings to shield themselves," Kaufman said.

Dale Rim, a Wachovia spokesman, had no comment on Zoda's case. Wachovia is not named in the lawsuit.

Rim said the bank does not condone a debt collector violating the Federal Trade Commission's Fair Debt Collection Practices Act.

A spokeswoman for Florida's attorney general said there have been no complaints filed against Hudson Valley.

Earlier this year, the state Legislature passed a bill implementing tighter restrictions for consumer debt collection agencies and increased fines against out-of-state collectors that fail to register.

The bill was signed into law by Gov. Charlie Crist and takes effect in October.

Sandi Copes, a spokeswoman with the attorney general's office, said the law was designed to "protect consumers from unscrupulous debt collectors by enhancing the attorney general's enforcement authority."

Benson said corporations sell their debt to smaller collection agencies for "pennies on the dollar." Sometimes these agencies are sued for their harassment, but the range of compensatory damages is $100 to $1,000. An additional $500 can be collected for attorney fees.

Debt collectors pull enough money to offset the costs from lawsuits, said Benson.

Kaufman said the callers are trained to manipulate everyone they talk to, including children.

It is common for a child to answer the phone and hear someone on the other line tell them that their mom and dad are going to get arrested if they don't pay, said Kaufman.

People who are in debt are particularly vulnerable.

"They feel so much less about themselves," said Kaufman. "A common term in the business is, 'Get 'em while they're crying.'"