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Debt Collection & Rent-A-Lawyers
The debt collection industry is growing by leaps and bounds – and the current state of the economy only helps to fuel the fire. To increase collections, many firms are hiring lawyers to do their dirty work. Debt collection consumer advocates refer to them as rent-a-lawyers and the way they do business isn’t pretty.
According to Bud Hibbs, a debt collection consumer advocate and consultant for over 25 years who has written several books, is approved to teach CLE courses through the State Bar of Texas and has appeared in numerous radio and television programs including the Oprah Winfrey Show:
There are a lot of lawyers out there who obtained a law degree and are finding out that they can’t make a lot of money at it and so, they found a debt collection or what we call renting out their law license. We refer to them as rent-a-lawyers. You and I could conceivably get together with no money if we both had good credit ratings and put $10,000 or $20,000 on our credit cards and buy a loan portfolio that could be worth, say, a half of million dollars. We’re buying debts for two or three cents on the dollar. We could go find a lawyer, offer him a commission on the debts that we collect and, in reality, we rent his law license. The lawyer, in most cases, is at one location, usually in the downtown area of large cities.
Buffalo, NY: The debt collection capital of the world
Hibbs says that this is what goes on in Buffalo, New York a lot, which he says is the debt collection capital of the world. He explained, “They move the collection offices out to the suburbs in a strip center and they become the law offices of John or Jane Doe. So, they call you or they call your spouse and say, “I’ve got an urgent message for Bruce. It’s an urgent legal matter. I’m calling from the law offices of . . .” Well, using the words “law offices” makes a heck of a difference in how you interpret your relationship with this individual as opposed to Joe’s Collection Agency.”
Rent-a-lawyers being reprimanded
Although many states turn a blind eye to lawyers who rent out their licenses, some of these ‘lawyers gone bad’ are being reprimanded. Hibbs says, “In Buffalo, one of the lawyers had his license taken away for doing it; another one had hers suspended and many of them have ended up filing bankruptcy and are 100 times worse off for getting involved with the criminal elements that are involved in this area.”
If you are being harassed by a debt collector, contact an attorney whose practice focuses on issues relating to the Fair Debt Collection Practices Act (FDCPA) to discuss your situation. Consultations are free, without obligation and are strictly confidential. Click here, to contact an experienced debtor’s rights lawyer. We may be able to help.
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