Two Illegal Tactics Bill Collectors Use to Terrify You Into Paying

Can they arrest you for not paying a bill? Bill collectors are now outsourced globally just like any other customer service. And since they are not in the United States, they are ignoring standard American bill collection laws, procedure, and protections.

What are your greatest fears about bill collectors? There are two illegal tactics and one terrifying collection tactic that no one wants to deal with. They are someone:

• Calling your relatives about your debt
• Calling your boss about your finances
• Threatening you with arrest if you don’t pay, and involving your relatives.

The last is the terrifying bill collection tactic some offshore collectors are now doing. One client who filed bankruptcy has been receiving repeated calls from a collector who will not identify himself, nor the company he is collecting for. He has repeatedly told her the sheriff will arrest her the same afternoon for not paying the bill. He also says that if she does not pay, her mother and sister will be subpoenaed to testify against her. He ignores requests to provide verification of the debt as required by American law. He has her name, address, date of birth, and even her social security number.

Although we do not know the creditor he is calling for, the amount of the debt corresponds closely to an online payday loan her husband took out before filing bankruptcy. That may be why he has her personal identification information.

There are two possibilities here. First, he is actually collecting for a real creditor. I highly doubt this possibility because saying they will arrest you for not paying a bill violates the Fair Debt Collection Practices Law, the bankruptcy automatic stay, and the bankruptcy discharge injunction. The second and most likely possibility is that the whole thing is a scam. I say this because the way they he is collecting would subject both him and the company he is working for to serious civil liability if he could be found out. Just a plain, simple crook out to steal from you.

This scammer is looking for the quick hit. The phone number he calls from does not correspond with any real address. I have communicated with a number of bankruptcy attorneys nationwide, and they all report their clients are getting the same kind of calls for bills that have been long discharged.

The bottom line is be very careful about the information you put out about yourself online, and if you get a collection call from someone saying he will arrest you for not paying a bill, especially for a bill you know you no longer owe, be smart, and ignore the caller. He is just trying to use a terrifying bill collection tactic to scam you out of your money.

[thanks to Bill Balena and Esparta via CC]

Viacom’s General Counsel Michael Fricklas Gives Lecture to Yale Law Class on DRM

Michael Fricklas, Viacom’s General Counsel, gave a lecture to a Yale Law class in which he confessed that suing people for copyright infringement felt “like terrorism.” He says that this was bad strategy on the entertainment industry’s part, as was “bad” DRM.

That’s the good part — an admission that suing customers is bad news. But lest you think that Fricklas has learned anything from this experience, consider the rest of his talk.

First, like a lot of people who got bitten on the ass by the magic DRM beans he bought a decade ago, he’s unable to resolve his cognitive dissonance around DRM. The problem isn’t DRM, he reasons, the problem is that he used the wrong DRM. He argues that there are “business models” that are enabled by DRM, and you just need to get it right.

I hear this all the time. It’s truly the mark of a magic-bean-buyer: someone who has failed to absorb the first principle of DRM, namely, “DRM is technically impossible.” There is no way that you can send someone a scrambled message, and the key to descramble the message, and then build a business on the foundational principle that no one will descramble the message except on the terms that you set.

And what’s more, the effort to preserve DRM involves laws that prohibit telling people about flaws in DRM (which doesn’t mean that the flaws won’t be discovered and shared and used to undermine DRM, of course — just because you cover your eyes, it doesn’t follow that the danger goes away). It involves laws that prohibit making products compatible with DRM without permission from the DRM maker, even if you’re doing something otherwise legal (so your customers can’t buy someone else’s music player, which means that you’re locked into that vendor who can dictate terms to you forever).

This often gets lost in the DRM discussion: we get bogged down in what the DRM “allows” and “prohibits” and forget that DRM doesn’t actually stop pirates from doing anydamnthing they want to do. And since most infringing users will “crack” the DRM by finding a copy that someone else took the DRM off of and uploaded, it doesn’t deter “casual” pirates either.

But if you’ve been buying magic beans for ten years, it’s hard to stop believing in magic beans — certainly harder than believing that you’ve just been buying the wrong beans.

And Fricklas’s wrongness doesn’t end there. He also believes in a “three strikes” approach to copyright enforcement, because it is “more proportional to the harm.” That is to say, he thinks that cutting an entire household off from the Internet (which supplies livelihood, civic engagement, publication, communications, education, and family) because one member stands accused (without conviction) of copyright infringement is less bad than merely bullying the family’s teenager out of ten or fifteen thousand dollars.

This really is the most telling part of the whole speech: to believe that issuing the digital death penalty for entire families’ information lives will somehow be less of a PR disaster than suing kids. It is the mark of a man who is so monumentally out of touch with reality that it’s easy to understand how he rose to a level of prominence and power in an industry that made history by suing 30,000 of its customers.

[thanks to james cridland and cory doctorow via cc]

Donald Trump Files Lawsuit Against Law Firm Over Legal Fees

Donald Trump is in the news once again. This time he is suing Manhattan law firm Morrison Cohen LLP and his lawyer who represented him in a malpractice suit, saying that the law firm has treated him like a “cash cow” by overcharging him and performing unnecessary work in order to bill more hours and therefore handing him what he feels is a huge legal bill. Mr. Trump is claiming he has enough experience in dealing with lawyers and feels that he knows when he’s been overcharged on legal fees. This time he feels that the legal fees quoted are not fair and a malpractice suit is in order. Trump, who has said that he has already paid Morrison Cohen $1 million in legal fees, is asking for $3 million in damages in his malpractice suit.

“I have dealt with a lot of lawyers and paid a lot of legal fees,” says Mr. Trump. “I have a Ph.D. in legal fees. I know when fees are fair and when they are not.”

Overview of the Legal Battle

Morrison Cohen’s David Scharf was hired by Trump last year to represent him in a suit against a golf course contractor, who Trump felt overcharged him for the service. They won the case and Justice Kenneth M. Rudolph who handled the case, awarded Trump almost $2 million in damages for the earth-moving contract and about $40,000 for the infrastructure. In addition, $1.3 million was also awarded for attorney’s fees. Despite the success of the malpractice suit, Trump feels that Morrison Cohen should have advised him not to pursue the infrastructure claims since it would certainly incur more cost and would outweigh any recovery. He said that most of their conversations were centered on legal fees and very little was discussed about the merit of the case.

“Ninety percent of the conversations I had with David Scharf were about legal fees, not the case,” said Trump. “We won the case because I’m a great witness.”

On the other hand, David Scharf maintains that the infrastructure issue was an integral part of the success of the case, and that it was necessary because the defendant has raised the issue. Scharf said that Trump was using his popularity as a negotiating tactic to get a discount because of the successful outcome of the case. Scharf also believes that his firm fairly billed Mr. Trump for the services rendered. They have counterclaimed for $470,000 in legal fees that they say remains unpaid.

This isn’t the first time Donald Trump has faced off against Morrison Cohen. Robert S. Cohen, the firm’s co-founder, represented Ivana Trump when she divorced from Mr. Trump in 1991.

“I beat him too,” said Mr. Trump, referring to attorney Robert S. Cohen’s attempt to bypass the Trump’s prenuptial agreement.

Donald Trump is represented in his malpractice suit by Alfred Donnellan of Delbello Donnellan Weingarten & Wiederkehr in White Plains, N.Y.

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