Buffalo, NY, Debt Collector Accused of Fraudulent Collection Practices

Inside Subprime: Nov 19, 2018

By Grace Austin

A Buffalo, NY, debt collector is accused of running several companies that used tactics such as posing as lawyers and police to siphon more money than was owed from consumers.

This comes after a massive suit filed in late October by the New York Attorney General’s Office and the Federal Trade Commission, which targeted six companies accused of “overbiffing,” in which the organizations would go after consumers for more money than was actually owed in their loans.

The practice is called “overbiffing” because scammers exaggerate a person’s “balance in full,” which is sometimes shortened to BIF, according to a CBS News article on the trend. The debt collectors are accused of telling those consumers they owed up to thousands more than they actually owed.

Here’s how the FTC put it: “For example, one particular form includes fill-in-the-blanks for ‘Client Balance’ (what the consumer actually owes) and ‘Balance Given’ (what the debt collector told the consumer they owe). In many instances, forms completed by the collectors show that the Balance Given to consumers is hundreds of dollars higher than the Client Balance.”

That’s in addition to threatening those consumers with lawsuits as fake attorneys and arrests as faux police officers. The New York Attorney General’s Office and the FTC claim the debt collectors would threaten arrest by police, then say the consumers could speak to an attorney to help them avoid arrest, which was actually just another debt collector employee. In the case of a Florida woman, the FTC reports, after speaking to one of those “attorneys” she gave them her debit card payment.  

In another tactic, those employees would pretend to be lawyers and say the consumers were being sued, but the consumers could keep the lawsuit from going further by settling on a payment amount.

The New York Attorney General’s Office says the companies’ aggressive tactics also included using profane language in calls to consumers, and even threatening to place phone calls to their employers and family members.

Those unsavory companies operated in Buffalo for at least the past four years, officials say, and often moved locations periodically and changed names. The debt collectors are accused of violating national laws — the FTC Act and the Fair Debt Collection Practices Act — and laws in New York state.

A temporary restraining order was issued and an assets freeze placed on the debt collectors, the companies, and some of the employees. That means they can’t throw out documents or take out company money, and those companies must, at least temporarily, refrain from doing business.  

By law, debt collectors should never use abusive language or be in contact with anyone besides the person with the loan or debt. They aren’t allowed to lie about who they are to a debtor, the amount a debtor owes, or what will happen if the consumer doesn’t ante up.

For more information on scams, payday loans and title loans, check out all of our state-by-state Financial Resource Guides.

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