The Federal Trade Commission and the Attorney General of New York are accusing a number of defendants of violating the Fair Debt Collection Practices Act and the FTC Act by fabricating personas to collect more than what was owed by individuals.
Those accused of the violations are Robert Heidenreich, who controls the operation and Campbell Capital LLC; Kahl, Heidenreich, and Nemmer LLC; Urban, Heidenreich, Melendez, and Associates, LLC; J & V Receivables LLC; Rich Financial LLC; and BCH & Associates Ltd. Heidenreich also went by the alias “Bobby Rich” according to the complaint.
A copy of the complaint can be accessed by clicking here.
To induce people to pay more than what was owed, the defendants “falsely tell consumers that they are about to be arrested, have committed crimes, or are about to be sued or served with legal papers because of their failure to pay an alleged debt,” and call “their employers and family members about the alleged debts and use profanity and other abusive language during collection calls with consumers,” according to the complaint.
The practice of demanding more than the Balance in Full (BiF) is known as “overbiffing,” and the defendants allegedly went as far as to include the extra amount on forms they used to keep track of their collection activity. From the complaint:
These forms had both a “Client Balance” field for the amount a consumer purportedly owed and an “Original Balance Given” or “Balance Given” field for the amount collectors claimed consumers owed. In many instances, forms completed by Defendants’ collectors show the Balance Given to consumers is higher than the Client Balance. The Balance Given to consumers is often a few hundred dollars higher than the Client Balance, and, in some cases, the Balance Given is thousands of dollars more than the Client Balance. In numerous instances, the “settlements” with consumers that result from this coercive and illegal overbiffing, as documented by Defendants’ collectors, are for amounts that exceed the Client Balance.
Employees of the defendants are also accused of swearing at and insulting individuals they were trying to collect from.