Steve Bernas and Lisa Madigan Criticize
Abusive, Illegal Debt Collection Practices
Bernas, president and CEO of your Better Business Bureau, participated
in a news conference today (Wednesday, January 11) called by Illinois
Attorney General Lisa Madigan announcing the attorney general's Top 10
list of consumer complaints for 2011. In particular, Madigan detailed
complaints about abusive and illegal debt collection practices. To
combat this trend, Madigan announced action against a Chicago-area debt
collector. Bernas detailed complaints to the BBB against the debt
collector. He also described action consumers can take to help avoid
debt collection issues, and how to complain about abusive debt
The official press release from Attorney General Lisa Madigan's office follows.
MADIGAN: 2011 CONSUMER COMPLAINTS SHOW DEBT COLLECTORS USING ILLEGAL, ABUSIVE TACTICS
- Attorney General Lisa Madigan today released her list of the top 10
consumer complaints for 2011, revealing that consumer debt was the
upmost concern among Illinoisans.
the fourth consecutive year, consumer debt complaints in 2011 ranked
No. 1 on the Attorney General's annual top 10 list of complaints. Of
the nearly 5,900 debt-related complaints, more than 1,100 were filed
against debt collectors who illegally threatened and harassed
consumers. Madigan said the complaints and calls to her office
demonstrate the extent to which consumers are struggling to pay off
debt and are being targeted by abusive, aggressive debt collectors.
Abusive debt collection is a growing problem nationally, Madigan noted,
with the Federal Trade Commission reporting in 2010 its top complaint
was abusive debt-collection practices.
part of today's announcement, the Attorney General took action against
a Skokie-based debt collector, PN Financial Inc., filing suit in Cook
County Circuit Court. Madigan said PN Financial emerged last year as
one of the most egregious cases of illegal debt collection during her
tenure as Attorney General. "As this difficult economy persists,
honest, hard-working families are increasingly targets for debt
collectors that operate outside the law," Madigan said. "Though
consumers may be struggling under the weight of debt, they still have
the right to be protected against illegal harassment and fraud."
lawsuit against PN Financial and owner, Nelson Macwan, of Skokie,
alleges numerous violations of state and federal laws that protect
Illinois consumers from off-limits debt collection tactics. Madigan
alleged PN Financial acted illegally by:
- Revealing information about debts to people other than the consumer, including employers or family members;
Fronting as a law firm and intimidating consumers with fake court case
numbers on letters sent to consumers to falsely represent they had
been sued for failure to pay a debt;
- Debiting more money from consumers' bank accounts than consumers authorized, causing some to incur overdraft fees; and
- Accessing consumers' credit reports without authorization to intimidate them to pay alleged debts.
Madigan said in some instances PN Financial attempted to collect debts
it was not authorized to collect. As a result, some consumers paid PN
Financial, without realizing they didn't owe any outstanding balances
to the collection company, and reported losing at least $9,000. PN
Financial also contacted other consumers over debts that had already
been paid off.
consumers have filed complaints with Madigan's office against PN
Financial. The Chicago Better Business Bureau has received 82
complaints against the company.
BBB has received numerous complaints from consumers who allege a
troubling trend in the debt collection industry," said Steve Bernas,
Better Business Bureau of Chicago president and CEO. "According
to these consumers, certain debt collection companies are attempting
to collect debts that these consumers don't owe or have previously paid
off. We support the efforts of Illinois Attorney General Lisa Madigan
to protect consumers. Currently, PN Financial Inc., against which
Attorney General Madigan filed suit today, has the BBB's lowest
lawsuit seeks to shut down PN Financial, permanently bar it from debt
collection in Illinois, provide restitution to affected consumers and
assess an array of civil penalties.
addition to consumer debt, Madigan said other categories that topped
her list of complaints involved identity theft and home repair. In
2011, more than 200,000 consumers contacted Madigan's office for
assistance and a total of 24,516 formal complaints were filed.
The Top 10 consumer complaints for 2011:
# OF COMPLAINTS
1. Consumer Debt (mortgage lending, debt collections, credit cards)
2. Identity Theft (fraudulent credit cards and utility accounts, bank fraud)
3. Construction Home Improvement (remodeling, roofs/gutters)
4. Telecommunications (wireless service, local phone service, cable/satellite)
5. Motor Vehicles/Used Auto Sales (as-is sales, financing, warranties)
6. Promotions and Schemes (sweepstakes, pyramid, work-at-home schemes)
7. Mail Order (Internet purchases, catalog ordering, television/radio)
8. Fraud Against Business (consulting, directories/publications)
9. Motor Vehicle/Non-Warranty Repair (collision/body, engines)
10. Utilities (electric, water, natural gas/propane, waste removal