Consumer complaint received 2017-02-09
Company: Creditors Specialty Service Inc
State: CA
Product: Debt collection
Sub-product: I do not know
Issue: Communication tactics
Sub-issue: Threatened to take legal action

Complaint:
On XX/XX/XXXX I received a letter ( attached hereto for reference ) from Creditors Specialty Svc XXXX Inc. ( " CSS XXXX '' ) alleging I owe {$1700.00} for a debt to a third party. The debt is well out the statute of limitations in XXXX and the creditor may not use language in its correspondence to imply litigation remains a possibility. XXXX v. XXXX, XXXX ( XXXX ) ( " If the debt collector uses language in its dunning letter that would mislead an unsophisticated consumer into believing that the debt is legally enforceable, regardless of whether the letter actually threatens litigation, the collector has violated the FDCPA. '' ) Here, the debt collector CSS XXXX has " extended to you the opportunity to take care of this delinquent account voluntarily. '' This falsely implies that payment can be compelled through involuntary means, i.e. litigation. The letter states it may rely upon " avenues of legal collection procedures '' to enforce the alleged debt. An unsophisticated debtor would naturally assume CSS XXXX is not making reference to " legal '' procedures as opposed to " illegal '' ones but, rather, that " avenues of legal collection '' refers to a lawsuit. Finally, CSS XXXX letter refers to " attorney fees '' and " court costs '' though there could be no such charges allowable in connection with the alleged debt. 

CSS XXXX letter is further in violation of 15 U.S.C. 1692e ( 10 ) because it states " YOU ARE IN DEFAULT ON YOUR PAYMENT ARRANGEMENT '' which is false and misleading. CSS XXXX either knows or should know that there are no payment arrangements with regard to this particular debt and indeed ANY debt with regard to the entire portfolio of the business on whose behalf CSS XXXX ostensibly is collecting. 

Finally, the bogus interest charges of {$880.00} are illegal under California for a variety of reasons. This debt does not involve a loan, which would permit a lawful interest rate of up to 10 % per year, which the applied interest rate would exceed in any event. Nor does this debt involve a purchase of goods or services on a contract which would permit the collection of interest subject to the debt collector 's having proven that such fees were both reasonable and necessarily incurred. Nor is this alleged debt even reduced to judgment, only after which would a creditor in XXXX be permitted to charge 10 % per annum ( which, again, the interest charges in this matter exceeds. ) Finally it is noteworthy that this creditor has been sued on numerous occasions in both State and federal court, with one federal court noting that this collector is not properly licensed. This debt collector not only lost these cases, but very recently filed for bankruptcy protection within two weeks of its owner XXXX being compelled to appear in Court to answer questions about his own assets in order to collect the judgments in lawsuits against the company. Interestingly, this debt collector does not even appear to be forwarding the money to the companies on whose behalf it purports to collect as they they appear as creditors in the bankruptcy proceeding. Because XXXX and CSS XXXX continue to engage in perfidy in connection with the bankruptcy proceedings, a receiver and an injunction was recently sought against XXXX and his various alter-ego debt collection businesses. 

The " debt collection '' practices set forth above cross the line into criminal fraud and RICO. XXXX and his companies enjoy the automatic stay in bankruptcy, which conceivably prevents debtors who are victimized by these continuing acts from suing to stop them. It is therefore imperative that the CFPB take some sort of remedial action in this case.

Company response to consumer: Untimely response