Debt Collection

The long arm of the law reaches only so far, according to a federal appeals court. In a win for consumers, a three-judge panel of the 9th U.S. Circuit Court of Appeals ruled this week that a San Clemente debt collection company could be sued for alleged overly aggressive tactics, even when the company is working on behalf of prosecutors. The appeals court ruled in a lawsuit against American Corrective Counseling Services Inc.

With her flowing, hot-pink Indian suit, jangling silver bangles and perky voice, Bhumika Chaturvedi, 24, doesn't fit the stereotype of a thuggish, heard-it-all-before debt collector. But lately, she has had no problem making U.S. debtors cry. For the last three years, Chaturvedi has been a top collection agent at her call center, phoning hundreds of Americans a day and politely asking them to pay up. As the U.S.

If you owe money to Tom Anderson's employee-recruiting company, don't expect to take your time paying. Every morning, his office manager checks to see which customers have paid their bills. Clients who promised that a check was in the mail get a personal call from Anderson a week later, instead of the nice letter he used to send out. "In the old days, like January through June of this year, I'd look at our receivables report once a month.

In late 2007, Centinela Hospital in Inglewood was losing nearly $1 million a month and had piled up $15 million in debt. Among the causes of the crisis: $25 million in overdue bills. Collecting that money would have given Centinela a measure of relief. But the bills went unpaid, and the century-old medical center was sold. The new owners slashed services, closed half the operating rooms and laid off a third of the employees. Who owed Centinela that elusive $25 million?

Marissa Ruiz learned about debt collection the hard way. After struggling with credit card debt for years, the Pasadena social worker answered an advertisement from a debt-settlement firm last December. She followed its instruction to stop making minimum payments and to let the firm's representatives handle everything. That's when she started getting calls. "Debt collectors were calling every day, threatening to sue me and take my wages," she said. "There was no reasoning with them at all."

Congress should revoke the Internal Revenue Service's authority to use private debt collectors because the program doesn't work and the collection companies may be using unethical methods to "take advantage of taxpayers," the tax agency's independent watchdog said. Nina E. Olson, the national taxpayer advocate, said in her annual report to Congress that the agency struggled to supply contractors with accounts to collect.

Congressional leaders probing the $85-billion student loan market pushed into new areas Thursday, raising concerns about loan collection tactics and seeking an inquiry into possible conflicts of interest inside the Education Department. Sen. Edward M. Kennedy (D-Mass.), chairman of the Senate education committee, wrote to the heads of two major student loan firms, expressing concerns about allegedly abusive loan collection tactics.

For Cassandra Cooper and Rewa Scott, getting a bank credit line backed by the Small Business Administration was a welcome infusion for their temporary-employee firm. Then disaster struck. The company lost its biggest client, and the bank, California Bank & Trust, wouldn't budge when it came to reworking the credit line for Scott & Cooper Staffing Solutions.

When too many parents fell behind on paying for school lunches, the Chula Vista Elementary School District decided to get tough -- on the children. They told students with deadbeat parents that they had only one lunch choice: a cheese sandwich. The sandwich, served on whole wheat bread, came with a clear message: Tell your parents to pay up -- or no more pizza and burgers for you.

For one deadbeat dad, a flight back from China turned out to be more costly than he could have imagined. The father, whose name was not released, earlier this week paid $311,491 in back child and spousal support -- the largest amount ever collected in the United States -- after federal authorities refused to renew his passport while he was stuck in Hong Kong, Los Angeles County officials said Thursday.