Debt collector gets jail for extortion

SignsonSanDiego.com ^ | August 14, 2006 | Ray Huard

[APRPEH]

Threats included arrest, deportation

Strong-arm tactics were standard procedure for a La Mesa man who ran a debt collection business out of El Cajon, posing at times as a lawyer or investigator for the district attorney.

Edward Mitchell Davis told people he contacted that police were on their way to arrest them and the only way to avoid jail was to pay him immediately for debts the people often didn't even owe, prosecutors said.

If he thought they were immigrants, Davis told them they could be deported if they didn't pay or could be arrested at the airport when they next returned from a trip abroad, according to court records.

Davis,55, was sentenced to 270 days in jail, fined $499 and placed on probation for five years on Aug. 4 after pleading guilty in October to extortion and attempted extortion, prosecutor Tricia Pummill said.

As part of a plea agreement, Davis promised to repay $40,864 to people he pressured to pay, Pummill said. Davis also agreed to repay anyone else who comes forward with proof that they made payments to his company, ARM Financial, because of extortion.

Davis “was collecting bills too aggressively,” said his lawyer, William McGuigan.

“He's not a violent person or an evil person,” McGuigan said. He said Davis has repaid money he collected improperly.

The debts Davis collected “were all legitimate but some were too old,” McGuigan said.

Pummill said the unpaid debts Davis collected often were on long-dormant or inactive accounts, some going back more than 10 years.

“Most of these people didn't even have debts,” Pummill said. “It had been paid off or forgiven or they (debtors) had declared bankruptcy and it had been discharged.”

Davis' undoing came from a former employee who was sick of pressuring people to pay and a man Davis threatened with arrest and deportation to get him to pay an old bill.

Investigators first learned of Davis in December 2003 when a man called prosecutors to complain about what he considered coercive collection practices.

The man said that someone who identified himself as a lawyer by the name of Ed Smith called him about a $1,500 debt from 1991, according to court records.

The so-called lawyer, later identified by investigators as Davis, told the man that he was facing criminal charges over the unpaid debt and had to pay $7,000 to cover the debt and court fees, according to the records.

While investigators were investigating his complaint, a man who once worked for Davis called the District Attorney's Office in April 2004 to alert it to what he said were unfair business practices Davis instructed him to use.

The former employee said he told debtors to call Davis' company about a debt. Davis would then tell the debtors that the court action could be stopped if they made immediate arrangements to pay the debt through Davis.

Pummill said Davis' high-pressure, illegal debt collection practices are all too common.

“It's a huge problem,” Pummill said.

[APRPEH]

these people are scum of the earth. Professionally, I have seen far too many attempts by debt collectors harrassing consumers who were either victims of fraud or the wrong person (ie. not the actual debtor) and have been bullied into paying a debt that they didn't owe.

"Debtor Phishing" should be illegal.

[rb22982]

Creditborads.com for information regarding credit card collecting, scores etc. It's a very useful website/forum.

These guys are indeed the scums of the earth.

[APRPEH]

also take a look at Bud Hibbs.

Bud's Website

[TimesDomain]

If you honestly owe somebody money and you don't pay them back then YOU are the criminal.

No, I do not like strong arm collectors, but the debtors have the majority of the blame.

[Old Professer]

Debtor's prison was abandoned for a good reason.

[mkjessup]

Debtor's prison was abandoned for a good reason.

Yeah, I'm wondering if TimesDomain was able to get a traditional correctional officer position in the regular prison system in their state when the Debtor Prisons were abolished, know what I mean? ;)

[rb22982]

I wouldn't call people criminal for not paying back credit cards with 23+% APR. Stuff happens. Most people sadly dont realize what those high APRs mean to paying back your debt. Most people that default do not do so on purpose.

Beyond that though, debt collectors are awful. They will call and bug your family members & friends, call you at work, sell the 'debt' to other collection agencies after you pay, agree to a settlement over the phone and then never follow through with it, run E-Checks you never authorized anytime they want, threaten to sue, beat you, tell you that you owe way more than you really do, refuse to get an itemized statement which they are REQUIRED BY LAW to do, etc, etc.

[mkjessup]

BTW, just kidding with you my FRiend, and welcome to FR. :)

[GeronL]

Edward Mitchell Davis told people he contacted that police were on their way to arrest them and the only way to avoid jail was to pay him immediately for debts the people often didn't even owe, prosecutors say

That is ridiculous, we don't have debtors prisons in this country and we should not. This guy should serve time in jail for trying to make people pay what they do not owe.

---

Although I do believe people should pay they do legitimately owe.

[APRPEH]

If you owe debt then expect a collection. Debtors need to be responsible whether they made bad decisions or honest mistakes. i would however, like to draw your attention to this line in the story:

“Most of these people didn't even have debts,” Pummill said. “It had been paid off or forgiven or they (debtors) had declared bankruptcy and it had been discharged.”

there is a epidemic of collectors calling or sending letters to anyone and everyone with the same or similar name living in a geographically similar area to the actual debtor and demanding payment. it is a very competitive business which breeds contempt for legitimate business practices and ethical decision making.

[GeronL]

Bad debt collectors are awful. The guy in the story was threatening jail to people who did not owe. Thats criminal.

People who owe should pay it back, even if in tiny bits per week or month.

[TimesDomain]

Usury is EVIL also - but if I borrowed $5.00 from someone, $10 after 5 years or so would NOT be considered too much to pay back.

Yes there are rare exceptions to everything, but today the majority of dead-beats are just that. Thieves who borrow and then have no intention of ever paying back using the liberal whiny lawyer court system to declare bankruptcy right after charging everything to the max.

So now the honest American citizen gets to pay for all those thieves, robbers, criminals, you name them....

What was that old adage "Never a lender nor a borrower be" ? If you can't live without borrowing I suggest we do something about the root cause --- BIG GOVERNMENT and LAWYERS.

[ozzymandus]

If you owe a debt, you owe a debt, and there are a lot of deadbeats out there, but there are legal methods of collecting.

[kinoxi]

He was found guilty of extortion, not collecting legitimate debts.

[spinestein]

[If you honestly owe somebody money and you don't pay them back then YOU are the criminal.]



Morally speaking, all debts are between the debtor and the debtee. When some third party comes along and insists you owe THEM money then they can go to hell.


A few years ago I disputed the amount of credit card debt I had with one company; I said it was about $1,800 and they said it was about $2,400. I disputed this for two years with them in writing (meanwhile making good faith payments) but they simply ignored my numerous letters to them requesting my past account information regarding payments made. I assume the reason for this is such a big company is only capable of generating standard computerized statements to customers and any request for something out of the ordinary just gets tossed into the trash.

After about two years I started getting calls from third party debt collectors and I told them that I was always willing to pay the original company the amount I owed, provided they simply responded to my reasonable request. And all this trouble was because some company is too big and too impersonal to have one employee set aside just five minutes to deal with a customer.

[longtermmemmory]

The new profit point is "uncollectable" debt.

Debt which is outside the statute of limitations. The objective is to get the hapless victim to pay a token amount thinking it will settle the debt (as a book keeping tool) while not realizing they just rebooting the statute of limitations.

[rb22982]

In my opinion, the Collection Agencies are WORSE than the 'thieves' as you call them. If you or a loved one/friend have never dealt with them, consider yourself lucky. They are awful. Almost everything they do is criminal and against the law. Most violate so many FCRA and FDCPA that if they were fined/sued for each issue, 99% of the CAs out there would go bankrupt. If every consumer knew they could sue for $1000 per problem on their credit report, it would put an end to it quickly but most do not. Most people who default are not what I consider thieves and just make honest mistakes. But Losing a good credit score can kill a person for 7/10 years. Most people just do not want to deal with that hassle. This is just an opinion. I have no sympathy for CAs. People who owe money should only pay the O(riginal) C(reditor) as far as I'm concerned.

Honest citizens have always paid for the thieves. Who do you think pays for shrinkage at retail?

Fair? Of course not, but neither are unethical and unlawful collection practices of these CAs.

[rb22982]

That I will agree with, but it's not always possible in some cases (major medical problems). I have a friend who ended up with $500,000 in medical bills on a 30k/year salary. Think his creditors will be seeing any of that money anytime soon?

[The Brush]

Don't get me started.
First of all what this guy did was wrong. Period.
Debt collections, especially from self-employed people is a tough job.
We could clean up a big chunk of the federal debt by suspending the licenses of professionals who refuse to pay their student loans.
Since lawyers help to write the laws, it doesn't seem likely they'd write a law requiring a lawyer to pay back their loan. In my experience lawyers are the worst offenders. They know how to stall, avoid talking to collectors and many have actually say that the government will never get a dime from them. I've heard it from law students too. It seems as though the first thing they teach in law school is how to avoid paying for your schooling.

[GeronL]

send them $10 a month