ERRONEOUS BMG MUSIC BILL
Complaint
JERMY F
Country: United States
Yesterday I received a credit alert advising me that there was derogatory information reported on my credit report on 3/1/10 by a company known as National Recovery Agency (NRA). The debt was for $36. I called the agency and they advised me that this debt derived from an order that I placed with BMG music back in 2006. I advised them that this debit is erroneous and someone clearly used my name without my permission in order to obtain these goods. With the advent of online file sharing, I have not purchased a CD in over a decade.
I advised the agent that I was never informed of this outstanding debt from BMG music. It has been four years! I was never contacted by phone or mail. I never supplied my signature or my social security number. They stated that they were not legally obligated to prove that I authorized this transaction, so I just need to pay it immediately. This issue has caused my score to drop by as much as 60 points. Do I have any legal recourse in this matter?
I advised the agent that I was never informed of this outstanding debt from BMG music. It has been four years! I was never contacted by phone or mail. I never supplied my signature or my social security number. They stated that they were not legally obligated to prove that I authorized this transaction, so I just need to pay it immediately. This issue has caused my score to drop by as much as 60 points. Do I have any legal recourse in this matter?
Comments
The pattern of complaints are consistent with abusive collection, routine use of deception, attempts to evade validation requests, willful and negligent malicious reporting of erroneous debts, possible reaging, and other similar violations of FDCPA, FCRA, and state laws.
One of several complaint threads on this site.
https://complaintwire.org/Complaint.aspx/PZzRKact9wBMZgjLdWEHww
It is not clear from your complaint whether you ever had a BMG account, or whether you had one over a decade ago. Be aware that based on other complaints, this debt collector may be trying to force you to pay someone else's debt, one that you do not owe.
If you once had an account over a decade ago, then any debt from over 7.5 years would be illegal to report on credit reports, possibly indicating that they are illegally reaging the reported information and falsely claiming it is recent.
"I advised the agent that I was never informed of this outstanding debt from BMG music."
Why would you be? It probably isn't your debt.
"It has been four years! I was never contacted by phone or mail."
Or even 14. Or it's someone else's account, with BMG bills sent to their address, not yours.
"They stated that they were not legally obligated to prove that I authorized this transaction, so I just need to pay it immediately."
Now the lies begin.
They are required by law (FDCPA) to notify you of your right to dispute the debt, and that if you don't dispute them within 30 days of receiving their first letter, they may assume it is valid. They are required by FDCPA to send that letter within 5 days of first contact, so you should receive it within 10 days of your phone call.
Under law, just because they may assume the debt is valid, that does NOT make it valid or owed.
What they said was a half-truth. They don't have to prove anything, UNLESS you dispute. If you dispute, IN WRITING, within 30 days of receiving their first letter, they are PROHIBITED from any additional collection activity until they send you proof from the original creditor. That is the law (FDCPA) and they are required by law to tell you you can dispute IN WRITING. THEY DIDN'T TELL YOU THAT, but instead told you you couldn't dispute, but had no choice but to pay. THAT WAS A LIE. They are PROHIBITED by FDCPA from using DECEPTION in collection of debts. IT WAS ALSO A VIOLATION OF FDCPA for which you can SUE THEM.
Pull your credit reports through the credit reporting agencies (CRAs), to determine which ones show this erroneous account. You can get real free reports under federal law through www.annualcreditreport.com (NOT "freecreditreport"), but be aware that if you use the free annual report mechanism, the CRA can take 45 days (instead of 30) to investigate and respond.
Send NRA a letter, certified return receipt requested, indicating that you dispute this alleged debt, that you do not owe it, and demanding that they obtain proof from the original creditor and send it. Include that you have received NO letters from them regarding this debt, and include a copy of the page of your credit report showing only their entry. (Black out everything else.)
On confirming that NRA has received your letter (via the USPS website), send a dispute letter to the credit reporting agency disputing this erroneous negative information. Indicate that it is not your debt. Send that dispute certified return receipt requested.
After notifying NRA the debt is disputed, and then disputing with the CRA, if the CRA responds that NRA has erroneously "verified" their error, then under FCRA NRA is liable for the damages caused by their error, and in addition, liable under FDCPA for continuing to collection without verification (assuming they don't or can't send "proof").
Keep track of the damage caused by their error (notices from other creditors of reduced credit lines, raised rates, closed accounts,etc.) and if any creditor notifies you of a change of terms, contact them to request an Adverse Action Notice, indicating why they changed your terms. That should identify which credit report they pulled, so you can pull it and see if this error was on there.
If they fail to remove their erroneous
"debt" from your credit reports, contact an attorney with experience in FDCPA and FCRA litigation. Both FDCPA and FcRA allow courts to awared attorney fees should you prevail.
You might try www.naca.net
None of that "proves" an alleged account was ever opened by you, or even that they got that information with the alleged "debt". They can get all that information either through pulling your own credit reports, or through a skip-trace database like Accurint.
What may appear to be some "id theft" account, which they will play up as hard to dispute so you better pay it, may be nothing more than their BS attempt to convince you that you owe someone else's debt.
When you find someone already using deception, expect more deception.
http://fairdebtcollection.typepad.com/fair_de ... -group-llc.html
Here's the course of events, so far.
1st call, around 8:30 at night. Informed me I had an outstanding debt with BMG. I informed them I've never had a BMG account. I had a Columbia House account about 12 years ago, but I paid that in full within the first month. "Well, sometimes these companies buy each other out. Perhaps that's the case here" No. I paid them, and CH does NOT own BMG to my knowledge. What do I need to do to dispute this?
"You need to fax us in writing that you're disputing this"
Ok. Fax sent.
2nd call, around 6 at night, about 2 weeks later: Calling to inform me of my outstanding BMG account. I inform them that I've already disputed and faxed a letter saying as much. "We never received such a letter". Ok, Fax another letter. Called back about 30 Minutes later and verified they got it.
3rd call, about a week later: Calling to offer me a settlement on my BMG account. Original Debt was $32, we'll settle for $27. No thank you. It's not my debt. What do I have to do to make you understand this isn't mine? "How did you dispute this?" I faxed TWO letters to you, verifying the second one made it. "I don't know why they told you to do that. The only way to dispute is to send a letter to each of the 3 credit bureaus". Fine. I'll do that.
Letters mailed AND faxed to each.
2 Weeks later, 4th call. Same thing. I tell em everything I've done. WHAT do I have to do to get you to leave me alone? I've disputed this across the board. STOP calling me. "You need to send us a cease and decist (sp) letter stating you've disputed the claim." WHAT THE HELL are you people doing over there??? Fine... Letter mailed AND faxed.
3 Weeks later, 5th call. About 8:45 PM. Calling to settle again. This time, I'm P.O'ed. I review EVERYTHING I've done. The guy tries to talk me into the settlement. Kept interupting me and was pretty rude. "Put it this way. Pay the $27, it stops the calls, and we don't bother you anymore" I'm not paying a bill that's not mine. I don't care if it's "only $27 or $2700 I'm NOT paying something that's not mine. I've sent you cease and decist letters, faxed and wrote all the credit bureaus and even sent a letter to BMG, who can't do anything because they sold it to National Recovery.
Now it's about 3 till 9, and the guy starts getting huffy "So, you're refusing to pay your debt?" No, I'm refusing to pay someone ELSES debt, he interupts me mid sentence "You know what I meant, so you're not going to.." And I interupt HIM. I don't care if you think I know what you're implying, this may be recorded and I WON'T fall into THAT trap... He interupts me again "Look, my shift is ending, so I need an answer." I don't care if your shift is ending or not. You called ME. If you can't give me the decency to complete the call professionally, DON'T call me. Now, I've filed ALL the paperwork you've asked me to. If you call me again, I'm talking to a lawyer, and you're going to have to spend oodles of money on an attorney, and pay someone to go to court, to sue me over $32. Knock yourself out. My credit is crap anyway so your little smudge mark isn't going to make or break me.
They've called 2 or 3 other times, and I ignore the calls. These people are insane....
Note that they directed you to FAX your dispute, which they then "lost", repeatedly.
You notified them the debt was disputed. You did so within 30 days of their sending you their first letter (if they even sent one). That is all FDCPA requires.
You should also have sent your letters certified, so you would have proof of timely mailing, and of their receipt, as that would be stronger proof in court if you need it. However, several confirmed faxes, and 2 letters, with your contemporaneous documentation, creates the presumption that they were notified of your dispute.
From their receipt of your timely dispute (sent within 30 days of their first letter, which should have notified you of your right to dispute), they are prohibited from continued collection until they obtain and send proof of the debt. Failure to observe that requirement of FDCPA is a violation that you can sue them on.
You should also check your credit reports, as they routinely put damaging accounts on consumer credit files, even for these small music club accounts, and even though they regularly dunn the wrong people. If you find their erroneous entry on your credit reports, you dispute it through the credit reporting agencies as "not yours". They have 30 days to "investigate", which generally just consists of electronically asking NRA to verify its accuracty. NRA is often reported to erroneously "verify" these trivial erroneous "debts", after which you can sue under FCRA, and also FDCPA if you notified them of the dispute and they haven't sent proof.
They have a nice little racket collecting on small "music club contract termination fee" accounts. Yes, these are the BS charges the music clubs charge when they claim some sucker consumer "hasn't made their agreed number of purchases". They open these consumer accounts with just about anyone (minors included), credit not required and they probably don't even pull credit reports or otherwise identify the applicant.
No matter if they get paid, there's plenty of profit in what they already sold, and they can then sell off the remanants to NRA. NRA can then bill any similarly named person, like you, who is much more likely to pay an unowed debt to protect their credit than the original sucker was. Were you the wrong person? Sorry your credit is trashed. But hey, we had a "debt" owed by "John Doe", see it says to right here.
Look up BMG, and you can also find numerous complaints of what can only be called politely "bad customer service", including errors crediting payments, crammed product shipment and billing, etc. Some of these "bad debts" are probably entirely bogus.
Some companies get paid more the worse they do.
http://en.wikipedia.org/wiki/Columbia_House
"...
Fraudulent Sale of Debt
In December 2008, BMG Music Service (now yourmusic.com) sold an unknown number of fraudulent debt claims to a collection agency, National Credit Solutions. Supposed delinquents were not made known of their debt and most had not made purchases with the company for at least five years. Victims of the sale of false debt claims were not made known of either their debt or the account opened with National Credit Solutions. Most victims learned of the collections agency account when they were denied for a loan, had credit cards canceled, or checked their credit reports. [12]
Better Business Bureau rating
As of 2010, this business has an unsatisfactory rating with the BBB due to a failure to respond to complaints.[13][14] This company also has an unsatisfactory record due to a pattern of complaints. Specifically, complainants allege receiving merchandise and/or bills for merchandise from BMG/Columbia House for CDs and/or DVDs that they did not order. Complainants further allege that they did not join BMG/Columbia House and do not know how the company obtained their information and that the company's phone line & website do not provide live customer service representatives to help resolve these issues.
..."
Numerous complaints against BMG, Columbia House, and Nationwide Collections, many alleging attempted collection of bogus accounts, show up here. Many complaints allege attempts to collect on unowed debts, illegal collection actions (threats to sue on OOS debt,etc.) by Nationwide Collections, with the bogus accounts reversed after contacting BMG.
Clearly BMG generated a bunch of bogus old account information that was sent to at least this debt collector. Some of this bogus debt may also have originated with Columbia House negative option marketing, pushing shipments and cramming charges after cancellation, as complaints include very old debt (10 years), supposedly sent to old addresses possibly after a move, but with possible reaging of negative credit reporting.
http://www.topix.com/forum/city/waynesboro-va/T44R8K5V6V3B3I61Q
Letter from BMG to FTC, raving about all the benefits brought to consumers of negative option marketing. Of course, it doesn't mention the damage caused by negative-option created "debt" going to collections and trashing the credit of entirely different consumers.
http://www.ftc.gov/os/comments/prenotnegativeoprule/541909-00014.pdf
Very recent complaints against Columbia House, and collection agencies National Recovery Agency (NRA) and Takhar Group, in many cases alleging unowed debts, either never had account, or account had been closed with no balance after meeting terms.
Some reports of debt collectors offering "vouchers" for payment of the alleged debt. The bogus debts may be partly an attempt to force consumers to continue ordering and not close their accoutns, similar to common magazine publisher "automatic renewal" scams. Other Columbia House complaints (including FTC and AG actions) allege they attempted to continue telemarketing to DNC consumers after accounts were closed, in violation of the DNC law.
http://www.consumeraffairs.com/entertainment/columbia_house.htm/
They appear to routinely "beat up" their ex-customers' who try to leave, indirectly through debt collectors who may also have acted as telemarketers. Similar patterns show up in fraudulent magazine subscription sales scams.
It would not be surprising if this petty fraud activity spills over onto unrelated consumers as bogus debts sent to debt collectors willing to play this game.
This is consistent with the above wikipedia article claim that suspect debt collection activity by National Credit Solutions resulted from BMG data sold in late 2008.
http://ficoforums.myfico.com/t5/Rebuilding-Yo ... IONS/m-p/429346
Sale of such suspect account data by BMG to NCS would support the premise that similar BMG account data transferred to NRA is also bogus.
In addition, note similarities to tactics used by AFNI with their old Verizon account "shotgun mailing" campaign: "id theft" gambit, same stonewalling tactics, same deceptive talk-offs to evade validation requests, fabricating their own "validation", etc.
http://ficoforums.myfico.com/t5/Rebuilding-Yo ... IONS/m-p/429346
"BMG MUSIC AND NATIONAL CREDIT SOLUTIONS
02-02-2009 04:56 PM - last edited on 02-02-2009 05:07 PM
ON 01/31/09 MY EX SCORE WAS 674. TODAY I RECEIVED AN ALERT FROM THEM REGARDING A NEW COLLECTION BEING ADDED TO MY CR. APPARENTLY, BMG MUSIC SOLD A ACCT WITH MY INFO TO NATIONAL CREDIT SOLUTIONS. I HAVE NEVER, REPEAT, NEVER HAD AN ACCT WITH BMG. I AM COMPLETELY OUTRAGED THAT MY SCORE DROPPED TO 598 BECAUSE OF THIS. I SENT A DV LETTER ASAP TO NATIONAL CREDIT SOLUTIONS AND DISPUTED WITH EX ONLINE. HAS ANYBODY DELT WITH THESE CLOWNS BEFORE? I AM SO UPSET. I'VE BEEN WORKING ON MY SCORE TO BUY A NEW CAR AND MY PLAN WAS TO PURCHASE A NEW BMW NEXT MONTH. ANY ADVICE ON HOW I CAN GET THIS GONE....FAST
Addition info HERE!
I called NCS and spoke to Elizabeth Perez. Initially she was unable to find the acct. Allegedly the acct was opened in 04/03 and closed in 05/05. I asked what did I allegedly purchase...she had no clue. The original creditor didn't provide that. I asked her if she had any proof that I was the person doing the ordering...NOPE. I asked her for the original creditors telephone number...she claimed she didn't have it. She advised that her company acquired the acct in 12/2008. It is being reported on my credit report as opened 12/08. Is that reaging?
Message Edited by detdime83 on 02-02-2009 08:07 PM
..."
"...
Re: BMG MUSIC AND NATIONAL CREDIT SOLUTIONS
02-04-2009 07:08 AM
This just popped up on my credit report as well (2/3/2009). I use Identity Guard to monitor my stuff and new instantly when this was added. Like the poster, I had some mysterious BMG collection amount for $308; the account was created 12/2008 and went to collections in the same month as per my file. I've not had a BMG account since I was 16 (I'm 28 now), so I know it is incorrect. I disputed this collection with Experian and they removed it. Now this National Credit Solutions has showed up on my file with no account balance, no credit bureau ID, and no other information besides their address. I've emailed them and asked to substantiate the account. No reply as of yet.
..."
"...
Re: BMG MUSIC AND NATIONAL CREDIT SOLUTIONS
02-05-2009 05:37 AM
I just saw the same thing on my EX i just filed a dispute with them as well I have not lived in American since 2002 just recently moved back in september of '08 so I know for a fact I should not have any new BMG items show up on my report.I am waiting to see if EX deletes.
..."
"...
Re: BMG MUSIC AND NATIONAL CREDIT SOLUTIONS
02-06-2009 11:49 PM
Weird, I have that collection in my file too and I've never ordered stuff from them. I had disputed, but have not seen a response yet. What's the next step if they don't delete the erroneous reporting? Thanks.
..."
Similar recent complaints against BMG and NCS on ripoffreport.com
Re-aging account from 2000 to 2005.
http://www.ripoffreport.com/miscellaneous-companies/national-credit-solu/national-credit-solutions-bm-aa8f3.htm
Evading validation.
http://www.ripoffreport.com/credit-reporting-agencies/bmg-music-national-c/bmg-music-national-credit-sol-59687.htm
http://www.ripoffreport.com/book-stores/rhapsody-book-club/rhapsody-book-club-bmg-dnar-f52a2.htm
NCS confirmation that they are aware how flimsy BMG account identification is. The old "id theft" gambit, just like AFNI. Deceptive collection.
http://www.ripoffreport.com/music-shops/bmg-music-and-ncs/bmg-music-and-ncs-ncs-pushed-i-5fcb6.htm
"...credit report with Experian and found a collection from this agency. I also explained that I am a victim of identity theft, since I was 13 years old. So naturally, this is very upsetting for me.
She explained that this account was reported from BMG, some sort of cd/dvd store? Apparently, in 2004 I had ordered cds/dvds for A PENNY (imagine that) and I now owe 199.00. I asked for proof that I had done that and was told the proof is that my name & address were provided. Since I received mail at that address, I must have been the one to order the product.
She went on to explain that sadly, that is all anybody needs to provide. No signature, no ssn or proof of identification. When I asked why in 6 years I never received a phone call or a letter from either her agency or BMG, she stated that "Yes, a letter requesting payment would be appropriate but it is not required".
So now, 6 years after somebody ordered cd's (could have been anybody, neighbors, siblings, ect) I am being penalized. My credit score is down, my interest rate has gone up and now my fall student loans may be denied.
But wait, if I pay the 199.00 just because somebody claims I owe an outstanding balance, it MIGHT be removed from my account. OR I could some how, go on a man-hunt for whoever ordered these cds and file a police report.
..."
Evading validation, deceptive collection.
http://www.ripoffreport.com/collection-agencies/national-credit-solu/national-credit-solutions-bmg-ceb36.htm
"...
The individual was rude and said they could send me a bill to pay from them... but they did not have to validate anything. On my report the original bill was $28.00 and present balance was $169.00 yet I told them it was not my bill and I wanted the account deleted from my credit report. The answer was no, and so now I am stuck with this account on my credit report and even if I were to pay a debt I dispute it would remain.
..."
"...I informed her I have no idea what this is for she said that someone in my household could have ordered it in my name and that with authorization from me someone as young as 13 could order products. Again, I told the rep I have never authorized anything to be ordered in my name, I have never received a bill from BMG, Direct Brands and have NEVER been contacted by NCS. About 5 days later I received a collection letter from NCS. I immediately disputed the debt in writing to NCS and all 3 major credit bureaus. I have since received a letter of so called "validation" from NCS and all it has is the information the rep told me over the phone. Their idea of verifying and validating debt is a joke. As of yesterday I wrote and sent a 2nd letter of dispute to NCS certified letter. I have also reported their company to the BBB, the Federal Trade Commission, the Oklahoma and Minnesota Attorney General. ..."
It appears that Capital Assistance Group (allegedly "in-house collections" for BMG) is aware of bogus BMG/National Credit Solutions collection activity. They should be catching some flak on this, as it has been going on for about a year.
http://www.creditboards.com/forums/lofiversion/index.php/t380875.html
"...
aash
Mar 4 2010, 03:23 PM
For all who are experiencing issues with National Credit Solutions,
Please contact Chris Murphy at cmurphy@capitalmv.com 617-965-2000 x 2530
Chris is very pleasent and quite helpful in providing a quick resolution to the problem with National Credit Solutions.
I called him today, and received immediate help with my issue.
As stated before, Capital Assistance Group https://www.caghub.com owns BMG music and associated debt.
..."
http://www.creditmagic.org/debt/capital-assistance-group.html
BBB report on Capital Assistance Group, rated "C-", due to high levels of complaints.
http://www.bbb.org/boston/business-reviews/co ... ewton-ma-15265/
(North Shore Agency shows up in connection with magazine publisher "subscription renewal" scams.)
http://www.louisianacajun.com/msg/louisiana-c ... 8&fid=199&tid=0
"...
She said that the company she works for, Prism Venture Partners LLC is in Boston MA, and that it is a venture capital company, and they do things like hook up scientists with scientific projects both government and private, etc. and that they have NOTHING to do with BMG Music Service whatsoever.
She then told me that the company I need to talk to is based in New Jersey, and that HER company in Boston is suing the New Jersey company in court to make them stop using the name Prism Venture Partners LLC.
She said that she has received over ONE HUNDRED calls this week from people who have received the very same letter as I, and all of them said that they have NEVER bought anything from BMG Music and they all wanted to know why they received this letter. And of course, she had to refer them to this other, fraudulent Prism Venture Partners LLC in New Jersey.
..."
http://north-shore-agency.pissedconsumer.com/north-shore-agency-field-and-stream-mag-20100115167882.html
http://www.ripoffreport.com/miscellaneous-companies/rodale-press-north-s/rodale-press-north-shore-age-75exx.htm
http://www.ripoffreport.com/Collection-Agencies/North-Shore-Agency/north-shore-agency-falsely-cla-fg95c.htm
http://www.ripoffreport.com/miscellaneous-companies/north-shore-agency/north-shore-agency-threatening-5cbxc.htm
http://www.ripoffreport.com/Book-Magazine-Publishers/North-Shore-Agency/north-shore-agency-nsa-surrend-yydyf.htm
http://www.ripoffreport.com/collection-agency-s/north-shore-agency/north-shore-agency-nsa-threat-966dq.htm
http://www.topix.com/forum/business/financial-services/TN8L9NOLVD3F4CJRR/p3
This group appears to be separate from those associated with predatory "inflated subscription" bait-and-switch telemarketing fraud, notes on which appear elsewhere.
They appear more often associated with small balances, sometimes playing "chicken" with consumers victimized by fabricated subscriptions, and often employ credit damage over small amounts before any consumer contact as a recurring tactic. Many in this group have high BBB ratings, often "A+" indicating BBB acreditation, despite high rates of consumer complaints of evading validation, or deceptive and fraudulent collection.
There is apparently no "debt" so flimsy that you can't find someone to try to get money out of it.
NRA "validation" reply is consistent with attempting to deceive consumers into paying unowed debts. It appears they set up to just print them out from the information they already have, passing that off as "validation" since most consumers wouldn't know what to do when they were stonewalled.
They leave out all information that might be used to verify or refute the legitimacy of the alleged debt. No original customer billing address, not even a Columbia account number, which they probably already have, nothing to allow disproving their claim, or even tracing it back independently through the original creditor. Deception and Denial.
Also note report of alleged "account" supposedly opened in maiden name 4 years after moving from alleged account address. Possibly consistent with id theft, but 4 years after moving? That would indicate either that Columbia has NO mechanism to verify identity under which accounts were opened (probably true) leaving ALL their bad debts suspect, and/or that the alleged "account" data has been "fixed" after the fact.
Consistent with "fixing" the account data based on skip-trace on address to find former residents to pin the "debt" on. Only party to be in a position to do that would be the debt collector, with routine access to Accurint or similar, and motive. High level of "not mine" complaints against NRA is consistent with this scenario.
Note BMG's policy is to retract and cancel all challenged debts. That is consistent with their knowledge of the suspect nature of these "debts". Despite this, NRA is reported to routinely post negative collection accounts on credit reports, playing "chicken" until challenged.
Above picture is consistent with numerous other complaints, as well as with the corresponding rise in federal lawsuits against NRA over the last year.
http://www.creditboards.com/forums/lofiversion/index.php/t413614.html
That would subject BMG (or Direct Brands, or whoever they now are) to the same prohibitions against deceptive collection, and statutory damages plus attorney fees, as NRA.
Several allegations of reaging in violation of FCRA, and deceptive collection through eomployees claiming accounts can be posted to credit reports based on the date the debt collector gets it, not original date of delinquency.
Complaints had been piling up at a steady clip in 2009, but began rising at an increasing rate in 2010.
http://www.consumeraffairs.com/entertainment/bmg.htm
http://www.louisianacajun.com/msg/louisiana-c ... 8&fid=199&tid=0
Another report of fraudulent crammed "account", ca. 2007.
http://answers.yahoo.com/question/index?qid=20070530175151AAq1ybG
"Columbia House DVD Club Scam?
Today I received a DVD and new membership packet from Columbia House. Not only did I not sign up for membership, but the package had originally been sent to an address that I had moved from 1 year ago and I had to pay a forwarding fee.
..."
U.S.A. (FTC) v. Columbia House, stipulated judgement and permanent injunction in 2005, related to Telemarketing Sales Rule/Do Not Call violations. $300,000 civil penalty, and 5 years subject to auditing, also applies to their successors and assigns (e.g. BMG).
http://www.ftc.gov/os/caselist/0423078/050715stip0423078.pdf
Numerous complaints of crammed or bogus collection accounts, ca. 2007-2008. On being challenged by consumers calling to notify them they never signed up, they are reported to say the account would be closed and pulled back from collection, but that numerous bogus "accounts" existed at all is still indication of some mechanism for fraudulent account creation. Since reports include unordered shipments arriving with bogus new accounts, not consistent with id theft. Might still have resulted in numerous bogus "cancellation fees" in their receivables records, later sold or transferred to debt collectors.
http://www.topix.com/forum/city/waynesboro-va/T44R8K5V6V3B3I61Q
http://archive.slickdeals.net/showthread.php?t=526826
Consumer complaints are consistent with CH or marketing affiliates using debt collectors to cram new accounts and renewals, similar to some magazine subscription scams. Note that this follows their 2005 FTC injunction, which would have severely limited their cold-call telemarketing ability, putting pressure on them to get new accounts by other means. They were caught calling former customers after cancellation in violation of the TSR/Do Not Call laws.
More recently, caught in the "discount club" "marketing affiliate" scandal.
http://www.ag.ny.gov/media_center/2010/jan/jan27a_10.html
Capital Assistance Group is reported to have purchased or be managing the old Columbia House "accounts" from BMG, with National Credit Solutions, NRA Group, and several other debt collectors reported in connection with recent collection activity on bogus "accounts".
That would imply that this investigation is related to the same rise in complaint counts in connection with suspect BMG/Columbia House "accounts" as is showing up on consumeraffairs.com.
A number of consumer complaints have alleged re-aging, as alleged here, along with credit damage from reporting unowed bogus "debts".
http://www.myfloridalegal.com/lit_ec.nsf/inve ... 525769C00567B87
"The case file cited below relates to a civil -- not a criminal -- investigation. The existence of an investigation does not constitute proof of any violation of law.
Case Number: L09-3-1237
Subject of investigation:
National Credit Solutions, LLC, a/k/a NCS of Oklahoma, LLC, Capital Assistance Group
Subject's address:
3675 E 1-240 SVC Road Oklahoma City, OK 73135
Subject's business:
out-of-state debt collector
Allegation or issue being investigated:
1) Violation of Fair Credit Reporting Act for re-aging debts for purposes of credit reporting by falsely reporting to Experian that the alleged debts are new, when some are so old they can no longer lawfully be reported (NCS); 2) Violation of Fair Credit Reporting Act for reporting amounts in excess of that owed (NCS); and 3) Violation of FCCPA (s. 559.72(9), Fla. Stat.) and FDUPTA for knowingly collecting debts in excess of amounts owed (NCS and Capital). Complaints have raised several other issues.
AG unit handling case:
Economic Crimes Division in Tampa, Florida
..."
Note reports of Do Not Call violations, including several to former customers who are on the Do Not Call list, which would be in direct violation of the 2005 FTC settlement and permanent injunction.
Also note reports of repeated high pressure calls to current members. May be consistent with telemarketers motivated by policies/compensation to fabricate fraudulent "orders".
Calls end April 2008.
https://800notes.com/Phone.aspx/1-800-966-6214
Indicates CH was doing NO verification of the identity of anyone claiming to open an account, and was obtaining NO identification information. Evidently, they just checked "name" and "address" automatically against what was in their system, and nothing more.
That is how "reliable" old CH account information is, and this is all the debt collectors posting these accounts to credit reports have available to "identify" the alleged debtor. Based on numerous complaints from consumers who never opened accounts, they don't even appear to be using anything but name.
BMG's and Capical Acquisitions
http://www.crimes-of-persuasion.com/Crimes/Business/against_business.htm
"...
A man has pled guilty to an information charging him with fraudulently obtaining more than 26,000 audio compact discs, valued at about $425,000, from two mail order companies. Under an information, a defendant waives the right to have his case presented to a federal grand jury and, instead, pleads guilty to charges presented by the government.
Over a five year period he opened 2,417 customer accounts—each in a different false name—at BMG Music Services and Columbia House Music Club. By taking advantage of offers for new customers, which typically provide nine free music CDs with the purchase of one at regular prices, he received through the mail 26,554 CDs, valued at about $425,000. He later sold them to vendors at flea markets.
He rented sixteen boxes at post offices to receive the CDs and knowing that he would avoid fraud-detection thresholds as long as none of the addresses was identical, he slightly altered letters, numbers, punctuation marks and spaces in the addresses. For example, he created hundreds of variations of his home address by deliberately adding fictitious apartment numbers, creating the impression that his single-family home was an apartment complex.
He faces a maximum sentence of five years in prison and a $250,000 fine, and may be ordered to pay restitution and costs of prosecution.
In an similar earlier case, the accused pled guilty to fraudulently obtaining 22,260 music CDs, valued at $350,000, from BMG and Columbia House by using 1,630 false names to establish fake accounts, and was sentenced to a year in prison. He as well deliberately added fictitious apartment numbers and suite numbers, and inserted unnecessary directional abbreviations and extra punctuation marks and spaces to post office addresses.
..."