For Maureen Coffin of Stoneham, Mass., it started on July 21 — the insistent calls from debt collectors demanding she pay $900. For what, they never said. Since May, Deborah A. Donovan of Weymouth has received at least 25 calls — many of them abusive, she says — and two letters asking her to pay $4,900 for a delinquent Sears credit card.
Eileen R. Myers of Harvard had a longer nightmare — 18 months of annoying phone calls and letters from five successive debt collection companies insisting that she pay a delinquent Capital One credit card bill.
In all three cases — and thousands like them, specialists say — the posse is chasing the innocent. Maureen Coffin was being asked to pay for a debt owed by a Lorraine Coffin. Donovan's tormentors, it turns out, only discovered last week that the Sears cardholder is Deborah Doyle — not Donovan. Capital One Financial Corp., one of the country's largest credit card issuers, hired debt collection firms to go after Eileen R. Myers. The name of the actual debtor: Eileen A. Myers.
Debt collection, as the Globe Spotlight Team reported in a recent series, is a major growth industry: Tens of millions of consumers are being pursued by armies of collection agents and lawyers for hundreds of billions in delinquent debt, much of it sold and resold to one debt collector after another. The debtors are, the series found, often subject to exorbitant fees and roughhouse treatment, even in courtrooms where judges and clerks frequently favor debt collection lawyers.
But there is parallel phenomenon, with its own unchecked growth: cases of mistaken identity, in which the abused consumer owes nothing at all.
After the Spotlight series, hundreds of people called or e-mailed the Globe to complain about debt collectors. Many said they had been pursued for debts owed by others with identical or similar names; or asked to pay debts for ill or deceased relatives; or besieged by debt collectors for the misfortune of having phone numbers once held by people who defaulted on their debts.
In some cases, the mistakes border on cruelty. In October 2003, Marjorie and Allan Slotnick of Brockton received a demand from a debt collector that they pay a 1995 Southwestern Bell phone bill, for $484, purportedly owed by their son. But Adam Slotnick was killed in the Northridge, Calif., earthquake in January 1994 — a year before the debt was incurred. The Slotnicks sent the debt collector a copy of their son's death certificate, thinking that would be the end of it.
No such luck. The debt collector resold the debt. On July 18, another debt collector, Merchants Credit Guide of Chicago, sent a demand letter to the Slotnicks — this time for $982. The Slotnicks sent off another copy of the death certificate, but not before Allan Slotnick had a telephone encounter with a collector who hung up on him. "He refused to listen. He just wanted the money," Allan Slotnick said.
"It's very upsetting to get this kind of a reminder of our son's death after all these years," Marjorie Slotnick said.
Abusive tactics
Regulators and specialists in consumer debt say the number of mistaken-identity cases is growing.
William Lund, chief of Maine's Office of Consumer Credit Regulation, which has taken aggressive action against some debt collectors, said the incidence of collectors chasing the wrong people has increased dramatically in the last five years. Lund blamed the problem on the growth of the debt-buying industry, hundreds of companies that buy old debt, often with outdated, insufficient or inaccurate information about debtors. Last year, for instance, debt-buyers purchased $66.4 billion from bank credit card issuers alone, up from $4.4 billion in 1995.
Knowing that debtors move frequently, debt collection firms commonly rely on databases to locate and go after people with the same name in the same general geographic area, according to Lund. Too often, as the Globe determined in several cases, such identifications are wrong.
But when consumers proclaim their innocence, the result is often an angry impasse. The collectors, citing federal privacy laws, will not share information about the debt with consumers who claim not to be the debtor. And debtors, asked to prove their innocence, are seldom willing to do so by sharing their Social Security numbers with strangers, especially unpleasant debt collectors.
"It's an unfortunate and abusive game that is played," Lund said.
Deborah Donovan is a case in point. Allied Interstate Inc., a national collection agency that works for creditors, was trying to collect on a Sears credit card debt that is owned by a subsidiary of Sherman Financial Group, a major player in the debt-buying industry. The account wrongly identified Donovan as the debtor. Allied's own database-verification effort did not catch the error, according to Gregory E. Harmer, the general counsel for Allied.
As a result, Donovan, who is disabled, suffered a summerlong headache. In April, she received a demand letter. The calls started in May. "I told them I never had a Sears card," Donovan said. The Allied debt collector then demanded to know her Social Security number. Donovan refused. "The woman was very abusive. She said, 'We're going to keep on calling you and keep on sending you bills until you tell us,"' Donovan said.
Allied Interstate's collectors were also badgering Maureen Coffin on behalf of another creditor, Midland Funding, though the suspected debtor was a Lorraine Coffin who lives in another area code. "They were very aggressive and belligerent," Maureen Coffin said. "They told me I was Lorraine Coffin. ... They said, 'You have
to be because we have this telephone number and you owe $900."'
"What alarms me," Coffin added, "is that a lot of elderly people may be intimidated by these kinds of calls and say, 'Maybe I forgot, and maybe I should pay."'
Mistaken identity
Cases of mistaken identity, Harmer said, "are a problem, and are an issue for every debt collection agency."
Such mistakes, according to Harmer and other industry officials, involve just a small percentage of cases. But it is a percentage of an enormous number. Allied Interstate, for example, is one of hundreds of debt collection companies pursuing Massachusetts consumers. Yet Allied alone has 396,819 delinquent accounts in Massachusetts, according to Harmer, with 28,244 added just last month. That means Allied has one account for every 16 people in Massachusetts.
Harmer assured the Globe that Allied, by computer link, had alerted the Sherman Financial subsidiary to the Donovan error. But something went awry. Resurgent Capital Services, another Sherman subsidiary, reassigned her case to Frederick J. Hanna & Associates, a Marietta, Ga., debt collection law firm. Last Tuesday, the Hanna firm called her seeking payment of the same bill.
David Alster, the operations manager for the Hanna agency, said during a conference call with Donovan and a Globe reporter last Wednesday that Donovan had been wronged. During the conversation, Alster did a further database search, using the actual debtor's Social Security number, and discovered that her last name is Doyle. He said he was at a loss to explain how the debt buyer could have had the wrong name, address, and telephone number.
In interviews with the Globe, Harmer, Alster, and a spokeswoman for Resurgent all apologized for the treatment of Donovan.
Also inexplicable is how Capital One could have targeted the wrong Eileen Myers — and paid no heed to her protestations that she was being wrongly targeted.
Starting in February 2005, Capital One hired three successive collection companies to pursue Myers — and gave all of them the wrong contact information. Myers told them she had never had a Capital One card. The calls persisted, even though, Myers said, she told them her Social Security number was different from the debtor's partial number they provided. In August 2005, Myers wrote a letter to one of the companies, FMS Inc. of Tulsa. Under federal law, FMS was required to respond with evidence the debt was hers. It did nothing.
This year, Capital One sold the debt to yet another subsidiary of Sherman Financial Group, which hired a fourth collection agency to collect from Myers. Within days, she sent another letter of protest. Nonetheless, Sherman transferred the account to Resurgent, which resumed collection efforts.
Resurgent "deeply regrets" that Myers was targeted, according to its spokeswoman. Diana Don, a spokeswoman for Capital One, said the banking giant, one of the country's top five credit card issuers, apologizes "for any inconvenience" to Myers. Don would not say how Capital One targeted the wrong consumer, or why it sold the debt after its collectors were informed it was a case of mistaken identity.
Creditors' pursuit
In several of these cases, including those involving Coffin and Myers, it took just minutes for Globe reporters to locate the apparent debtors, using common commercial databases. In the Myers case, the actual Capital One cardholder had once lived within 15 miles of the innocent Myers. But she moved to another state several years ago.
"It is clear that Capital One's debt collectors are not doing simple research. If they cannot find the Eileen Myers who has evaded payment, then they think it's fine to pester another Eileen Myers into paying the bill," the innocent Eileen Myers said.
Even when debt collectors locate the right person, they sometimes ask the wrong person to pay, as happened to Mary DePasquale of Norfolk. In May, a Houston-based collection agency, FMA Alliance Ltd., began a concerted effort to get her to pay $1,300 owed on a Discover Card — her father's Discover Card. Philip DePasquale, who is 70, has a small disability income and lives in a nursing home after losing a leg to diabetes.
Mary DePasquale explained to the collector that the debt was not hers. His rejoinder, as she vividly recalls it: "Don't you want to help your Dad out?" She couldn't afford to pay it, she told him. Then, she said, the collector, who identified himself only as "Mr. Chris," told her he had "checked her out," knew the value of her home, and suggested her pockets were deep enough to satisfy the debt.
"I was outraged," DePasquale recalled, and told the collector: "How dare you check me out?"
It was then that she called Discover to complain about FMA. Discover, she said, apologized. Jeffrey Palmer, chief operating officer at FMA, declined to discuss the specifics of the case with the Globe, but said, "It would not be our general practice" to pursue someone for a family member's debt.
But the , nonetheless,
Eugene Ferraro knows that all too well. Ferraro's father, Anthony F. Ferraro, is 89 and in ill health, but remains in his Wellesley home with the assistance of his sons and a caretaker. For six months this year, the elder Ferraro kept getting calls from Elite Recovery Services Inc. The Buffalo collection firm wanted him to pay $2,252.74 for a Household Bank credit card — owed by Anthony E. Ferraro.
Eugene Ferraro said he had angry telephone exchanges with Elite Recovery employees and twice wrote letters — copies of which he provided to the Globe — insisting that the firm stop harassing his father. It was in an August phone call with Elite that Eugene finally prevailed: The representative, Steve Snyder, told him the firm was looking for a man who was 26 years old, had a different middle initial, and lived in a different town. Elite promised, at last, to take his father off its list.
But, said Eugene Ferraro, the agent also told him that other collection agencies would probably keep calling his father. "The guy told me the only way to stop this is to change his address and phone number," Ferraro said.
Tell us your story
Have you had a personal experience with unscrupulous debt collection practices or been the victim of mistaken identity in a debt collection case? If so, please e-mail us your story for a possible Deseret Morning News report.
Please e-mail a brief description of your experience, your name and phone number to respond@desnews.com.
Michael Rezendes of The Boston Globe contributed to this report.