http://www.consumerlitigators.com/2038/consumer-news/judge-finds-west-asset-managements-collection-of-death-debt-unlawful/January 14, 2012
Judge Finds West Asset Management’s Collection of “Death Debt” Unlawful
byJoseph Mullaneyon January 1, 2012 ·2 comments
West Asset Tries to Squeeze the Dead andSurvivorsThe 68 year-old Florida widow, Linda Long, won theright to pursue
Management (West Asset) for damages in a civil suit. A Florida judgeassigned to the case found in her favor after weighing facts that West Asset harassed the widowwhen it tried to collect a debt her deceased husbandowed to Bank of America.Bank of America relies on West Asset to collectdebts that are owed by persons who passed away.This kind of debt is known in the debt collectionindustry as “death debt.” Bank of America and West Asset have zeroed in on this segment of thedefault debt market touched little by other debt collectors in the past. In a bid to tap this market asan additional revenue source, Bank of America believes successful collection of death debt willboost its languishing revenues.
Bank of America Needs West Asset to Produce New Sources of Revenue
Bank of America is fighting for its survival as the pool of consumer debt shrinks and as ithemorrhages loan losses. As of December 30, its stock price closed at $5.56 hovering near its 52-week low of $4.92. Bank of America is also still reeling from its portfolios of toxic debt consisting of defaulted mortgages and collapsed securities collateralized by consumer debts.The November 5 Bank Transfer Day hasn’t helped Bank of America either, nor did its stunningrebuke after attempting to charge its customers $5 per month to use a debit card.West Asset agreed to collect Bank of America’s death debts including the debt owed by Long’sdeceased husband. West Asset was found by the judge to have repeatedly called Long despitefederal and state laws to the contrary. West Asset called Long up to 10 times per day trying tocollect approximately $16,000 her husband owed Bank of America when he died from cancer.
The federal Fair Debt Collection Practices Act gives consumers – even those who survive the deathof a consumer – certain rights regarding the collection of death debts. If the surviving loved onesare not legally liable for the deceased’s debts, they can restrict debt collection communications or even prevent those communications altogether. However, debt collectors are accused of playing onthe emotion and legal confusion that surrounds death and the debts that are left behind.Bank of America, West Asset, and other banks and debt collectors are accused of tricking survivingfamily members and friends into paying the debts of their deceased loved ones. Surviving lovedones are pressured into paying death debts upon which there is usually no legal obligation to do so.In 2010, the Federal Trade Commission found that many debt collection agencies who specialize in