Jacksonville Collections in Jacksonville Newspaper

Last modified 6/11/2007 - 5:20 am
Originally created 061107


Jacksonville is a good place to be past due


It leads in the investigation of bad debt-collection practices.




By David Bauerlein, The Times-Union


Jacksonville isn't home to the biggest number of debt collection agencies among Florida cities.


But it leads in investigations into unfair or unlawful practices.

Since 2004, the Attorney General's Office has opened three investigations of Jacksonville-based businesses. In the most far-reaching case, the state this year won a final judgment against Ellis Crosby & Associates on accusations the company threatened consumers with arrest if they didn't pay overdue loans.


What the law allows
When consumers don't pay off their debts, businesses often turn to debt collection agencies that pursue the money. Federal and state laws set limits on what those agencies can do.
- A debt collector cannot contact you at inconvenient times or places, including before 8 a.m. or after 9 p.m., unless you agree. A collector cannot contact you at work if the collector knows your employer frowns on those contacts.
- Debt collectors must stop contacting you if you write a letter telling them to stop. That won't make the debt go away or prevent the collector from filing suit or referring the debt to a credit bureau. The collector can still contact you about specific action that will be taken.
- The collector must send you a written notice within five days of contacting you. The notice will detail what you owe, the name of the creditor, and what you must do if you dispute that you owe the money.
- If you reply to the written notice within 30 days by saying you do not owe the money, the collector cannot keep contacting you. The only way the collector can resume pursuit of the money is by sending a copy of the bill or other proof of the debt.
- Collectors cannot falsely imply you have committed a crime or say you will be arrested if you don't pay your debt. They cannot collect an amount greater than your debt, unless state law allows the additional charge.
- For more information or to file a complaint, contact the Federal Trade Commission at (877) 382-4357 or go to its Web site at www.ftc.gov.
Source: Federal Trade Commission
While the state pursued that judgment, the company's president, Ted Ellis Crosby, 28, is serving time in the Duval County jail on a possession of a handgun by a felon charge.

Tom Stephens, president of the Better Business Bureau of Northeast Florida, said complaints about debt collectors dipped in 2006 while the state cracked down on Ellis Crosby & Associates.

But this year, complaints have shot back to the top of the bureau's list.

"Most companies are doing a good job, but there are a handful of bad apples," said state Sen. Victor Crist, R-Tampa.

Crist has tried to win approval of legislation that would give more power to the state Office of Financial Regulation in investigating complaints about debt collectors, and add requirements for businesses to get state registration. He said he intends push again for the bill, possibly in the 2008 session.

Complaints in part are the "nature of the beast" for collection companies, which often deal with irate consumers, Stephens said. He said the worst complaints about heavy-handed tactics stem from collection agencies that aggressively try to collect payday loans.

Consumers should understand that under federal and state laws, they can't be arrested for failing to pay their debts, Stephens said.

"The debt collector cannot throw them in jail," Stephens said. "He cannot have local law enforcement come out to arrest them. It's a civil matter, not a criminal matter. It could end up in court, but it's civil court, not criminal court."

Debt collection is big business, and Jacksonville has its share of collection agencies. According to the Office of Financial Regulation, 40 businesses whose primary address is in Duval County are registered to collect debts in Florida. That's 9 percent of the 428 collection agencies based in Florida.

A spokeswoman for the attorney general and Andy Grosmaire, an administrator for the Office of Financial Regulation, said it's just coincidence all the recent investigations of Florida-based agencies have been in Jacksonville.

But the state's lawsuit against Ellis Crosby & Associates does contend a link between Ted Ellis Crosby and Bass Prelitigation, the latest subject of an investigation. In a motion filed in November, the state contended Crosby was involved in debt collection by using "aliases, fronts of strawman operations such as Bass Prelitigation."

Broward County resident Joanna Cook made a similar allegation in a lawsuit she filed in February against Bass Prelitigation.

Cook contended former employees of Ellis Crosby & Associates formed Bass Prelitigation last year and worked with Ted Ellis Crosby to develop a business plan for the company. Her lawsuit contends Bass Prelitigation was organized to sidestep the attorney general's lawsuit against Ellis Crosby.

Cook's lawsuit said an employee of Bass Prelitigation called and said she faced immediate arrest if she didn't pay $999 that same day by MoneyGram for a payday loan. She said she became frantic because she feared being separated from her two children, including a newborn.

David Jacobs, office manager for Bass Prelitigation, declined to comment on the specific allegations and the attorney general's legal filings. But he said Bass Prelitigation does not threaten consumers with arrest or have any association with Ted Ellis Crosby.

"I will tell you, categorically, we have no connection with him whatsoever," Jacobs said. He said Ellis Crosby & Associates put a "horrible stigma" on debt collectors and "is an example of what not to do." He said Bass Prelitigation will be installing a telephone recording system so it will have records of what employees say in their calls.

Ellis Crosby & Associates was founded in 2003, four years after Ted Ellis Crosby was court-martialed by the Navy in Jacksonville, according to court documents.

At its peak, the business was collecting debts from thousands of customers across the nation, but in a 14-month period, 120 complaints were filed with the Better Business Bureau.

The attorney general won a final default judgment in February that bans Ellis Crosby & Associates and Ted Ellis Crosby from engaging in any kind of debt collection in Florida.

Meanwhile, the State Attorney's Office prosecuted Crosby on two counts of possessing a handgun by a felon, based on his conviction by the Navy court on LSD distribution charges.

Crosby stood trial in April on the gun charges. The jury acquitted Crosby in a January 2006 incident when he fired a handgun at an armed robber in a parking lot outside his Southside Boulevard business. But the jury convicted Crosby on a charge of possessing a handgun during a 2006 traffic stop.

Circuit Judge Russell Healey sentenced Crosby to six months in jail and added a special provision to his probation - Crosby cannot work in any way in the debt collection field.

"It makes it a bigger hammer hanging over his head not to do it," said Assistant State Attorney Adam Urra.

david.bauerlein(at)jacksonville.com,

(904) 359-4581



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Investigations
Significant investigations of Jacksonville-based debt-collection businesses since 2004:

2004
- The state Attorney General's Office and the Office of Financial Regulation settle a case against two Jacksonville collection agencies by requiring $101,000 in restitution. The state accused Barrows, Manning & Associates and Ditore, Ruibal & Associates of impersonating law enforcement officers and falsely threatening criminal charges. The collection agencies no longer are in business.
- The attorney general opens an investigation into Allen, Lewis & Associates to determine whether employees identified themselves as lawyers. The business's owner, Robert Hecht Jr., said the allegations focused on an employee who left with a group of co-workers and went to work at Ellis Crosby & Associates. He said the departing employees included Ted Ellis Crosby.
- The attorney general launches an investigation into Ellis Crosby & Associates and its president, Ted Ellis Crosby, which led to a civil lawsuit against the company. The lawsuit contended the business scammed consumers by threatening them with arrest, prosecution or jail time if they didn't send payment that day.
2006
- The attorney general opens a civil investigation of Bass Prelitigation Services, also known as Bass & Associates. The inquiry is focused on whether the agency violated consumer-protection laws by posing as law enforcement and threatening arrest. A company official denies that allegation.