Abuses spur vows to protect debtors

Massachusetts Attorney General Thomas F. Reilly will push for legislation to protect unwary consumers from predatory debt collection practices, including a clear requirement that evidence be offered that a debt is owed, and new protections for consumers whose cars are targeted for seizure by collectors, Reilly aides said yesterday.

And Mayor Thomas M. Menino said he may do away entirely with the city-appointed force of 186 constables ``unless we can get control" over their credentialing and performance. Constables, in Boston and across the state, commonly assist in debt collection actions, including car seizures.

Reilly and Menino were both responding to a Globe Spotlight series this week that found widespread abuses by some collectors and constables, and evidence of bias against debtors in many small-claims courts.

Menino was reacting, in particular, to a finding by the Globe that 88 of the 186 Boston constables have criminal arrest records, some for violent crimes. One early step, he said, would be to quickly remove one constable who has been convicted twice in the last four years of beating his wife, along with several other constables who, the Globe reported, are city tax scofflaws.

The mayor said he has also ordered a formal review of whether other constables with criminal backgrounds should lose their licenses, badges, and arrest powers. He said he had no knowledge until now that many of the Boston constables he has appointed have such problematic backgrounds.

``It's an archaic system," Menino said of the Colonial-era post. City officials said yesterday that the appointment of constables has long put a greater premium on patronage considerations than on their individual qualifications or the need for the service.

``This is vintage Old Boston," the mayor said. ``I do not know why we need this many constables, or whether we need them at all."

Menino said he also wants to flatly bar the seizure of automobiles as a means of pressuring consumers to pay their debts.

The mayor looks to have an ally in state Senator Jarrett T. Barrios , Senate chairman of the Legislature's Joint Committee on Public Safety & Homeland Security . Barrios said it may be time for the Legislature to consider abolishing the office of constable because the officers typically have no formal training and their work largely duplicates that of deputy sheriffs.

Meanwhile, state investigations into alleged abuses by some collection firms are ongoing.

Alice E. Moore, the chief of Reilly's Public Protection Bureau, indirectly confirmed that the attorney general's office is investigating both Norfolk Financial Corp. and Commonwealth Receivables Inc., two debt-buying and collecting firms that, the Globe investigation found, file more than 12,000 lawsuits a year against Massachusetts consumers. The two firms have used bullying constables and deputy sheriffs to seize thousands of cars as a way to force people to pay debts, the series found.

Moore said complaints against Norfolk, Commonwealth, and three other firms are off-limits to public disclosure, an indication that they are the subjects of active investigation.

The Spotlight investigation found that millions of consumers across the nation are being chased for delinquent debts; that Massachusetts court officials sometimes flout procedural rules to favor collectors while treating debtors dismissively; that debtors too frequently receive no notice they have been sued; and that constables and deputy sheriffs commonly charge consumers between $600 and $900 for auto seizures.

At the same time, regulators have been largely passive in the face of the debt collection crisis. Reilly's office, for example, has taken action against just one debt collector since 1999, even though his office gets about 800 complaints a year about their practices.

Yesterday, two of Reilly's opponents in the governor's race expressed disappointment about his enforcement record.

Lieutenant Governor Kerry Healey, the presumptive Republican nominee for governor, said Reilly ``has failed to do enough to protect consumers in Massachusetts." But Healey also found fault with the state court system. It has been, she said in a statement, ``too lax, loosening notification rules for debt collectors instead of enforcing them to protect average citizens."

Deval L. Patrick, one of two Democrats vying with Reilly for the Democratic nomination, was less direct in his criticism. But he said the lack of enforcement is stark evidence that, ``at both the federal and state level, the government is on the side of the big players, and not the little guy."

Moore, who oversees consumer protection actions in Reilly's office, said the attorney general's office is seeing ``increasingly aggressive activity by debt collectors," and has five investigations underway. Reilly's office refused to make public the complaints against the five firms, citing an ``investigative exemption" that law enforcement agencies invoke when a company is under active investigation.

In addition to Norfolk and Commonwealth, which are owned by two brothers, Daniel W. and Chad E. Goldstone, respectively, records concerning another Massachusetts firm, the Cambece Law Office in Peabody, have been sealed.

John J. O'Connor, the attorney for Norfolk and Commonwealth, refused to comment yesterday about the investigation. A spokesman for the Cambece firm, Nancy Sterling, said the firm is aware of the investigation, which she said is ``based on a small number of complaints."

Moore, in an interview, said Reilly will support legislation to put restrictions on the practices of debt-buying firms such as Norfolk and Commonwealth, which purchase old credit card debt for pennies on the dollar, and then seek to collect the entire amount.

Very often, such companies proceed against consumers with no other evidence than a computerized printout of debtors' names, addresses, account numbers, and balances due.

As the Globe reported, court officials almost never ask such debt buyers to provide more detailed evidence of the debt -- indeed, Globe reporters, in visits to dozens of court sessions, never heard a request for such evidence.

Moore said Reilly would like the law to forbid debt buyers from even beginning the collection process ``without having a complete account history" for each debtor. If such a provision were to become law, it would probably make it too difficult for many debt buying firms to operate in Massachusetts. The firms often have no access to original documentation of the debts.

Moore said Reilly would also like to outlaw attempts to collect certain older debts. Under state law, collectors have six years to file suit for credit card debt. After that, they can try to collect it, but cannot sue. Reilly's step would cap any collection activity at six years.

Like Menino, Moore expressed concern that consumers need more protection from dark-of-night auto seizures. Yesterday, stung by public attention to the practice since the Globe report, some county sheriffs said they were pulling back on the practice.

In Plymouth County, sheriff's deputies stopped seizing cars from debtors on Monday, and will assess the practice -- and the fees charged for it -- in the next month, according to John Birtwell, the spokesman for Plymouth Sheriff Joseph D. McDonald Jr. Constables and deputy sheriffs are engaged by collectors to enforce court judgments allowing the seizure of cars in debt cases.

In Norfolk County, Sheriff Michael G. Bellotti said the Globe reports ``definitely raised our awareness of the predatory nature of some of these debt collectors who resort to auto seizures." Bellotti said he is considering administrative changes or legislation to bar auto seizure unless the debt runs to several thousand dollars. He would also like to ban the seizure of cars for unpaid medical debt and to provide greater safeguards to ensure that collectors hold legitimate court orders authorizing seizures.

Officials of the sheriff's departments in Norfolk and Worcester counties also disclosed that both Norfolk Financial and Commonwealth Receivables notified them recently of their desire to cancel more than 200 pending auto seizures. Bellotti said that Chad Goldstone, the owner of Commonwealth, told the sheriffs that he was suspending collection action because his firm was not properly registered as a debt collector with the state.

The proliferation of auto seizures has kindled debate about whether the state needs both constables and deputy sheriffs, who compete for court business that, mostly, involves serving legal papers. There are an estimated 1,500 to 2,000 constables, who are independent contractors with badges and arrest powers. There is no training required, and no oversight of their work.

``Perhaps now is the time to consider whether or not it's appropriate to continue with constables, given that they are private individuals with no required professional training," said Barrios, a Cambridge Democrat.

At a minimum, Barrios said, he and other lawmakers will consider legislation that would bar anyone with a felony conviction from becoming a constable, and require all cities and towns to perform criminal background checks on all applicants for the job.

Richard E. Ramponi , a constable for the last 35 yeas and the president of the Massachusetts Bay Constables Association , defended the reputation of most constables. But he also said he believes state law should be amended to prevent cities and towns from appointing anyone with a criminal conviction to the office of constable.

``The majority suffer because of the actions of a few," Ramponi said, referring to the reputations of most constables who, he said, perform their jobs in a professional matter. ``I just don't think people with criminal records ought to be charged with administering the law. The two just don't go together."

Beth Healy of the Globe staff contributed to this report. The Spotlight Team can be reached at 617-929-3208, or by e-mail at debt@globe.com.