The battle by Joanne M. Johnson of Leominster, who lives on a disability check, to get her car back took an emotional toll. (Globe Staff Photo / Michele McDonald)
No mercy for consumers
Firms' tactics are one mark of a system that penalizes those who owe
This story was reported by Spotlight team members Michael Rezendes, Beth Healy, Francie Latour, Heather Allen, and editor Walter V. Robinson. It was written by Rezendes and Latour.
First of four parts | July 30, 2006
It was just before 6 a.m. on a Saturday in the fall of 2002, when Marie-Colette Dimanche woke to a loud rapping at the door of her Mattapan duplex. With her night robe on and her two daughters still sleeping, she rushed down the stairs and peered out the window.
Outside, a tow truck blocked her driveway and her 1996 Chevy Blazer. A man and a woman with a court order told the single mother they had come to take her car for nonpayment of an old credit card debt. With interest and legal fees, the bill totaled more than $2,000, and it came from a company called Commonwealth Receivables. They gave her a choice: Pay the money now, in cash, or hand over the keys.
Dimanche had never heard of Commonwealth and believed the debt had been paid by a social services agency. ''I just said, 'You guys must be insane,''' she recalled.
She had reason to be stunned: The debt was at least five years old. And she'd never gotten notice of the lawsuit against her: When Commonwealth, a local debt collector, went after Dimanche, the address it supplied the court was one where she hadn't lived for more than a decade.
But Dimanche didn't have the paperwork to prove the debt had been paid off, and she didn't have $2,000.
''What could I do?'' she said. ''I gave them the key.''
Dimanche is one of thousands of Massachusetts residents who have had their cars seized and lives upended by a pair of debt collection companies, Commonwealth Receivables Inc. of Watertown and Norfolk Financial Corp. of West Roxbury. Run by two brothers, one of whom was disbarred this year for his business practices, Norfolk and Commonwealth have become two of the state's most litigious and aggressive collectors, a Globe Spotlight Team investigation of the debt industry has found.
In America's debt-saturated culture, Chad E. and Daniel W. Goldstone are among the clear winners. They are perhaps the most active local players in a nationwide debt collection industry that has exploded in size and profits, inundating court systems in Massachusetts and across the country with collection lawsuits seeking tens of billions of dollars in debts that are often purchased for collection by the Goldstones and hundreds of other firms for just pennies on the dollar.