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July 25, 2012 / Admin

Fake Court Hearings Held in an Effort to Shake Down Debtors

Debt collectors in a bad economy sink to new lows and adopt new strategies to secure payment from cash-strapped debtors.  In a recent lawsuit filed in Erie Pennsylvania, the Attorney General’s Office accused Unicredit America, Inc. (also known as the Unicredit Debt Resolution Center) of using “deceptive tactics to mislead, confuse or coerce consumers,” including holding hearings for debtors in a mock courtroom located at their Erie office. According to the state, the “courtroom” was convincingly realistic, complete with a raised area where a judge would sit, attorneys tables, a simulated witness stand and legal books on bookshelves. A person dressed in all black would sometimes even sit in the position of judge. These pseudo-official proceedings often intimidated unknowing consumers into signing payment agreements, making on the spot payments and in some circumstances surrendering other assets in resolution of their debt.

In a recent statement, Attorney General Tom Corbett said, “This is an unconscionable attempt to use fake court proceedings to deceive, mislead or frighten consumers into making payments or surrendering valuables to Unicredit without following lawful procedures for debt collection.” “Consumers also allegedly received dubious ‘hearing notices’ and letters – often hand delivered by individuals who appear to be Sherriff Deputies – which implied they would be taken into custody by the Sherriff if they failed to appear at the phony court for ‘hearings’ or ‘depositions’.”

Given the unlawful intimidation tactics debt collectors are now resorting to, it is important for consumers to know that there are strict rules in place controlling the parameters of debt collection. The Federal Trade Commission provides a FAQ outlining consumer rights in these circumstances.

Attorney General Tom Corbett has petitioned Eerie County for a preliminary injunction halting these phony hearings and depositions and seeking to freeze Unicredit’s assets. The Court is expected to hold a hearing related to the preliminary injunction this Tuesday.

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