Last week, Reuters reported that John Williams of Williams Scott & Associates LLC was convicted in federal court of conspiring to commit wire fraud. Mr. Williams was sentenced to five years in prison. He was also ordered to pay almost $4 million in restitution. Who is John Williams? I didn’t know either. But the point of this blog is to highlight what Mr. Williams reportedly did. No doubt, there are many others out there doing the same or similar things. As consumers, we must all be vigilant and on guard against these types of situations.
Scheme That Terrorized Consumers
According to the Reuters report, U. S. District Judge Richard Sullivan said that Williams had “participated in a scheme that terrorized consumers by threatening them with arrest if they did not pay” on the outstanding debts that Williams was collecting upon. Williams was accused of using scare tactics and threats thereby defrauding 6,000 consumers out of almost $4 million between 2009 and 2014. The scheme reportedly involved Williams’ employees calling consumers and falsely representing to the consumers that the employees were detectives or investigators associated with government authorities. Williams’ employees would then warn the consumers that they could be arrested if they failed to pay on the debts being collected by Williams. Reportedly, these employees also used scripts where phrases like “statute of limitations” on the “civil legal rights” held by the consumers had expired.
Williams maintained that the debts he was collecting were legitimate and he seemed confounded by the criminal charges filed against him. “I think it was a personal vendetta,” Williams reportedly said. Williams denied any wrongdoing. The jury saw it otherwise.
Debt Collectors Cannot Threaten Legal Action
Federal law, and the law of some states, governs the activities of debt collectors. And threatening to have someone arrested (something that’s supposed to happen only in criminal cases) is not an appropriate way in which to collect a debt. Williams’ firm was undoubtedly a debt buyer firm. These firms “buy” consumer debt for a fraction of the face value of the debt. Then, they turn around and try to collect the full amount of the debt. Often, this tactic involves suing a consumer in court. Many times these “debts” that are bought by the debt buyer are not even owed by the person being called. Such “debts” may have been discharged in bankruptcy or maybe owed to someone else. In some cases, the “debt” was previously paid and the debt buyer is trying to collect it again. The U. S. Consumer Financial Protection Bureau has reported that debt collection is the No. 1 source of complaints in the area of consumer financial services.
If you are called by a firm claiming that you owe money, you have the right to demand documentation that supports the debt they claim that you owe. Federal debt collection laws set standards that debt collectors must follow. Whether or not you owe the debt is irrelevant. The debt collectors must follow all laws pertaining to debt collection. If the person calling you cannot provide supporting documentation, you may be the target of a debt buyer. If so, it’s probably best to seek competent legal counsel to review your options. Simply ignoring these matters may lead to trouble down the line.