The 68 year-old Florida widow, Linda Long, won the right to pursue West Asset Management (West Asset) for damages in a civil suit. A Florida judge assigned to the case found in her favor after weighing facts that West Asset harassed the widow when it tried to collect a debt her deceased husband owed to Bank of America.
Bank of America relies on West Asset to collect debts that are owed by persons who passed away. This kind of debt is known in the debt collection industry as “death debt.” Bank of America and West Asset have zeroed in on this segment of the default debt market touched little by other debt collectors in the past. In a bid to tap this market as an additional revenue source, Bank of America believes successful collection of death debt will boost its languishing revenues.
Bank of America Needs West Asset to Produce New Sources of Revenue
Bank of America is fighting for its survival as the pool of consumer debt shrinks and as it hemorrhages loan losses. As of December 30, its stock price closed at $5.56 hovering near its 52-week low of $4.92. Bank of America is also still reeling from its portfolios of toxic debt consisting of defaulted mortgages and collapsed securities collateralized by consumer debts.
The November 5 Bank Transfer Day hasn’t helped Bank of America either, nor did its stunning rebuke after attempting to charge its customers $5 per month to use a debit card.
West Asset agreed to collect Bank of America’s death debts including the debt owed by Long’s deceased husband. West Asset was found by the judge to have repeatedly called Long despite federal and state laws to the contrary. West Asset called Long up to 10 times per day trying to collect approximately $16,000 her husband owed Bank of America when he died from cancer.
West Asset Must Obey the Fair Debt Collection Practices Act
The federal Fair Debt Collection Practices Act gives consumers – even those who survive the death of a consumer – certain rights regarding the collection of death debts. If the surviving loved ones are not legally liable for the deceased’s debts, they can restrict debt collection communications or even prevent those communications altogether. However, debt collectors are accused of playing on the emotion and legal confusion that surrounds death and the debts that are left behind.
Bank of America, West Asset, and other banks and debt collectors are accused of tricking surviving family members and friends into paying the debts of their deceased loved ones. Surviving loved ones are pressured into paying death debts upon which there is usually no legal obligation to do so.
In 2010, the Federal Trade Commission found that many debt collection agencies who specialize in the collection of death debt intentionally trick survivors into paying debts they do not owe. But, these unlawful practices are apparently successful enough to make collection of death debt worthwhile despite scrutiny from federal regulators.
While West Asset’s actions against Long were found to be unlawful, Bank of America says it complies with all laws regarding the collection of death debts… an easy claim when it hires a dog to do the biting.
This year Long is scheduled to have a jury decide how much West Asset owes her in damages for its collection harassment.