Did you know that unethical vendors, bad brokers, and unscrupulous contractors, similar to non-paying customers can drive unsuspecting businesses to disaster, much like Marion Crane, who chose the Bates Motel as a hideout from her clients who were seeking retribution for the money she had embezzled?
Recently, a member asked PICB for help recovering money that had been LITERALLY stolen by a fraudulent collection agency. As the printer shared his nightmarish tale of how he had been bamboozled not once, but twice by their slick talking salesman, I could not help but think how his story resembled a Hitchcock thriller. Much like Tippi Hedron trying to fight off the waves of attacking birds, his efforts to get his money back had been completely thwarted by their 'slight of hand' excuses and outright lies. No matter how Tippi screamed, cried, flailed, or fought off her tormentors, just like his, the collection agency never stopped their vicious attack: they were both endlessly picked and pecked without mercy.
I, like a shocked and horrified audience silently screamed 'Don't go there'.... but the printer had! He had signed a contract allowing the agency to charge exorbitant fees regardless if money was recovered or not. They convinced him to download his entire account receivable aging report for 'review', but instead of providing a 'review' as promised they sent collection demand letters to all of the Printer's customers, regardless of their status.
Remember, HUGE fees were due the agency no matter the consequences.
What a nightmare!
Upon investigation we discovered this 'outfit' was operating in violation of state law by not being properly licensed or bonded as required. Further research of the public records confirmed the agency's history of many nefarious acts of bad faith. This trio of thieves had been sued numerous times by other victims of their scams, all their prior businesses were now closed, and their client's money just mysteriously disappeared...... Possibly, it had been buried along with Marion by Norman Bates in swamp behind the Motel?
Our attorney confirmed he was aware of these financial scammers having previously represented victims who also unsuccessfully sought re-payment from the now closed and defunct businesses. He stated he believed the new company recently formed by the thieving trio was their third or fourth foray into the nether world of cheating, scamming, and conning. In fact, this so-called new company already had a noxious reputation for unethical behavior. The lawyer had been recently retained by yet another victim seeking six-figures from these peckers!
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PICB is dedicated to the Graphic Art Industry and has proudly served the Members of The Printing Industry for more than 30 years. We have successfully recovered and returned millions of dollars from non-paying delinquent accounts to our Printer's while maintaining a high standard of excellence and ethics.
Whether you need training in credit granting procedures, assistance and tools for risk analysis, or professional debt collection of your delinquent accounts, our staff of dedicated managers pledge to provide you superior service at affordable rates.
We will earn your respect and gain your trust.
ORIGINAL ARTWORK BY MARC.ART, INC.
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Q: It's Halloween - What are some of your nightmares or most memorable cases, and what lessons can be learned from your experience?
A: My most memorable Halloween related case. This happened many years ago while collecting a consumer debt. It is not really related to Halloween, but is in a way a costume saga.
We had a debtor, call him Joe for now, his defense among other things was that it was not his bill. After pushing around some paperwork we had our first hearing and they call his name.
I have to add, we are out in the boonies, the Court house I think was an old car dealership but it looked very much like a double-wide. There was a farm across the street.
Up comes a middle aged man in makeup and a dress. He was not a particularly good looking man, and putting on a dress did little to improve that. Just picture a middle aged, out of shape guy, unshaven, wearing a dress to go to Court. Think Archie Bunker. His defense was that HE didn't owe the debt but Josephine (his alter ego) did. Turns out he was pretty well known in that town and a regular in the Courthouse.
I don't even remember what happened to the case, all I can think of when I remember the case was this guy in a dress..
Lesson to be learned: Take time to know who your customer is by using credit agreements and checking the information provided.
Lindner & Associates PC
A: I learned many years ago, as a younger lawyer, that persistence pays off when pursuing a debtor. I had a particular case in which we obtained judgment against a debtor who operated a small business, and his major asset and necessary piece of equipment was his truck. After we obtained judgment, the debtor was not cooperating, even though he was making numerous promises that the matter would be resolved. I then sent out the sheriff with an execution and bond and we seized the debtor's truck. The debtor still did not follow through and I arranged a sheriff's sale. The debtor showed up at the sheriff's sale and purchased his own vehicle back, but his high bid was only about half the amount of the judgment. At that point, the debtor thought he had prevailed and found a cheap way out of the judgment.
After making demand on the debtor for payment of the remaining balance, and him not following through, I arranged with the sheriff to go out and seize the vehicle again. I held another sheriff's sale. Again, the debtor showed up and made a bid less than the amount that was due and purchased the truck back. In the meantime, all of the costs of the sheriff's sale, the seizure, the towing of the truck, were being added to the amount of the judgment.
At that point, the debtor was a little more careful and was not parking his truck in the usual place, where it had been parked in the past. However, after contacting client I found out several service stations that the debtor used on a regular basis. It so happened that the client had some contacts at both of the service stations and we were able to arrange for the stations to contact my office when the debtor was at the station. I had also made arrangements with the sheriff for a third seizure. As soon as I received the call, I phoned the sheriff and he was over at the station seizing the vehicle for the third time. Shortly thereafter I received a call from the debtor and, finally, he came to my office with a cashier's check to pay the remaining balance due on the judgment and all of the costs and expenses.
Collections are not always easy. However, with persistence and cooperation from the client providing whatever information they have, questionable accounts can turn into cash. Years later when I ran into a debtor who appealed and challenged every court proceeding, took our case to the Wisconsin Court of Appeals twice, and once to the Wisconsin Supreme Court, I thought back about the truck case and the persistence necessary, and the ultimate result was the same, in the end the debtor paid.
Rinehart, Scaffidi & Mathews
A: One of my top five craziest cases...
Debtor purchased a hairpiece using business credit card issued by my client. A month later, debtor decides he doesn't like the hairpiece and tries to return it. Merchant refuses because it's been used. Debtor attempts to chargeback the charge to the card. Client refuses because it was a face-to-face purchase and debtor purchased the item without right to return/exchange. It was a custom piece after all. Debtor refuses to pay client. Card goes into default. A year (and four collection agencies) later, the debtor sues the client plus all four agencies. I am hired to defend, and we successfully obtain a dismissal. Debtor appeals. After a year, the case is fully briefed and ultimately, oral argument is ordered. I show up on the date of argument, and the debtor is wheeled into the courtroom, complete with a cast on his leg and arm! Shockingly, the dismissal is reversed. We then litigate for another year. Debtor shows up to his deposition with a disbarred attorney who refuses to leave the deposition. We move for a protective order, and the court denies it! We forget about the deposition and instead file for summary judgment. The court agrees and enters judgment in favor of all defendants but refuses to award our attorneys' fees. We decide to just let it go. Debtor files an appeal (again!) and the case gets to wind its way through appeals for another year. This time, the court of appeal rejects his appeal. The debtor swears, "I will not let this go." He convinces the Los Angeles Times to publish a story. Ultimately, he is ordered to pay the costs incurred (approximately $6000), which are only a fraction of the legal fees paid by my clients to defend against this nonsense (nearly $80,000 when it was all done).
PS - here's a link to the LA Times story:
John D. Guerrini
The Guerrini Law Firm
A: Pursuing a fallen star
Several years ago I was retained to pursue the collection of a Maryland judgment for $175,000. I should have known better than to take a case where I was the third Pennsylvania attorney to give this a try. There was a delay of about 6 years before the client and his Maryland attorney decided to pursue the collection of the judgment in Philadelphia where the debtor resides. When the case finally arrived at my door it was almost 12 years old. The debtor who was once a popular gospel singer now appeared to be a fallen gospel rock star. Undeterred we pursued nonetheless. We proceeded to garnish bank accounts only to find out from debtor's legal aid attorney that he was receiving social security disability. Not wanting to hog all the fun we enlisted the aid of a fellow collection attorney in NYC. We were able to garnish some royalties, but have only collected a small fraction of the balance.
To make things even more interesting the debtor was most popular with a European audience, and toured there in his heyday. Needless to say there were not any European lawyers eager to take on this case for a contingent fee.
The client is not ready to give up, but I can't say that I share his enthusiasm. The lesson is collectability does not improve with age. Act timely to protect your interest.
Jay C. Scheinfield, Esquire
Upper Darby PA
A: Lesson Learned
Don't get fooled. There is an important lesson to be learned in the law and in business. It's important to garnish new business but at what cost? During my initial years of practice I was approached by a potential new client late afternoon with an emergency. There was a case that was up for a hearing in a Law Division courtroom the next day. The client needed immediate representation. After discussing the matter I agreed to accept the case provided I was paid a retainer prior to beginning any work. The potential client agreed, and came to my office with the agreed retainer check that same afternoon. So far the story sounds great. I immediately began working on the case. The hearing was scheduled for 2:00 p.m. the next afternoon on a major issue potentially costing my new client money damages in excess of $100,000.00. I prepared through the night. The case lasted 5 days with multiple hearings, court reporters and expenses incurred. At all times throughout the representation I had no idea what I was going to face after all of my hard work. I won the case client was pleased to say the least. What was my gift for all of my hard work and sleepless nights? The check bounced. Not only did I ultimately lose my fees, I was out of pocket $2,500.00 in expenses for court reporters and transcripts. My lesson learned was a business lesson. I will not take on an emergency case at last minute without funds cleared in hand.
Michael S. Baim, Esq.
The CKB Firm
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PRINT PARTNERS LTD
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