``They were scaring me, screaming at me,'' said Kathleen Shelton, a partly disabled Santa Cruz County employee. ``The guy called me a liar. I mean, it was unbelievable.''

Believe it. The calls came from Capital Acquisitions and Management Corp. -- CAMCO for short -- a debt collection firm based in Rockford, Ill. CAMCO is one of hundreds of companies that buy up old debts and lists of debtors for pennies on the dollar and try to collect whatever they can -- and sometimes, however they can.

Abusive debt collectors are a growing problem in California, say government officials in the region and in Sacramento. ``We have been receiving more and more complaints about abusive debt collection practices'' from all over the state, said Tom Dressler, a spokesman for the attorney general's office.

If collection agents are making calls to Californians, he said, they can be brought into California courts, no matter where their headquarters are.

Although some California complaints about CAMCO have been referred to the Illinois Attorney General's Office, most have been passed on to the Federal Trade Commission, the U.S. enforcement agency on business practices.

On March 24, after receiving what an FTC spokeswoman called ``hundreds of complaints'' from throughout the country about CAMCO, the agency took CAMCO to court. Its complaint, filed in federal court in Illinois, accused the company of a long list of violations of the Fair Debt Collection Practices Act. CAMCO paid a $300,000 fine and signed a 13-page consent decree agreeing not to:

• Harass consumers at work.

• Call frequently ``with the intention of annoying or abusing them.''

• Threaten them with jail, garnishment of wages, attachment or sale of property.

• Disclose or discuss consumers' alleged debts with others, including employers.

• Or do anything else, ``the natural consequence of which is to harass, oppress or abuse any person.''

CAMCO's compliance manager, Jeffrey Garrington, and its chief operating officer, Reese Waugh, did not return calls seeking comment.

Nadine S. Samter, an FTC lawyer, said her office continues to receive complaints about CAMCO, though she wasn't sure how many of them involved post-March 24 violations. And Robin Gysin, consumer affairs coordinator for the Santa Cruz County District Attorney's Office, said she has received at least two dozen complaints about CAMCO in April and May.

``We will . . . continue to monitor the company for compliance,'' said the FTC's Samter. ``If we receive a substantial number of complaints, we will take action,'' which could involve fines of up to $11,000 a violation.

CAMCO is part of a little-known but growing group of companies that buy debts from creditors for pennies on the dollar, and then collect as much of the debt as they can. More than 940 debt buyers attended the most recent Las Vegas convention of the Debt Buyers Association.

As a private company, CAMCO doesn't publicize how its business works. But Portfolio Recovery Associates, a publicly traded debt-buying operation that buys debt from credit companies, installment loan companies and others, noted on its Web site that as of the end of 2002, it owned a portfolio of debts with a face value of more than $5.5 billion for which it had paid about $142 million, or just under 2.6 cents on the dollar.

On its Web site, Portfolio Recovery Associates describes its business structure, explaining that the loans it buys ``can be segmented by asset type, age and size of account, level of previous collection efforts and geography.''

The fact that debt buyers focus on geography as one important factor could help explain why little Santa Cruz seems to have been harder-hit by CAMCO than other Bay Area counties, including Santa Clara. ``Santa Cruz may have been the primary source of this particular batch'' of old debts, said William Atkinson, an assistant Santa Cruz district attorney.

The Mercury News
Posted on Mon, Jun. 07, 2004