Payday loan collector Goldman Schwartz shut down for widespread debtor abuse

Goldman Schwartz, although not the law firm they claimed, threatened to take children into custody and charged bogus attorneys fees. Debtors were lied to and intimidated into making payments on payday loans or face imprisonment or other extreme illegal actions.

A federal court shut down Goldman Schwartz and froze the company’s bank accounts and other assets. It ruled in favor of the Federal Trade Commission who asked for the action in response to an investigation into a high number of serious complaints against the firm.

Goldman Schwartz was based in Houston, Texas. Some of the payday loan companies that the firm collected bad debts for include Ace Cash Express, Advance America, Allied Cash Advance, Checkmate, First Cash Advance and MoneyMart.

Imagine being told that if you do not pay, that the Sheriff would be sent to your home to arrest you and put you into prison, and that you would lose custody of your children. The firm knew which hot buttons to press to get people to pay. The problem though is that the debt collector’s tactics were grossly illegal.

The Fair Debt Collection Practices Act protects debtors from abusive debe collection techniques. It ensures that legitimate debt collectors play by a set of rules while attempting to collect on unpaid debts.

Goldman Schwartz allegedly committed other acts common to rogue debt collectors. These include claiming to be affiliated with law enforcement, using abusive language, harassing debtors over the phone, failing to adhere to legal calling hours, disclosing private details to employers and family, and finally, failing to provide verification of the debt to the debtor.

Any one of those acts could have resulted in $1,000 in damages payable to the debtor, if only they knew their rights. However, now that the debt collector’s assets are frozen, you would have a very difficult time collecting on a lawsuit even if you won. A court appointed receiver is now in charge of all assets of the agency. Still, rogue debt collectors rarely pay out for violations.

The FTC successfully argued that the collection agency had such a widespread history of committing serious consumer protection violations that it warranted forced closure. The principals of Goldman Schwartz, including owner (not an attorney) Barry Schwartz are all banned from further debt collection activities.

Kenneth Long
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Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.

Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.

In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.

Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!

Favorite quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson
Kenneth Long
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