Prosecutors Enabling Debt Collector Misconduct

On September 27, 2012 By southwerkIn Business Ethics

Adam Levin: The Alarming Ties Between Debt Collectors and District Attorneys

Consider what’s happening here. The debt collection companies are using the letterhead of the prosecutor’s office to threaten consumers with criminal prosecution and possible jail time. In reality, they’re in no position to back that threat up — but from reading the letter, the consumer has no way to know that. The truth is that in the vast majority of cases, the prosecutor’s office has no idea when these letters are mailed or who is receiving them, and has conducted no investigation to determine whether the claim of unpaid debt is actually true. Thus, the debt collectors are apparently mailing official letters without effective oversight — and often without even having the evidence they would need to prove that the recipients actually owe the alleged debts. In short, no case.

“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” Noach Dear, a civil court judge in Brooklyn who sees up to 100 such cases a day, told the New York Times.

This is, indeed, outrageous. To have prosecuting attorneys renting out their letterhead to private companies at all diminishes their office and, at the end of the day, betrays the public trust. To do this without weighing the merits of each individual case betrays the fundamental American ideal of due process and turns the phrase “innocent until proven guilty” on its head. Finally, to allow private companies to use the power and prestige of public office to coerce consumers, using the fear of criminal charges and imprisonment to bully them into compliance — well, that is so clearly abusive that it’s hard to imagine how anyone could defend it (not that they haven’t tried).

Adam Levin: The Alarming Ties Between Debt Collectors and District Attorneys

Debt collectors have a terrible reputation in this country for misconduct and often direct law breaking. For prosecutors to form an alliance with them, loaning them some of the powers of the state, is simply unconscionable.

I’m not the only one that thinks so – here’s J.F. Quackenbush from the web site, Disinformation:

So here’s the deal, it’s a crime to write a bad check if you know that the bank isn’t going to honor the instrument. But in most states, in order to be convicted the State has to prove that you knew the check was going to bounce when you wrote it. That’s hard which is as it should be, because the crime here is not owing a debt, it’s fraud. We don’t do debtors prisons anymore, and for good reason. Bankruptcy law is explicitly mandated by the Constitution because it has long been understood that not all debts are equal, and sometimes it’s for the best in our society if we just let people off the hook and give them a clean financial slate to start over.

This, of course, drives the vampires of the collection industry, who make money by buying debts for pennies on the dollar and then brutalizing the people who owe those debts who can’t afford to pay them, and in the meantime making all manner of threats and coercive promises to keep those debtors out of bankruptcy so that the vampires can continue to feed.

And here are some more thoughts on the subject from Caveot Emptor, Seeking Justice for Consumers –

Prosecutors’ job is to enforce the law. One important part of that job is exercising some discretion over who to prosecute. That’s especially important in bad check cases. People bounce checks all the time, usually unintentionally. That doesn’t make them crimes. So a prosecutor’s job is to sort out the crimes from the accidents. Under the new arrangement, everybody gets contacted by a debt collector, which then demands even more money for a budgeting class — the profit from which goes into the collector’s pocket.

Here are some thoughts from Naked Capitalism –

The excuse for this program is that district attorneys’ offices were overwhelmed with merchant requests to go after bounced checks where they were unable to collect the debt and alleged fraud. Um, what about saying “no” unless the amount at issue was significant, say at least a few hundred dollars, or having the merchant provide evidence of intent? Instead, this scheme allows the debt collectors to get a windfall from people who’ve stuffed up on relatively small checks (the two examples in the article were each under $100) as well as contributing to erosion of public faith in the legal system.

Consumer attorneys did succeed in getting one debt collector that engaged in this practice, American Corrective Counseling Services, to file for Chapter 11 in the face of class action suits. But its successor CorrectiveSolutions carries on with the same dubious practices and has “partnerships” with more than 140 district attorneys’ offices.

Read more at http://www.nakedcapitalism.com/2012/09/local-das-allowing-debt-collectors-to-use-their-letterhead-split-fees-from-shakedown.html#4zpTdsHv0KVu1LAJ.99

And here is a comment from Tech Dirt –

The DAs office, it appears, is literally selling the use of their stationary. In exchange for letting debt collectors appear both a lot more official and for falsely suggesting that law enforcement is pursuing criminal action, the debt collectors “sell” a “financial accountability” class, from which some of the proceeds get kicked back to the DAs’ offices.

An Insight on Happiness from the Book, 59 Seconds.

On September 23, 2012 By southwerkIn Philosophy

59 Seconds, Think a Little, Change a Lot by Richard Wiseman is a book I have enjoyed. Below is a quotation from the book. I think you should consider buying it. I was going to put up an image of the cover but Amazon has a giant copyright notice on the thing and I learned from a miserable experience with CBS news that positive comments and a recommendation don’t matter a damn.

Dunn and her colleagues have conducted several studies on the relationship between income, spending, and happiness. In one national survey , participants were asked to rate their happiness, state their income, and provide a detailed break-down of the amount spent on gifts for themselves, gifts for others, and donations to charity. In another study Dunn measured the happiness and spending patterns of employees before and after they each received a profit-sharing bonus of between $3,000 and $8,000. Time and again, the same pattern emerged. Those who spent a higher percentage of their income on others were far happier than those who spent it on themselves.

This is a fascinating passage. Apparently Greed is not the only important human value. It would seem that contrary to Ayn Rand, altruism is not evil but a useful tool in the full and happy life. It’s amazing what you can learn from research.

James Pilant

A World War II Melodrama with Gary Cooper

On September 23, 2012 By southwerkIn Personal

The Story of Dr. Wassell – YouTube

Everyone is very brave including America’s allies.

I’m very fond of Gary Cooper films. “Love in the Afternoon” is one of my all time favorites. It is odd to think that I who have loved the film for more than two decades have now arrived at the same age as Gary Cooper in that film. Here below is that film – http://www.tudou.com/programs/view/FLXUYnBwLXI/

I don’t know whether or not you can work the link. It’s a Chinese web site and they may be suspicious of occidentals.

But back to The Story of Dr. Wassell. Dr. Corydon Wassell was an Arkansan, a very real person not a fictional archetype. The story is full of references to Arkansas including a long soliloquy to Arkansas catfish. The film is fun to watch but the heroics so incredible as to defy rational belief. Of course, that is to be expected in a wartime film. This is directed by Cecil B. DeMille and carries his trademark taste for complex action sequences. If you are not tolerant of heroism without limits, you probably will find the film ridiculous. An interesting side note is that Wassell was a uncredited advisor on the film and all of the money he was due from the film he donated to charity.

James Pilant

Discrimination Against Women Alive and Well in the Sciences

On September 23, 2012 By southwerkIn Business Ethics

Science documents discrimination against women in science « Kay Steiger

This means men were deemed more qualified and competent in a science setting, even if women were making the judgement. Study participants also dramatically increased the recommended salary for men. The researchers concluded, “These results suggest that interventions addressing faculty gender bias might advance the goal of increasing the participation of women in science.”

The problem of increasing women in the sciences has been a long and highly contested one. Lots point to conflicts between family and work, but this study seems to say that there are still underlying biases based simply on perception of gender, regardless of whether that person has children.

Science documents discrimination against women in science « Kay Steiger

Discrimination against women should be gone by now.

Discrimination against women, even by other women in the sciences, continues. It is a very sad thing. It has been several hundred years of struggle for women to rise above the status of cattle. This is evidence that the struggle has years to go and its success is by no means guaranteed.

There is much that remains to be done. Let us carry the struggle forward with confidence in the inherent goodness of humanity and faith in the future.

James Pilant

Re-Occupy Wall Street?

On September 23, 2012 By southwerkIn Economic Justice

The Radical Rich: Moving From Romney to Re-Occupy | OurFuture.org

David Frum, a conservative and former George W. Bush speechwriter, gets it. Frum writes that “what makes it all both so heart-rending and so outrageous is that all this is occurring at a time when economically disadvantaged Americans have never been so demoralized and passive, never exerted less political clout. No Coxey’s army is marching on Washington, no sit-down strikes are paralyzing factories, no squatters are moving onto farmer’s fields.”

Beautifully said. Frum’s batting average dips slightly as he continues: “Occupy Wall Street immediately fizzled, there is no protest party of the political left.”

Occupy didn’t “fizzle.” It attracted massive support almost overnight. Within weeks it had dramatically transformed the national conversation. Democrats from the president on down were forced to address issues of economic injustice, at least rhetorically, instead of negotiating destructive (and pro-wealthy) austerity deals with the Republican counterparts.

But the powers arrayed against Occupy – in the media, in politics, and elsewhere – combined with the winter winds to force it into hibernation.

Frum’s absolutely right, however, when he says there’s “no protest party of the political left” – although I’d drop the word “protest” and make it simply a party, one that can win rather than just siphon off votes. That won’t happen without a mass movement.

That’s why it’s time to re-Occupy our country. In fact, maybe it should’ve been called “Re-Occupy” all along. It was, and it remains, a re-occupation – of our privatized public spaces and our privatized political discourse. Occupy, or something like it, is the only force that has a chance against the power of the Radical Rich.

The Radical Rich: Moving From Romney to Re-Occupy | OurFuture.org

1_Get_Richer Hindsight 20 20 — The 1% Get Richer

Occupy Wall Street isn’t dead. Is it morphing into something new, Re-occupy Wall Street? What that is, I am not able to clearly define. No one can. A collection of individuals determined not to be co-opted by the existing political parties is bound to seek an independent course.

I like this piece by Richard (RJ) Eskow. I have seen it quoted many times in the blogs I read but I am using a part seldom quoted. I have spoken to wealthy individuals on a few occasions and Eskow is quite right, they are enraged at a nation in which their money goes to support the “entitled.” They go to enormous lengths to remain uninformed and their resentment can even fall on their employees (and the occasional waitress.) They burn with disgust at how others are not like them. They see themselves as virtuous, hard working and vital to the nation. The others they see as parasites. Whether or not, they follow Ayn Rand, they have the John Galt thing down perfectly.

This is a pretty incredible amount of hubris. The Classical Greeks would have been appalled. I am appalled. To whom so much has been given and so little asked, there is so little perception of being fortunate just persecuted.

Whether justice in this matter will be settled in this world or the next, is not something I am given to know.

James Pilant

Does Teaching Business Ethics Matter? From the Ethics Sage

On September 22, 2012 By southwerkIn Business Ethics1 Comment

Are Ethics Courses Failing to Produce Ethical Business People? – Ethics Sage

The bottom line is there is no way of knowing whether business ethics education has made a difference. A graduate of a prestigious school might commit fraud in the future, but it doesn’t mean business ethics has failed them or even all students. Organizational pressures and the culture of a firm can create barriers to ethical behavior. The key is to find a way to work through the obstacles and voice your values.

I’m asked all the time why I teach ethics and am challenged whether it is even possible to change one’s ethics by a college course. After all, some argue, ethics is formed at a very early age. I don’t dispute that but do point out that my goal is to get students to reflect on their actions in a safe setting so they can better develop the tools to deal with ethical challenges in the workplace. I am not a guarantor of ethical action.

Teaching ethics should not rely on having one college course in business ethics and that is it. I see the failure of business ethics education to be one of not integrating ethics into each course and each decision in business. When colleges rely on one course to teach ethics, they are not sending the message that ethics counts. If they cover it in all courses and in the context of functional courses, then they send a completely opposite signal that it is an important part of every business decision.

I can teach business ethics – I know it from past experiences including grading papers, exams, and student presentations and papers on the topics. What I don’t know is whether students will really learn the lesson. Similarly, I can teach Intermediate Accounting to my students but I don’t know if they have truly learned the material and will be successful on the CPA Exam or in their accounting careers.

There is old African proverb: “It takes a village to raise a child”. It is quite appropriate to say that it takes an organization to raise an ethical employee.

Are Ethics Courses Failing to Produce Ethical Business People? – Ethics Sage

(I should mention that a great deal of this posting dealt with the “Giving Voice to Values” curriculum and the work of Mary C. Gentile. I have visited the web site for this curriculum and liked what I saw.)

I guess you could ask if classes in art, history or music are effective? It’s hard to measure the results once you wander even a little distance from the hard sciences, and even they have trouble coming up with hard data at times. Many of the most important subjects like leadership are difficult to teach and have results hard to measure. Ethics is no different. We “cast our bread on the water” and hope for it to return.

James Pilant

Online Education Maxed?

On September 21, 2012 By southwerkIn Teaching

Have we maxed out on online education? « Kay Steiger

A new survey from Eduventures (the terrible punny name is not my fault) comes via Inside Higher Ed and finds that though the number of adults entering into higher education as non-traditional students continues to increase, the percentage interested in taking all or most classes online has roughly stayed stagnent. The survey found 38 percent were interested in taking all or most of their classes online compared with 37 percent in 2006.

“We feel this is the watershed moment,” said Richard Garrett, vice president and principal analyst for Eduventures and the report’s author told IHE. “After years of endless growth, we’re definitely coming to more of a plateau situation.”

Have we maxed out on online education? « Kay Steiger

This is from Kay Steiger, who has a web site that deals in a thoroughly intelligent manner with education and other issues. She’s clever and often eloquent. I recommend you visit the site.

I find the findings quite interesting. You would think from reading the web and the news that online education is spreading across the nation like some Medieval plague. If the phenomenon has maxed out; if online education maxed, then we have arrived at a balance between online and in-class teaching. This is important to me, for one thing, because I teach both traditional classes and online. But I have another issue, I love the whole idea of self improvement and higher education. I am delighted by spacious campuses, earnest undergraduates talking about major issues, people trying to think, and, above all, teaching. I like the environment and I believe for many people, it is their opportunity to think new thoughts and become different people, different than the expectation imposed on them by family and high school. Online education has many advantages but it cannot create an environment of hundreds, often thousands of fellow learners trying to understand what is important.

So it would appear from the study that physical campuses still make sense and have a future.

I am very pleased.

James Pilant

Make as Much Money as Possible–Typical Business Rule?

On September 20, 2012March 15, 2014 By southwerkIn Capitalism1 Comment

Do businesses have ethical obligations beyond what the law and shareholders require? | The CQ Researcher Blog

“In a free-enterprise, private-property system,” Friedman wrote, “a corporate executive is an employee of the owners of a business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom.”
In this view, going beyond those basic requirements — for instance, as Friedman wrote, spending more to reduce pollution than “the amount that is in the best interests of the corporation or that is required by law” — amounts to improperly spending money that belongs to the shareholders.
The U.S. concept of free-market capitalism is not, of course, universally accepted. Karl Marx, the intellectual father of communism, saw profit as the result of capitalist exploitation of workers. Socialist and communist systems assert that some or all of business profits rightfully belong to society.
But among those who embrace capitalism, many say ethical obligations go well beyond simply making a profit.
A survey of business executives from around the world by consulting firm McKinsey & Co. found that only a minority wholeheartedly embraced Friedman’s view. Sixteen percent of respondents agreed that business should “focus solely on providing the highest possible returns to investors while obeying all laws and regulations.” But 84 percent said the role of large corporations should be to “generate high returns to investors but balance [that] with contributions to the broader public good.” [Footnote 14]

Do businesses have ethical obligations beyond what the law and shareholders require? | The CQ Researcher Blog

Does business believe in the absolute pursuit of profit to the exclusion of all other goals? A study by McKinsey and Co. indicates otherwise. This is an unexpected result based on my perceptions but, of course, I live in the Southern United States where free market worship is one very short step below the more traditional forms of worship.

I hope the study is correct. We need business leaders willing to be valuable members of our communities. Without their participation, the ties that bind us together as a people, a civilization, weaken.

James Pilant

From around the web.

From the web site, Business Talk.

http://businessadministrationblog.wordpress.com/2012/01/29/goal-of-the-firm-maximize-profit-maximize-shareholder-wealth-stakeholder-wealth/

Wealth maximization is long term process. It refers the value of the company generally expressed in the value of the stock.

Value maximization says that managers should make all decisions so as to increase the total long run market value of the firm. Total value is the sum of the value of all financial claims on the firm- including equity, debt, preferred stock and warrants.

Here, the executives undertake investing in new projects, maximizing profits from existing products and services, controlling cost, and adding value to the company through process, which reflects in the price of the stock, but always in the increase in Net Asset Value and Equity Per Share.

The wealth of corporate owners is measured by the share price of the stock, which in turn is based on the timing of returns (cash flows), their magnitude and their risk. Maximizing share price will maximize owner wealth.

Cash flow and risk are the key decision variables in maximizing owner wealth.

When investors look at a company they not only look at dollar profit but also profit margins, return on capital, and other indicators of efficiency. Profit maximization does not achieve the objectives of the firm’s owners; therefore wealth maximization is better option than profit maximization.

Islamic Business Ethics!

On September 19, 2012 By southwerkIn Business Ethics

Business Ethics – Mufti Menk – YouTube

Mufti Menk explains the rules of a good bargain.

I have taught business ethics for some years now and I have tried to emphasize the application of religion to the field. Several Protestant denominations have strong codes of business ethics, and the Catholic Church has an vast array of teachings on the proper conduct of business from a moral standpoint. However, both Judaism and the religion of Islam have a lot to say about business ethics. I have been impressed by the Islamic take on what constitutes proper business conduct.

This brief video is eloquent and beautifully explains the concept of “blessings” in business dealings. Blessings in this teaching are the benefits of the bargain. They are not to be concentrated on one side of the deal but both parties are to share in the prosperity brought about by business deals. I was delighted with the concept and I hope you enjoy it too.

Islam Kaaba_at_night — Kaaba at night (from wikipedia)

In these days, when many are willing to judge all practitioners of Islam as militant radicals, it is important to recognize the basic morality of the religion and the benefits it has brought hundreds of millions of people. Among those benefits is a strong well taught set of rules for Islamic business ethics.

James Pilant

Erskine Bowles, Freeloader?

On September 19, 2012 By southwerkIn Economic Justice

Since Romney Raised the Issue of Freeloaders, What Is Erskine Bowles? | Beat the Press

Since we seem destined to have a national debate on the topic of government freeloaders in the wake of the Romney fundraising video, it might be worth asking how we think about someone getting hundreds of thousands of dollars a year for sitting on a corporate board for which they did little obvious work. Erskine Bowles, a possible future Treasury Secretary, is of course the poster child for such people.

Mr. Bowles has earned millions of dollars sitting on corporate boards over the last decade. The stock prices of the companies on whose boards he sat have mostly plummeted. Since 2003 the Erskine Bowles stock index has lost more than one third of its value. By comparison, the S&P 500 has risen by more than 50 percent. If Mr. Bowles was trying to serve shareholders, he has not done a very good job.

Since Romney Raised the Issue of Freeloaders, What Is Erskine Bowles? | Beat the Press

Dean Baker writing in his blog, Beat the Press, wonders who the definition of freeloader fits most. It is not flattering to Mr. Bowles.

“Beat the Press” is the first web site I read when I get up in the morning. If you are bored with the nonsensical claims of economists who have affiliated themselves with the malefactors of great wealth, Mr. Baker is the man for you. He is independent, intellectual and speaks the language of economics in a way a layman can appreciate.

James Pilant