It's Cold in the Freezer
Robocalls, Payday Loans, and My Wife Didn't Kill Me
Somehow I have written more than two dozen of these newsletters and have not talked once about robocalls. If you own a telephone in 2019, you probably receive lots of them. Last year, according to one source, Americans received almost 48 billion robocalls. They make up the majority of complaints lodged with the FCC, and there are many laws regulating them. Yet every year, we get more.
Our government has, thus far, been unable to combat the scourge. They did drag at least one guy in front of Congress to answer questions.
Alex W Palmer from Wired tells the story of one “Robocall King” who was exposed by an investigator who works at TripAdvisor. The short version is that this particular telemarketer would robodial people with an automated voice message telling them that they’d won some travel credits from TripAdvisor, and they could claim them for a vacation. If the consumer expressed interest, they’d be connected to a call center agent - in this case located in Mexico - who would try to sell them on a vacation package.
TripAdvisor had nothing to do with these offers, so they went on the hunt for the company behind it. Their investigator was able to track down some of the companies behind the calls, at which point they realized it was being run by an American. He was called Adrian Abramovich, and last year the Senate hauled him in for a hearing, as the FCC was charging him with a $120 million fine for various violations of telecommunications laws.
The agency identified Abramovich as the source of 96,758,223 illegal robocalls. The laws governing robocalls are complex and sometimes contradictory, enforced by multiple agencies, and with layers of exceptions and loopholes. But the gist is simple enough: no calling cell phones, no using automated or prerecorded messages, and no using fake names or numbers. According to the FCC, Abramovich had broken all of these rules.
It’s not just people like Abramovich who make these calls. Dish Network was fined $280 million in 2017 for making robocalls. Many large companies deal with TCPA lawsuits and class actions - TCPA stands for the Telecommunications Consumer Protection Act, a notoriously vaguely worded law that has been modified repeatedly by the FCC as it struggles to deal with the problem.
I have a lot of…thoughts about ways to fix the problem. It helps to understand how the telemarketing ecosystem works. You have your marketer, like Abramovich, who creates the scripts and uses third-party technology to dial consumers and transfer them off to sales reps. You have the call center operator, who trains the agents and either takes payment for the product, or transfers prospective sales farther up the chain. In the event the product is in fact real, you have an end company like a Dish Network who signs a contract and provides a service to the consumer. At times there can be as many as a half dozen companies involved in the process. It’s confusing!
However, none of this happens without the companies who provide the technology to make the dialing happen. Recent reports suggest that a lot of the worst offenders are smaller telecom carriers who need the money - most major VOIP companies have rules against spamming and take their enforcement seriously. The most effective way to tamp down on robocalls would be to hold the companies whose networks the scam calls travel on financially accountable. The current strategy of blocking calls is not a reliable fix - many people do receive important marketing or customer service calls from companies they do business with. There is such a thing as a legal robocall, according to the TCPA.
However, this is America, so we’ll continue to do things the dumbest way possible, subjecting people to an absolute onslaught of dangerous spam and scam calls and hoping that phone carriers or FCC lawyers will save us.
For those of you somehow unfamiliar with payday loans, they are highly predatory small dollar loans, referred to as “payday” loans because the intention is that the borrower is able to pay off the debt by their next pay day. While it may be true that many payday borrowers are actually able to pay off their debt, many are not, and the loans are designed in a way - entirely legally - to trap people in endless cycles of debt, as they take more loans to pay off their existing ones, with interest charges piling up towards the heavens.
I could write volumes about how awful payday loans are, but instead I want to share an incredible story about a guy who single-handedly took down the biggest, scammiest payday lender in the US.
It starts with debt collectors:
He gave his name as Charles Cartwright and said Therrien owed $700 on a payday loan. But Therrien knew he didn’t owe anyone anything. Suspecting a scam, he told Cartwright just what he thought of his scare tactics.
Cartwright hung up, then called back, mad. He said he wanted to meet face-to-face to teach Therrien a lesson.
“Come on by, asshole,” Therrien says he replied.
“I will,” Cartwright said, “and I hope your wife is at home.”
Consumer debt in America has been rising for decades. It currently stands at over $4 trillion dollars. The US economy has become heavily dependent on consumer spending, which now makes up 68% of our GDP. Wages for the average American, however, have stayed mostly flat, meaning they need to borrow more and more money. With interest rates near 0%, banks are eager to lend. When people can’t pay the debt, collectors get involved.
So, we have payday loans with very high interest rates coupled with very few consumer protections against debt collectors, and we get a very angry Rhode Islander who decides to go Falling Down on one particular network of payday loan sharks.
Except, instead of showing up to break the knees of the guy who’d sold his data to the debt collector, Andrew Therrien befriended the guy whose company had issued the original loan years before, and used him to work his way up to a man named Joel Tucker, who was the brother of Scott Tucker, at one point the biggest payday lender in the country.
Backing up a little, what had actually happened to Therrien was that he’d been sold as a record on a list made up of real and fake debts. The process is as horrifying as you’d imagine:
…almost one person in 10 has a debt in collectors’ hands. The agencies recoup what they can and sell the rest down-market, so that iffier and iffier debt is bought by shadier and shadier individuals. Deception is common. Scammers often sell the same portfolios of debt, called “paper,” to several collection agencies at once, so a legitimate IOU gains illegitimate clones. Some inflate balances, a practice known as “overbiffing.” Others create “redo” lists—people who’ve settled their debt, but will be harassed again anyway. These rosters are actually more valuable, because the targets have proved willing to part with money over the phone. And then there are those who invent debts out of whole cloth.
Portfolios are combined and doctored until they contain thousands of entries. One collector told Therrien that he’d paid cash at a diner for a thumb drive with a database containing Therrien’s name. Some collectors told him they thought the files were partially legitimate; others knew their paper was completely falsified.
That’s right. Debt collectors think people who have paid off their debts are more valuable than those who haven’t, because they can harass them into paying debts that don’t exist. This fucking country.
Therrien ended up collecting enough information on the Tuckers that the feds brought charges, and Scott is now in prison. He’s also…weirdly…still friendly with his brother Joel, the guy who started this whole mess? Also, the guy he is currently helping put in jail? It’s hard to feel bad for any of the lenders or collections agents involved, since the amount of human misery they caused over the years, and continue to cause, is incalculable.
In a timely crossover, noted “libertarian” Rand Paul recently argued against a certain robocall bill that just passed the Senate, saying he had “big concerns” that the measure would burden debt collectors. It is impossible to overstate how much influence the payday loan and debt collection industries have on our government, and how much our society has stigmatized poverty and debt. As usual, the biggest scammers are the ones who aren’t actually breaking the law.
This Notarized Letter Says My Wife Didn’t Kill Me
I have a strict policy that I do not write about crimes of financial desperation. In the case of this Utah couple who (allegedly) defrauded the VA out of $177,000, however, they’re both dead so it’s fine, and kind of funny?
Paul Mathers had been diagnosed with a terminal illness and rather than dying the…normal(?) way, he and his wife decided to stick his body in a freezer with a note that his wife didn’t do it, so she continued to receive his benefits. They found him after his wife Jeanne died. Imagine keeping that secret for 10 years! Where’s grandpa? Oh, he’s still on that fishing trip with his buddies.
This bit is my favorite:
"Detectives tracked down the notary and she said she didn't read it, she just stamped it," Hansen said.
I knew notaries were bullshit! Imagine if she had actually read the letter and blown up their whole plan? This has to be the most creative tax evasion scheme I’ve ever seen. Kudos to the Mathers family, rest in peace you lunatics.
Krebs on Security - “Last summer, a wave of sextortion emails began flooding inboxes around the world. The spammers behind this scheme claimed they’d hacked your computer and recorded videos of you watching porn”
Buzzfeed News - “Tomi Masters was a 23-year-old from Indiana who moved to California with dreams of making it big in the cannabis business. Then she met a hacker who introduced her to a dark new world of digital manipulation, suspicion, paranoia, and fear…”
The Atlantic - “Emma Perrier was deceived by an older man on the internet—a hoax that turned into an unbelievable love story.”
Tips, robocalls, or catfishes to email@example.com.