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Resource ID: #27182
Subject: Debt
Source: CNNMoney
Affiliation: 
Date: 2015-02-17

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CNNMoney's report, The Secret World of Government Debt Collection, exposes an industry rife with political corruption, aggressive tactics and legal loopholes. In this world, forgotten tolls can snowball into hundreds of dollars in debt and unpaid speeding tickets can land people in jail. We found that thanks to legal exemptions, collectors working for government agencies typically don't have to follow the main federal law that regulates the debt collection industry, and state consumer protection laws often don't apply either. All of this opens the door for steep fees that other debt collectors couldn't dream of charging, and allows them to threaten consequences as dire as arrest. The report focused on one of the industry's biggest players, Texas-based law firm Linebarger Goggan Blair & Sampson. Through our reporting, we uncovered this little-known firm's massive influence and controversial political ties. For example, Linebarger spends more on state lobbying than Texas giants Exxon and Halliburton, and it pours millions of dollars into political campaigns. It even has current elected officials on its payroll and has become entangled in multiple bribery scandals. CNNMoney discovered it is also currently linked to an ongoing FBI investigation. But Linebarger continues to rake in lucrative government contracts, making its top executives and founders rich while the debtors it goes after are left scrambling to pay its steep fees. And because firms like Linebarger are powered by government agencies, consumers are left with little recourse.

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