Thoughts on Judgment Collection 

A fall from grace: a cautionary lesson to judgment collectors

Photo by ieang/iStock / Getty Images
Photo by ieang/iStock / Getty Images

Since when has pretexting become such a hot topic? It appears to have gotten a giant kickstart last year from a most unlikely candidate, Hewlett-Packard’s (HP) Chairwoman Patricia Dunn. Fed up with leaks to the media from HP’s Board of Directors, Dunn covertly acquired the phone records from its board members to obtain a pattern of contacts and calling. Although eavesdropping was not involved, the unauthorized access of records touched off a public relations disaster for HP. Not only did Dunn become Newsweek’s cover girl, a warrant was triggered for her arrest. It was a sad chapter in the brilliant career of a cancer survivor with humble beginnings in Las Vegas. In addition to fines, the four counts in the felony complaint carried prison sentences of up to three years.

But does the punishment fit the crime? Pretexting is defined as, “the use of false pretenses, including false statements and impersonation, to obtain consumers’ personal or financial information”. Dunn did something stupid and unquestionably wrong. But was the crime so egregious in nature -- or had the world’s largest technology company -- with 150,000 employees and one billion customers in 170 countries -- become an irresistible target? This question may have been answered on December 7, 2006 when Attorney General Bill Lockyer announced that HP entered into a $14.5 million settlement to settle his civil suit and that HP will “finance a new law enforcement fund to fight violations of privacy and intellectual property rights.” With state funds drying up, a review of the past year reveals that the attorney general has indeed been scoring legal touchdowns while finding alternative ways to secure new funding.

The HP scandal pointed out the need to tighten up privacy laws, as pretexting is expressly prohibited to obtain financial information but phone records fall into a gray area. “Stealing someone’s private phone records is a criminal act, but it can’t be prosecuted,” Senator Charles Schumer has remarked. “Phone information and call logs should be protected with the same safeguards as financial data or medical records. With pretexting companies popping up across the country, law enforcement needs the tools to track down these criminals down and put this industry out of business.”

On December 11, 2006 Schumer’s TRAPP bill passed Congress. The TRAPP Act would have made it a federal offense, punishable as a felony, to obtain customer information from a telephone service provider by false pretenses or access a customer account on the Internet to obtain billing information without authorization.

But in a surprise turn, a few days earlier, Senator Debra Bowen’s SB 1666, California’s tough anti-pretexting bill, went down in flames after sailing through the Senate. The demise was due in large part to the effective lobbying by the Motion Picture Association of America. The MPAA was able to convince legislators that pretexting was necessary to discover the source of illegal downloading. It was a disappointment for the ambitious Bowen, a consumer rights advocate, who today is California's Secretary of State.  

There is a lesson here for judgment collectors. If you are purchasing data, just how clean is it? Dunn maintained that she was assured that ‘only legal means’ would be used to obtain records. Plausible deniability didn’t work. There can be little sympathy for those data companies who brazenly offered records for sale on the Internet and are now the subject of a criminal investigation. In California there is no legal way to purchase phone records from data brokers. Furthermore, there never has been.

Unlike HP’s chairwoman, judgment creditors have the legal right to personal information if properly obtained. Not only must your judgment debtor deliver phone records, you can compel the delivery of far more sensitive and revealing documents. But pretexting to get those very same records remains illegal - even when you have ‘permissible purpose’.


©2007 Ramona Featherby

Ramona Featherby