Mrs. SPELLMAN. Ms. Avant, do you have many dealings of this type of creditor with your credit unions? Ms. AVANT. Yes, because in the Washington, D.C. area where we deal with neighborhood credit unions and a lot of times you do have people who do intend to pay and do, for some reason, fall behind, but these people do pay even though they are on welfare, they do pay. She is only one that did not. Mrs. SPELLMAN. Mr. Sheppard? Mr. SHEPPARD. Yes, I am sure, Mrs. Spellman, that there are certain credit grantors that extend credit rather liberally, but as Mr. Selbo said, if we have a great amount of trouble in trying to collect these past due accounts, we just terminate the relationship with the client. Mrs. SPELLMAN. I don't want to put you on the spot, Mr. Selbo, but I have this paper here that says there have been a good many complaints against your corporation and I am curious about why. Fairfax County, has told us that they have had 15 complaints, Prince Georges 4, Montgomery County 21. Mr. SELBO. Right. Mrs. SPELLMAN [continuing]. Twenty-seven from Arlington, 11 from D.C. Consumer Affairs, FTC regional office 7, Alexandria Consumer Affairs 13. Now that is a total of 98. Mr. SELBO. Over what period, Mrs. Spellman? Mrs. SPELLMAN. Let's see. That's from 1975 and 1976. Now, you probably handled a great many cases during that period of time and it's probably a small percentage. Mr. SELBO. In that time, we handled 639,612 accounts in the period of July 1974 through June of 1975. Then, if you would bring it up to date, put on another 325,000, it accounts for almost a million in a matter of 12 years or 1 year and 8 months. Now, true, we have a great many of them. I think we are the largest agency in the general area here, in fact, the largest on the east coast. We handle something like 45 people that are on the phone collecting every day in this area. You can imagine how many calls we can make. Now, true, you are saying we had complaints. These are alleged complaints and, anytime we have a name, I would be very happy to check it out as we did the three that testified here and let you know exactly what it was, because I can assure you that we get a lot of complaints that are not justified. There are just complaints versus saying, "Why am I being billed? I am not the right party." Rather than coming to us, they will go to the consumer affairs which is fine, which they should do, and we are willing to answer any question about any individual account and will pull our records and give a transcript exactly what we did with it, because we record everything we do. Mrs. SPELLMAN. That might be interesting for us to pursue, in order to get a real picture. Mr. SELBO. If you will give me the names of anyone you would like to have investigated, we will give you a transcript of every one of the accounts for the subcommittee. We will be very happy to do it. Mrs. SPELLMAN. Thank you very much. Mr. ANNUNZIO. Thank you, Mrs. Spellman. I want to welcome one of the senior members of our full committee to the panel this afternoon who is also chairman of the Financial Institutions Supervision, Regulation and Insurance Subcommittee, Congressman Fernand J. St Germain of Rhode Island. Mr. ST GERMAIN. Thank you, Mr. Chairman. Mr. Selbo, among your clients, do you have the Famous Artists School? Mr. SELBO. We did at one time. We no longer have them. Mr. ST GERMAIN. You no longer have them. Was that your own. choice? Mr. SELBO. Our own choice. Mr. ST GERMAIN. How long did you handle that account? Mr. SELBO. I can't, off the top of my mind, just tell you how long. It's been a couple of years ago. Mr. ST GERMAIN. For how many years did you handle them? Mr. SELBO. I just could not say. I would be glad to get you the answer. At one time, we handled them, yes. Mr. ST GERMAIN. You handled and you said you let them go. Mr. ST GERMAIN. And was the reason perhaps that it was one of the better fleecing operations around? Mr. SELBO. Not necessarily. Mr. ST GERMAIN. Well, the Famous Artists School is interesting; isn't it? I mean the ad is in the paper and on television or radio and they ask you to send in a sample of your drawing and very seldom will you have a sample go in without a letter returning saying, "Yes, you have great potential. You sign this contract and you're off and running." Mr. SELBO. We had a great many disputes, sir, in this particular area and, because of that, we discontinued it. Mr. ST GERMAIN. And in many instances, I happened to have worked for an attorney who represented them and I told him I would not handle their cases anymore because what would happen was these poor people sincerely thought there was an honest evaluation. There wasn't. They found out after one or two of those correspondent lessons. that they weren't getting anything out of it. However, they had signed a long-term contract. The case was then assigned usually, if they were not incorporated in a particular StateI don't know if they did this here they would assign the case to an assignee within the jurisdiction. Mr. SELBO. We have never taken assignments. Mr. ST GERMAIN. So you do not know what the followup was if you were unsuccessful in your process? Mr. SELBO. No way. Mr. ST GERMAIN. In your process, you send these people a letter to the effect that unless they pay up they will be liable to legal process and extra fees, and so forth. Do you have a form letter to that effect? Mr. SELBO. We have a suit letter who informs that, if things can't happen, we are going to turn the thing back to the client, because we do not sue in our own name. We turn it back to the client. Mr. ST GERMAIN. But have they submitted, Mr. Chairman, copies of these letters for the record? Mr. ANNUNZIO. Some of them have. Mr. ST GERMAIN. Would you be able to submit copies of this? Mr. ANNUNZIO. Congressman St Germain is asking you to submit copies of your forms or letters that you mail to the debtors for the record; would you do that, please? Mr. SELBO. On the advice of counsel, we would be glad to. [The following forms for immediate collection and a letter used by the Capital Credit Corporation was submitted for the record by Mr. Selbo:1 Capital Credit Corporation 582 Market Street San Francisco, California 94104 Telephone 415/392-8466| ollections SL That if your creditor refers this matter to an attorney who decides that the appropriate action to be taken on your account is the institution of legal proceedings, that you may become liable for additional cost and expenses by reason thereof. Avoid the possibility of this extra expense. You can do so by remitting the full amount or calling this office within five days to arrange payment. Sincerely, Capital Credit Corporation CAPITAL CRED CORPORATION |