Did a Minnesota debt-collection agency go too far?

A Minnesota-based debt collection agency is at the heart of a lawsuit filed by an Arizona couple over a defaulted student loan.

Michael Collier, a 100% disabled Army veteran, claims in the lawsuit that the company, Gurstel Chargo, garnished their savings to to cover his wife’s $6,000 student loan, even though the money came from Social Security disability payments, which are exempt from garnishment.

But it’s the accusation of the tactics the company allegedly used when the couple tried to get their money back that’s getting attention.

According to a lawsuit filed last week in Phoenix, a representative of the firm told the couple they’d have to sue.


He was also told during this conversation that he should just sign the funds over as it would make a good down payment on the judgment, but was emphatically told that he would not be getting the money back. During this conversation, after Michael told the legal assistant that the funds were exempt veteran disability payments, the assistant told Michael “F- – - you! Pay us your money! You can’t afford an attorney. You owe us. I hope your wife divorces you’re (sic) a- -. If you would have served our country better you would not be a disabled veteran living off social security while the rest of us honest Americans work our a- – off. Too bad; you should have died.”

Today, the Golden Valley-based company posted a response on its website:


We learned late last week of the lawsuit filed by Michael Andrew Collier and Kim Collier-Dingman. Gurstel Chargo takes the allegations made in the lawsuit very seriously and we have immediately launched an internal investigation to determine the facts. We are extremely disturbed by the allegations stated in the Complaint, as they are contrary to the policies, practices and values of our firm. We expect that all Gurstel Chargo employees fully comply with all state and federal laws, and we thoroughly train our employees to perform their job in a lawful and respectful manner. Under no circumstances does our firm tolerate the type of conduct alleged in the Complaint.

The Complaint states that the wrongful remarks were made during a telephone call. We have requested from the attorney that filed the Complaint the phone number of the phone that Mr. Collier was allegedly on, an approximate date on which the call occurred, whether the person who made the alleged wrongful comments was male or female, all in order to help us to get to the truth about what occurred. We have been informed by Mr. Collier’s attorney that he is unaware of any of this information. To date, we have discovered no information to substantiate the allegations, but our investigation continues. Should these allegations prove to be true, we will take immediate corrective and disciplinary action.

(h/t: Nate Minor)

  • Mark Gisleson

    Collier’s accusations ring true. Back in the ’90s when I was struggling to repay student loans (thanks to a two-year gap between graduation and my first paycheck) I had collectors routinely call me every name in the book. They’d call and call and call, and if you complained to the Dept. of Education, they’d just churn your loan (selling it to another strong arm collector), adding another $1,000 in phony transaction fees to my debt (when I finally paid off my loans, the fees for churning exceeded the interest by a considerable amount, all perfectly legal).

    I really thought Obama would fix this, but Obama’s disappointed me in other things as well. The bottom line is that when student loans were privatized, white collar thugs lined up to take that action. The only reason we don’t read more stories like this is because no one wants to admit they can’t pay off their student loans.

  • Ryan P

    I used to work at this firm until very recently, in a relatively senior position with eyes-on visibility of both legal and collector staff. I am also a disabled vet, so this issue is near and dear on multiple fronts.

    I can say that over the course of almost 2 years, I never once heard of something like this. I terminated, and witnessed the termination, of multiple staff members for significantly smaller infractions – GC indeed take legal and moral compliance with the utmost degree of seriousness.

    More often than not, complaints (albiet of much smaller magnitude) like this were found to have been baseless, or outright fabricated. The Courts will determine the reality in this case, assuming a settlement is not reached (which happens frequently, to avoid costly litigation expenses – Mr. Bebee is probably the single biggest benefactor in AZ of this over the past 3 years).

    It’s unfortunate, whether true or not, that a story like this gets attention based on a mere allegation; I hope that either the vet gets compensated to the utmost if his Complaint is accurate, or GC recieves similar levels of press if they’re exonerated.

  • http://www.farces.com/ Michael Fraase

    Were Gurstel Chargo in any way honorable, they’d resolve the allegation the veracity of which is easily established. If Gurstel Chargo garnished Social Security disability payments, that’s clearly disallowed under the law. If true, refund the money immediately and let the lawyers fight over the rest of the matter.

    Unfortunately, once the lawyers get involved, they’re the only winners.

  • SueDebt.com

    It’s fairly obvious this debt collector went too far. Unfortunately they only realized that after this story made national headlines. The reality is that millions of people are harassed for unpaid debts, Michael is definitely not alone. The debt collection industry is a 14 billion dollar behemoth, they know they break the laws and don’t care since profits are so high. Michael will sue and win thousands of dollars and likely get all his money back plus much more.

  • James Hamilton

    I was under the impression that collection calls were recorded by most companies. Perhaps Ryan P. can tell us if that was the practice at GC. I find it difficult to believe that the company has trouble identifying who was working the account.

  • Bob Collins

    In reading the lawsuit, I was under the impression that it was a face-to-face conversation. I’ll need to doublecheck.

  • BJ

    @James – the company asked for the date and time of the call and if the person was male or female. With thousands of calls made you can guess that they will need to search records. They can’t randomly listen to all the calls they have ever made to find the recording.

    Most recordings don’t log anything but date/time, extension making the call and the number called.

  • Ryan P

    James,

    I should emphasize that I have no private (“inside”) information of this particular Complaint, and can only speak in generalities.

    To answer your question; it depends. Without divulging the (boring) nuances of GC’s operational systems, suffice it to say the date, time, and number dialed are all highly relevant to determining who worked the call, and/or locating the potential call recording (not ALL calls are necessarily recorded, typically only “collector” lines since consumer calls are not handled by “legal assistants”).

    My hunch is this is why GC is seeking this information from plaintiff’s counsel – to aid in locating a potential recording.

    I would assume all this will eventually come to light over the course of the litigation, barring a settlement.

  • Mark Gisleson

    Ryan P., I could not prove anything in my story other than the churning charges. I do not for a moment believe that the threatening and shaming calls I received were recorded or authorized. All I know is that they happened, and that the internet chat rooms are full of comments from others who’ve been treated the same way.

    Give incentives to collectors and then supervise them very loosely. It works for everyone but the person being collected on. It also makes honest collectors’ jobs harder, so I’m sure you’re rooting for this outfit to get fined or shut down.

  • Ryan P

    Mark, indeed you posted this story with the most journalistic integrity of any source out there presently, which is why I follow MPR and chose to post here instead of the “less objective” sources out there.

    I agree the reputation of the industry is well-deserved by some, and difficult to live down by those seeking to ensure their files are handled with dignity and respect. Personally, I cheered the CFPB and other federal/state regulatory measures as a “competitive advantage” – driving those who give the industry a bad name out, and recognizing those who hold themselves to moral standards. I was quite proud f GC’s position of avoiding lawsuit service at work, calling neighbors, etc – practices that are generally legal, competitors in MN utilize, but GC had taken a moral position against. So it saddens me when the firm is subject to threats of violence, spurred by the way the story is being represented in the blogosphere at present.

    It did occur to me that GC does have blanket call recording – I recall several director-level discussions of the functionality, nuances, etc. I recall the debate over legal staff calls being recorded, and how the software was an “all or nothing” package. I can’t honestly say I paid attention to the nuance of the software, other than laughing at the poor guy tasked with listening to a plethora of mundane, routine calls; or the IT staff charged with finding a needle in a haystack when a client requested a particular call from 6-months ago. I’m quite confident that if the call exists, there would be a recording.

    If there is a recording, I’m ashamed to have been an employee there when the incident occurred. If it didn’t, I’m ashamed to call the disabled vet a comrade. Either way, this entire affair is quite depressing…

  • Anonymous

    I worked in a call center, and that call, if it occurred, should be easy enough to locate in a myriad of ways. If Gurstel records calls, they could search the recordings by his phone number (which they obviously have on file). If their CSRs document calls, they can pull up his file in the database — like every CSR does when making a call — and scroll through the call history (which link to the recorded calls). If Gurstel doesn’t record calls, then how would the approximate date help them? Are they going to interview the CSRs? Would the kind of person who would say such things, tell the truth?

    In short, they pulled the staff bios on their website and spewed out some nonsense.

  • Eye Witness

    I also worked at GC and this is nothing compared to what I witnessed first hand… The place is run like a kindergarten with very little oversight. They spent most of their days playing awful practical jokes on new employees, going out for 2 hour lunches to bars and coming back to work in the bag, and that doesn’t even have anything to do with what happened on the phones… then the calls were never professional, you were taught to scare them with “legalese” and they would often take funds knowing full well they were exempt and then one person who was responsible for responding to these “thefts” would laugh about how many times these poor folks would call in until they cried for their money back. Eventually if they jumped through all the hoops they might get their money back but often the people would wind up behind on their rent or medicine.

    I could go on but suffice it to say this place should be disbarred and closed on public TV.