GOPer Founded Debt Collection Firm That Harasses People For Medical Debts

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Rep. Tom Reed's debt collection firm has harassed some of his own constituents over medical debts they never incurred.

New York Rep. Tom Reed founded a debt collection company nearly two decades ago that harasses and mistreats his own constituents, at times attempting to collect debts that are not owed and at others refusing to remove debts that were paid.

The Intercept investigated:

> Over the last two years, Michael Enslow, a resident of Waterloo, New York, has been in a back-and-forth with a debt collector. The exchanges, familiar to many Americans, ended up in federal court, claiming that the debt collection company repeatedly refused to remove medical debt he long ago resolved from his credit report. Their error prevented him from getting preapproved for a mortgage.

> Such chicanery is par for the course in the debt collection industry, which is known for abusive practices, including bullying consumers into paying debts they do not owe. What’s unusual about Enslow’s case is that he was mistreated by a company that his own representative in Congress, western New York’s Republican Rep. Tom Reed, founded.

Numerous consumers have found themselves in the same boat, according to a docket maintained by the Consumer Financial Protection Bureau. Several complaints against Reed’s firm claim the company harassed individuals over phantom medical debt or debt they had previously resolved.

Despite having sold his stake in the company to his brother, Reed continues to benefit financially from the firm.

> For nearly two decades, Reed reaped financial rewards from the debt collection industry, managing a law firm that specialized in the trade. After his election to Congress in 2010, Reed resisted congressional rules that prohibited him from practicing law and required him to remove his name from his law firm. The Buffalo News reported that 194 court documents continued to carry his law firm’s name after he was elected. But his name remained until 2014, when Reed said he had sold his stake in the company to his brother. In response to an inquiry from The Intercept, Abbey Daugherty, a spokesperson for Reed’s campaign, said, “Tom is not involved in this business.”

>

> Yet records show that the Reed household did not fully divest from the company, though the company was rebranded from the “Law Office of Thomas W. Reed,” to “RR Resource Recovery.” An ownership stake in the firm is now controlled by Jean Reed, the wife of Tom Reed. And the newly incorporated firm lists Tom Reed’s brother John as the registration agent.

>

> Reed makes little effort to distance himself from the company. Records show that he owns a property company called Reed & Reed Properties that houses RR Resource Recovery. And his personal ethics disclosure shows that Reed’s household continues to own a stake in both firms and collect an income of up to $100,000 a year from the two companies.

Reed also has voted for legislation that would weaken the very agency tasked with overseeing companies such as RR Resource Recovery:

> From his perch in Congress, Reed has participated in several Republican-led attempts to unravel the Consumer Financial Protection Bureau, the primary federal agency that polices debt collection practices. The attacks would defang the very agency that has collected consumer complaints about Reed’s company.

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> Last year, Reed voted for the Financial CHOICE Act, a sprawling financial deregulation bill that rolls back CFPB’s mandate to regulate “unfair, deceptive, and abusive practices,” and weakens the agency’s independence by making the director an at-will employee of the president. In a conference call with reporters after the vote, Reed claimed that such a move was necessary to stop the CFPB from spending “millions on a Taj Mahal type of operation for their facility to serve these unelected, independent bureaucrats.”

Read the full report here.

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