Bradstreet, Part 2

In case the previous post failed to make it clear, I was pleased by Attorney General Lori Swanson’s lawsuit against debt buyer Bradstreet & Associates. However, I don’t think Swanson’s lawsuit went far enough; she should have included Wells Fargo and U.S. Bank as co-defendants in the lawsuits (they being the two bank who originated the debts.)

Now, I’m sure that any defender of those banks (of which there are many, and they are very well paid) would say that the banks aren’t responsible for what occurs after those accounts are sold. They would argue that once a third-party has ownership, the banks are no longer able to control methods of collection, resale, etc. This is utter nonsense; not only can these banks exercise that control, they should do so.

When an entity the size of Wells Fargo sits across the table from a little guy like Bradstreet, the bank enjoys ¬†extraordinary bargaining power. According to reports, Bradstreet has a portfolio valued at around $18 million, which is only a fraction of a percentage of what Wells Fargo has on its books. Wells Fargo could EASILY dictate to a debt buyer of that size how they should be collecting on the debts, whether the debts could be resold, and data security requirements. And a company like Bradstreet would bend over backward to comply; after all, there is a lot of value in purchasing the “paper” originated by a place with the name brand recognition of Wells Fargo or U.S. Bank.

So why don’t the banks do this? I can’t tell you for sure, but knowing banks, it has to do with money. Imposing those requirements would likely lower the dollar value of the portfolios they’re unloading. Also, they would have to hire additional compliance personnel to audit those parties to whom the debts were being sold. It would effect their bottom line.

However, it is fundamentally in the consumer’s interest that creditors should be held accountable when bad actors purchase their debts. First, at no point did the individuals who were sued by Bradstreet maintain a business relationship with them. Those consumers opened accounts with U.S. Bank and Wells Fargo; they likely never heard of Bradstreet & Associates.

Second, the information transmitted to debt buyers when the accounts are sold is extremely sensitive. Not only are debt buyers given addresses and telephone numbers, they also receive social security numbers and are given the right to pull the account holder’s credit information. It is VITAL that the banks impose strict data security requirements on whoever is purchasing their debt (just look at the whole Target debacle.)

In the case with Bradstreet, I think U.S Bank and Wells Fargo took a “See no evil, Hear no evil” approach and completely abdicated the responsibility owed to their customers. If the banks aren’t going to protect those interests, it is incumbent on the Attorney General to do so. Suing an entity such as Bradstreet ¬†& Associates (who operates out of a shopping mall), does very little to move the needle in favor of consumers. But taking on Wells Fargo and U.S. Bank? That would be some powerful consumer protection.



Dave represents clients in Minnesota on a range of legal issues, including civil litigation, business ventures, and creditor relations. He also has expertise raising capital to finance David v. Goliath cases. (Yes, pun intended!) Dave can be reached via email at