Most Texas bills targeting toll road payment problems failed this year

[ZLoth]

From The Texas Tribune:

Most Texas bills targeting toll road payment problems failed this year

For years, Texas drivers like Witchel have complained about toll payment problems like double billing, rejected automatic payments, erroneous charges and invoices with hundreds of dollars in late fees and fines. Toll authorities have acknowledged issues and solved some of them, but others have persisted.

Lawmakers have been hesitant to intervene in the state's toll road system, a mishmash of agencies and contractors that generates more than $2 billion a year and has improved mobility in Texas' largest metropolitan areas, but often forces drivers to pay to get from one point to another – and deal with the frustration of an unexpected bill.

FULL ARTICLE HERE

[The Ghostbuster]

What would any of you suggest to remedy this situation, other than to abolish toll collection statewide?

[kalvado]

In general, you want to make such changes non-punitive, but unavoidable. Attached to things like registration renewal, maybe
Problem is that $1 for commute runs up to $250 over a year, and people are shocked - or pretending to be shocked. And there is a rising culture of "small person shouldn't pay to big corp". Failure to prosecute shoplifting, "cancel rent" and what not ..

[DNAguy]

I've tried to help friends with this.
Backstory:
Friend is older lady, fixed income. She lives in Houston, but keeps car registered at in Louisiana at relatives house to save $. Again, fixed income.
Friend's niece uses her car. Niece blows through all kinds of tolls. Doesn't tell her. And gets into drugs / shenanigans. Friend is reluctant to report car stolen due to implications for niece.
Finally reports car stolen. Goes back to LA with family to visit. Finds lets from a law firm showing she owes > $5K in tolls, penalties, and fines as she missed her 'court case' to fight this.

What I find out when I dig in.
1.) The lawfirm is really just a debt collector that uses civil court to get their $.
2.) Their fees / penalties are not bound by any law and are astronomical
3.) HCTRA when contacted (I spoke with their head) wasn't aware of the crazy penalties that get tacked on after they 'sell' their debt off.
4.) There is no real recourse for 'violators'

As the car was register in LA, they really had no recourse against the friend. I gave them a fair offer and told them I'd pay it. They insisted on the $5K. I laughed and never gave it any more mind.

That being said, folks in Texas can have registration denied. Which can spiral into tickets, which can then spiral into jail. It's a viscous cycle.

It was a while back.

Here's an old CNN Money artcle about the shady practices of Linebarger Goggan Blair & Sampson LLP.

https://money.cnn.com/interactive/pf/debt-collector/government-agencies/index.html

"They keep figuring out ways to stack these fees up,"  said Tai Vokins, a Kansas-based attorney and former assistant attorney general. "They're preying on the absolute poorest people."

And this is all legal.

One of the biggest players in this industry is law firm Linebarger Goggan Blair & Sampson. It has worked for small-town school districts, the city of New York and at one point, the largest tax collector in the country: the Internal Revenue Service.

Based in Texas, Linebarger works for 2,300 clients nationwide and collects $1 billion for its clients each year.

The firm, which would only respond to interview questions in written statements, told CNNMoney that government agencies need the money it collects to fund vital services, such as teacher salaries and police budgets.

But the collection system is far from perfect. Government agencies sometimes hire Linebarger to hunt down decades-old debts that people can't even remember incurring. Some turn over unpaid bills to collections just months after consumers have received them. And others provide the firm with inaccurate information, leading it to pursue the wrong person entirely. These agencies also issue the arrest warrants, foreclosure lawsuits and other harsh threats that Linebarger cites in its letters to debtors.

All of this can lead to some nightmare scenarios.

One Kansas man ended up behind bars three times because he couldn't afford the growing bill for his unpaid speeding ticket, while another Kansas woman says she had her entire paycheck garnished for back taxes. A Texas woman was threatened with arrest for not mowing the grass on a property she didn't even own. And an Oklahoma business owner is still bitter about the $112,000 bill he received for taxes he had already paid.

These consumers and many others have gone public with their frustrations. Some have filed complaints with state attorneys general, while others have even sued the firm. Yet, the outsourcing by government agencies continues and Linebarger's business is thriving.

Despite decades of scandals over the way the firm gets business -- and even jail time for one of its top executives -- Linebarger still lands lucrative government contracts.


Source: Houston Chronicle, Texas Lawyer Click the image above to learn more about Linebarger Blair Goggan & Sampson's history.

Many attribute this success to the millions of dollars the firm has spent wooing politicians, from local mayors to powerful players like former Texas Governor Rick Perry. Its political pull has even helped it get certain state and federal laws changed in its favor — including Texas legislation that allows it to charge debtors such high fees.

For one out-of-town driver who mistakenly failed to pay $7.50 in tolls on a Texas highway, these fees became a $157.50 bill in a matter of months. The toll road was due the original toll amount, plus $66 in administrative fees. Linebarger added $84 for itself.

The Harris County Toll Road Authority told CNNMoney that it uses the funds collected by Linebarger to help keep Houston's toll roads drivable and safe. More than a dozen of Linebarger's other current and former government clients were also contacted for this report, but the toll authority was the only one to provide comment.

Linebarger maintains that its fees are reasonable and depend on the kind of debt and how hard it is to collect.

By collecting these fees, Linebarger says it doesn't have to charge the majority of the state and local governments that hire it, thereby keeping taxpayers from subsidizing its collection costs.

This is different from a consumer creditor like a bank, which typically has to pay for its collection costs out of the money recovered from debtors.

In a months-long investigation into the government debt collection industry and Linebarger, CNNMoney analyzed hundreds of consumer complaints obtained from six state attorneys general and the Federal Trade Commission, among other organizations. We interviewed more than 60 consumers, former Linebarger employees, attorneys and other experts. We also reviewed more than 100 lawsuits against the firm -- alleging everything from unfair fees to harassment.

CNNMoney found that with the power of government agencies behind them, debt collectors like Linebarger are able to play by their own rules, in essence acting above the law.

Thanks to legal exemptions, government collectors usually don't have to follow the main federal law that regulates the debt collection industry. State consumer protection laws often don't apply either. And when debtors have challenged Linebarger's government collections work in court based on other laws, the firm has gone so far as to argue it has immunity because it is an extension of the government.

Because the law so often lands on Linebarger's side, consumers often end up in a black hole with little recourse.

They keep figuring out ways to stack these fees up. They're preying on the absolute poorest people."

– Tai Vokins
Former Kansas assistant attorney general

"I had no defense whatsoever," said Houston Army veteran Harry Memnon, who says his unpaid $1.25 toll charges became a nearly $300 bill.

Protections go 'out the window'

While Linebarger isn't the only government debt collector out there, it is one of the largest. And as it continues to grow -- with clients in 21 states -- so does the controversy surrounding its methods.

Linebarger says that consumers should typically receive at least one notice (and sometimes multiple notices) from the government before a debt ends up in collections.


Harry Memnon received a nearly $300 bill for unpaid toll charges.


Yet many people say the government never notified them, and Linebarger's threatening letters and phone calls were the first they had heard of their debt. Angry, frustrated and suspicious consumers have posted complaints on sites like Ripoff Report, Yelp and the Better Business Bureau.

Some were so confused that they became convinced Linebarger's collection claim was a scam and refused to pay. Others say that no matter how much proof they had provided that a debt wasn't theirs, Linebarger kept calling and sending them threatening letters.

And for those who just couldn't afford to pay what they initially owed, the firm's fees left them trapped in debt and fearful that they may lose their driver's license, their home or end up in jail. After a class-action lawsuit challenged the fees Linebarger charged under a contract with the city of New Orleans, the Louisiana Supreme Court even ruled that the firm's 30% fees were unconstitutional.

Yet Linebarger still has the Better Business Bureau's A-plus rating, which the organization stands by. The BBB says Linebarger, which is a paying member, does a good job responding to complaints -- a requirement for the firm to stay in good standing. It also noted Linebarger's complaint volume was in line with the size of the firm and that it had waived fees in a few cases where consumers hadn't been notified of the original debt.

Linebarger says it tries to negotiate payment plans or reduce the debt whenever possible.

But Oklahoma tax attorney Paul Tom, who has represented dozens of people battling the firm, said while he has sometimes been able to negotiate the taxes owed, Linebarger's fees are always set in stone.


These six people received threatening letters from Linebarger. Click the image to read their stories.

Consumers tell a similar story.

Memnon, who is a high school ROTC instructor, was so worried about having his driver's license suspended that he used a credit card to pay Linebarger's $287 bill -- which he says the firm told him all stemmed from $1.25 in toll charges.

The Harris County Toll Road Authority said it doesn't send out bills until three toll violations have been incurred, and that it notifies people of their outstanding charges before handing over the debt to Linebarger. The agency wouldn't comment on Harry's specific situation though.

Linebarger declined to comment on any individual grievances. But it did say that it does everything it can to reduce errors and that the cost of collection -- even for a small amount like a toll -- can be significant. It also said that in general, toll violators are given multiple opportunities to pay before the debt escalates.

"While we understand that this is frustrating to some debtors, they can avoid all fees by doing what the vast majority of Americans do — pay their tolls when they're due instead of allowing them to go delinquent," said Linebarger partner and chief marketing officer Michael Vallandingham.

Debtors can avoid all fees by doing what the vast majority of Americans do -- pay their tolls when they're due."

– Michael Vallandingham
Linebarger partner and chief marketing officer

But Memnon says he wasn't notified of the 2009 toll charges or given a chance to pay until he received a $102 bill from Linebarger in July of 2012, which demanded he pay or attend a hearing. Confused, he immediately called the firm. After being told the violation was incurred by a rental car driver, he asked for proof the debt was his. When he didn't hear back and another call to the firm went unanswered, he became convinced it was a scam and didn't attend the hearing.

Then a new bill arrived in September, and the amount owed had nearly tripled, growing from $102 to a $287 bill, thanks to new collection fees and fines due to the missed hearing.

At this point, he had already fought the firm for months over the phone, so he gave up and paid.

Grieving mother Laverne Dobbinson received a particularly horrifying letter from Linebarger in 2012 -- billing her recently deceased son for $710 in damage to the New York City police car that killed him.


Courtesy Linebarger Goggan Blair & Sampson Linebarger partner Michael Vallandingham


Photo: John R. Coughlin Laverne Dobbinson received a $710 bill for damage to the police car that killed her son.

"I could hardly breathe -- I couldn't believe they were sending me a letter [like this]," said Dobbinson. "My whole family was outraged."

The City of New York did not comment, though at the time of the incident the city acknowledged the letter was sent in error.

Even when the mistake is clearly on the part of one of Linebarger's clients, those who end up in Linebarger's crosshairs feel like they have little recourse.

If these were consumer debts, like an old credit card bill, consumers would have a number of state and federal laws protecting them, and they could turn to an attorneys general office or the Consumer Financial Protection Bureau for help. CFPB officials declined to comment on whether they have oversight of government debt collectors but encouraged consumers to share their story or submit a complaint to the agency.

The main federal law regulating debt collectors is the Fair Debt Collection Practices Act. It prohibits collectors from charging any fee that wasn't already agreed to in a contract or permitted by state law. Collectors also aren't allowed to make false threats of arrest -- since consumer debts rarely land debtors behind bars -- and they are required to provide proof that a debt was incurred if the debtor requests it.

Federal consumer protection rules rarely apply to the government debts Linebarger collects, however, because they usually aren't considered "consumer debts." Speeding tickets and property taxes, for example, aren't considered a service or product that has been purchased, like an unpaid water bill.

So while shocking to some, Linebarger's high fees are completely legal. And the threats it makes are okay too, since the firm's government client can pursue an arrest warrant, foreclosure or other penalty to back it up.

"All of these [consumer] protections seem to go out the window," said Alex Kornya, assistant litigation director at Iowa Legal Aid.

Linebarger says that as a law firm, it is held to a higher standard than typical collectors. "Our law licenses, and thus our jobs, are always on the line," said Vallandingham.

Yet in lawsuits, Linebarger's attorneys have argued that consumer laws don't apply or that it has "immunity" to certain laws, claiming it operates as an agent of its government clients

Air Force Major Jose Iraheta has been battling Linebarger in court for more than seven years because the firm hit Iraheta with a foreclosure lawsuit while he was serving in the Middle East. While active duty military are able to delay paying property taxes without penalty until they return to Texas, Linebarger sued him over a $10,500 bill for unpaid property taxes.

All of these consumer protections seem to go out the window."

– Alex Kornya
Iowa legal aid attorney


Photo: Jeremy Freeman Air Force Major Jose Iraheta sued Linebarger after it tried to collect on property taxes while he was serving in the Middle East.

Linebarger dropped its lawsuit after he countersued, claiming the firm had broken state and federal laws. His case is ongoing. Linebarger would not comment on the suit.

"How can I defend other people's rights halfway around the world when I can't defend my rights at home?"  he said. "Linebarger holds itself to be above the law."

FBI probes and jail time

Despite decades of scandals and bad press surrounding the firm and its partners, Linebarger continues to wield widespread political influence and rake in new million-dollar contracts.

The scandals date back to its early days, when firm partners became infamous for using political connections to win contracts and change laws. Past controversies ranged from allegations of illegal loans to public officials to inappropriately influencing lawmakers, including a controversial Mexican getaway with a Texas Speaker of the House that reportedly involved a topless dancer.

Some critics thought the firm could even face extinction in 2002 after a major partner, Juan Pena, was indicted on charges that he bribed two city councilmen with more than $10,000. (See timeline)


Source: San Antonio Express-News Headlines from the 2002 bribery scandal.

Pena eventually pleaded guilty to bribery charges, lost his law license and was sentenced to 30 months behind bars. He did not respond to requests for comment.

Yet the scandals have continued. Take Chicago, for example, where Linebarger's contract was terminated in 2008 because the firm had paid for the trip of a top city official. The bad blood didn't last long though, with the city hiring it again in the same year.

"The incident ... was embarrassing to say the least, but we worked very hard to earn another chance to represent the City," said Vallandingham.

Meanwhile in Memphis, attorneys in a class-action lawsuit challenging the firm's fees questioned Linebarger's payment of millions of dollars to a local attorney who helped it win the city contract to collect taxes. After the lawsuit was filed, Memphis ended its relationship with the firm.

And in Texas, a partner was indicted in 2012 for covering up donations to a local elected official and his case remains ongoing. More recently, two Linebarger consultants have been at the center of alleged bribery schemes -- one of which is heading to trial and another that is still under investigation.

Linebarger says the firm itself has never been charged with committing a crime and the actions of a few individuals aren't representative of its overall business practices. But one former Linebarger partner, who asked to remain anonymous, said some of the firm's tactics for getting contracts made him uncomfortable and didn't always "pass the smell test."

So how does Linebarger keep getting new business? The firm touts its longstanding work in the field saying: "we are hired and rehired because we are good at what we do."


Illustration: Jesse Harp While Linebarger is able to go after consumers nationwide, the government clients it works for are in these 21 states.

But others say it's all about the money.

Linebarger spends millions on campaigns and lobbying efforts across the country. And it pays big bucks to influential current Texas public officials by putting them on its payroll -- a surprising but legal practice.

"They've discovered a niche that they can monopolize through political manipulation," said Byron Schlomach, a former fellow at the Texas Public Policy Foundation. "And they've become very good at it."

During the 2012 elections, for example, the firm spent nearly $500,000 on Texas political campaigns alone, according to public records.

Years earlier, the firm lobbied heavily for the 2004 law that allowed the IRS to use private collectors. It had spent nearly $700,000 on its overall federal lobbying efforts between 2003 and 2006. Linebarger was hired by the IRS as part of a pilot program in 2006, but the contract ended about a year later -- before the program was nixed entirely amid controversy over the use of third-party collectors.

Linebarger says it undertakes all of its political activities with "strict adherence to the law."

While co-founder and former partner Dale Linebarger said he believes elections should be government funded, he admits that political spending is vital to a company's success.

"The way you get access is you contribute to political campaigns, you go to fundraisers ... You make friends with these people," he said.

But even if all of the politicians and government agencies end their love affair with Linebarger, there are other private collectors that would be happy to take its place. What is really needed, consumer advocates say, is an end to the special treatment given to government debt collectors.

Until then, millions of Americans are left facing ominous threats and steep fees each year.

"They're bottom feeders; that's what they are," said Tom, the Oklahoma tax attorney. "The problem is they're bottom feeders with the power of the government behind them."

[CtrlAltDel]

Part of the issue is that it seems like every Tom, Dick, and Harry can start their own toll road in Texas, which leads to a multiplicity of practices and a diffusion of responsibility. I would wager that things would be much better if there were only one agency doing this.

Here's, for example, the road system in Houston. There are six agencies for just one, count 'em: one, metropolitan area.

[The Ghostbuster]

Would it be possible to combine the county toll authorities into regional toll authorities? Also, they should make the toll collection devices compatible statewide.

[jeffandnicole]

I've tried to help friends with this.
Backstory:
Friend is older lady, fixed income. She lives in Houston, but keeps car registered at in Louisiana at relatives house to save $. Again, fixed income.
Friend's niece uses her car. Niece blows through all kinds of tolls. Doesn't tell her. And gets into drugs / shenanigans. Friend is reluctant to report car stolen due to implications for niece.
Finally reports car stolen. Goes back to LA with family to visit. Finds lets from a law firm showing she owes > $5K in tolls, penalties, and fines as she missed her 'court case' to fight this.

What I find out when I dig in.
1.) The lawfirm is really just a debt collector that uses civil court to get their $.
2.) Their fees / penalties are not bound by any law and are astronomical
3.) HCTRA when contacted (I spoke with their head) wasn't aware of the crazy penalties that get tacked on after they 'sell' their debt off.
4.) There is no real recourse for 'violators'

As the car was register in LA, they really had no recourse against the friend. I gave them a fair offer and told them I'd pay it. They insisted on the $5K. I laughed and never gave it any more mind.

That being said, folks in Texas can have registration denied. Which can spiral into tickets, which can then spiral into jail. It's a viscous cycle.

So:
Friend is illegally keeping car registered in another state.
Friend loans car to niece who also violates laws.

Seems like crime runs in the family.  Why should we feel bad for them?

[ZLoth]

Also, they should make the toll collection devices compatible statewide.

AFAIK, the Texas Toll Tags (TxTAG, NTTA, EZ-Tag) as well as the Kansas K-Tag and Oklahoma's Pike Pass are compatible with the toll systems across the state of Texas, Oklahoma Toll Systems, Kansas Toll Systems, and most of the toll roads in Florida. NTTA tags can also be used at DFW International and Dallas Love Field.

[DNAguy]

I've tried to help friends with this.
Backstory:
Friend is older lady, fixed income. She lives in Houston, but keeps car registered at in Louisiana at relatives house to save $. Again, fixed income.
Friend's niece uses her car. Niece blows through all kinds of tolls. Doesn't tell her. And gets into drugs / shenanigans. Friend is reluctant to report car stolen due to implications for niece.
Finally reports car stolen. Goes back to LA with family to visit. Finds lets from a law firm showing she owes > $5K in tolls, penalties, and fines as she missed her 'court case' to fight this.

What I find out when I dig in.
1.) The lawfirm is really just a debt collector that uses civil court to get their $.
2.) Their fees / penalties are not bound by any law and are astronomical
3.) HCTRA when contacted (I spoke with their head) wasn't aware of the crazy penalties that get tacked on after they 'sell' their debt off.
4.) There is no real recourse for 'violators'

As the car was register in LA, they really had no recourse against the friend. I gave them a fair offer and told them I'd pay it. They insisted on the $5K. I laughed and never gave it any more mind.

That being said, folks in Texas can have registration denied. Which can spiral into tickets, which can then spiral into jail. It's a viscous cycle.

So:
Friend is illegally keeping car registered in another state.
Friend loans car to niece who also violates laws.

Seems like crime runs in the family.  Why should we feel bad for them?

It's not illegal in the state of Texas to keep your car registered in another state.

And stealing a car is very much illegal.

So you can victim blame all you want, but you sound like an unserious person who great forums like this one become a beating.

Please find another place to troll. Facebook, Reddit, or Twitter are over there.

[CtrlAltDel]

It's not illegal in the state of Texas to keep your car registered in another state.

I believe it is.

Not more than 30 days after purchasing a vehicle or becoming a resident of this state, the owner of a motor vehicle, trailer, or semitrailer shall apply for the registration of the vehicle for each registration year in which the vehicle is used or to be used on a public highway.

[SectorZ]

It's not illegal in the state of Texas to keep your car registered in another state.

I believe it is.

Not more than 30 days after purchasing a vehicle or becoming a resident of this state, the owner of a motor vehicle, trailer, or semitrailer shall apply for the registration of the vehicle for each registration year in which the vehicle is used or to be used on a public highway.

And even if it isn't illegal, they'll learn the hard way when they have an insurance claim if they did it to save on insurance costs.

[jeffandnicole]

It's not illegal in the state of Texas to keep your car registered in another state.

And stealing a car is very much illegal.

So you can victim blame all you want, but you sound like an unserious person who great forums like this one become a beating.

Please find another place to troll. Facebook, Reddit, or Twitter are over there.

OK buddy.

And the victims appear to be the law-abiding toll payers, where tolls will need to rise to compensate for those that don't pay.

[Scott5114]

What would any of you suggest to remedy this situation, other than to abolish toll collection statewide?

I can't believe I'm suggesting this, but, "drive to Oklahoma City and ask OTA how they manage to not fuck it up."

Folding all of the multitudes of toll-collecting agencies into a single Texas Turnpike Authority or TxDOT division probably wouldn't hurt. If you have six agencies screwing something up, you have to fix it six times. Having one agency involved gives one a single point of truth.

[kalvado]

What would any of you suggest to remedy this situation, other than to abolish toll collection statewide?

I can't believe I'm suggesting this, but, "drive to Oklahoma City and ask OTA how they manage to not fuck it up."

Folding all of the multitudes of toll-collecting agencies into a single Texas Turnpike Authority or TxDOT division probably wouldn't hurt. If you have six agencies screwing something up, you have to fix it six times. Having one agency involved gives one a single point of truth.

By the way... If I remember correctly, back in 2017 a law requiring cross compatibility of toll payment tags within US was enacted. 

[Scott5114]

What would any of you suggest to remedy this situation, other than to abolish toll collection statewide?

I can't believe I'm suggesting this, but, "drive to Oklahoma City and ask OTA how they manage to not fuck it up."

Folding all of the multitudes of toll-collecting agencies into a single Texas Turnpike Authority or TxDOT division probably wouldn't hurt. If you have six agencies screwing something up, you have to fix it six times. Having one agency involved gives one a single point of truth.

By the way... If I remember correctly, back in 2017 a law requiring cross compatibility of toll payment tags within US was enacted. 

It's clearly very well enforced.

[ZLoth]

[The Ghostbuster]

One Sticker To Rule Them All. One Sticker To Find Them. One Sticker To Bring Them All And In The Darkness Bind Them. In The Land Of Mordor Where The Shadows Lie.

Maybe the Lord of the Rings should have used stickers instead of rings.

[Road Hog]

Just don't drive a toll road. Problem solved.

[kalvado]

Just don't drive a toll road. Problem solved.

Sometimes that is easier to say than to do. For example, as far as I remember first non-tolled bridge across Hudson River is in Albany. Everything downstream from Albany is tolled.

[bwana39]

I've tried to help friends with this.
Backstory:
Friend is older lady, fixed income. She lives in Houston, but keeps car registered at in Louisiana at relatives house to save $. Again, fixed income.
Friend's niece uses her car. Niece blows through all kinds of tolls. Doesn't tell her. And gets into drugs / shenanigans. Friend is reluctant to report car stolen due to implications for niece.
Finally reports car stolen. Goes back to LA with family to visit. Finds lets from a law firm showing she owes > $5K in tolls, penalties, and fines as she missed her 'court case' to fight this.

What I find out when I dig in.
1.) The lawfirm is really just a debt collector that uses civil court to get their $.
2.) Their fees / penalties are not bound by any law and are astronomical
3.) HCTRA when contacted (I spoke with their head) wasn't aware of the crazy penalties that get tacked on after they 'sell' their debt off.
4.) There is no real recourse for 'violators'

As the car was register in LA, they really had no recourse against the friend. I gave them a fair offer and told them I'd pay it. They insisted on the $5K. I laughed and never gave it any more mind.

That being said, folks in Texas can have registration denied. Which can spiral into tickets, which can then spiral into jail. It's a viscous cycle.

It was a while back.

Here's an old CNN Money artcle about the shady practices of Linebarger Goggan Blair & Sampson LLP.

https://money.cnn.com/interactive/pf/debt-collector/government-agencies/index.html

"They keep figuring out ways to stack these fees up,” said Tai Vokins, a Kansas-based attorney and former assistant attorney general. “They’re preying on the absolute poorest people."

And this is all legal.

One of the biggest players in this industry is law firm Linebarger Goggan Blair & Sampson. It has worked for small-town school districts, the city of New York and at one point, the largest tax collector in the country: the Internal Revenue Service.

Based in Texas, Linebarger works for 2,300 clients nationwide and collects $1 billion for its clients each year.

The firm, which would only respond to interview questions in written statements, told CNNMoney that government agencies need the money it collects to fund vital services, such as teacher salaries and police budgets.

But the collection system is far from perfect. Government agencies sometimes hire Linebarger to hunt down decades-old debts that people can’t even remember incurring. Some turn over unpaid bills to collections just months after consumers have received them. And others provide the firm with inaccurate information, leading it to pursue the wrong person entirely. These agencies also issue the arrest warrants, foreclosure lawsuits and other harsh threats that Linebarger cites in its letters to debtors.

All of this can lead to some nightmare scenarios.

One Kansas man ended up behind bars three times because he couldn’t afford the growing bill for his unpaid speeding ticket, while another Kansas woman says she had her entire paycheck garnished for back taxes. A Texas woman was threatened with arrest for not mowing the grass on a property she didn’t even own. And an Oklahoma business owner is still bitter about the $112,000 bill he received for taxes he had already paid.

These consumers and many others have gone public with their frustrations. Some have filed complaints with state attorneys general, while others have even sued the firm. Yet, the outsourcing by government agencies continues and Linebarger’s business is thriving.

Despite decades of scandals over the way the firm gets business -- and even jail time for one of its top executives -- Linebarger still lands lucrative government contracts.


Source: Houston Chronicle, Texas Lawyer Click the image above to learn more about Linebarger Blair Goggan & Sampson’s history.

Many attribute this success to the millions of dollars the firm has spent wooing politicians, from local mayors to powerful players like former Texas Governor Rick Perry. Its political pull has even helped it get certain state and federal laws changed in its favor – including Texas legislation that allows it to charge debtors such high fees.

For one out-of-town driver who mistakenly failed to pay $7.50 in tolls on a Texas highway, these fees became a $157.50 bill in a matter of months. The toll road was due the original toll amount, plus $66 in administrative fees. Linebarger added $84 for itself.

The Harris County Toll Road Authority told CNNMoney that it uses the funds collected by Linebarger to help keep Houston’s toll roads drivable and safe. More than a dozen of Linebarger’s other current and former government clients were also contacted for this report, but the toll authority was the only one to provide comment.

Linebarger maintains that its fees are reasonable and depend on the kind of debt and how hard it is to collect.

By collecting these fees, Linebarger says it doesn’t have to charge the majority of the state and local governments that hire it, thereby keeping taxpayers from subsidizing its collection costs.

This is different from a consumer creditor like a bank, which typically has to pay for its collection costs out of the money recovered from debtors.

In a months-long investigation into the government debt collection industry and Linebarger, CNNMoney analyzed hundreds of consumer complaints obtained from six state attorneys general and the Federal Trade Commission, among other organizations. We interviewed more than 60 consumers, former Linebarger employees, attorneys and other experts. We also reviewed more than 100 lawsuits against the firm -- alleging everything from unfair fees to harassment.

CNNMoney found that with the power of government agencies behind them, debt collectors like Linebarger are able to play by their own rules, in essence acting above the law.

Thanks to legal exemptions, government collectors usually don’t have to follow the main federal law that regulates the debt collection industry. State consumer protection laws often don’t apply either. And when debtors have challenged Linebarger's government collections work in court based on other laws, the firm has gone so far as to argue it has immunity because it is an extension of the government.

Because the law so often lands on Linebarger’s side, consumers often end up in a black hole with little recourse.

They keep figuring out ways to stack these fees up. They're preying on the absolute poorest people."

— Tai Vokins
Former Kansas assistant attorney general

"I had no defense whatsoever," said Houston Army veteran Harry Memnon, who says his unpaid $1.25 toll charges became a nearly $300 bill.

Protections go ‘out the window’

While Linebarger isn’t the only government debt collector out there, it is one of the largest. And as it continues to grow -- with clients in 21 states -- so does the controversy surrounding its methods.

Linebarger says that consumers should typically receive at least one notice (and sometimes multiple notices) from the government before a debt ends up in collections.


Harry Memnon received a nearly $300 bill for unpaid toll charges.


Yet many people say the government never notified them, and Linebarger’s threatening letters and phone calls were the first they had heard of their debt. Angry, frustrated and suspicious consumers have posted complaints on sites like Ripoff Report, Yelp and the Better Business Bureau.

Some were so confused that they became convinced Linebarger’s collection claim was a scam and refused to pay. Others say that no matter how much proof they had provided that a debt wasn't theirs, Linebarger kept calling and sending them threatening letters.

And for those who just couldn’t afford to pay what they initially owed, the firm’s fees left them trapped in debt and fearful that they may lose their driver’s license, their home or end up in jail. After a class-action lawsuit challenged the fees Linebarger charged under a contract with the city of New Orleans, the Louisiana Supreme Court even ruled that the firm’s 30% fees were unconstitutional.

Yet Linebarger still has the Better Business Bureau’s A-plus rating, which the organization stands by. The BBB says Linebarger, which is a paying member, does a good job responding to complaints -- a requirement for the firm to stay in good standing. It also noted Linebarger’s complaint volume was in line with the size of the firm and that it had waived fees in a few cases where consumers hadn’t been notified of the original debt.

Linebarger says it tries to negotiate payment plans or reduce the debt whenever possible.

But Oklahoma tax attorney Paul Tom, who has represented dozens of people battling the firm, said while he has sometimes been able to negotiate the taxes owed, Linebarger’s fees are always set in stone.


These six people received threatening letters from Linebarger. Click the image to read their stories.

Consumers tell a similar story.

Memnon, who is a high school ROTC instructor, was so worried about having his driver’s license suspended that he used a credit card to pay Linebarger’s $287 bill -- which he says the firm told him all stemmed from $1.25 in toll charges.

The Harris County Toll Road Authority said it doesn't send out bills until three toll violations have been incurred, and that it notifies people of their outstanding charges before handing over the debt to Linebarger. The agency wouldn't comment on Harry's specific situation though.

Linebarger declined to comment on any individual grievances. But it did say that it does everything it can to reduce errors and that the cost of collection -- even for a small amount like a toll -- can be significant. It also said that in general, toll violators are given multiple opportunities to pay before the debt escalates.

"While we understand that this is frustrating to some debtors, they can avoid all fees by doing what the vast majority of Americans do – pay their tolls when they’re due instead of allowing them to go delinquent," said Linebarger partner and chief marketing officer Michael Vallandingham.

Debtors can avoid all fees by doing what the vast majority of Americans do -- pay their tolls when they're due."

— Michael Vallandingham
Linebarger partner and chief marketing officer

But Memnon says he wasn’t notified of the 2009 toll charges or given a chance to pay until he received a $102 bill from Linebarger in July of 2012, which demanded he pay or attend a hearing. Confused, he immediately called the firm. After being told the violation was incurred by a rental car driver, he asked for proof the debt was his. When he didn’t hear back and another call to the firm went unanswered, he became convinced it was a scam and didn’t attend the hearing.

Then a new bill arrived in September, and the amount owed had nearly tripled, growing from $102 to a $287 bill, thanks to new collection fees and fines due to the missed hearing.

At this point, he had already fought the firm for months over the phone, so he gave up and paid.

Grieving mother Laverne Dobbinson received a particularly horrifying letter from Linebarger in 2012 -- billing her recently deceased son for $710 in damage to the New York City police car that killed him.


Courtesy Linebarger Goggan Blair & Sampson Linebarger partner Michael Vallandingham


Photo: John R. Coughlin Laverne Dobbinson received a $710 bill for damage to the police car that killed her son.

"I could hardly breathe -- I couldn't believe they were sending me a letter [like this]," said Dobbinson. "My whole family was outraged."

The City of New York did not comment, though at the time of the incident the city acknowledged the letter was sent in error.

Even when the mistake is clearly on the part of one of Linebarger's clients, those who end up in Linebarger's crosshairs feel like they have little recourse.

If these were consumer debts, like an old credit card bill, consumers would have a number of state and federal laws protecting them, and they could turn to an attorneys general office or the Consumer Financial Protection Bureau for help. CFPB officials declined to comment on whether they have oversight of government debt collectors but encouraged consumers to share their story or submit a complaint to the agency.

The main federal law regulating debt collectors is the Fair Debt Collection Practices Act. It prohibits collectors from charging any fee that wasn’t already agreed to in a contract or permitted by state law. Collectors also aren’t allowed to make false threats of arrest -- since consumer debts rarely land debtors behind bars -- and they are required to provide proof that a debt was incurred if the debtor requests it.

Federal consumer protection rules rarely apply to the government debts Linebarger collects, however, because they usually aren't considered "consumer debts." Speeding tickets and property taxes, for example, aren't considered a service or product that has been purchased, like an unpaid water bill.

So while shocking to some, Linebarger's high fees are completely legal. And the threats it makes are okay too, since the firm's government client can pursue an arrest warrant, foreclosure or other penalty to back it up.

"All of these [consumer] protections seem to go out the window," said Alex Kornya, assistant litigation director at Iowa Legal Aid.

Linebarger says that as a law firm, it is held to a higher standard than typical collectors. "Our law licenses, and thus our jobs, are always on the line," said Vallandingham.

Yet in lawsuits, Linebarger's attorneys have argued that consumer laws don’t apply or that it has "immunity" to certain laws, claiming it operates as an agent of its government clients

Air Force Major Jose Iraheta has been battling Linebarger in court for more than seven years because the firm hit Iraheta with a foreclosure lawsuit while he was serving in the Middle East. While active duty military are able to delay paying property taxes without penalty until they return to Texas, Linebarger sued him over a $10,500 bill for unpaid property taxes.

All of these consumer protections seem to go out the window."

— Alex Kornya
Iowa legal aid attorney


Photo: Jeremy Freeman Air Force Major Jose Iraheta sued Linebarger after it tried to collect on property taxes while he was serving in the Middle East.

Linebarger dropped its lawsuit after he countersued, claiming the firm had broken state and federal laws. His case is ongoing. Linebarger would not comment on the suit.

"How can I defend other people’s rights halfway around the world when I can't defend my rights at home?” he said. “Linebarger holds itself to be above the law."

FBI probes and jail time

Despite decades of scandals and bad press surrounding the firm and its partners, Linebarger continues to wield widespread political influence and rake in new million-dollar contracts.

The scandals date back to its early days, when firm partners became infamous for using political connections to win contracts and change laws. Past controversies ranged from allegations of illegal loans to public officials to inappropriately influencing lawmakers, including a controversial Mexican getaway with a Texas Speaker of the House that reportedly involved a topless dancer.

Some critics thought the firm could even face extinction in 2002 after a major partner, Juan Pena, was indicted on charges that he bribed two city councilmen with more than $10,000. (See timeline)


Source: San Antonio Express-News Headlines from the 2002 bribery scandal.

Pena eventually pleaded guilty to bribery charges, lost his law license and was sentenced to 30 months behind bars. He did not respond to requests for comment.

Yet the scandals have continued. Take Chicago, for example, where Linebarger's contract was terminated in 2008 because the firm had paid for the trip of a top city official. The bad blood didn’t last long though, with the city hiring it again in the same year.

"The incident ... was embarrassing to say the least, but we worked very hard to earn another chance to represent the City," said Vallandingham.

Meanwhile in Memphis, attorneys in a class-action lawsuit challenging the firm’s fees questioned Linebarger’s payment of millions of dollars to a local attorney who helped it win the city contract to collect taxes. After the lawsuit was filed, Memphis ended its relationship with the firm.

And in Texas, a partner was indicted in 2012 for covering up donations to a local elected official and his case remains ongoing. More recently, two Linebarger consultants have been at the center of alleged bribery schemes -- one of which is heading to trial and another that is still under investigation.

Linebarger says the firm itself has never been charged with committing a crime and the actions of a few individuals aren't representative of its overall business practices. But one former Linebarger partner, who asked to remain anonymous, said some of the firm's tactics for getting contracts made him uncomfortable and didn't always "pass the smell test."

So how does Linebarger keep getting new business? The firm touts its longstanding work in the field saying: "we are hired and rehired because we are good at what we do."


Illustration: Jesse Harp While Linebarger is able to go after consumers nationwide, the government clients it works for are in these 21 states.

But others say it's all about the money.

Linebarger spends millions on campaigns and lobbying efforts across the country. And it pays big bucks to influential current Texas public officials by putting them on its payroll -- a surprising but legal practice.

"They’ve discovered a niche that they can monopolize through political manipulation," said Byron Schlomach, a former fellow at the Texas Public Policy Foundation. "And they’ve become very good at it."

During the 2012 elections, for example, the firm spent nearly $500,000 on Texas political campaigns alone, according to public records.

Years earlier, the firm lobbied heavily for the 2004 law that allowed the IRS to use private collectors. It had spent nearly $700,000 on its overall federal lobbying efforts between 2003 and 2006. Linebarger was hired by the IRS as part of a pilot program in 2006, but the contract ended about a year later -- before the program was nixed entirely amid controversy over the use of third-party collectors.

Linebarger says it undertakes all of its political activities with "strict adherence to the law."

While co-founder and former partner Dale Linebarger said he believes elections should be government funded, he admits that political spending is vital to a company’s success.

"The way you get access is you contribute to political campaigns, you go to fundraisers ... You make friends with these people," he said.

But even if all of the politicians and government agencies end their love affair with Linebarger, there are other private collectors that would be happy to take its place. What is really needed, consumer advocates say, is an end to the special treatment given to government debt collectors.

Until then, millions of Americans are left facing ominous threats and steep fees each year.

"They're bottom feeders; that's what they are," said Tom, the Oklahoma tax attorney. "The problem is they're bottom feeders with the power of the government behind them."

Linebarger:

In Texas , like almost anywhere else, government is going to get theirs. In Texas, most governmental entities have little or no in-house counsel. If it has anything to do with monetary collection, it is almost universally Linebarger with token competition from pbfcm (Perdue) and a few brave local attorney firms. . Linebarger started out decades ago as the go to collector for ad-valorem (property ) taxes. Ironically, there are fewer "tax sales" since Linebarger is the defacto collector.  Linebarger has branched out to collections for municipal utilities (particularly electricity), toll roads, funds owed to state colleges and universities, and pretty much anything you owe to any governmental agencies originally in Texas and now throughout the United States (with a few EXCEPTIONAL exceptions Note: Louisiana).



CTRMA and NTTA are run as independent neo-governmental corporations. HCTRA (particularly) is run as part of the Harris county government. Whereas almost (if not) all  of the other toll providers in Texas offer pay-by-mail, HCTRA does not. Harris County's position is as a governmental entity in Texas, they are not legally allowed to "offer credit terms" to anyone, therefore they cannot offer pay-by-mail. This was fine and good UNTIL Westpark and others became "EZ Tag Only". SO if you do not have a compatible tag with funds attached, you have a violation (plus the toll) simply for driving on the road.  Compatibility of the tags is not a big problem. Both the NTTA TollTag, and the CTRMA/TxDOT TxTag  are both fully compatible on all HCTRA facilities. Tag interoperability in Texas, Oklahoma, and Kansas is pretty much universal.

Now to this woman's dilemma.  Linebarger can be a pain in her butt, but as long as she is in Texas, they really cannot collect it. It eventually will become problematic registering a car or renewing a Texas driver's license, but as far as actually collecting it, they are really toothless against Texas residents in toll cases.

I am assuming that this woman kept herself as a Louisiana resident. The primary reason one would do this is medicaid or in the past Obamacare eligibility. While transferring a car registration to Texas is a not insignificant amount, GENERALLY it would be  offset by the difference in car insurance costs within a couple of years. Another issue in the Houston area would be the emissions check if the car is less than 20 years old.

I have said this before, it is GENERALLY easier for the Texas toll road authorities to collect out-of-state scofflaws than in-state.

[bwana39]

What would any of you suggest to remedy this situation, other than to abolish toll collection statewide?

I can't believe I'm suggesting this, but, "drive to Oklahoma City and ask OTA how they manage to not fuck it up."

Folding all of the multitudes of toll-collecting agencies into a single Texas Turnpike Authority or TxDOT division probably wouldn't hurt. If you have six agencies screwing something up, you have to fix it six times. Having one agency involved gives one a single point of truth.

Scott,

This is almost solely a HCTRA issue.  The beauty of the locals controlling the agencies is that you don't have a single entity controlling it and you can build what you want or need.

[wxfree]

Just don't drive a toll road. Problem solved.

I'm close to this.  I'm fortunate that I rarely go where the toll roads near me go, so I use them at most a few times a year.  After every use, I check my TxTag account to make sure all of the tolls were paid, and I put money in my account manually to make sure that it never runs dry.  For months my debit card was deactivated every time a newspaper tried to charge me its $1 introductory rate, which I authorized, because it was a small amount that might evade scrutiny but the information, verifying that the numbers were correct, could enable larger amounts of fraud later.  It got the attention of the computer and my card was disabled until I responded.  This could have resulted in a TxTag charge being refused and then I start having unpaid tolls that no one tells me about until there are thousands of dollars in late fees added.  I verify every toll payment, which is easy in my case.  Frequent users can still check the amount charged with the amount they expected to spend.

[ZLoth]

One of the Texas toll roads is right near my home, but even then, it's rare that I use it because of the frontage roads. Even then, I still maintain the NTTA account because there is no monthly fee, and the ZIP cash rate is now double the TollTag rate. Having said that, if you let your NTTA account go in arrears, then you can't renew your Texas vehicle registration.

[kalvado]

One of the Texas toll roads is right near my home, but even then, it's rare that I use it because of the frontage roads. Even then, I still maintain the NTTA account because there is no monthly fee, and the ZIP cash rate is now double the TollTag rate. Having said that, if you let your NTTA account go in arrears, then you can't renew your Texas vehicle registration.

Thinking about it, would it make sense to allow 1 month renewal? That should still achieve the purpose, but less likely to crash normal life.

[Road Hog]

Just don't drive a toll road. Problem solved.

Sometimes that is easier to say than to do. For example, as far as I remember first non-tolled bridge across Hudson River is in Albany. Everything downstream from Albany is tolled.

That's fair, but something tells me NY / NJ tolling is more on the up-and-up than in places where people don't look on a regular basis.