According to a statement from newly formed collection agency Kramer, Meggison & Taylor LLC, the firm has "no association with Mann Bracken, and just, several lawyers who worked together in the past formed a new firm to resurrect their careers." I also heard from another source that bacon is now good for you.

Whether you believe the statement or not, it is clear that Mann Bracken and its former owners may be responsible for serious violations. These violations were substantial enough for regulators from Maryland and Minnesota to shut the company down.

Mann Bracken is now in receivership, and receiver Cheryl E. Rose is pursuing additional claims against the firm. Rose stated that she is "pursuing litigation to see if there are parties that might be responsible for what happened to Mann Bracken."

Mann Bracken was accused of widespread violations of the Fair Debt Collections Practices Act, of which many claims are still pending. The greatest wrongdoing was the assignment of its arbitration cases to a related firm. National Arbitration Forum (NAF) shared common ownership with Mann Bracken, creating a very clear conflict of interest. Accretive LLC was the owner of both Mann Bracken and NAF.

As a result, arbitration clients had no chance against the collector, since the arbitrator had clear financial incentives to side with Mann Bracken. Indeed, “in each and every case where a business entity brought a claim against a consumer and the matter was disposed of by hearing, the NAF arbitrator ruled in favor of the business entity — a 100% success rate.” This was the conclusion of the City Attorney for San Francisco, CA after reviewing records obtained from NAF.

In a number of states, default judgments awarded to Mann Bracken were reversed. New York Attorney General Andrew Cuomo led the charge by throwing out nearly 100,000 judgments against New Yorkers by the firm.

Given the scope of violations against Mann Bracken, it is clear that Kramer, Meggison & Taylor LLC will not enjoy the same cozy relationship that it had with NAF. The scrutiny that this firm will have to overcome is far reaching. Even though Mann Bracken came crashing down, its shadow still lurks over the new firm.

Debtors should always do what they can to repay valid debts. That being said, no one deserves to be a victim of any firm that breaks the law.

By Kenneth Long on August 9, 2010

The Internal Revenue Service has scored one for the disadvantaged tax filer. The IRS announced that it will no longer supply banks with the information they need to determine the likelihood that a tax filer will actually receive their refund.

This "debt indicator" would previously inform banks if a tax filer owed money for child support, back taxes or student loans that had been defaulted on. However, the IRS has agreed with numerous consumer groups that the information does more harm than good. It gives predatory lenders the information they need to provide high interest refund anticipation loans (RALs) to tax filers in large numbers.

While this does not stop the practice of RALs, it does change the marketplace substantially. For one, those who are poor credit risks may no longer even qualify for a RAL. Anyone who does qualify may see the average fees increase beyond the 400+% APR that is currently charged on many such loans.

Since most federal tax refunds are direct deposited in about 10 days, the need of such high interest loans should be minimal. However, predatory lenders push these products on poorly educated and financially desperate consumers when they are eager to obtain their much anticipated income tax refund. Many of these households receive much larger refunds due to the earned income tax credit (EITC) and child tax credits.

RALs are specifically designed to skim hundreds of dollars from each tax filer's return at exceptional interest rates and minimal risk. However, without the information from the IRS regarding seizure of tax refunds, RALs now carry tremendous risk. It is up to each bank to determine whether it will approve a RAL. While it is possible that some banks may review a credit report for signs of seizure, it is likely that RALs will no longer be an option for most households regardless of what their credit report shows.

The gluttonous business models of paid tax preparers are about to get a real shock. Now they must depend more on their ability to overcharge for preparation and filing of income tax returns. We expect that other financial products will be emphasized as a way to recover some of the lost profits now that RALs are much less feasible.

Tax filers who want help with their income tax return can avoid predatory preparers. Instead, they can either utilize a reputable tax filing service, prepare their own returns using do-it-yourself software or get help with an IRS volunteer return preparation partner. AARP's TaxAide and the IRS Volunteer Income Tax Assistance (VITA) programs provide free tax preparation and electronic filing to lower income households.

With this change, we can score one for the less fortunate. Most of these tax filers have no idea how much money they are throwing away. It's good to make a change that benefits those least fortunate folks who get taken to the cleaners every year.