Controversial Industry Veteran Bill Bartmann Dies at 68

According to a report in TulsaWorld, debt buying and collection industry veteran Bill Bartmann has died following heart bypass surgery.

insideARM has written extensively about Bartmann and his career over the past 10 years.  In the mid-1980's he founded Commercial Financial Services (CFS) with his wife and Jay L. Jones. The company purchased credit card debt from banks and worked to collect on it in-house, and used money from bond issues to buy more accounts. At its peak, CFS employed 3,900 workers in Oklahoma City and Tulsa.  

In the late 1990's an anonymous letter sent to rating agencies revealed a scheme of using a shell company called Dimat Inc. to buy accounts the company couldn't collect, in order to meet goals needed to pay off bondholders.  CFS’ credit rating fell and it filed for bankruptcy. Prosecuters indicted Bartmann and others. His partner, Jones, struck a deal, agreeing to serve as the government’s key witness linking Bartmann to the shell company. Jones served a 5-year sentence after pleading guilty to conspiracy and fraud.

Bartmann’s defense claimed he was just buying Jones’ CFS shares, and Jones was making the Dimat purchases behind Bartmann’s back so he could form a rival collection agency. In 2006, after hearing eight weeks of testimony from 53 prosecution witnesses, jurors deliberated for more than four days before acquitting Bartmann of 57 counts of conspiracy, fraud and money laundering. 

In the midst of the financial crisis in 2008 Bartmann developed a series of training programs to teach individuals to buy and collect on portfolios of defaulted credit-card debt and, in 2009, he published a book called "Bailout Riches," which describes the opportunity he says the bank-bailout and recession of 2008-2010 has created. The book made the bestseller list on Amazon, the Wall Street Journal, USA Today and BusinessWeek.

He then formed the aptly-named CFS II, followed by a public relations tour challenging the rest of the debt collection industry to stop abusing consumers. His efforts included recommending the "Bartmann Bill for Ethical Debt Collection" in Oklahoma (which passed the state senate but was later put on hold for further research), and, in a 2013 article on Huffington Post, reiterating a “plan” he initially floated in the Christian Science Monitor, freezing debt collector lawsuits until the national unemployment rate drops below 6 percent.

He said, “My industry is overrun with scum bag collectors across America who repeatedly abuse consumers who don’t know their rights. Fortunately, we can stop this abuse. And I know just how to do it.”

In 2014 Bartmann argued that nonprofit organizations could accept donations of consumer debt accounts and use the collections on those accounts to fund their operations. He says the move would help consumers, nonprofits, and banks while hurting the “traditional” collection industry and the attorneys it employs.

His latest venture, Financial Samaritan provides services for debt-negotiation, job search, social services and financial literacy -- for free. Their theory is that consumers will buy stuff from them later ("After you’re finished paying off your debt, you may need to purchase the products and services we recommend").

One thing Bill Bartmann accomplished that was indeed quite unique within the ARM community was to gather positive national press, including many accolades, and this feature on the CBS Evening News.

Within the ARM community, Bartmann did not receive such a warm response. Many felt that his public statements were disingenuous and unfairly bashed the industry. In 2013, one collection agency posted an open challenge to him on its website,

“Congratulations Mr. Bartmann,” the company writes, “The Affiliated Group — along with ACA International and its nearly 5,000 member organizations which represent approximately 300,000 men and women who dutifully work with consumers to resolve debt issues — have those goals too. We just don’t repeatedly pat ourselves on the back for articulating the obvious.

...Let’s see it, Bill. Let’s see your commitment to ‘reforming the debt collection industry.’ Throw this lazy narrative in the trash and engage in some real dialogue with other agencies with proven track records in terms of compliance and best practices. Prove that a cleaner collections industry and consumer advocacy truly lie at the top of your priority list, well ahead of your public profile or your next TV appearance.”

It is unlikely the debt collection industry will see another personality like Bill Bartmann.