According to a recent Wall Street Journal article, even debt collectors are falling on hard times. Cry me a river.
By all accounts, debt collectors should be enjoying the best of times, but even they are falling prey to the lack of excess cash in our economic system. Most people think that the debt collection business should be great but even debt collectors are finding that the old phrase “you can’t squeeze blood from a turnip” is especially relevant.
The article had a very juicy tidbit:
“NCO Group Inc. of Horsham, Pa., which is owned by an investment arm of J.P. Morgan Chase & Co., said it posted a $14.8 million net loss in the quarter ended June 30 because of ‘lower-than-expected collections’ on accounts receivable it had acquired.”
Did you catch that? The bank that issued the credit card can’t seem to collect it, so they turn it over to another division in the company … but they can’t collect it either.
Does anyone else sense an impending bailout of debt collection agencies?
I personally believe that when times get this tough, debt collection agencies will resort to activities that are on the edge of illegal. Some will probably resort to more abusive phone calls at home and work as well as threats of lawsuit or other legal action.
If you find yourself on the receiving end of a debt collection phone call that you find harassing, intimidating, or otherwise threatening, you DO have rights according to the Fair Debt Collection Practices Act. A debt collector (defined as someone who collects debts on behalf of another) may not harass, oppress, or abuse you or any other third parties they contact. For example, debt collectors may not:
- use threats of violence or harm
- publish a list of consumers who refuse to pay their debts (except to a credit bureau)
- use obscene or profane language
- repeatedly use the telephone to annoy someone
- make any false or misleading statements when collecting a debt
- falsely imply that they are attorneys or government representatives
- falsely imply that you have committed a crime
- falsely represent that they operate or work for a credit bureau
- misrepresent the amount of your debt
- indicate that papers being sent to you are legal forms when they are not
- indicate that papers being sent to you are not legal forms when they are
- threaten that you will be arrested if you do not pay your debt
- claim will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so
- clim that actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.
- give false credit information about you to anyone, including a credit bureau
- send you anything that looks like an official document from a court or government agency when it is not
- use a false name
It’s a pretty large list, but always keep in mind that it only applies to those collecting debts “on the behalf of another.” In other words, a bank that issued a loan to you, would not be held to these standards (the banking lobby is very powerful, no?).
If you feel that you’ve been the victim of illegal activity based on a debt collector’s threats or harassment, report your experiences to your state Attorney General’s office and the Federal Trade Commission. Many states have their own debt collection laws, and your Attorney General’ s office can help you determine your rights. You can reach the Federal Trade Commission by telephone at 1-877-FTC-HELP (1-877-382-4357).