Anyone Feel Sorry For Debt Collectors?

by Ron Haynes

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).

About the author

Ron Haynes has written 1001 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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{ 11 comments }

Bryan

Actually, the Fair Debt Collection Practices Act does apply to banks. It applies to any person of business that engages in the act of collecting a debt. So if you feel your bank is taking liberties you can and should stand up for yourself.

Also, if you can’t seem to get a supervisor or anyone who will act professionally, you could always make them stop. All it takes is a short letter signed by you stating that they must cease any and all collection efforts – send it via certified mail and kiss the calls goodbye.

Admin

That’s a common misconception. The FDCP Act only applies to those who “collect debt on behalf of another.” States have their own debt collection acts, but I’m only referring to the Federal act. I ran this by several attorneys prior to printing it. Some courts have found that buyers of debt are covered by it as well since they didn’t actually issue the debt.

Check out the Act itself or the People and entities covered by the FDCPA section of Wikipedia.

Bryan

Now that I read the act in further detail it says under the definition of “Debt collector”…

“…The term does not
include—
(A) any officer or employee of a creditor while, in
the name of the creditor, collecting debts for such
creditor;”

Which is interesting because for the banks I have worked for we were always told to act within the restrictions of the FDCPA. I’m going to have to investigate this further.

Eileen Flanagan

I do feel sorry for debt collectors–not the people who own the companies, but for the people who have to do such a soul deadening job. Thanks for pointing out some of the dangers.

Eileen
http://www.imperfectserenity.com

Marie Beausoleil

There’s an award for you over at my blog – http://ofbooksandwriting.wordpress.com

Henry

What is the fear in a third party collection notice ? All the bill collector is trying to do is sell you that you owe the debt. If you dont want to pay the debt it is your job to sell the collection agency that you dont owe it. There are plenty of tactics to use to sell your ability to not have to pay. (with out litigation)

Jan

“Sell me that I owe the debt”!!!!!! Why should I have to “sell” them that I don’t owe them??? Sorry …but having dealt with a less than honest debt collector that does not set well! They DID not sell me!!! They out right LIED and I caught them in the middle of it. They were lucky that I did not take them to court! Debt collectors will never make my warm and fuzzy list!!

Chelo Marroquin

You are probably right debt collectors will start crossing the line to try to collect a debt (not that they already aren’t). As they are paid bonuses most likely for collecting the most etc. But you would think that with things being so tight for everyone they would try to be nicer to their clients. If I was being hounded by two collection agencies and 1 was decent to me and the other was rude and horrible if I had to chose one to pay I would pay the nice guy. Why pay the ogre when it’s being reported either way.

Joshua @ Accountable Living

Wow, there is some serious misconception here about debt collectors.

1) The FDCPA only applies to third-party debt collection agencies and attorneys, not to the originating financial institution or debt originator.

2) NCO is a privately owned corporation and is not a subsidiary of any bank

3) Debt collection is not “soul deadening”. It is in fact a very robust business that provides a needed instrument. How soon we forget that the reason debt collectors exist is because of consumers who largely neglect to pay

4) Debt collectors are doing a job that not a lot of people would like, but due to the number of restrictions that exist, although many cry “harassment”, it is more noise than anything. States have even more stringent rules than the Federal government and this has truly toned down harassment over the last 30 years.

5) Debt collectors help bring money back to a large swath of companies and insitutiions, not just banks. They collect money for hospitals, insurance companies, utility companies, and the list goes on and on. It is BECAUSE they bring money back into the system that costs by those companies can be kept down. Remember, they are in it for a profit ( usually ) or at least need to make sure that they can cover their cost of business. When consumers don’t pay, they have to either collect that money in some way or charge customers more. Which would you prefer?

I could go on, but suffice to say, collectors as a whole are a hard working crowd and deserve more respect than they receive.

Bryan

Hear hear! I once worked for a collection agency as a collector. I loved it because despite the misconception, collectors are not professional jerks, they are actually there to help and often times have many tools available for loss mitigation to help achieve a win-win situation for both the company and customer.
As far as harassment is concerned, my policy was: during the first 30 days of being delinquent the customers spoke to customer service reps, if they made it to my desk we weren’t in the delightful world of customer service anymore. My job was to get them back on top or begin legal for repossession – not sugar coating – because it’s serious.
I went into every conversation the same, I was very nice to those who were nice – tried to be nice to those who were less delightful – but those who stepped out of line and were downright rude and belligerent… well I wasn’t so nice.
Treat others as you wish to be treated. Whether you like the situation you are in or not, collectors are often your last chance.

Gypsie

I am pretty sure that debt collectors cannot continue to call/harass you at work if you tell them not to call you there anymore.

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