Collectors Can Be Difficult
We have all had one of those bad guys call us before…the collector. Normally from a bill we forgot to pay and ran a little late, we answer the call and on the other end a harsh tone and demanding voice. Meet the adult version of a fourth grade playground bully. They use threats and misinformation to get their way. It makes not answering the phone or screening calls a way of life for some people. What most don’t know is that the consumer has rights, regardless if they are in debt and have run into financial hardship, or have run late on making a payment. Congress passed a little known act called the Fair Debt Collection Practice Act (FDCPA) in 1978. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act.
To better understand their practices, we should explore their job duties. They are employed either by the original creditor or by a collection agency to recover debts that have defaulted. They are paid by a percentage of what they recover. This is an incentive for them to recover more of the debt from you, regardless of the situation or negotiation. They will use bullying tactics and threats of lawsuits, etc to get paid. It is part of their job, and most are very good at it. But some of their practices are prohibited by the FDCPA which you may not be aware of.
Some of the things they’ll say:
“We will garnish your pay check” - This is a pretty common threat used by collection agencies, which rarely happens. The bill collector needs a Judgment from a court in their favor, but this is not normally cost effective for collection agencies unless they have reason to believe that you have the money to satisfy a judgment and recoup their legal costs. Some collectors will go as far as saying they can take up to 50% of your pay, but this is untrue. Most states prohibit a garnishment to about 20% of your net pay (after taxes). Don’t let them fool you!
“If I don’t have payment by today, we will…” - Remember, collectors are paid by commission to do their job and also have quotas they must reach to keep their job or pay rate. So expect them to say anything if they feel that it will result in you making a payment and to create a sense of urgency. Some collectors make six figures annually if they put enough pressure on their collection accounts.
“Pay in full, We will not accept monthly payments”- The more you pay the less risk you pose at running late or missing another payment, so they will push you to pay the full debt. Payments are always an option. If a collection agency is demanding payment in full, go back to the original creditor and you should be able to setup a monthly payment plan with them easily.
“I am in the legal department…” This is another very common threat used by collectors, but again is often untrue. They know if you think they are in a position of greater power to force legal action, you will be scared; no one wants to go to court. From a business perspective, legal costs are expensive, so unless the debt is large enough to justify the expense, it will not go that far. Most large creditors often write off the debt in their taxes, it is part of the business.
“The FDCPA does not apply to this…” - This is sometimes a grey area of the act. Some have interpreted that if the original creditor is the one making the call for collections, the FDCPA does not apply. However many states, like California have passed their own legislation which mirrors the FDCPA and does apply to original creditors.
Collectors sometimes resort to unsavory tactics that are illegal. This includes contacting you outside the hours of 8:00am to 9:00pm, contacting you after being asked to stop (written notice), contacting you at your place of employment after having being told that it is not acceptable. Also illegal is if they use abusive or profane language in the course of communication related to the debt or if they make contact with third parties, discussing the nature of the debt or threatening such action.
For more information on the FDCPA, visit the U.S. Federal Trade Commission’s website at http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm or contact a local specialized attorney if you feel your rights have been violated. Sometimes the best thing you can do is turn to an expert to deal with these collectors to reduce your stress and make sure the situation is handled properly. You may want to contact a Debt relief company like http://www.NegotiateMyDebt.com that employs Debt negotiators which are certified to deal with creditors and who have built relationships with some large creditors and collection agencies to make the process much more effective.
Add comment November 9th, 2007
