Debt collectors are vicious and they make millions, much of it illegally. It may not be your debt, but it could be your problem. One of the collection agency's latest tactics is bullying blameless consumers into paying debts they never owed. They use illegal tactics to collect money and they don't care who they collect it from. They will try to collect from the wrong people even if that person never owed a debt.
For
example, the FTC charged that as much as 80 per cent of the money
collected by Capital Acquisitions and Management, a large
debt-collection firm, came from consumers who never owed the original
debt in the first place. CAMCO agreed to a $300,000 civil penalty in
March 2004, but that didn't stop them; they evidently considered the
fine just another cost of doing business. The FTC eventually
succeeded in shutting CAMCO down. Here's a guess: they reopened for
business under another name.
In
July 2005, the FTC won a record $10.2 million court judgment against
National Check Control after accusing the debt collector of illegally
threatening consumers with arrest and wage garnishment. Again, many
of the consumers targeted by National Check Control didn't owe the
original debt, the FTC said.
Allied
Interstate was sued by the
Minnesota attorney general for repeatedly calling innocent consumers
despite requests to stop. Allied eventually agreed to a settlement
that prohibits it from contacting such consumers after being orally
told that they don't owe the debts in question.
Applied
Card Systems hassled relatives, neighbors and employers with repeated
phone calls in its efforts to track down debtors, according to the
FTC. The company ignored requests to stop calling, and its
representatives sometimes used obscene language when its hapless
targets protested that they didn't know how to contact the debtors.
The company agreed to a consent decree that prohibits it from
harassing consumers.
They
frequently engage in illegal practices such as:
- Filing lawsuits with no documentation
- Pursuing debts that are not actually owed by the person being targeted
- Attempting to collect, improperly suing, or threatening to sue people on debts that are past the applicable statute of limitations or were settled and closed via bankruptcy
- Reporting inaccurate creditor information
- Impersonating law enforcement and threatening to have a person arrested, garnish a person's wages, seize their property, etc.
- Failing to validate debt in writing when requested
- Continuing to call a person's place of employment when instructed not to
- Ignoring cease-and-desist notices to stop telephoning and communicate only via mail
- Verbally abusing, using obscene language, threatening consumers
Debt
collectors protest that most firms are ethical, law-abiding and
provide a needed service that helps reduce borrowing costs for all
consumers. But the economics of debt collection often encourage the dogged pursuit of innocent
consumers.
They often attempt to collect on debts so old that they
used to be considered uncollectible and even many that have been
discharged through bankruptcy. Getting a list of people who used to
owe money can be had for as little as 25 cents for each $100 which
means they can make a profit if they can get debtors to repay even a
tiny fraction. They have also learned they can also extort money from
people who don't owe it.
Under
the Fair Debt Collection Practices Act, collectors are supposed to
advise consumers that they have a right to dispute the debt, but that
if consumers don't do so promptly, in writing, the collector can
assume after 30 days that the debt is valid.
Once
collectors are notified that they've contacted the wrong party or
that the consumer denies owing the debt they are supposed to provide
proof of the debts and if they can't they are supposed to cease all
attempts at collection. Usually, they don't.
If
you're contacted about a debt you don't owe:
- Know your rights!
- Assuming the sleazy operators will provide it, get the name of the collector, its address and a telephone number.
- You can tell the collector on the phone to stop calling, but that won't preserve your rights under Federal law.
- Send a certified letter, return receipt requested and make clear they contacted the wrong party, that you don't owe the debt and that you don't want to be called again.
- If they continue to call, contact your state's attorney general's office, but don't always expect them to do a lot; as government officials, they're always super busy (that's a joke). You can also complain to the Federal Trade Commission, but they won't intervene in individual cases.
You
need an account at the FREE Credit Karma! If a collection agency
posts false information on your credit report, dispute the item immediately with
the credit bureaus. Include copies of the certified letter you sent
the collector and any complaints you filed with regulators. Don't
wait until you're about to apply for a loan to check your credit
report! Check it regularly!!
Consumers
can bring lawsuits against collectors but that can cost you. You can
contact the National Association of Consumer Advocates for referrals
to attorneys who handle such cases.
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