Handling Abusive Collection Agencies
We’ve all experienced financial distress at one point or another. Unexpected bills, loss of employment and pay cuts can all affect our monthly expenditures and force us to tighten the purse strings a bit. Sometimes we even fall into debt with our creditors, and that is when the collection agencies start calling.
According to statistics released by the Federal Trade Commission (FTC), there are more complaints lodged every year about abusive collection agencies than about all other businesses combined. Government agencies are flooded with reports of threats, harassment and inappropriate phone calls from collection agencies nationwide.
Although collection agencies are governed by the Fair Debt Collection Practices Act (FDCPA), many still seem to slip through the cracks, and a large part of this is because people don’t realize that they have rights when it comes to debt collections. Even when consumers owe money to one or more entities, they still have law on their side when it comes to harassment, and it is important for individuals to stand up for those rights.
Why do Collection Agencies Get Away with Abuse?
One would think that with the laws governing debt collection, the collection agencies would tone down their mistreatment of consumers. This is not the case, however, says debt counselor Mark Hassler from Houston, TX. Collection agencies and their employees are motivated by several factors that result in abusive debt collection practices.
Collection agency employees are typically required to take between two and six weeks of training before earning a headset and cubicle of their very own. During this training period, they are taught a collection script and are instructed to be ruthless in the pursuit of delinquent accounts.
If they don’t collect debts, then they aren’t given their commission and therefore aren’t paid. This is quite a motivator, especially since the employees might be trying to get out of debt themselves.
“Many collection agencies don’t inform their employees about the laws,” says Hassler. “That way, it’s the employee who screws up and not the agency.”
Collection agencies know that if they ever get into hot water with the FTC or another government agency that they can simply dissolve their current company and their assets and set up shop under a new name in a different building.
This encourages the collection agencies to go to extreme measures to collect the debts that are owed before receiving complaints for abusive behavior.
Collection agencies know that eight out of ten consumers aren’t aware of their rights when it comes to debt collection. With that in mind, they are free to take whatever action is necessary to elicit payment.
How to Handle Abusive Collection Agencies
When faced with an abusive collection agency, your best course of action is to be proactive. Unless you begin documenting your experiences from the beginning, you won’t have enough information to protect yourself.
First of all, you must be informed. Do some research on debt collection laws in your state as well as the federal laws set forth by the FDCPA. Know what constitutes abusive behavior, and what the procedures are for battling the abuse. Having a full understanding of the laws surrounding debt collection will make you better prepared to handle it in the future.
Most likely, you will be contacted by phone concerning the debt, and this may be either at your home or place of work. When you receive the first phone call and you feel that you’ve been mistreated, calmly tell the debt collector that you do not want them to call again. Explain that you have rights under the Federal Debt Collection Practices Act, and that you are invoking them as of that phone call. Advise them that future correspondence must be conducted through the mail.
Many times, this will work, and you will never receive another phone call, but if the debt collector persists, you will have to put it in writing. Compose a letter to the collection agency informing them of your desire not to be contacted by phone, and send it by certified mail. Keep a copy of the letter for your records.
Once the collection abuse has reached this point, you should begin to create a paper trail. Every time that the collection agency calls, write down the substance of the conversation in a notebook designated as a call log. Note the date and time of the phone call, the debt collector to whom you speak, what was said during the conversation, and whether or not the situation was resolved. This is something you will need later if this ever progresses to court.
Your next step will be to contact the FTC, the Better Business Bureau and your state’s Attorney General to make a note of the situation. Inform all three agencies that you are being contacted illegally by a credit agency. Although none of these entities will personally fight your battle, your complaint will be noted and used if several similar complaints are given.
You are also legally allowed to record conversations with a collection agency as long as you inform the debt collector that you are taping it. Recorded conversations can be used in court if it ever progresses that far, and many do.
Examples of Abuse
Abuse from collection agencies is defined differently from state-to-state, but here are a few examples of harassing and abusive statements that debt collectors might make and can be construed as such.
- “I’m going to keep calling you until you decide to pay.”
- “I’ll personally make sure that your credit is ruined unless you remit payment immediately.”
- “You know the old loan shark rumor about breaking people’s kneecaps? Well, that isn’t an old wive’s tale.”
- “What, are you stupid? Don’t you know how dumb it is not to pay your debts?”
- “I’m sorry, but I’m going to have to continue to call you. There isn’t anything you can do about it.”
- “I’ll call your mother, your father, your ex-husband, and whoever it takes to collect this debt.”
- "You told me last time I called that you would pay. Obviously, you’re a liar.”
- “It’s pretty pathetic that you can’t manage to pay your bills.”
It is also considered abusive if the debt collector refuses to or fails to disclose his or her name and the collection agency for whom he or she is calling.