debt collection agency
Consumers with debt-related complaints have a solution
In a prior post, we discussed the biggest complaints that consumers have and how credit card and other individual debt-related issues consumed two of the top three spots on the “Top Consumer Compliant List.”
Threatening collection practices seemed to play the largest role in causing debt to rise so high on the complaint list along with collection confusion and errors that should have been easily detected and avoided.
Laws related to debt and debt collection are constantly being reviewed and changed as societal needs develop. The Credit CARD Act of 2009 created new requirements for disclosures and protections for credit card users, but according to consumers, it is not enough. Approximately 252,009 complaints were made to consumer protection agencies in 2010. Despite the new protections, consumers continue to experience deceptive practices.
Consumers are calling for even stricter laws against creditors who misbehave not just laws that provide more disclosure requirements.
Many governmental consumer agencies that participated in the survey admitted a sort of failure to handle the large number of complaints that roll into their offices daily. The failure, they say is largely due to the budget cuts that have occurred across the board. As their funding decreases, their staff size decreases, their resources decrease and they have trouble giving every complaint the attention it deserves.
“Consumer protection agencies need more funds to do their jobs effectively,” said the director of consumer protection for the Consumer Federation of America. “They provide essential public services, like firefighters and police, and deserve the same support.”
Source: Fox Business, “Auto Repair, Credit and Debt Issues Top Consumer Complaint List,” Aug. 3, 2011
Consumers say debt-related issues cause them significant headache
Filing for bankruptcy protection is very helpful for people who have found themselves with too much financial stress to handle on their own. Often, individuals file after credit card and other kinds of debt become too high as a result of a change in economic circumstances like the loss of a job, large medical bills and many other situations.
Although filing for bankruptcy is helpful, most people did not plan to end there. They try to make the payments that they can, but when they are illegally threatened by creditors, it is hard to even want to pay. According to the most recent “Consumer Complaint List,” complaints related to credit card debt collection rank number two on the list, with other debt-related complaints trailing just behind in slot number three. Number one was auto-repair transactions.
According to consumers, credit card debt collection has gotten out of control despite laws that are supposed to protect them. Consumers reported that creditors were using highly offensive and illegal techniques like saying that they would kidnap their children unless they paid or extradite them to the Dominican Republic.
A lot of the threatening calls related to online loan applications. The major problem for some consumers was that the calls were being made for debts that were not even due. Many people had already paid off the loans while others said their information was obtained in a loan application process that they never even finalized.
Attorneys can help people with debt-related issues all the way from ensuring creditor workouts to dealing with threatening collection practices. Debt is stressful enough, but when you try to go about it alone, it can be even tougher.
Source: Fox Business, “Auto Repair, Credit and Debt Issues Top Consumer Complaint List,” Aug. 3, 2011
Know your rights-don’t become a debt collector harassment victim
One of our previous blog posts talked about the extreme measures debt collectors use to hound people with outstanding debt. Experts believe that many of these tactics border on harassment and may even be illegal. In this rough economic climate, anyone can fall into financial trouble and seek bankruptcy protection or debt relief. Simply having outstanding debt does not make someone a criminal, which is why debtors are granted certain federal protections under the Fair Debt Collection Practices Act (FDCPA).
The nonprofit organization Privacy Rights Clearinghouse is an advocacy group that helps consumers figure out how to manage aggressive debt collectors. Privacy Rights Clearinghouse provides a list of tips that consumers can use when dealing with a debt collector for the first time.
One of the upmost pieces of advice offered by the organization is to make sure you understand exactly why a debt collector is calling you. Are you actually behind on your payments to a creditor or has there been some confusion within the debt collection agency. Furthermore, is it possible that an identity thief has hacked into your personal information and racked up debt under your name? Knowing the details of your specific situation is vital to eventually getting the collector off your back.
Privacy Clearinghouse also stresses that debtors should keep a record marking each time they are contacted by a collection agency, including dates, names, and details of the conversation. Carefully documenting a debt collector’s actions and words could help bolster your harassment case later on. Make sure to especially note any abusive or inappropriate language used by the collector.
Finally, the organization encourages consumers to never pay a bill if they don’t agree with the charges. In effect, by agreeing to pay the bill individuals are accepting responsibility for the debt and will therefore find it much harder to challenge the payment later on.
These are just a few of the tips available to potential debt collector harassment victims. If you find that your debt has become too overwhelming and you need some financial assistance, a bankruptcy attorney can discuss your options and help you protect your rights.
Source: Privacy Rights Clearinghouse, “Debt Collection Practices: When Hardball Tactics Go Too Far.” Last revised January 2011
Debt collectors accused of illegal harassment using Facebook
Debt can pile up for any number of different reasons. Individuals may fall into a patch of financial difficulty after running into an unexpected expense or suddenly finding themselves out of work. Small business owners may find themselves in debt after making a high-cost investment in their trade or losing customers to a competitor.
When a person’s outstanding bills exceed their available assets, they risk accumulating a large amount of credit card debt or finding themselves in need of bankruptcy protection. In these cases, debt collectors are charged with the job of making sure that individuals with outstanding debt make their payments. Recently, however, US debt collectors are receiving a lot of negative attention from the media regarding their hostile and underhanded methods of forcing people to pay.
According to some reports received by organizations such as the Federal Trade Commission and the Better Business Bureau, debt collections agencies are authorizing their employees to use collection tactics which many people believe border on harassment. Individuals have reported instances in which collectors contacted them through the social media website Facebook, leaving public and humiliating messages on their wall.
Representatives from the Federal Trade Commission have also heard of instances in which collectors assumed a fake identity on Facebook in order to collect a debt. Since the social media site allows users to choose who can see their personal information or post messages to their page, collectors have allegedly pretended to be an individual’s friend in order to gain access to their account.
Posting information about an outstanding debt in a public place is prohibited by the Fair Debt Collection Practices Act. Many consumers are wondering how and when the government will take action to stop debt collectors from using illegal strong-arm tactics.
Source: MSNBC, “Debt collectors trolling Facebook.” Herb Weisbaum, 3 May 2011
Debt Collector Uses Facebook to Go Too Far
Debt collectors must follow certain rules set out by the Fair Debt Collection Practices Act that protects debtors from being harassed by debt collectors. The rules restrict the time of day which a collector may call, they restrict how information can be obtained, who can be contacted, what information can be shared, what information must remain confidential and much more. One of the rules prevents a collector from contacting third parties to confirm someone’s location once it is already known to the collector.
One woman said that a debt collector went too far when he began using her Facebook profile to collect on her $362 unpaid car loan. The woman claimed that she had been working cooperatively with the collection agency to come up with an effective payment plan, but that the specific agent went beyond “fair debt collection” when he began sending her messages on Facebook and contacting her listed friends and family. The woman filed suit in August and updated the papers on November 18, 2010 against the debt collection agency alleging violations of consumer protection law.
“I was shocked when I found out these collectors used Facebook to contact my family because they knew exactly where I was. I’m angry they caused me so much embarrassment with my family,” she told Associated Press reporters last week when they contacted her about her situation. She was sickened by the actions that one agent took to allegedly harass her into paying on the car loan.
The company admitted to using Facebook to locate debtors when they could not be contacted through other means. However, bankruptcy attorneys have reported rising complaints of harassment through social media networks including collectors who have created false profiles of “women in bikinis” asking to be “friends.”
Source: OrlandoSentinel.com “Woman sues debt collector over Facebook messages” Tamara Lush 11/18/10
Debt Collection Agency Seeks Protection from Creditors
No one is immune to the effects of an economic downturn, and even debt collection agencies that are assumed to be busier than ever these days have been forced to lay off employees or shut down operations entirely. The collection agency Hudson and Keyse, LLC of Painesville, Ohio was forced to fire its approximately 40 remaining employees and effectively close its doors on the first of this month.
In what could be described as an ironic turn of events, the once successful debt collection firm was forced to file for Chapter 7 bankruptcy protection nearly two years ago after being in business for over two decades. The once profitable company was home to over 150 employees in 2008 but now owes over $63 million to more than 200 creditors of their own. The company is in severe financial trouble and unable to pay their million dollar debt with the assets they now own totaling merely $288,000.
CEO Mark Finston attributed a large portion of the financial decline to “inappropriate management” within the company itself. Inside Accounts Receivable Management, a reliable source of industry news, reported that the company had purchased debt at nearly double its market value.
Hudson and Keyse, LLC owes money not only to creditors like Vion Holdings of Atlanta, but to many former employees as well. The company was unable to pay thousands of dollars worth of back wages to a handful of people who were let go from their positions at the firm. While the future of the economy is unknown, it is clear that Hudson and Keyse, LLC will not be the last business to file for bankruptcy or seek alternative solutions to their financial difficulties.
Source: BankruptcyHome.com “Debt collection firm files for Chapter 7 bankruptcy” Eric Sanderson 9/20/10