Thanks to the recession, debt collection has been a growth industry. Creditors are unloading debt to collection agencies for pennies on the dollar. Collection agencies are coming down much harder on consumers lately. About collection agency harassment, there are more consumer complaints. Law firms that are using debt collection software are in all the courtrooms. But consumers need to know that they can hire an attorney to sue debt collectors for abusive practices.
All collection agencies – abuse, violence and bogus claims
More collection agencies are trying to get money out of individuals. It was reported by CNN that harassing phone calls, abusive language and physical violence are becoming a bigger part of the collection agency business. The New York Times reports that a single law firm can use computer software to file thousands of debt collection cases, often depending on inaccurate or incomplete information supplied by creditors who sold the debt. It was reported by the Post-Bulletin in Minneapolis that accounts are tapped, wages seized and individuals threatened with arrest for debts they don’t owe or for inflated amounts.
Complaints of collection agency harassment increased by 50 percent in 2009, according to the Federal Trade Commission. The CNN article explained that they are on track to jump 13 percent more in 2010 depending on FTC complaints filed in the first six months. Repeated calls is the biggest complaint. It is common for debt collectors to harass consumers with calls for. When they get somebody to answer the phone, they’re more likely to be abusive. Complaints of collection agencies using obscene or abusive language spiked 35 percent last year. Complaints of debt collectors threatening or resorting to violence more than doubled last year.
Debt collection software sues indiscriminately
When harassment by collection agencies is increasing, they are also hiring lawyers to sue. The New York Times article explained that a debt buyer sends a law firm a database that contains consumer data including names, home addresses, outstanding balances and also the date of default. The law firm runs the data through debt collection software that runs suits through the legal system automatically, such as the collection letters, summonses and lawsuits. Most consumers who get sued by debt collection software fail to show up in court, and those who do rarely have a lawyer. A court judgment gives debt buyers the ability to collect on the debt through things like wage or property garnishment.
The bankruptcy laws fuel debt collection industry
The debt collection industry exploded starting in 2005 with sweeping changes to federal bankruptcy laws that made it harder for individuals in financial trouble to get a fresh start. Instead, many defaulted on loans, expanding the debt buyers’ market. The Post-Bulletin article explained that the nation’s five publicly traded debt buyers last year paid $ 835 million to acquire $ 20 billion in old debts. Credit card debt makes up the total But almost all of the types of charged-off debt, from unpaid cell phone accounts to hospital bills are for sale. Debt buyers base their claims on data that is up to 15 years old that can be difficult to verify, and they are ready to hound individuals for years.
Suing being done by consumers to get besides collection agencies
Aggressive tactics are now more common. The CNN article said collection agencies calling before 8 a.m. or after 9 p.m., demanding more money than what is owed, revealing a consumer’s debt to a 3rd party or threatening “dire consequences” like prosecution, jail time, property seizure or job loss. These practices are illegal under the FTC’s Fair Debt Collection Practices Act. Consumers can take a collector to state or federal court for harassment. If they win, the collection agency has to pay for any damages caused by the harassment, as well as all of the court and attorney fees.
Discover more details
CNN on Yahoo
finance.yahoo.com/news/Debt-collectors-sock-it-to-cnnm-2499699064.html?x=&.v=4
New York Times
nytimes.com/2010/07/13/business/13collection.html?_r=1&emc=eta1
Post Bulletin
postbulletin.com/newsmanager/templates/localnews_story.asp?z=7&a=460512
