[roxette]

I was doing some research on the nature of business of some collection agencies. Here is what I summed up looking at the illegal activities:

They want to earn largely from your money

Collection agents have huge commissions on the money they recover from you. It may be even double or triple the amount of their salary that they earn. There main intention is to force you to pay just on anything so that you agree to make a ‘down payment'.

Making the payment date urgent

The collectors often set up deadlines while recovering money from you. I realized that this is done just to create a sense of urgency in you. The more you linger in making the payments, lesser are the chances of recovering the money from you.

Targeting your personal information

Collection agents often want to keep you within their easiest reach. They will try to acquire personal information from you like your bank account numbers, references, place of employment, etc. You will always remain trapped if you don't pay to them.

Threats which seem to be baseless

I heard 9 out of 10 times when a collection agent says that ‘Your credit will get completely ruined'. He ignores to mention at that point that the credit report is already ruined as because it is in collections. They also forcibly say that ‘Your property will be seized and sold at a public auction.' I have not seen this thing happening commonly because most of the times, they don't have accurate and complete information to take legal actions against you. Besides, it is illegal in some states as the state laws don't allow it. If at all legal actions happen, bank accounts and wages are mostly on the target.

Repeated calling over the phone is a violation of the fdcpa law

As per the FDCPA law, you can put a stop to all the collection calls coming your way. You can write a cease and desist letter and they are required to stop all collection efforts after receiving it. But they have the right to call you and inform that all collection efforts have been stopped or the agency is aiming to file a lawsuit against you. If you send a complete cease and desist letter, they won't inform of the latest actions taken against you as you have restricted them from contacting you in your cease and desist letter. It will be better to write that they should not contact you at your place of work.

When they call you later, get complete information about them as the federal law demands it. They should disclose their identification every time they call and the purpose of the call. Handle it using your consumer rights and don't let them harass you endlessly.

Be careful with your SSN# number

A collector can easily get the last minute balance in your account if he has your SSN# and your bank account number. Nowadays, banking inquiries are made online and anyone can view your account if your account number and SSN# is no longer confidential to that collector.

Collection agency can work on a judgment in your state only.

If the creditor has filed a judgment against you and you are presently residing in a different state, the CA has to get the debt transferred in your state which is very time consuming and an expensive affair.

CA can't take the complete amount from you that you earn

Social security deposits, pensions and 75% of your earning cannot be taken by the collection agency as it is exempted from enforcement. A claim can be filed allowing only 25% of the wage garnishment.

Read this very carefully

A collection agency tries to recover the debt from you by giving it the most legal importance. He gets a court form where questions about your income and assets need to be listed. Legally, it is known as "post-judgment interrogatories" or "information subpoenas." If they have served you this questionnaire, be sure that they are not having the complete information about your debt and it will be easier to intimidate you. Since these papers list the sanctions and the fines, many people get tensed and fill the form to avoid the legal actions. But if you see it in true sense, the CA attorney has not obtained it directly from the court which should be served after the court notice. This is avoided by most of the CA's as it is too expensive and time consuming.

Good news for all the student loan borrowers

You can force a collection agency to accept a monthly payment plan under the 1992 Higher Education Act. Through this law, you can force a collection agency to accept as low as $10 per month for a minimum six months period. You can further extend this benefit if you keep paying each month under Title IV Student Aid. Once your financial situation improves, you can contribute more towards the account and clear it up faster.

Regards
Roxette

Roxette,
I am an honest collector in the field of defaulted student loans. You just posted that all the above activities are "illegal" when in fact they are not. First off, we do not earn "huge commissions", we are doing our jobs, trying to help debtors and recover lost funds to our clients. It has nothing to do with commissions. What we do recieve, is a bonus for rehabilitating a set number of loans. That's right, we get borrowers on monthly payment plans, we get a bonus FROM THE CLIENT not from the debtors.

The reason why urgency is pitched is because interest is accruing daily and speaking on behalf of the client, THEY are not going to wait! If it were up to the collectors, we have all the time in the world, but we are trying to help borrowers whether or not they appreciate it.
As far as places of employment and references are concerned, they are REQUIRED information on loan applications, and yes we are required to keep debtors in reach in order to recover funds. This is not to trap them, that remark offends me.
As far as credit goes, I have found some debtors that have superb credit, they just misplaced their student loan! It is not up to the collector to contact the credit reporting agency, it's the original creditor who does so and collections does not necessarily mean ruined credit! As for "threats", interest accrual, wage garnishment, litigation, and suspension of professional license are the extent of it and they do happen.
According to fdcpa law, collectors are legally allowed to contact borrowers twice a week at home and twice a month at work, unless of course the cease communication letter arrives which rarely happens because good collectors build respectful rapport with debtors for the express purpose of HELPING THEM!
As for the social security number, it was required information on the loan application or credit card application and therefore collectors already have it. It is used solely as an identifier for privacy purposes. Also, where I come from, collectors cannot access the pay-by-phone checking account information unless they are on the phone with the respective debtor. It is this way because the information including account numbers and payment dates have to be verified each time by the debtor with a collection manager. The collection managers have password to the pay-by-phone window to prevent unauthorized checking account transactions, after all, when we rehabilitate a loan, we DO NOT want any checks to bounce!
Wage garnishment is only 15%.
Finally, "forcing" a collection agency to accept $10 a month on a defaulted student loan is just ludicrous. It does nothing to slow interest accrual, it's a shot to the foot. Collectors who specialize in defaulted student loans, myself for instance, are more than ready to set up reasonable and affordable loan rehabilitations. We enjoy rehabilitating loans that particular payment plan does more to benefit all three parties (debtor, creditor, collector) than a balance in full or compromise. When a loan is rehabilitated, it benefits the borrower by helping them improve their credit. It benefits the creditor by getting them a return on their investment, and it benefits the collector by showing that we are doing our jobs and we are reasonable with borrowers.

In the future, Roxette, please get your facts straight before you go and tell all these unsuspecting borrowers to tell the collector off, stay in debt, and shoot themselves in the foot.

Regards,
Ari

[Rhonda28]

Ari,

If you read the post carefully, Roxette mentioned "some" collection agencies. She did not make a reference to all. If your place of employment does not fall within this category then you should not be offended. Roxette was merely stating words of caution to those hounded by these agencies.

Wage garnishment is only 15%

Actually, Roxette said that they may garnish up to 25%. Usually when it is a judgement, it is 25%. Roxette is only giving good advice for those who may not know collection practices.

hooray ari!! it's clear certain people on this forum are trying to help the debtors skip out on what they owe. that list is rubbish! while i admit, i make a very nice living being in 3rd party collections (as the #1 collector), i am not making a huge amount of $. it's certainly less than $55,000.00 a year.

my favorite one is 'repeated calling over the phone is a violation of the fdcpa law' WRONG!!!!! and remember, a cease and desist does not make the debt go away

[roxette]

Ari

I have my facts straightened up before I post anything in the forums. I intend to help the community and make them aware of the illegal practices done by SOME companies. If you don't fall in that category, you don't have reasons to get offended. Do you?

Thanks Rhonda for giving it the immediate attention.

[Not so Lucky]

I have one thing to say to Guest, collectors do repeat calling several times a day even after they talk to someone. Cease and desist letters are our way of getting you collectors to back off and QUIT HARASSING!! Collectors have no compassion for people who have fallen on hard times. They simply do not care. All a collector cares about is the big fat bonus at the end of the month.

Roxette,

Forgive me, it was not my intention to fire up a big debate. Especially in the faces of these folks like Mom of Twins who are clearly under siege by the jerks who are making me look as villainous as them. Overall, I just thought your post was a bit of a generalization. That's where my feeling came from. When I collected defaulted student loans, there was no big fat bonus to get all excited about. The purpose was to recover lost funds so that the Department of Education could continue funding students.

I have sinced moved from Boston to Pensacola and am seeking a new collections position because I believe in what I do. However, I will be selective in which place I hang my hat in. I will not ever work for a company like Encore or 1st C of A who terrorizes people because I'm not going down with them when the Attorney General comes marching in with a warrant.

I love the fdcpa! It's my ice-breaker!

[roxette]

ARI

I also feel sorry if I have hurt you in anyway.

Actually, I have read and gone through so many posts about the illegal collection activities which resulted to this type of conclusion. But believe me, I know it very well that only those agencies who do bad practices get focused immediately. In this forum, you will read about many companies that are doing unfair to the community. It does not imply that good agencies and good people associated with them do not exist. They do exist and they are helpful to the people. That is why, nobody brings them to the cover.

I know you are one of those rare good collectors who have the self dignity and understand the fact that people should not be harassed for unfair reasons.

Ari, I really appreciate your help in the forums and hopefully, your posts will guide people in the proper direction.

Take care
Roxette

Ari, do you feel that its right to harrass someone 5x a day every other day from 7am to 10PM? What do you think about that? You said your agency collects student loans.

i have signature conformation stating tfor you to remove my phone number. I have SallieMae's number (3 different numbers same company same messages) all over my caller id and recorded messages.

any suggestions? I wrote Cease and Desist and I have copies of Sallie receiving it w signature conformation

Dear Guest,

Legal calling hours are between 8 a.m. and 9 p.m. all times zones. Legal telephone correspondence is twice a week at home and twice a month at work unless the borrower asks the collector to refrain from calling them at work.

I never worked for Sallie Mae, so I don't vouch for them. I worked for the third party agency CCA.

I have, however, built rapport and worked out settlements with attorneys hired by borrowers who didn't know what else to do. You might want to try that avenue.

Exactly what kind of exchange is going on between you and Sallie Mae? I'd like to know why they are over-stepping the fdcpa, agencies that recover government money such as student loans really do have to walk softly since student loan debt is often huge.

The FDCPA was written back during the Carter administration I believe, because it seemed as though another Great Depression was on the rise because in pre-FDCPA days, collectors were so awful and cruel that many borrowers, often victims of circumstance, were driven to suicide!

[ben]

HarassedBySallie

Have you recorded the telephonic conversations made at odd hours of the day? If not, attach a recording device with your phone and start recording the calls.

Inform the caller that the call is being recorded for legal purpose. In some states, consent from both the parties is necessary before recording. To be in the safe side, tell him in advance about your actions and write down the dates and times of the calls being made. Talk to your lawyer for further help.

Whatever may be the reason with Sallie Mae, but it is a violation of the fdcpa law to call you after receiving the cease and desist letter. You should consider legal counsel.

lots of confusion in regards to laws here (big surprise). as ari pointed out, the 'normal' calling hours are 8am-9pm in the debtor's time zone... UNLESS the ca has been informed to call at other times. as far as the frequency of the calls goes... there are certain states which restrict the # of calls to the debtor, their place of employment, the parents and to 3rd parties. most states do NOT restrict the # of calls to the debtor. HOWEVER....

a 'call' is not the same thing as a 'contact' in the collecting biz. i can call someone 15 times a day if i wanted to. however, i cannot SPEAK (contact) a debtor 15 times a day (without permission). a 'contact' is classified as actually speaking to a debtor. so, if some of your debtors out there are being called and NOT identifying yourself as the debtor, the collector as the right to try back later that day. if the debtor id's themselves, that is considered a 'contact' and the ca cannot call back until the next day (unless restricted to do so by state law).

[ben]

KarmaPolice

Thanks for the difference between a call and a contact.

As you have distinguished 'call' from a 'contact', please tell us what should be done when the CA is not identifying himself on phone. They are leaving recordings to call back at a number which in turns leads to some recorded message.

It becomes quite tough when the CA is not clearly stating the purpose of the call. Is that 'call' considered legal?

ben, i can understand how irritating it is when ca's use 'unattended messages' and other recordings. while it isn't fdcpa law, some companies have a policy that does not allow them to state what company they are calling from. other companies (like mine) will only state what company they are calling from if asked (by anyone). of course we can't state it's in regards to a debt. it is also our company policy NOT to leave our company name on an answering machine. every single legitimate collector should have no problem stating their FULL name and company when asked. PLEASE NOTE: by law they are not to state what the nature of the call is unless the person id's themselves as the debtor!!

if someone is getting a ton of calls on their machine from a 'mysterious' company, i would suggest they pick up the phone (if they can) and ask what company they are from and who they're trying to contact. never be afraid to ask the collectors questions, just keep in mind they may not be able to tell you what the call is in regards to.

[ben]

KarmaPolice

(Just getting off the topic here for a while. Please join this forum because your posts are very informative and as a guest, you are loosing those valuable debtcc points that can later get encashed.)

I hope the moderators and the site admins won't mind me getting off the topic here for a while. :wink:

now that i have some time, i thought i'd correct a few things posted by roxette. i think some of the things you found are a little misleading:

Collection agents have huge commissions on the money they recover from you. It may be even double or triple the amount of their salary that they earn. There main intention is to force you to pay just on anything so that you agree to make a ‘down payment'.

gross generalization here. not all agents make huge commissions. in fact, most hardly make any type of commission at all. also, our main intention isn't to force anyone to do anything!

The collectors often set up deadlines while recovering money from you. I realized that this is done just to create a sense of urgency in you. The more you linger in making the payments, lesser are the chances of recovering the money from you.

doesn't that make sense? our clients were 'burned' out of their money and they want it back now! while there are good and bad tactics to go about getting the money quickly, i don't feel it is wrong for a client or a ca to stress urgencies in making payments.

Collection agents often want to keep you within their easiest reach. They will try to acquire personal information from you like your bank account numbers, references, place of employment, etc. You will always remain trapped if you don't pay to them.

how are we trapping anyone? sure, we skip trace and can find out a ton of personal info, but most debtors are evaders and they need to be tracked down.

I heard 9 out of 10 times when a collection agent says that ‘Your credit will get completely ruined'. He ignores to mention at that point that the credit report is already ruined as because it is in collections. They also forcibly say that ‘Your property will be seized and sold at a public auction.' I have not seen this thing happening commonly because most of the times, they don't have accurate and complete information to take legal actions against you. Besides, it is illegal in some states as the state laws don't allow it. If at all legal actions happen, bank accounts and wages are mostly on the target.

ok, first of all, no ca should be telling anyone their credit will be 'ruined' if they don't pay their debt. i would consider that a threatening statement. yes, not paying your bills can lead to bad credit, but no need to say it will be ruined. second, if a collection account is on someone's credit, by paying it off,the credit will start to repair itself. would you rather have an upaid debt on your credit? or a debt which has been paid off? those viewing your credit would rather see a debt that has been paid off in full. as per fdcpa law, ca are not allowed to make statements if they are not true. period.

As per the FDCPA law, you can put a stop to all the collection calls coming your way. You can write a cease and desist letter and they are required to stop all collection efforts after receiving it. But they have the right to call you and inform that all collection efforts have been stopped or the agency is aiming to file a lawsuit against you. If you send a complete cease and desist letter, they won't inform of the latest actions taken against you as you have restricted them from contacting you in your cease and desist letter. It will be better to write that they should not contact you at your place of work.

this is completely true. a cease and desist letter will stop the collection activity. but it only stops the collection activity from that specific ca. and, of course, it does not dissolve the debt itself. the debt is still owed.

When they call you later, get complete information about them as the federal law demands it. They should disclose their identification every time they call and the purpose of the call. Handle it using your consumer rights and don't let them harass you endlessly.

as soon as the debtor ids themselves, the collector must id themselves and their company. some states even have laws as to how quickly they must give you that info!! and some states require a collector to give their address as well.

A collector can easily get the last minute balance in your account if he has your SSN# and your bank account number.

completely untrue. most collectors don't have access to the system which gives out that info.

You can force a collection agency to accept a monthly payment plan under the 1992 Higher Education Act. Through this law, you can force a collection agency to accept as low as $10 per month for a minimum six months period. You can further extend this benefit if you keep paying each month under Title IV Student Aid. Once your financial situation improves, you can contribute more towards the account and clear it up faster.

good news for those who are stiffed by people who refuse to pay back for student loans... student loans cannot be added to bankruptcies!!