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About collection agencies


When collectors are trained, many call centers require that the agent not give up control of the call. They are trained to be assertive, demanding, and to talk over the debtor during an argument. They are also taught to refer back to any and all possible consequences of non compliance. It is illegal for them to threaten any action they do not intend to or cannot take (a common, illegal threat is to prosecute the debtor for fraud).

Collection agencies are not permitted to call excessively, although the law likely differs from an individual’s opinion as to the definition of excessive. Should you tell a collector that you are going to try to obtain the money in the next few days; the collector will schedule a callback. If you do not call back, the collector will do so starting from the scheduled time/date, and continue for approximately a week. If you have made a promise to pay an amount, the collector will again set a callback time/date. In the event the money is not received and you have not contacted the collector, they will conduct follow up calls, as frequently as twice a day for up to a week. Telling a collector over the phone to stop calling is not effective. To stop all calls, you must put it in writing.

Abusive, illegal tactics by collection agencies can include the following:
Contacting you at work when you have already informed the collectors that it is not permissible
Contacting 3rd parties after contact has been made with you
Disclosing or threatening to disclose information to 3rd parties (friends, family, neighbors, co-workers, supervisors, etc…)
Threatening to have you arrested
Reporting or threatening to report false information on your credit report
Threatening any other action they cannot or do not intend to carry out
Name calling (examples include deadbeat, liar, and thief)
Using profanity
Attempting to collect a debt, or the portion thereof, that is currently in dispute
Contacting you over the telephone after you have sent a letter revoking their ability to do so
Calling in excess of what the law (your state law or the FDCPA98, whichever is more strict) permits
Contacting you in any manner after you have sent a thorough cease and desist letter—except to inform you of any action now in progress, i.e., a lawsuit

In the event of violations, you must preserve your rights. File a complaint with the FTC, the state agency that oversees collection agencies, and/or obtain a lawyer. If the agency is based out of state, you may be able to file a complaint in their state as well.

One of a debtor’s rights when dealing with a 3rd party collection agency is to demand that communications cease. The debtor can demand to be contacted by mail only, or not at all. Should the debtor send a complete CND letter, it is advisable only when the statute of limitations has run out for the debt. Otherwise, the letter will be interpreted (assuming that it doesn’t blatantly state so) as a refusal to pay the debt. The collection agency/creditor may very well file a lawsuit, viewing litigation as the only way to receive payment. A letter restricting communication to letter form only, in many collection agencies, move the debtor’s account from a collector to the compliance department (or whatever the dept is named, that attempts to ensure that the law is followed regarding debt collection) or experienced collectors will prepare a letter for the account.

It is my personal opinion that any and all correspondence sent to the collection agency be sent using certified mail. This is to provide the sender with a return receipt, which may prove very useful evidence in the event you take the collection agency to court.

Many people wish to not work with the collection agency, and instead work with the creditor. A debtor may attempt to work with the original creditor as long as they still own the account. If the debt has been sold, then it is no longer possible to work with the OC. Some entities by policy refuse to work with a debtor once the account has been assigned to a CA. This is not limited to consumer debts, and can include taxes, student loans, tuition, traffic tickets and other civil penalties. Most collection agencies that are collecting assigned debts do so on a contingency basis, and may only settle on the OC's terms.

It is important to know that collection agencies can do the following:

-Require the full payment immediately
-Not accept partial payments
-When attempting to locate the debtor, they may contact 3rd parties to obtain contact info (neighbors, friends, family members, etc…)
-Sue you for the debt (if past the statute of limitations, the defense is expiration of SOL)
-Ask you for your employer, banking info, income, etc…you are not required to give this information to them
-Attempt to collect a debt that has passed the SOL
-Use power phrases, such as “refusal to comply/cooperate”
-Explain any and all possible consequences of not paying off the debt*
Many collection agencies will perform some level of negotiating.
Simplified examples of negotiations may include the following:

-PIF demand --> settlement of 2/3
Or,
-PIF demand --> ½ down, ½ in 2 weeks or a month --> ½ down, 2 payments of 1/4
Or,
-PIF demand --> 2/3 down, partial payment plan over 3-12 months
Or,
-SIF offer, limited time only

The older the debt, the lower a company may be willing to settle for, but no matter which collection agency is attempting to collect, they will likely use boiler room tactics. In other words, the money must be in by 2 p.m., end of the day, end of the week, etc… Whenever a debtor is told that the money must be in by 2:00 p.m. (sometimes 3 p.m.), it is often because any payments received after that time will be applied to the next business day’s collections. Towards the end of the month, the collection attempts often get more aggressive. This is because most collectors/collection manager’s bonuses are based upon some form of monthly productivity, and they are striving to reach or maximize that bonus check.

The terms will soften only over time, provided the CA does not aggressively litigate. After each offer you are given is rebuffed, the collector will likely press you harder by explaining possible consequences (and in the case of abusive collections, will threaten you with things they cannot actually do).

On accounts that have passed the statute of limitations, collectors will attempt to have you verbally acknowledge the debt, especially if the call is being recorded, or having you make a token payment. Even a minuscule payment, or a promise to pay, will restart the clock. A cease and desist letter that does not acknowledge the debt, but does inform the CA that said debt has lapsed is probably the best defense.

Some collection agencies will refuse all payment plan offers, accepting only the BIF. These most aggressive companies will only take the PIF, or litigate the matter. Unfortunately, if they are legally entitled to collect the debt, they then do have the prerogative to proceed this way. Even though it isn’t “right,” it is legal. Before suing you, a debt collector must have either bought the debt, or been assigned to collect on the debt by the entity that does own it. In the event a debtor has asked for validation and is sued prior to being given said validation, then the debtor should answer with a counter claim for FDCPA8 violations.

It might be worth noting a couple of other things. First, many collectors are rarely paid a good wage. They may be paid a few dollars above minimum wage, but have the incentive of a potentially large bonus check after exceeding the amount they are budgeted to collect. The bonus can effectively double or better their standard wages. A second interesting fact is that a good number of collectors end up with the job after having been collected upon themselves, even with the same office if they live in the area.


*There is a difference between giving possible consequences and threatening.
For example: A collector may explain that failure to pay a traffic citation can result in the driver’s license being suspended (if that in fact can happen). A collector may not state that he/she is going to suspend the license unless the debtor pays.

BIF = Balance in Full
SIF = Settlement in Full
PIF = Paid in Full
CA = Collection Agency
OC = Original Creditor
fdcpa = Fair Debt Collection Practices Act
FTC = Federal Trade Commission




I got a call from Georgia two weeks ago and thinking it was friends, I answered. When I asked them to identify themselves, I realized it was a debt collection agency and immediately hung up. Suddenly I get a letter today (10/1) that per my verbal agreement with them I was suppose to have paid $5,600 by yesterday. I never made any sort of agreement or even acknowledged who I was. What legal recourse do I have here?

Sub: #71 posted on Thu, 10/01/2009 - 20:31

Unregistered


Hi,

Please can you offer advice on how to deal with multiple CAs trying to collect on the same debt. I took out an illegal internet payday loan in April, default on the loan, attempted to arrange a repayment of the funds, but to no avail...no return call....i have been contacted by multiple CAs trying to collect on the same debt. I pulled my CreditRpt and learned that Nat'l Credit Adj is report me as of 9/09 for $830 (the loan was for $600). I was contacted on 9/26/09 by TK Financial aka TK Recovery with threats of "aggressive legal action" if I did not pay the $830 today. I immediately fired off a DV letter, lodged complaints with BBB, FTC and AG, and forwarded a copy of my complaints, together with receipts of acknowledgments from the FTC and AG to the second collection agency. I also disputed the debt with the Credit Reporting Agencies.

Morning Star how should I deal with this situation? Is it legal for more than one collector to attempt collection on the same debt? Can one agency report to me to the credit bureau while another attempts to collect the same debt? BTW I have never been contacted by Nat'l Credit Adjusters, either.

Your comments would be much appreciated.

Sub: #72 posted on Fri, 10/02/2009 - 11:25

elaine lee elaine lee

(Posts: 4 | Credits: )

Quote:
Originally Posted by elaine lee
Hi,
Please can you offer advice on how to deal with multiple CAs trying to collect on the same debt. I took out an illegal internet payday loan in April, default on the loan, attempted to arrange a repayment of the funds, but to no avail...no return call....i have been contacted by multiple CAs trying to collect on the same debt. I pulled my CreditRpt and learned that Nat'l Credit Adj is report me as of 9/09 for $830 (the loan was for $600). I was contacted on 9/26/09 by TK Financial aka TK Recovery with threats of "aggressive legal action" if I did not pay the $830 today. I immediately fired off a DV letter, lodged complaints with BBB, FTC and AG, and forwarded a copy of my complaints, together with receipts of acknowledgments from the FTC and AG to the second collection agency. I also disputed the debt with the Credit Reporting Agencies.
Morning Star how should I deal with this situation? Is it legal for more than one collector to attempt collection on the same debt? Can one agency report to me to the credit bureau while another attempts to collect the same debt? BTW I have never been contacted by Nat'l Credit Adjusters, either.
Your comments would be much appreciated.

I'm not Morningstar but I'd like to tell you my opinion. Due to the fact that this is an illegal lender, you can rest assured that the collection agencies attempting to collect are most likely bottom feeders. You did the right thing by filing complaints. Inform these collection agencies that they are attempting to collect on an ILLEGAL debt. Dispute it on your credit report on the grounds that the lender was not licensed to lend in your state and violated the usury laws by charging illegal interest rates.

Sub: #73 posted on Fri, 10/02/2009 - 11:36

Shazzers Shazzers
Moderators Cum Industry Expert
(Posts: 17345 | Credits: )

Shazzers,

Thank you for your reply....I am so nervous about these collection agencies attempting to strong arm me and to destroy my credit....my life has not been easy, but I do take responsibility for my errors in judgment. I am going to fight them, tooth and nail....the last collector TK Financial said that they were prepared to take "aggressive legal action" if I did not pay today....via telephone call and via e-mail....As soon as I sent him the DV letter together with an acknolwedgement that I filed a complaint with the FTC/AG's office -- they replied by saying "we have ordered the documents to prove you owe this debt," so that we are clear, "are you claiming fraud?" I replied by saying please submit all future correspondence to me in writing through the US Mail at the address I listed on my letter to you. Thank you.

I can't help but wonder if these collection agencies know what the right/left is doing...it just does not seem logical to me that more then one agency can attempt to collect the "same" debt.

In the event that I do hear from one of these CAs again, should I inform them that they are attempting to collect a debt from an illegal unlicensed out-of-state pdl lender (I live in California) and that I will be filing complaints against them with the BBB and AG, again?

Sub: #74 posted on Fri, 10/02/2009 - 13:28

elaine lee elaine lee

(Posts: 4 | Credits: )

To Meg---I am not sure about any legal recourse, but send them adebt validation letter. I had a collection agency dothis to me one time, so,I added in my debt validation letter that they were wrong. I put that they did not speak with me, nor did I ever make any such arrangement.

I learned the hard way to document everything. I kept notes of days and times, copies of letters to and from the CA,etc.

They neeed to prove that they are the ones that are suppossed to be collecting on the debt and amount, etc. When was your last payment and /or your last transaction on this account?..Karen

Sub: #75 posted on Sat, 10/03/2009 - 08:26

Bossy4455 Bossy4455
Moderators
(Posts: 5854 | Credits: )

bossy is right.in fact i would shoot a reply stating that you are demanding these documents they ordered.it is up the CA to prove you owe it.the fact they sent that in an e-mail.wow!!!!!!!!!again shoot a reply stating your demand of these docs.bet they will balk,as bottomfeeders always do.

Sub: #76 posted on Sat, 10/03/2009 - 08:34

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15512 | Credits: )

Hi everyone
I am going through some hard times these fast few years. I have an unsecured credit card debts that was sold to a CA whom had called me few times demanding payment. I explained to them that I have every good intention of paying of that debt and that currently my financial situation is so difficult that I was not even able to participate in college due to dufficulty of paying for school costs. I explained to them all that I can afford is paying $50-$100 per month. They said they wont accept that and only want the balance paid in full along with all the late fees and interest accumulated even after they purchased it from the original credit card company. I told them I am not able to pay the whole thing since I can not even pay for my last 2 terms at university to be able to get a real job that pays me well enough to pay the debts. They stated that they will sue me and that according to state of Illinois laws I can get my wages garnished.
I am scared I dont make much at all. Can my wages be garnished??
I am really considering doing a chapt 7.
If I receive a notice of being sued is that too late to file for chapt 7.
Any suggestion or words of advice is appreciated. I am very nervous.
Thanks, Neginac

Sub: #77 posted on Mon, 10/05/2009 - 02:42

Unregistered


The last time I had any dealings with any of these PDL folks was in April 09. At that time I was desparately trying to workout an extended payment plan, but no one would return my call or anything....Now to learn that a CA has reported a collection account to CAs and that another unknown CA is attempting collection on the so called original debt, is beyond me. In addition to trying to collect on an illegal pdl. EPProcessing is not licensed to do business in California. I have disputed with all three CRA, filed with the California AG, BBB, and the FTC. Now I realize that I need to do the same with NCAdjusters, as well. I will continute to dispute this debt until it is removed from my credit and, if it comes to it, I will prepare to sue the CAs that are trying to collect on this illegal PDL.

I will keep you all posted on my progress. I noticed that I have been placed in to a dialing rotation from TK Financial, even though they have not validated that I owe this debt.

Sub: #78 posted on Mon, 10/05/2009 - 10:26

elaine lee elaine lee

(Posts: 4 | Credits: )

If one has no means of paying the whole debth at once and since the CA is trying to collect the whole thing and is not williong to set up a monthly plan-is it really possible that they could garnish wages?
worried to death

Sub: #79 posted on Tue, 10/06/2009 - 07:12

Unregistered


Hey all,

I'm doing some background research on the collections industry and had a question for everyone. What types of things embarrass collections agents with their coworkers or peers? Do they care about harrassment or being too aggressive (judging from your stories, I'd say probably not)? Do they worry about low sales? How are debt collections companies judged by their peer companies? On recovery rates, customer relationships, relationships with their clients (like the credit card companies they collect for) or something else?

Obviously, these questions are best answered by an ex-collections officer, but any insight would be helpful. Thanks!

Sub: #80 posted on Tue, 10/06/2009 - 10:35

Unregistered


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