Are we going too harsh on collection agencies?

I believe like in any business, there are good and bad collection agencies. But it does seem like there seems to be more and more collection agencies that will do whatever it take to collect a debt, including lie and scare the crap out of people. I have always wanted to pay my debts, but have gotten in over my head and make promises I know I can't keep becuase the collection agencies insist that I pay more then I have said I could afford or they are so agressive in their tactics. If I say I am able to pay them $50 a pay period, that is what I can pay. Don't tell me I have to pay $100. This just starts a spiral in the whole process where I can't meet my obligations to either them or some other bill. If I say I can pay $50 a pay period, that is better than me agreeing to $100 I can't really pay. Or if I say I will send the payment by money order, this is probaly the best for me so don't tell me you will only make arrangements that come directly out of a bank account or the whole amount is due. I just don't understand the unwillingness to make reasonable arrangements with people. I know there are people who don't intend to pay their bills, but why does it seem as if the agencies think everyone is this way.

Let's check why some people do not pay their loan,

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Creditors and collection agencies, both are there to do business. A creditor always lends money keeping in mind that the borrower will pay it back as per agreement. But if the borrower does not, creditor can adopt some methods to get it back, one of which is to send the account to collection.

Now, the activities of the collection agencies should conform to the rules, set for this purpose and here starts the controversy. The collection agencies take up unfair means, very often, to collect the debt and pressurize the persons in different way.

It's true that borrowers should try their best to return the loan amount. But if he fails and the account is sent to collection, there is nothing to panic at first. Everybody should try to negotiate with the collection agency and make them understand of the reason why the payment was stopped. If the process is successful, it's ok, otherwise be aware of the laws of FTC and try to fight them legally.

Most of the time a successful credit counseling session can help people to continue with their payments by proper planning. So before going to be default, such a session can be really helpful to save our time and money.

Bryan

I have actually had quite a few good experiences with collection agencies. I have dealt with numerous that I have threatened to come to my job etc..... But there have been a good number that were willing to work with me and were very polite and professional even when I couldnt pay as agreed. So there are some that are out there and with those I try my best to keep up with my payment agreement if I cant I just give them a phone call and they are fine with it.

One tip from my side
Do not pay direct cash, always keep a recipt

Since it is a requirement on both ends, the consumer and collection agencies can establish a mutual relationship between each other. The collection agencies are doing business and the consumers are tying to improve their credit files.

So, we (consumers and collection agencies) all should understand each other's point and get this problem solved which will be profitable to both of us.

Unfortunately for the industry, collections thrives on agressive individuals who are compensated for bringing in money - not for being scrupulous.

Those who are aggressive also tend to see themselves in a position of authority and because their employer will accept an alleged debt as unquestionable, ergo, the collector is trained to view the debtor as wrong, as someone who owes the money, no questions are allowed and the original creditor could not be in error.

We all know that isn't always the case, but when someone who perceives themeselves as ultimately powerful is challenged in any way, the lines harden and the alleged debtor is put in a category that will often result in punitive actions or even illegal threats.

Any collection firm that allows this to go on should be put out of business, but it takes hundreds of complaints to bring about an investigation, let alone a prosecution. All too often, the company gets a slap on the wrist and goes right back to business as usual - BECAUSE IT PAYS. It pays so much that the fines and restitution are simply part of doing business.

The answer lies with the original creditors. They need to cease dumping alleged debts, unidentifiable and even purely manufactured debts (remember Alyon and TelConnect?) into the industry and walking away as if it's not their problem anymore.

Medical service providers need to own up to the fact that they routinely fail to hammer insurers into paying appropriately on claims. Conversely, they will inflate bills to make up for the predicted shortfalls and leave the ignorant patient hanging out to dry on the overcharged balances. It's far too easy for the service providers to dump off those unpaid bills to collections as if they were ever valid.

Creditors also need to stop selling debt to the companies that engage in these kinds of practices, and they could do that without any serious effort. Once the slime-balls can't buy any debt, they will go out of business.

Until then, for every one that gets slapped or shut down, two or three will rush in to take their place.

The Honorable Judge Roy Bean
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