Legal And Illegal Tactics A Debt Collector Will Use To Collect: Debt Collection Basics Part Three
In the first two articles I defined what a delinquent account that had been sent to collection was, how sending late accounts out to an debt collection company benefits a creditor, and the practice of selling an old debt to a third party collection agency.
I described what sort of data a collection company will collect and use in their efforts, and also that third party collection agencies are governed by federal and state laws and are overseen by the FTC.
Some collection agencies will use illegal, deceptive and strong arm tactics to confuse and scare debtors that include pretending that they are one of their creditors and asking them to verify information, pretending to be an old friend or neighbor to catch a debtor off guard, repetitively calling or mailing a debtor to the point where it gets to be a nuisance, or sending threatening letters or leaving threatening voicemail messages.
Legal but manipulative practices include pressing the debtor, preying on their emotions, and using vague threats like “respond within ten days or further collections attempts will follow.” Other illegal practices include making an idle threat of litigation or pursuing litigation when the debt collector has no intention to, threatening to throw a debtor in jail, threatening to garnish wages or seize bank accounts when they have no authority to, lying about the amount that is owed, or asking for more than what is owed are used as well.
For the debt collection industry, time is the enemy and a good debt collector is fully aware of this. Their goal is specifically to obtain money as soon as possible.If you are talking to a debt collector, keep in mind that at any time you have the legal right to tell them you are busy and will call them back if you are flustered, hang up, cool off, develop a game plan, and contact them later. An aggressive debt collector will ask you why you can’t make payment arrangements today.
Rapid Recovery Solution is a commercial collection agency that writes articles on medical collection agencies. Also published at Legal And Illegal Tactics A Debt Collector Will Use To Collect: Debt Collection Basics Part Three.
How Will A Collection Agency Try To Collect My Debt?
Collection agencies primarily use letters and phone calls to achieve collection. Collection letters are typically computer generated, and differ in severity. The first letter usually starts with a simple “reminder” tone and as the letters progress they may build up to a final demand.
The first demand letter legally must inform the debtor that they have the capability of disputing the validity of the debt, or if they choose to, request written verification of the debt. If they would like to receive written verification, the agency by law must send some sort of confirmation after verifying it with the original creditor. Demand letters will also confirm that they come from a debt collector, and that any information obtained will be utilized in the attempt to collect debt.
The envelopes of collection correspondence cannot reveal anything that might suggest that it is a collections letter. Therefore, any type of mail that might be embarrassing or public, such as a post card, would be strictly prohibited. The return address should also be discrete; as a result many collection companies will just use their company’s initials, or some other type of vague name.
The nature of the additional notices will depend on the debtor’s reaction. If a debtor agrees to pay off the debt this will most likely result in letters written with a gentler tone. Belligerent reactions, or even a lack of reaction from the debtor might result in a more threatening tone to the letter.
The idea of debt collection is to try to achieve a sense of urgency. Most debt collectors are aware that many debtors owe many types of debt and seek to instigate the debtor to prioritize their particular account. Deadlines may be set, with vague threatening tones, but failure to respond usually results in only more correspondence. Collection letters will always try to convince the debtor to call the collection agency on the telephone directly. If the debtor does not within thirty days, then the collector will often initiate phone calls.
Mallory Megan works for Rapid Recovery Solution and writes articles on commercial collection agencies Check here for free reprint licence: How Will A Collection Agency Try To Collect My Debt?.
In A Time When Americans Are Going Without Health Insurance The Medical Debt Relief Act Is A Godsend
From 1999 to 2009, premium costs for family insurance have risen by one hundred and thirty one percent. That’s easily over three times the rate at which working wages rose during this time. In this period of economic hardship, millions of jobs have been lost, putting workers who have just lost their jobs at risk of living without health insurance also. For those who remain employed, employers are pushing more of the costs of health insurance onto their employees as they struggle with economic uncertainty. Then there are blue collar and retail workers, waitresses and the like who are paid less, work harder and are not offered health insurance plans at their jobs. No wonder that Americans are struggling to pay their medical bills.
In 2007, about seventy two million Americans struggled with their medical bills. A large amount of these people made paying off their medical bills their top priority, while they had to struggle to pay for basic necessities like food, rent or heat. More than THIRTY MILLION American adults used up ALL of their savings or BORROWED AGAINST THEIR HOMES in order to pay off medical bills. Unfortunately, in this time of economic hardship, many Americans could not stop the bill collector from knocking on their door.
Thirty million Americans are contacted every year by collection agencies for delinquent medical bills; many struggle to pay these. Many people are unclear as to why their insurance refused to pay a claim, others are confused about the amount they owe. Over half of people who took the survey reported that they were puzzled by the medical jargon on their bills, and one in four reported confusion led them to allow bills to go past the due date or to be sent to a collection agency.
A delinquent medical bill that gets sent to collections will typically be reported to credit bureaus. This will result in a lower credit score. Medical accounts, even those that have been paid off in full will stay on a credit report for up to seven years. This will result in lower credit scores and increases the costs of mortgages, car loans, or credit card interest.
Luckily, Ohio Congresswoman Kilroy saw the consequences of outstanding medical bills. She decided to take action because she saw medical debt as unique. She introduced The Medical Debt Relief Act, which states that medical debt that is fully paid off or settled must be removed from a consumer’s credit report within thirty days.
Even though this will not fix our chaotic healthcare system, it will provide relief for those who have paid off medical debt, while the rest of us wait for better health care reform.
Mallory Megan works for a debt collection company. Also she writes articles on business, finance, consumer spending and collection agencies. Click here to get your own unique version of this article with free reprint rights.
Debt Collectors Or Debtors: Who Is Suing Who Now?
It is true that Americans with overdue debts will typically be subject to a number of retributions. Collection letters, phone calls, unfavorable credit scores and a chance to wind up in court are examples of punishments for non-compliance.
A new trend that is growing however is for debtors to sue debt collectors first. Any violation of the Fair Debt Collection Practices Act can be reason to take a collector to court. It might be true that in a declining economy suing a debt collection agency instead of paying off what you owe may be your only choice. There were 8,347 consumer lawsuits filed against collection companies in 2009. That\’s a 55 percent increase over 2009 and double that number filed in 2007.
A portion of the debtors are plaintiffs suing for the first time, who suddenly find themselves unable to pay debts, and they feel that they have been wronged by aggressive collectors. Others compulsively sue. Usually these people have debts worth tens or hundreds or thousands of dollars. It is their hope that favorable judgments may put them on a \”collections blacklist.\” If he has sued 4 out of 5 debt collectors, debt collection agencies are probably going to want nothing to do with this strange character who puts time and effort into lawsuits when he could be looking for a sense of structure, and a job.
One example of a lawsuit in action was from a woman who complains that the collection agency never offered her proof it was entitled to collect. Seriously? Most debt collection companies adhere closely to FDCPA laws, but even that law is not clear on certain practices such as whether it\’s legal or not to leave a voice mail. Basically, the FDCPA hit the scene in the 1970s and needs desperately to be updated to today\’s technology.
You might not want to know my opinion, but here it is. I was contacted by a debt collector who left a message on a third party phone, asking for me and letting me know she intended to collect a debt. This is a big no-no. I could have called her and given her hell, but I know why I have the debt and even though I may be broke, I intend to pay it back. To me, it seems like the economy is not getting better any time soon as the number of people who refuse to hold themselves accountable for financial decisions they made in the past grows. I hate to say it, but a debt is a debt, whether we are in a recession or not, whether your bill collector is nice or not.
Mallory Megan is employed by a debt collection company. Also, she does articles on business and finance, the credit industry and debt collection Get a totally unique version of this article from our article submission service