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?.
When Do I Call In A Medical Collection Agency
Do you know how much debt your medical collection agency collected last year? If you don’t, how can you evaluate their effectiveness or your return? How could you possibly be aware?
Most patient balances forwarded to a medical collection agency are often considered “lost causes,” there would be little point in using such services if that were always the case. Logic dictates this much. Some of the reasons are as follows: Some patients simply do not respond to practice statements or internal collection letters. They will, however, respond when a collection agency states it will report their failure to pay to credit bureaus. Collection agencies have a number of resources on their hands. If reporting a debt to a credit bureau does not work, there are attorneys on hand that can assist you with problem consumers who refuse to pay.
It is a given that most medical practices acknowledge the need for collection agency services but they should evaluate and manage this collection method just like any other. Practices should have a full understanding of the terms of the agreement with their collection agency and the results of such arrangements; they must also understand how their own internal processes affect the agency’s success. And internal processes do have an enormous effect on the amount of money that you can collect.
Here are six questions you should ask when evaluating your current collection agency.
What is the total dollar value of accounts placed with the collection agency last year?
What is the protocol for turning accounts to collection?
What is the average age of transferred accounts?
What percentage of transferred accounts had balances less than $50?
How much did the agency collect last year?
What fees does the collection agency charge?
What reports does the agency provide?
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Wyoming City Is Attempting To Collect
In the city of Cody, Wyoming, 219 utility accounts were sent for collection. Only four of the bills belonged to property owners. Some are suggesting that the city council consider holding property owners responsible for utility costs that their renters left unpaid. A policy like that could have added $180,000 to the city budget during the past five years, and furthermore, other utility users are subsidizing those that don’t pay their bills.
Landlords are offering fast and obvious objection, asking the city council why it should be their responsibility to pay for a bill that someone else racked up. Another plan has been proposed though, one that would require a deposit from every person opening up a utility account.
This change in policy would involve a number of modifications like a requirement that a property owner co-sign for a renter’s account. Tenants would be billed under their own account but have an open landlord account for each property. Unpaid bills would be transferred to the landlord’s account if the tenant doesn’t pay.
Deposit requirements would go from $150 to $200, and would be required for all accounts, regardless of their credit history in the past. Property owners would be notified of late payments, and they would be encouraged to contact the city to see if the bill got paid before returning rental deposits. All property owners would have to keep utilities in their names.
Supporters of the plan allege that it is not out of line with what other cities are doing, and it is a simpler and the most cost efficient way to collect debts. Collection agencies get about one third of what they collect in the city, and 60 percent of bills that go to collection remain unpaid.
No matter what decision they arrive to, it should be quick: city officials are noting a trend towards fewer people making deposits and more accounts being sent out for collection.
Mallory Megan works for a debt collection company. She also composes articles on business, finance, consumer spending and collection agencies. You are welcome to reprint this article – but get your own unique content version here.