Debt Collectors Discover New Levels Of Relentlessness

It makes sense that as the economy has soured that the rapacity of debt collectors would rise, but this much?

More people have fallen behind their payments and companies have gotten more hardcore about collecting on overdue accounts or selling them off.

While customer complaints about threats of violence, cursing, and calling at inconvenient times have risen roughly in parallel with one another, complaints about repeated calls have spiked jfrom roughly 15,00 to 41,000, far outpacing all other complaints.

During the same time period, complaints about violence only rose from about 2,000 to 4,000; inconvenient calls from ~2,500 to ~10,000; and obscene language from ~8,000 to ~15,000.

CNN Money says that a 55-year old woman had a debt collector calling her house all the time, making personal verbal attacks against her and her hubby. When she stopped answering the phone, the collector then repeated the same against her sister, ex-boyfriend, and her husband’s ex-wife’s mother, anything and anyone to try to get at her.

“This guy was out of his mind and he kept calling and calling, telling me ‘you better talk to me, you deadbeat,’” the woman told CNN Money. “He was very threatening and the whole thing was just really unsettling — it made you wonder who was going to show up at your door.”

Most debt collectors do not work for the original creditor. Instead, they buy up charged off accounts from businesses, paying pennies on the dollar of the total amount that was owed. Sometimes in their extraction efforts, they break the law. It’s important to pay your debts, but also for collectors to follow the law and for you to know your rights so you know how to fight back when they’re trampled on.

Debt collectors get nasty [CNNMoney] (Thanks to FMA!)

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  1. TuxthePenguin says:

    Oh, gotta love this line from the article:

    “An industry representative said the increase in complaints of harassment should not only be attributed to desperate and aggressive collecting agents, but to more consumers trying to cash in on lawsuits.”

    Read that again. And one more time to make sure you get what he’s saying. I’ll even translate it for you:

    “We’re not any more of jerks than we used to be; its just the fact that people know their rights and are calling us out now.”

    That being said, I really wish there was a list of “good” debt collectors somewhere, a white list or something. A quick hint that “hey, if you get a call from this company, their nice and they’re usually legit.” I don’t know how many times someone has called trying to collect a 8+ year old debt… most of the time that wasn’t even mine.

    • dragonfire81 says:

      The problem is you don’t get to choose your debt collector, so having a list of reputable ones wouldn’t help too much in the long run.

      • wrjohnston91283 says:

        But it will help if you get a call from one of them that’s NOT on the list – chances are they’s shady.

  2. chaesar says:

    “During the same time period, complaints about violence only rose from about 2,000 to 4,000…”

    ONLY? The figure doubled!

    I had a debt from an old apartment building that I let slide for a while (ok it was a year), and the company they used was pretty reasonable. They even gave me a window to pay in installments before it officially went “into collection” and was reported to the credit bureaus.

    • DingoAndTheBaby says:

      I was thinking about this, too. I also had a debt that was kind of a grey area from an apartment complex as well. The collections agency was actually super reasonable, worked with me to get to the bottom of what was owed and why, and it was generally a really decent experience. I wonder if businesses of a certain class (for lack of a better word) level employ creditors of like class level. I don’t know if I’m saying it well, but a nicer place to which someone’s indebted might sell those debts to a nicer collections agency…

  3. aleck says:
    • pinkbunnyslippers says:

      “Debtors, either because they feel morally obligated or because they don’t know their options, get backed into a corner by their creditors and believe they have to repay their debts, he says. Not so with Cunningham. “I don’t have to do anything but stay black and die,” he says, a small, smug smile on his lips.”

      Yeah, that’s an awesome message to be teaching our future generations.

      • Megalomania says:

        It’s certainly a valid position to take; however, if he accepted credit with no intent to pay it back, then I’m sure a fraud charge can be squeezed in there, and of course no one will ever extend him credit again. A temporary gain that will bite him on the ass sooner or later.

        • pinkbunnyslippers says:

          The article sort of eludes to that – that once he figured out his rights, he could “lure them in like a venus fly trap” – that leads me to believe he’s trying to make a job out of this. And that makes me ill.

          If he’s taking the position that he’s able to make money to pay off the debts by being diligent and tedious about his suit filing, then more power to him. But that’s not how this artcile reads.

          • Beeker26 says:

            So it’s okay for the collection agencies to break the law? If they don’t want to face a lawsuit by him or anyone else then they should follow the rules. It’s that simple. He’s successful because collection agencies are lowlife scum-sucking douchebags that don’t think the law applies to them.

            And he’s right about something else. When a collection agency is on your back it means the original creditor has written off your debt and has already been paid. You no longer owe them anything. Any money the agency gets out of you goes right into their pocket. So essentially they are getting paid to harass and intimidate people. But for some reason their mafioso-style tactics are considered legal. Or at least you think they should be.

    • pantheonoutcast says:

      Wow, he’s a dick. What’s the point of playing the game by the rules when some assmonger comes along and lives on the fringes, and does so with a smug sense of self-satisfaction? I hope he dies in a house fire. Sames goes for this Katz guy in the same article.

      Makes me feel better knowing that his successes are small, short-lived, and when I’m retired and living on a sailboat, he’ll still be filing nickel and dime lawsuits against everyone he’s defaulted against in order to afford Ramen noodles.

    • Beeker26 says:

      OMG this dude is AWESOME!!! I love the way the collection’s agencies talk about the situation, that the rules and laws are just soooo complicated they can’t possibly be expected to follow them. Oh really???

      I smell a consumer revolution!

    • AustinTXProgrammer says:

      I was near bankruptcy after a long round of unemployment and medical bills. One collection agency broke the law in many ways, but I finally got them on the same grounds used in the article (Claiming they would garnish wages).

      All my defaults were at the same time and we were nearing the statute for them to sue me. We waited until it expired and hit them. My lawyer flaked out (folded his practice) in the middle of the suit but I never heard from the agency again, and haven’t heard from any others either! I guess those listing services have protected me!

    • smo0 says:

      Read the entire article… great stuff…. he even said it’s their system.. and he’s only playing that the way they do – just reverse the parties in the article… you could say that this was exactly how they go after people for debts owed.

      My question is… could this work for medical bills?

    • Brontide says:

      Good message, bad poster boy.

      Consumers should know their rights, but this guy is parasitic. He first doctored his credit in order to get in on the subprime action. He now preys on the companies that are collecting legitimate debts by intentionally baiting them. He does not work, and form the sounds of it, is not attempting to find work.

      He has been “playing the system” for so long he has forgotten what it’s like to be a person. Grow up and get on with life. If you are really that indebted, declare bankruptcy and move on. If not then pay off your debts like an adult.

      • Brontide says:

        I give you two quotes that seem indicative of this guy. This guy wants a free pass because he got in over his head and got burned. He is out for more “Quick Cash” and using anyone who gets in his way as fodder.

        Up until now, everything was about making easy money for Cunningham. Now, it’s about justice—or at least what he sees as justice.

        “I already paid them off,” he says. “The government took my money without asking me and gave it to the banks. And since I owe the banks money, but they already got my money from the government, I say we’re even.”

    • pot_roast says:

      I’m about to do just that. My wife has been haunted by a phantom debt that keeps reappearing on her credit report, tanking her FICO score 40 points each time. I got it removed once but a year later it’s back under a different debt collector. This one has simply ignored debt verification letters (certified, return receipt) and pretty much everything else, so the only option we have left is to file a lawsuit against them.

  4. kylere1 says:

    Extraction and Extortion are remarkably similar words.

    • Buckus says:

      “Are you blackmailing me?”
      “I prefer ‘Extortion.’ The ‘X’ makes it sound cool…”

  5. Ihaveasmartpuppy says:

    I just wish the collectors that keep calling my cell phone for some guy I never heard of would stop. I’ve had the number for at least 5 years, never heard of the guy until they started calling for him a few months ago.

    • Loias supports harsher punishments against corporations says:

      Then you need to read the link they provided.

    • Tim says:

      When I got a Comcast phone a year and a half ago, I started getting debt collection calls for the previous owner of the number. Nothing threatening though, and it usually took only a minute or two to explain to the collectors that I was not, in fact, that person.

  6. HogwartsProfessor says:

    The worst part is when it’s not even your debt. I can’t imagine having someone call me like this for something that belongs to whoever used to have my phone number.

    • Murali says:

      Oh tell me about it

    • tsukiotoshi says:

      Whoever had my phone number before me has fallen off the face of the earth. It’s been three years and I get calls for her at least once a month, including debt collectors. Thankfully, most of them have just let it go when I said, “I’m sorry, that’s not me, I don’t have a debt for a Harley motorcycle. I got this cell number a couple of years ago.” I did have a couple press me for a few more minutes until I just hung up on them and that was the end of it.

      • howie_in_az says:

        After 3 years I still get calls for my ex. The worst is when the collectors call early on Saturday mornings.

    • Sudonum says:

      How about just have the same unusual last name? I’m getting calls at my house from several debt collectors looking for some guy who apparently lives (lived?) 2000 miles away. I get people who don’t believe I don’t know who this person is and that no, I’m not related to them. The robo calls are the worst. They want a call back, I figured if I ignored them long enough they’d either stop on their own, or have a live body call. Nope, went on for 3 months. I finally called, told them I had no idea who the hell they were looking for. The person on the other end said they’d take my number off my list. Didn’t happen, I still got the robo calls. Finally sent them a Cease and Desist letter and asked for proof that the person they were looking for was associated with my address or phone number and also pointed out that if they continued to call they would be paying me $1000 per call, as the law allows. Calls stopped after that.

  7. smo0 says:

    I wish they would come to my door. *click-click*

    • GMFish says:

      Wow, that’s a great idea for a movie. College guys setting up a debt collection agency to buy their own debt. It’s brilliant.

      • GMFish says:

        Oops, I was supposed to reply to Supes. Still, shooting a bad debt collector isn’t a bad idea.

  8. Supes says:

    I wish I could buy my own debt for “pennies on the dollar.”

    • Loias supports harsher punishments against corporations says:

      Start your own collection agency. That would be quite the racket.

    • microcars says:

      *ding*
      I hear a business opportunity!
      Can you imagine starting a business that buys up old debt for “just a few more” pennies on the dollar than other firms offer. Then just write off the debt and never sell it.
      Debtors could subscribe to the service for a nominal fee. Never get a bill collector call again!

      of course if they failed to pay the fee you would have to turn over their account to collections….

      • TuxthePenguin says:

        While a good idea, I have a feeling that would be against the law. Probably something with regards to breach of fiduciary duty or some sort.

        That and its probably not as simple as you think. Although it would be fun to try…

        • Loias supports harsher punishments against corporations says:

          It wouldn’t be fiduciary at all, unless it was a public company.

          You rack up $30k in debt with AMEX, and fail to pay. Your company, Debt Collection Inc. buy that faulty debt for pennies on the dollar. AMEX doesn’t care who buys it, as long as it bought.

          You, the owner of Debt Collections Inc., choose not to pursue the debt collection of you, the debter. That is a business decision and you are not answerable to anyone else.

        • microcars says:

          when you buy someone’s old accounts receivables, they don’t get a cut of your collection efforts unless that is in the contract.
          They are happy to get their 5-10¢ on the dollar or whatever and be done with it.

          You can go buy a truckload of last year’s fashions for 10¢ on the dollar and resell them and hopefully make money, or dump them in a landfill. Your choice. The place you bought them from does not care.

  9. XianZhuXuande says:

    These extreme examples are lucrative lawsuits waiting to happen.

    • Loias supports harsher punishments against corporations says:

      A) These examples are extreme. Debt Collectors often break some law regarding collections

      B) The damages awarded are usually not severe. I think a previous Consumerist article had a $1000-range fine done through small claims court. That’s probably typical.

      • Loias supports harsher punishments against corporations says:

        Whoops,

        A1) These are NOT extremes. They are a little out there, but not that different from your typical collection violators.

  10. SphinxRB says:

    There are several consumer sites what will have SCRIPTS to go by/use when a Debt collector calls you. Also, know your states statute of limitations for debt.
    The statute of limitations on debt in Virginia limits the time you can be sued for a debt.
    Oral Contract: 3 years
    Written Contract: 5 years
    Promissory Note: 6 years
    Open-Ended Accounts: 3 years
    I had a company try to collect a debt from an old AOL account from 1995! Plus I don’t owe anything anyway, anything I owed, they charged the credit card I had on file with them. Know your rights before hand; just in case you get one of these collectors calling you. As for the AOL debt, you would think in the 15 years, they found my phone number, they would have mailed me something in all that time, I wasn’t hiding. If you get one of these calls, know that they are required to send you a letter once you ask during that phone call. I had to call AOL corporate and have a person there make them stop calling me.

    • smo0 says:

      I was reading a site on laws… even acknowledging debt can reset SOL – so, my question is, can you dispute something without resetting it… if you’re trying to get aging debt off your credit report- wouldn’t the ACT OF getting it off your credit report reset it? Seems like a catch-22.

      • Big Mama Pain says:

        If you dispute it with the credit bureaus, you’re all set. I had to get a zombie debt collecting monkey off my back two years ago, and the tactics they used to get me to re-acknowledge the debt and resetting the clock were downright criminal. I hope whoever owns R & J Acquisitions dies in a fire.

        • pot_roast says:

          “If you dispute it with the credit bureaus, you’re all set.”

          No, you’re not. They just tell the debt collector “is this true?” and the debt collector says “Ya, it’s true, dawg!” and the credit bureau sends you a letter saying “Sorry dude, this was verified.” That’s it. I’m dealing with that crap right now. Debt collector never sent any verification whatsoever.. they just click a little checkbox on the credit bureau’s website.

          Credit bureau reports are riddled with errors.

      • Beeker26 says:

        AFAIK the only time the counter on a debt resets is if you make any kind of agreement to pay or make a payment, even if you never make it. So saying something like “yeah, I’ll send you a check for $20″, even if you never send it, will reset the clock.

  11. Moosenogger says:

    That picture is terrifying.

  12. Commenter24 says:

    Everything else aside, I’m curious as to why people let calls get to the point of being verbally harassed and demeaned. Why don’t they just hang up the phone?

    • AngryK9 says:

      Sometimes, and this has happened to me before, that the call gets nasty the very instant the person on the other end finds out that he/she is speaking to the person that owes the debt. A call I got once was like that. The guy asked for me, I said, “speaking,”, and he immediately went into a nice verbose list of…colorful metaphors. I hung up, but being human, was tempted to spew a few fun words back at him…

    • SphinxRB says:

      because they call relentlessly, several times a day. Often times leaving no message. Sometimes when I pick up, no one is there. I phoned the company of the original debt once an had them contact the collector to make them stop calling.

  13. PerpetualStudent says:

    I’ve always wondered a few things about the whole debt collection industry:

    How can these third parties collect on the full debt when they pay only a fraction to assume the debt?

    If the person/company you owe sells it to a third party for X% of the debt, are they not saying your debt is only worth that X% or that X% is an acceptable payoff?

    Also, if the third party debt collector sues you, aren’t they only entitled to the amount they paid to assume the debt, since that is their actual damages; the X% they paid, not the full debt?

    I’m not trying to make an argument for shirking responsibilities or not paying what you owe in full, but I’ve had friends that worked for collections in the past and they could never come up with an answer other than “the law lets us”.

    Thoughts?

    • smo0 says:

      Not sure if that’s been looked at – it’s definitely a defense angle though…. I’m for this.

    • Commenter24 says:

      Debt collection works on the principals of contract assignment. Lets say you have a contract with Kabletown for services. Kabletown provides said services and you don’t pay. Kabletown has a contract that it can enforce in court and forcibly collect the debt. Instead, Kableltown assigns your entire contract to Kneecaps, Inc. Kneecaps essentially “stands in the shoes” of Kabletown and can enforce the contract the exact same way Kabletown could. Whether Kneecaps paid $.90/100 or $.01/100 is irrelevant. Kneecaps “owns” your contract now and can collect the entire amount due under it.

  14. 333 (only half evil) says:

    We have a debt collector calling repeatedly with a recorded call for someone we don’t know. There is no person to talk to. We’ve had the same number for 16 years. It leaves a message on my answering machine saying, “If you are not Steven Miller then hang up now. Continuing to listen to this message acknowledges that you are Steven Miller.” How is this legal? I hate Steven Miller, you deadbeat.

    • AngryK9 says:

      I get these on a daily basis. One is for my nephew who no longer lives here. Another is for some woman who I do not know, and another is for a guy who is apparently related somehow to the woman. Very frustrating!

    • Sudonum says:

      At the beginning of the recording it will say the name of the company who is calling. It’s probably nearly unintelligible. Sound it out as best you can, also if you can ID the number that’s calling and do a Google search you will find out what collection firm is calling most of the time. Once you have the name of the collection company you can search for their mailing address. Type them up a “Cease and Desist” letter. Here’s a nice one
      http://www.privacyrights.org/Letters/debt6.htm
      Mail it off Certified Mail with Return Receipt Requested. It should stop the calls within a week or so.

    • SphinxRB says:

      I also report their phone number/company to the “Do Not call” registry if your on it. donotcall.gov

  15. evilpete says:

    Instead of having to pay fines, debt collectors that violate the law should have to wave the debt they trying to collect.

    • Commenter24 says:

      How would you suggest the debt be waved? Like a flag? Like a sheet? Perhaps like “the wave” at a sporting event?

      • AngryK9 says:

        I think they should waive them myself, but that’s just me. :D

        Actually, I think that a debt collector that violates the law when trying to collect a debt should have to give the debt back to the original creditor, AND pay the full amount of the debt to the original creditor, AND pay twice the amount of the original debt to the original debtor, or $2000, whichever is highest.

        But then, I like to think crazy like that.

  16. DJ Charlie says:

    Sounds like the company that’s suing my wife. She was served a summons to appear in court and everything. Only problem? The debt doesn’t belong to her. Of course, we’ve lawyered up, and the lawyer’s advice is “go to court. We have proof it’s not your debt, and soon as the judge rules that, we slap them with a nuisance lawsuit for the same amount.” Court is in just over a week.

  17. AustinTXProgrammer says:

    I was repeatedly getting collection calls at work for a former employee. They always apologized and hung up, but called again the next day. I finally had a list of 4 collection agencies and setup rules to forward their calls to each other. Would have been fun to record the calls, but I have no interest in going to jail.

    I could have setup a fake voice mail box that didn’t retain messages, but that wouldn’t have been as satisfying.

  18. Hoss says:

    This couldn’t have been more timely. Today I got a phone message from a collector. The message had the standard introduction — we are calling for John Jones, if this is not John Johns please call us back to remove this number, etc, etc. The John Jones was not us, it was a former next door neighbor. This neighbor is a fine family man, with a great long term job. I believe they were fishing for his current number since he moved three years ago. Of course I can’t call him and say these arse-hole collectors are doing dirty tricks.

    • Beeker26 says:

      This is pretty standard these days. If they can’t reach the intended person they look up a neighbor, someone they can get to say “why yes, John still lives next door, oh, do you need his new number?” Pretty low if you ask me, getting your neighbors to unwittingly rat you out. Shit like that should be illegal. They have no business contacting relatives, neighbors, co-workers etc, let along harassing those people.

      • Hoss says:

        In case anyone is interested, I filed a report with our Atty General in MA. The phone message said they were collecting a debt from this person which is disclosure of private financial information. Turns out this agency works for AT&T I hope they get fined!

  19. AngryK9 says:

    That guy with the cigar looks like my boss…just…without hair. :D

  20. seamer says:

    I think it’s about time old debts were no longer sold out but just wiped off the slate. Note it to the IRS as forgiven debt, and then you would have to pay taxes on it (similar to ‘a fee’).

    This way, although you get out of crippling debt relatively free, some scumbag who owns a baseball bat won’t have a legal way to get paid for a debt he was not owed to begin with.

  21. Sol Collins says:

    The thing I hate about debt collectors &/or credit cards is the minimum payment.
    I don’t make a lot of money, and quite frankly live paycheck to paycheck. There is only a certian amount of money I can allocate to paying my debt. In most cases I have experienced, none of the credit cards or collection agencies are willing to accept what I can pay them. I’ll gladly give you what I can, but if you refuse to accept what I can pay you, then that’s your problem.
    I know that they have to accept any payment you send them, but is it really worth it when they say that if you don’t send them the monthly minimum, than it still hits your credit the same as if you didn’t pay at all? Or that you(I) would only be paying on interest, not principle.
    That may be false, but that is what all the collection people have told me.

    These days, I tend to value my money more than my credit score.

  22. Hardwired says:

    Change your cell/home phone number. It really IS that simple. The letters won’t stop but that’s what a paper shredder is for.

  23. Bog says:

    Interestingly I was contacted by a collection agency thinking the debtor was at my number, but actually they were looking for someone who owned me money too. “Well,” I said, “now that I know you have information on this guy I need you to turn over what you know to me, it would be easier for to volunteer what you know about him…” They apparently didn’t like they way I phrased that and got tight lipped saying they could not tell me anything. Yeah, they didn’t like when I suggested I send them a subpoena.

  24. lomedhi says:

    It sounds like we’re meant to be surprised that language, threats of violence, and time-of-day complaints rose much less than repeated call complaints. That’s a serious misinterpretation of the statistics. Think about it. There are far more debtors than collectors. Repeated call complaints should be proportional to the number of debtors. Complaints about the content of calls should be proportional to the number of collectors. When repeated calls increase, a few more of them will fall during inconvenient times, but the number of inconvenient hours per day has not increased, so this metric should also be most closely correlated with the number of collectors.

  25. Gregg Araki Rocks My World says:

    These collectors need to get their act together. I’ve had family members harassed for debt that wasn’t even theirs. I mean, really, what is wrong with these people? Did they find them in a sewer or something, because I can’t see respectable members of society getting into the debt collection business.
    That and tow truck drivers.

  26. JonBoy470 says:

    All the posters on this thread who are painting debtors with the “deadbeat” brush have obviously never experienced any financial set-backs in their lives, and as such have likely never actually dealt with debt collectors to any great extent. While you incur a moral obligation, by obtaining credit, to make good on your debts, a higher moral obligation exists to provide for yourself and your family.

    Realistically, this Cunningham guy from the article sounds like kind of a deadbeat, but realistically, there’s no way he’s going to climb out of the hole he dug himself doing the standard wage-slave gig that 95% of Americans slog through day to day. Personally I’m surprised he didn’t just cave in and just declare bankruptcy.

    Though there are surely honest, ethical collectors out there, the giants of the industry (and it is a booming industry) make their profit through intimidation and violation of laws meant to protect the consumer. Debt collectors are some of the lowest slime on this planet.

  27. JonBoy470 says:

    Also, the Cunningham types are a good back-pressure against the debt collection industry in general. These collectors go after debts with really the flimsiest of evidence. They abuse the court system, bringing suit against debtors (who, in fairness, very often actually owe the money) with the entirety of their evidence consisting of an affidavit saying the debtor owes the money, signed by lord-knows-who, and a computer print-out which contains nothing but information obtainable from the debtor’s credit report. Documentation from the original creditor is almost universally non-existent.

    Call me crazy, but if you’re going to claim that someone owes you four, or even five figures, especially in this age of computers and the Internet and what-not, you should be required to engage in some sort of book-keeping of that debt, and be able to produce, on demand, a paper trail that doesn’t have the appearance of having been whipped up in Microsoft Excel in under five minutes.