Ten Reasons to Get Out of Debt: Dirty Collector Tricks

[Aug 19, 2009.]

 

While many debt collection agencies perform legitimate work for credit card issuers, banks, and other lenders, some rogue collectors have drawn the attention of law enforcement officials for their dishonest and illegal behavior. If you need some inspiration to get out of debt faster, learn about these ten extreme cases of collector misconduct:

Submitting false reports. Some unscrupulous agencies can ruin your quest to reduce debt by reporting inaccurate information to credit bureaus. While this practice is illegal, some Americans prefer to pay a fee to have collectors remove the information rather than dispute the charges formally.

Camping out. In some foreign countries, collectors can send representatives to sit in front of debtors’ homes, often bearing signs, wearing costumes, or driving gaudy vehicles. Recent immigrants who don’t know that these practices are banned in America often agree to pay extra penalties to avoid these hollow threats.

Impersonating lawyers and court officers. Some collectors announce that they’re calling from a “legal network” or “legal office.” Other consumers report calls from collectors using job titles like “Agent,” “Inspector,” or “Investigator.” These carefully researched terms may sound like they come from a practicing attorney or court officer, but they simply scare consumers into making payments by sounding official.

Scaring your relatives. Imagine a loved one getting a call from a gruff collector, demanding to know if they have seen or heard from you. Collectors know they can’t legally divulge your financial status, but they have started resorting to using scary voices and veiled threats to convince your friends and relatives to confront you about your credit card debt.

Reviving expired debt. Each state enforces its own statute of limitations on debt collection, counting the time lapsed since the most recent payment of a debt. Some collectors trick debtors into paying just ten dollars on an expired debt in order to report it as “active” to credit bureaus.

Submitting false wage garnishments. In states where creditors can seize paychecks, some collectors have used automated reporting systems to garnish debtors’ salaries. However, wage garnishment can only happen as a result of a court ruling. Even then, judges often limit garnishments to a portion of a weekly paycheck. Collectors using this tactic count on the fact that employees find it too embarrassing to dispute a garnishment with their bosses.

Hiring attorneys without local licenses or bonds. In one case, debtors in Texas reported receiving harassing letters from an attorney’s office. However, a trace turned up proof that the attorney was licensed in California, not Texas. Therefore, the attorney’s office had no legal right to send letters to consumers across state lines.

Emptying checking accounts. Some collectors ask debtors to pay just a few dollars using a check or a debit card, only to turn around and deduct entire balances over the course of a few days. You can’t get out of debt if a rogue collector seizes your checking account balance.

Sneaking into your social network. Some debt collectors have started posing as attractive singles on Facebook and MySpace. Users who “friend” them wind up getting lots of direct messages--demanding payment.

Deviant acts. One debt collector raised the ire of New York’s Attorney General by making lewd threats against creditors’ loved ones. Lax hiring practices and poor training at many debt collectors have resulted in sex offenders and other convicted criminals gaining access to creditors’ personal data.

Fortunately, you don’t have to subject yourself to this kind of pain. By using legitimate debt relief solutions, you can get out of debt, stop the phone calls, and prevent your friends and relatives from becoming the pawns of desperate collectors. Remember that the Fair Debt Collection Practices Act sets strict ground rules for collection activity, enforcing those rules with severe financial penalties. Entering a debt relief program now can prevent you from needing to learn those rules in the first place.

 

About Author:

Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.