PDA

View Full Version : Article on debt collectors trying to collect old debts


Shagley
08-07-2006, 10:12 AM
There have been a couple threads on this subject, so I thought this might be of interest...

This article is on MSN Money, and it is called 'Zombie' debt is hard to kill by Liz Pulliam Weston. http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/ZombieDebtIsHardToKill.aspx?page=all

This is the part that I find particularly informative...

How to fight back
If you're being contacted about an old debt, here's what consumer attorneys advise:

Know the statute of limitations. If you racked up a debt in another state, you might want to check the statute of limitations there as well. But generally, it's the statute of your current state that applies. If the statute has expired, the collection agencies' legal remedies are limited.

Know your rights. Credit and debt collections can be an extremely complicated area of the law. Consider arming yourself with a book such as Leonard's "Money Troubles" and -- if the amounts at stake are considerable or the level of harassment unbearable -- consider contacting an attorney. The National Association of Consumer Advocates can provide referrals.

Consider ignoring the call. If the statute of limitations has expired, Szwak said, put the phone down and walk away. There's little to gain and a lot to lose if you keep talking. You could inadvertently extend the statute of limitations or find yourself roped into a repayment agreement that might not be in your best interest. "The debt collector is a lot smarter than (consumers) are, a lot more savvy," he said. "They don't have any obligation to tell you your rights."

Write them. If ignoring them isn't working, consider writing a letter demanding the agency stop contacting you. Send it certified mail, return receipt requested. Federal law requires them to comply with your request. Make sure in the letter you specifically say that you aren't acknowledging you owe the debt.

Negotiate carefully. If the statute of limitations hasn't expired, you may want to negotiate a settlement rather than risk a lawsuit. (Again, a lawyer's advice could come in handy here.)

Keep an eye on your credit report. If a collection agency tries to repost an old debt or lie about the date it went delinquent, you'll need to fight back vigorously. Dispute the entry with the credit bureaus and with the collection agency.

If the collector persists in its deception, you can demand that the collector produce a copy of the documentation that created the debt, such as the credit card agreement you originally signed, along with an account history, said consumer attorney Daniel Edelman of Chicago. Chances are the collector won't have this documentation, and continuing to report the account without providing proof that you owe the money is a violation of the Fair Debt Collection Practices Act, Edelman said.

ftwildernessguy
08-07-2006, 11:40 AM
I find it easier to pay my debts.

MrsPete
08-07-2006, 03:34 PM
Any advice on this ongoing headache of mine? It's not a major problem, but it irritates me:

I bought my current house from a relative; a number of family members have lived here over the years. One relative wasn't good with money, and he owes everyone. We're still getting calls from bill collectors (I suspect he's giving out this address/phone). Those bill collectors are not nice people. They obviously think I'm his wife/girlfriend, and they think I'm lying about him not living here.

How can I get them to believe he's not here, and I genuinely don't know how to contact him?

dcfromva
08-07-2006, 03:53 PM
Any advice on this ongoing headache of mine? It's not a major problem, but it irritates me:

I bought my current house from a relative; a number of family members have lived here over the years. One relative wasn't good with money, and he owes everyone. We're still getting calls from bill collectors (I suspect he's giving out this address/phone). Those bill collectors are not nice people. They obviously think I'm his wife/girlfriend, and they think I'm lying about him not living here.

How can I get them to believe he's not here, and I genuinely don't know how to contact him?
MrsPete,
Here is what the FTC web site says on the subject:

"I am being contacted by a collector looking for my former roommate, neighbor, or relative. Can I stop this?

The FDCPA says a debt collector may contact someone other than the debtor, but only to learn the location of the debtor. Usually this contact can be made only once, unless the collector has reason to believe the person has new information. If you are a relative or roommate, a debt collector who contacts you repeatedly also violates your privacy. Excessive contact may be considered a form of harassment. You should be able to stop contact by writing to the debt collector. For an example of what to say if you are the alleged debtor and want to cease calls to you or if the debt is someone else's and a collector is contacting you about it, see sample letters 4 or 6 at Attachment B,
Sample Letter 6 (http://www.privacyrights.org/Letters/debt6.htm) ."

If they persist:
Here is a link to the FTC web site complaint form (https://rn.ftc.gov/pls/dod/wsolcq$.startup?Z_ORG_CODE=)

FTC fair debt practices (http://www.privacyrights.org/fs/fs27-debtcoll.htm)


HTH,
DC :earsboy:

Microcell
08-07-2006, 05:04 PM
I find it easier to pay my debts.


Wouldn't it be great if we were all perfect.

There is a member of the boards that is a consumer advocate type that helped me out when this kind of thing happened to my DH. Hopefully he will see this and comment. He wrote me a letter that I sent to get the first company off my back, they turned around and sold this "debt" to another company who I need to send this letter to now. I was told I could sue these people, and I just might if it keeps up.

In my case it is a debt that I am not sure he ever owed, but even if he does, it is over 10 years old, and paying it now would adversly effect our current good credit. In my case it is 250 dollars in dispute, but would cause us thousands of dollars in increased interest rates when we take the hit on our credit report for paying such an old debt, which, like I said, I am not sure he owes.

Also, the company they say he owes the money to has long since written it off. The people going after us say that they own it now and want the money. They could be scammers for all I know. My Dh does not remember the debt (and with his record keeping who the heck knows if he paid it or not).

I have had stellar credit my entire adult life, and got my Dh (who had no credit at all) into good credit standing. So this does not just happen to people who are deliquent for thousands of dollars and should just pay off their debts.

Chicago526
08-07-2006, 05:07 PM
I find it easier to pay my debts.

Of course it's easier (and better!) to pay debts on time, but like the bumper sticker says "stuff" happens. And for those that have "stuff" happen and get behind on their bills, it's good for them to know their rights. They may owe money, and the debt collectors are within their rights to try and get paid, but they (the collectors) STILL must follow the law and people who owe money do have certain rights, and it's a good thing to know those rights so those collectors don't take advantage of you. A lot of these collection agencies play fast and loose with the laws, often downright breaking the laws in attempts to get paid.

spiceycat
08-07-2006, 05:59 PM
boy I didn't know alot of this stuff was illegal...

always good to know your rights!!!

mking624
08-07-2006, 06:38 PM
I can understand knowing your rights regarding a debt you know isn't yours (i.e. the first person mentioned in the article). But I do have problems with people who have debts they know are theres and they just aren't paying. So if a person owes money, and they haven't paid it in years and now collectors are coming after them...I don't feel sorry for them. That's a consequence of their actions. This article has been posted in the Community Board not that long ago. I remember reading it because one guy in the article simply stopped paying his credit card bill. Now I didn't like how some of the creditors were handling the situation...but the guy brought this mess on himself. You can't simply stop paying a bill thinking that no consequence will come of it. I don't feel sorry for him at all...I really think he deserves for collections to come after him. To stop paying a bill and then to tell someone to stop bothering him about it? The guy has some nerve. It's people like him who abuse the system that make me hate the SOL laws. Now I think a lot of tactics some creditors use are wrong and illegal...and THAT should be stopped. But I'm not going to fault them for going after a person who definitely owes them money.

LIFERBABE
08-07-2006, 08:17 PM
OP, thank you for posting.

I have a very common name, and many times I will receive calls from debt collectors looking for someone else. They call and are literally phishing for information and I dont give them any of mine, tell them they have the wrong person and hang up.

I always suspected if I did give them any info, they would add that to the file and that debt would magically become mine. Then i would have this huge credit report fight to deal with.

It is good to be educated in all aspects of consumer credit, even if you pay your bills on time. Especially when the companies are unscrupulous and will use any tactic they can to extort money from you.

Im glad some people have all the answers :rolleyes:

MyGoofy26
08-07-2006, 09:44 PM
Any advice on this ongoing headache of mine? It's not a major problem, but it irritates me:

I bought my current house from a relative; a number of family members have lived here over the years. One relative wasn't good with money, and he owes everyone. We're still getting calls from bill collectors (I suspect he's giving out this address/phone). Those bill collectors are not nice people. They obviously think I'm his wife/girlfriend, and they think I'm lying about him not living here.

How can I get them to believe he's not here, and I genuinely don't know how to contact him?

If you have some time to spare you could walk away with a nice chunk of change :teeth:

Once you tell the collectors to stop, they must stop. So each time someone you've told to back off ignores you and calls again, get proof of it (record the call if it's legal in your state, take a picture of the caller ID, etc) and let it add up. If they write? Hang onto the letter. At $1000 PER violation, it can add up fast. Once you get 10 or 20 (or more), call up a lawyer that deals with consumer credit, since they'd be aware of the laws. . . most of the time if you have documentation, the collectors will fold long before it goes to court and agree to cut you a nice fat check.

Shagley
08-07-2006, 11:33 PM
I find it easier to pay my debts.

Yes, it is best to pay any and all debts, but the threads that I recall were regarding people who were being harrassed about debts they weren't even sure were theirs. NOT people who were trying to get out of paying debts that they rightfully owed.

mking624
08-08-2006, 01:01 AM
Yes, it is best to pay any and all debts, but the threads that I recall were regarding people who were being harrassed about debts they weren't even sure were theirs. NOT people who were trying to get out of paying debts that they rightfully owed.
That's true, but one of the people in the article was a person who DID owe the debt, but simply stopped paying it and told the creditors to stop bothering him about it. That's wrong, IMO.
And actually there was a thread not too long ago on here from a person that did rack up a credit card bill, didn't pay it off, and now collections was coming after her. People were telling her to not pay it. I can understand issues with a debt that's not theirs or aren't sure if it's there (in which case, I would demand proof from both the collector and the company the collector is trying to get money for)...but SOL laws or not, I have issues with people not paying off debts or being advised not to pay a debt that they DO owe.

In situations you mention, yes I do agree that anything that's not theirs should not be paid. But if it's yours and you know it's yours, don't abuse the system and then complain about it when collections comes after you (i.e. the man in the article regarding his credit card debt). Note, I'm not saying to not complain about tactics use.

ftwildernessguy
08-08-2006, 07:21 AM
If you read the excerpt from the article quoted, it says nothing about innocent people wrongly accused of being delinquent on debt. In fact, it refers to people "racking up debt." As a business person, I have been on the receiving end of people amassing debt and then just plain refusing to pay. It is all too common a problem in the United States. If you are wrongly accused of owing a debt, then get an attorney and fight it. But if you have accumulated debt that you can't pay, then contact your creditors and make payment arrangements, but don't hide behind the law in order to get away with not paying your bills. There are too many hardworking honest business people being hurt by this attitude.

molly2004
08-08-2006, 08:40 AM
I find it easier to pay my debts.

That's the problem. People pay their debts but debt collectors come anyway with strong-arm tactics. :confused3 There was a full expose on it in the Boston Globe.

seashoreCM
08-08-2006, 08:42 AM
Part of the reason for the statute of limitations on debt collection is to save the need to save records and proof of payment for so long.

I could go on a long discussion but here is not the place. Aggressive collection of old debts has no place in a society that tries to help the needy. All that happens is that more and more money is sucked out of the economy and out of welfare to become paymenst for fees and legal costs. Meanwhile the original creditor often gets less then 10 cents on the dollar. And more and more honest businessmen and dentists and landlords are added to the losers when current bills go unpaid.

Disney hints:
http://members.aol.com/ajaynejr/disney.htm

MrsPete
08-08-2006, 08:50 AM
MrsPete,
Here is what the FTC web site says on the subject:

"I am being contacted by a collector looking for my former roommate, neighbor, or relative. Can I stop this?

The FDCPA says a debt collector may contact someone other than the debtor, but only to learn the location of the debtor. Usually this contact can be made only once, unless the collector has reason to believe the person has new information. If you are a relative or roommate, a debt collector who contacts you repeatedly also violates your privacy. Excessive contact may be considered a form of harassment. You should be able to stop contact by writing to the debt collector. For an example of what to say if you are the alleged debtor and want to cease calls to you or if the debt is someone else's and a collector is contacting you about it, see sample letters 4 or 6 at Attachment B,
Sample Letter 6 (http://www.privacyrights.org/Letters/debt6.htm) ."

If they persist:
Here is a link to the FTC web site complaint form (https://rn.ftc.gov/pls/dod/wsolcq$.startup?Z_ORG_CODE=)

FTC fair debt practices (http://www.privacyrights.org/fs/fs27-debtcoll.htm)


HTH,
DC :earsboy:Thanks for this information. As I said, it's not a major problem for me, but it's irritating to get these calls for someone else. If the collectors were polite, I wouldn't mind. But as soon as I say, "He doesn't live here", they hang up super-fast before I can tell them anything else. I think they either don't want to waste time, or they want to hang up before I can tell them to put me on the no-call thing.

MrsPete
08-08-2006, 09:04 AM
I could go on a long discussion but here is not the place. Aggressive collection of old debts has no place in a society that tries to help the needy.I can't agree. If we as a society decide to just "let it go", it'll essentially give people permission to become deadbeats when it suits them.

Sure, some people get into situations beyond their control -- medical emergencies come to mind immediately. But there are "safety nets" and helps of various types out there, and as a last result there's bankruptcy.

But if a person's run up a credit card or some other bill, he should pay it -- convenient or not. It's the moral thing to do. It's the legal thing to do. It's the fair thing for the store who provided him with the products in the first place.
Meanwhile the original creditor often gets less then 10 cents on the dollar. And more and more honest businessmen and dentists and landlords are added to the losers when current bills go unpaid.So your argument is that the new creditor is more worthy of payment than the creditor from year's past? Was the person who extended credit to the deadbeat less honest than today's businessmen, dentists, and landlords? I don't think so.

I understand that the old creditor may be forced to accept less than he is actually owed, but that's better than giving him nothing. He's out of pocket because of the deadbeat, and he deserves something.

MrsPete
08-08-2006, 09:08 AM
If you read the excerpt from the article quoted, it says nothing about innocent people wrongly accused of being delinquent on debt. In fact, it refers to people "racking up debt." As a business person, I have been on the receiving end of people amassing debt and then just plain refusing to pay. It is all too common a problem in the United States. If you are wrongly accused of owing a debt, then get an attorney and fight it. But if you have accumulated debt that you can't pay, then contact your creditors and make payment arrangements, but don't hide behind the law in order to get away with not paying your bills. There are too many hardworking honest business people being hurt by this attitude.If you're wrongly accused, it doesn't always take a huge amount of effort to solve the problem. Last week I got a letter demanding payment for a doctor's visit from two years ago. I called the phone number on the bill, and in a few minutes they figured out that it'd been sent in error. Problem solved. If you're not in the wrong, you can usually fix the problem easily.

ftwildernessguy
08-08-2006, 09:22 AM
If you're wrongly accused, it doesn't always take a huge amount of effort to solve the problem. Last week I got a letter demanding payment for a doctor's visit from two years ago. I called the phone number on the bill, and in a few minutes they figured out that it'd been sent in error. Problem solved. If you're not in the wrong, you can usually fix the problem easily.

I agree. The creditor should always be contacted first and I believe in most cases the error can easily be corrected. In a situation where a collection agency has been hired, an attorney may be the only recourse but should be a last resort.

MyGoofy26
08-08-2006, 10:30 AM
In my case it is a debt that I am not sure he ever owed, but even if he does, it is over 10 years old, and paying it now would adversly effect our current good credit. In my case it is 250 dollars in dispute, but would cause us thousands of dollars in increased interest rates when we take the hit on our credit report for paying such an old debt, which, like I said, I am not sure he owes.

Also, the company they say he owes the money to has long since written it off. The people going after us say that they own it now and want the money. They could be scammers for all I know. My Dh does not remember the debt (and with his record keeping who the heck knows if he paid it or not).




This is something that I think a lot of people don't understand. Just because someone *may* have messed up in the past, they don't and shouldn't pay the first person that comes knocking. Even for people never delinquint, if someone sends you a letter stating that the water department has hande over their billing and that they're now in posession of your water bill and that you need to pay them the full balance of your bill plus "fees" they've tacked on, would you not question it? Would you not want to be absolutely certain that this company is legitimate before you write them a check? It's the same with people who have messed up in the past. They have a right to know that the person asking them for money is legally allowed to collect it, AND that the amount they're asking for is correct.

I know the big argument is that the "cost" gets absorbed by everyone else when the original creditors writes it off, but when a debt is past statute of limitations, it's long been written off and any payment made isn't going to reverse it, it's just going to increase the bank accounts of junk debt buyers who've now paid fractions of pennies for this paper. At that point it becomes more about someone wanting to *feel* like they're doing the right thing, rather than actually paying back the debt. . . because the original creditor isn't seeing a penny of what's collected, and none of the money is going to the actual debt that was incurred. A junk debt buyer can buy a $10,000 debt for a couple hundred bucks and if you pay back that $10,000 it's almost pure profit for them and the original creditor is still out all that money except the couple hundred they got to sell the paper. Plus the debtor will end up with a paid collection for the next 7 years (paid looks just as bad as unpaid on a credit report) So the only person "winning" is the junk debt buyer.

I'm sure the flames are coming now :teeth:

ftwildernessguy
08-08-2006, 10:35 AM
Another misconception is a "write off." Not sure what everyone thinks this may be for a business, but any "write off" as far as a business and taxes are concerned is not a dollar for dollar tax credit, but is taken off the gross and only amount to pennies on the dollar in tax savings for the business. Also, whether you can write off a bad account in a business depends on how that business does their accounting. In my case, since I pay tax only on what monies I collect, I cannot write off bad debt.

spiceycat
08-08-2006, 11:32 AM
Another misconception is a "write off." Not sure what everyone thinks this may be for a business, but any "write off" as far as a business and taxes are concerned is not a dollar for dollar tax credit, but is taken off the gross and only amount to pennies on the dollar in tax savings for the business. Also, whether you can write off a bad account in a business depends on how that business does their accounting. In my case, since I pay tax only on what monies I collect, I cannot write off bad debt.

you know I think you are due a tax credit - have you talked to a tax accountant lately.

now it was a couple of years ago (okay I graduated in 2000) - but you could then.

as far as collectors - they are horrible.

I had a problem with nextel. they did not kept their promise to change the cell phone number. They just kept telling me they were WORKING on it for 5 months.

I paid the bills - but when I cancelled because they never changed my number. (there is a Federal law saying they must). they tried to make me pay for the cancelation clause. Well if they had change my phone I won't had canceled.... So I refused and went to the FCC. Well since then I have been bothered several times by their collection agency - going back to the FCC EVERY time - generally stops this.

I don't feel that I owe them a penny. They broke their promise to me. Not the reverse.... I would have been very happy to kept their phone for years - if they hadn't tried to cheat me. they knew they were cheating me. I did not use that phone period....

would you believe the collection agency has told me to pay my bills.... WHAT!!! I did pay my bills - I am not rewarding a company who does not kept their promises....

these people have also hung up on me - lots of times - so I certainly don't feel bad about hanging up on them.

but I didn't realize that I could sue them.... thanks!

my credit charge bills and any other bills that I have - I pay generally in 3 to 5 days of receiving them... (of course I do get on other stuff and forget sometimes - so I have my mortgage, power, phone on automatic draft) had the car too - but it is pay off.

Shagley
08-08-2006, 02:44 PM
Just for the record - I truely did not post this article to start a heated topic, I just thought it might help some people if they have debt collectors coming after them for debts that they honestly believe are not theirs. I never meant this to give ideas to people ideas of how to avoid paying on a debt that they rightfully owe.

Okay, now on with the discussions...

MrsPete
08-08-2006, 04:25 PM
A junk debt buyer can buy a $10,000 debt for a couple hundred bucks and if you pay back that $10,000 it's almost pure profit for them and the original creditor is still out all that money except the couple hundred they got to sell the paper. Plus the debtor will end up with a paid collection for the next 7 years (paid looks just as bad as unpaid on a credit report) So the only person "winning" is the junk debt buyerSo? I agree that the system is problematic, but saying, "Oh, well, no one has to pay their debts anymore" is no better.

You're making it sound like the debtor is the victim, and that's not true. The real victims are the original creditor and the taxpayers who "pick up the bill". The junk debt buyer may be an opportunist, but the debtor is the one who's in the wrong -- he's the one who put the whole thing into motion.

MyGoofy26
08-08-2006, 08:26 PM
So? I agree that the system is problematic, but saying, "Oh, well, no one has to pay their debts anymore" is no better.

You're making it sound like the debtor is the victim, and that's not true. The real victims are the original creditor and the taxpayers who "pick up the bill". The junk debt buyer may be an opportunist, but the debtor is the one who's in the wrong -- he's the one who put the whole thing into motion.

I'm not saying that the debtor isn't at fault. I'm just saying that once it gets to a certain point, the taxpayers have already picked up the bill and the debtor trying to right their wrongs will not help the rest of us and it becomes of a matter of "feeling" responsible rather than actually contributing towards the debt that was incurred. Once sold, the original creditor won't see a penny of what's collected. And it really does nothing for you and me, except keep junk debt buyers in business so they can keep harrassing people with similar names, phone number of old debtors, or some sort of relationship (like your situation)

And I see the junk debt buyers a much more the opportunists. Often they're forcing the taxpayers to pay even more, and engaging in illegal activity (there's a message board for collectors that's just plain frightening). The new trend is to buy a debt at a steep discount, maybe collect a small amount (still a profit based on what they pay) and then "write off" the remainder as a loss. So using the $10,000 I mentioned earlier, they pay a couple hundred and get back a couple thousand as a "settlement" then write off thousands as a loss, even though they turned a profit and even though the taxpayers already "paid" for that debt once when the original creditor took the loss the first time.

molly2004
08-09-2006, 07:36 AM
Here's a link to the Boston Globe special they ran a week or so ago.

http://www.boston.com/news/specials/debt/

There are victims on many fronts: the creditor, the debtor, and society. But when the debt collectors come a-knockin', they're pretty creepy themselves. This article states how something like 80 out of 180 constables who buy and collect these debts have criminal pasts, renegged on their own debts, etc.

No one should be skipping out on their financial responsibilities. I don't believe anyone has been saying that (though I might have missed something...I just skimmed this page :blush: ). I think they are just up on arms about what tactics the debt collectors use to get that money, which the original creditor will never see to begin with.

mking624
08-09-2006, 09:44 AM
No one should be skipping out on their financial responsibilities. I don't believe anyone has been saying that (though I might have missed something...I just skimmed this page ).
No one here said that, but the article implied it...especially when they used an example of a man who did rack up a debt and simply stopped paying it off. So many examples in this world about collections using illegal tactics and they choose the one who willingly chose to skip out on his financial responsibilities. It just sends a message of "hey, you don't have to pay if you don't want to...just tell them to bug off." That's the biggest problem I had with the article.

MrsPete
08-09-2006, 10:18 AM
I'm not saying that the debtor isn't at fault. I'm just saying that once it gets to a certain point, the taxpayers have already picked up the bill and the debtor trying to right their wrongs will not help the rest of us and it becomes of a matter of "feeling" responsible rather than actually contributing towards the debt that was incurred.I just can't see that. If a person borrows 10,000 and fails to pay it back, it's not just a "feeling" of responsibility -- he really and truely owes 10,000. Whether bill collectors are involved or not, whether the taxpayers have already picked up the tab or not, he has a legal and moral obligation to complete what he began. If problems arise, he has options (at least early in the debt); he can refinance or even go into bankruptcy if his problems are that severe, but simply walking away from a debt should never be an option.

I'm not defending collection agency practices --that's a separate issue that clouds the very clearcut principle here: people should pay their debts. If they cannot, they should go through legal channels to better the situation.