Collection Agency Question

[Maleficent13]

Now, I know we all have perfect credit here on the DIS , but on the off chance someone might know someone who knows someone...

I have an employee who just left my office hysterical because she is getting collection calls from somewhere (no idea where...a credit card, I think). They threatened to take her house and when she told them she doesn't own one, they threatened to call child services to have her kids taken from her because she was a deadbeat mom who doesn't pay her bills.

Now, debt aside, this woman is a good mom from what I've seen (at least to my observation her kids are fed, clothed, happy and healthy)...this can't actually happen, can it? I told her I believed it was just a scare tactic and to calm down. I also advised her to talk to a lawyer, but I know she doesn't have the money for that either.

 

[Tina]

It is against the law for collection agencies to harrass you at work. She needs to tell the caller this and tell them she will report them.

 

[Miss Jasmine]

I do not believe they can do that, and I think that is very threatening. I bet there is some FTC regulation that says they can't make those types of threats.

 

[HaleyB]

She needs to calmly tell them they may not contact her at work or by phone again. Then she needs to send them a drop dead letter.

Send her to this website: http://clarkhoward.com/topics/drop_dead_letter.html

 

[Crankyshank]

I would have her call back and ask for a manager and tell them they need to stop harrassing her and making unfounded threats against her or she will consider filing charges.

 

[Miss Jasmine]

I was right, here you go.
http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm

She needs to fire a nice letter off the collection agency and CC the FTC.

 

[AllyandJack]

That's terrible. I was a creditor's rights attorney - we represented the collection agencies who represented the creditors. First, let me say, they cannot take your kids away from you. Seriously, we all know loser parents who deserve to have their kids taken away and they aren't. They're not going to take her kids.

Second, tell her to write a letter to them instructing them that all correspondence must be in writing and they are not permitted to call her on the phone anymore.

Third, she shouldn't get horrified if they threaten litigation. Sometimes, the lawyers are better to deal with than the agency. I represented them and they were horrible to me, so I can only imagine how they treat debtors. If they do refer the case to a lawyer, she should be up front with them and work with them. Ignoring it will only make it worse and, even going to court isn't all bad. As long as she's reachable and doesn't try to run, most lawyers and judges will work out a fair deal.

If she can't afford a lawyer, tell her to contact local law schools in the area. They usually have clinics that offer free legal services. Also, call the local bar association and get a referral to a lawyer or organization that will offer free services if she meets income requirements.

I hope it all works out for her.

 

[mainewmn]

Tell her to go here www.creditboards.com

 

[cardaway]

I was told once by a person who does this for a living that they make their money off the amount they get the person to pay. They get a percentage. Is that true?

 

[diznygirl]

She needs to write a letter. Telling them over the phone to stop calling won't work - they need a letter on file. Then tell her to hang up whenever they do call, until the Do Not Call letter takes effect (something like 30 days probably). They can't do any of the things they are threatening. They can, however, eventually get a judgement to attach her bank accounts - but that would cost them money and is probably further down the road. But talking sense to a collection agency is pointless.

Get an address - write a letter. And hang up when they call. (advice from a "friend of a friend" )

 

[Maleficent13]

Wow...I read Miss Jasmine's link. I had no idea collection agencies were regulated like that. I'm sending the link to my employee. Thanks.

AllyandJack, I'm curious about something you said...

If they do refer the case to a lawyer, she should be up front with them and work with them. Ignoring it will only make it worse and, even going to court isn't all bad. As long as she's reachable and doesn't try to run, most lawyers and judges will work out a fair deal.

When you say run, do you mean become a fugitive?? That strikes me as excessive action to avoid a debt! I keep picturing that movie with River Phoenix...

I'm interested in what the worst case scenario would be, assuming it goes all the way to court?

 

[barkley]

financial mismanagment (as in collection agency activity) is not a basis for cps removing a child. additionaly collection agencies (despite what they will tell people) cannot get a collection lein against public assistance payments or child support.

some states have laws that allow for civil penalties against collection agencies who once notified by a debtor to no longer contact by phone but continue to do so.

if she is lower in income she can also contact her local county legal aide organization for free or low fee assistance in dealing with the matter.

 

[Maleficent13]

I was told once by a person who does this for a living that they make their money off the amount they get the person to pay. They get a percentage. Is that true?

My company turns debts over to a collection agency when they become old, and we do pay the agency a percentage of what they collect. So for the one we use, at least, that is true.

 

[AllyandJack]

When you say run, do you mean become a fugitive?? That strikes me as excessive action to avoid a debt! I keep picturing that movie with River Phoenix...

I'm interested in what the worst case scenario would be, assuming it goes all the way to court?

A lot of people will move, change phone numbers, etc. to try and evade the agency. It usually doesn't work. I generally could find anyone, as long as the creditor had a social security number. Some people will ignore letters and phone calls. That sort of thing.

If it goes to court and she appears, the judge will usually set up some sort of payment arrangement - I've had some as low as $20./week. If she defaults on that arrangement, the attorney will file a motion to hold her in contempt and get a judgment against her for the full amount, plus interest and, possibly attorney's fees (that will be statutory depending on the state). If they can't work out an alternative agreement or settle it, they can attach her bank account and garnish wages. If it was something like a store credit card, they can repossess the stuff she bought with the card. In MA, judgments are good for 20 years. So, even though she doesn't have any assets now, if she acquires assets during the time the judgment is still active, the judgment can be enforced in that state or the state where she might be living if she moves to another state.

I've never dealt with an agency in my personal life, but they were not much nicer to us and we were on their side (most of the time).

 

[Maleficent13]

I've never dealt with an agency in my personal life, but they were not much nicer to us and we were on their side (most of the time).

Yeah...the one we used to use was REALLY rude to us when we had to speak to them...my boss used to have to remind them they worked for us. Not that it worked.

Not that I was a fan before, but after working with them for years, it just turned me off more.

Thanks for all the info! The DIS is full of helpful stuff!

 

[MommyPoppins]

Collectors used to call me all the time asking me questions about my neighbor and for their phone number. I always enjoyed telling them off. It's always fun when your harassed by them and you aren't the one they want to collect from.

 

[Motherofboys]

Kudos to AllyandJack for the "unofficial" legal advice. I have also worked with clients who have had bad experiences with collection agencies. Your employee never needs to take a call from a collection agency at work-period. They have no right to call her place of employment (as long as she has a home number on file with them). In my experience clients have gone all the way up to a few days before the court date and have still been able to settle for a lesser amount out of court. Usually we can get them a 25% discount without even trying hard. I have seen discounts up to 65% in some extreme negotiating situations. Collection agents also like to use scare tatics about paying now to avoid attorneys fees and court costs, these are usually statutory and usually add on less than $200 (in my experience, your may vary). Bottom line she should not put up with the lies and harrassment, she should set up a payment plan or settle the debt. Hope this helps.

 

[ctinct]

Your employee needs to go to the crediboard site recommended by a previous poster and read, read, read. Is she sure the debt is hers? There are steps she needs to take to be sure it is hers...i am not very familiar with them, but the people on that board are. She may not even owe the money. Mistakes happen. Also, every thing she does should be in writing. The letter she sends to the collection agency should state that she wants all communication to be in writing. Keep copies of everything. Also, if she does owe the money, is the debt still within the statute of limitations? There are some agencies who will buy debt from companies even though the debtor is no longer legally obligated to pay it, and then harass the debtor hoping to get any money at all. Since debt collection agencies are regulated by law, and this collector is CLEARLY breaking the law if he/she threatened to take her children (nope, they cannot do that), my guess would be that this may not even be a valid debt. If the guy calls back again, your employee should tell him that she will record his call. Have her get a copy of her credit reports, also. If she hasn't done so in the last year, she can get them for free. make sure she goes to the right site for that. Sorry, i don't know it offhand, but there are copy cat sites besides the legit one. She may even want to pay for her reports, because if she questions anything on her free ones, the agencies have 45 days to investigate vs 30 if she pays for them. (Oh, and if she pays for them, make sure she goes to the Experian, TransUnion, or Equifax sites...don't do one of those credit monitoring deals.) She should check that the debt has not been illegally re-aged. Sorry, this is getting long, and I really am not an expert in this area....had to educate myself when people started calling here looking for my ex. Anyhow, creditboards.com is an excellent resource. Good luck to your employee.