Debt Collection Horror Stories

During the economic downturn, and knowing that no one is really paying much attention, some debt collection agencies are breaking the law. They're threatening and harassing the folks who have the debt - and sometimes they go after friends and family as well.

Warning: the full story at the link is upsetting and contains some direct quotes that contain racist and abusive language. From Alternet:

From racial epithets to impersonating police officers to trying to collect debts from the wrong people, some debt collectors have become increasingly abusive in recent years—and in the economic downturn of the late 2000s and early 2010s, those abuses are only becoming worse. In March, the Federal Trade Commission (FTC) announced that next to identity theft, complaints about debt collectors were the most common complaints it received in 2010; last year, the FTC said, it received over 144,000 complaints about debt collectors, which was a 17 percent increase from the 119,609 debt collector-related complaints it received in 2009. The FTC said more than 4,100 of the complaints it received about debt collectors in 2010 involved threats of physical violence.

Threats of physical violence?

Debt collection horror stories are not hard to find, and in many cases, those who have been verbally abused have actual recordings of the abuse. Tammy Henshaw of Bellville, Missouri told KMOV-TV (St. Louis’ CBS affiliate) that she was hounded by a Los Angeles-based debt collection agency after the death of her daughter Angie. When Henshaw’s daughter died, she was left with a considerable amount of medical debt; as a result, Henshaw was unable to pay the funeral-related expenses. The funeral home sold the debt to that collection agency, and abusive messages were left on her answering machine. In addition to calling her “white trash” and a “deadbeat piece of crap,” one of the agency’s collectors threatened to dig up her daughter’s dead body and hang it from a tree if she didn’t pay the debt immediately. KMOV-TV played a recording of the collector telling Henshaw, “Are you going to pay this bill or not, or am I going to have to kill you?”

Threatening to dig up her daughter's body? In the United States, in the 21st century? Over a debt?

Attorney Joseph Mauro was interviewed for this story:

Asked to list some of the most common ways in which abusive debt collectors blatantly violate federal law, Mauro said, “It’s everything. False threats of lawsuits, false threats of freezing bank accounts, false threats of garnishing pay, outright harassment in terms of name-calling and profanities, debt collectors acting like they are lawyers, debt collectors saying or implying that they are law enforcement, persistent telephone calls multiple times in a day.”

Naturally, the debt collection industry says these stories represent a small portion of their (mostly) ethical profession. Based on my own experiences and the anecdotes of other, these sorts of threats and bizarre statements may be far more common than the industry wants to admit to.

It is important for all of us to know our rights. The Fair Trade Commission enforces the FDCPA; the Fair Debt Collection Practices Act. The FTC's website has a lot of good information, including this Debt Collection FAQ that states clearly what and what is not legal behavior on the part of a collection agency. If you encounter harassing or threatening, please report it immediately to the FTC and to your state's Attorney General. Keep written records, and record calls if you can. Your state may also have a consumer protection agency that can help you.


cross posted at MainSt/workingamerica.org