Thanks to the recession, debt collection has been a growth industry. As millions of Americans struggle to pay their bills, creditors are unloading debt to collection agencies for pennies on the dollar. The collection agencies are coming down harder than ever on hurting consumers. There have been numerous more consumer complaints about collection agency harassment. Law firms that are using debt collection software are in all the courtrooms. But consumers have to know that they can hire an attorney to sue debt collectors for abusive practices.
A couple of collection agencies – abuse, violence and bogus claims
There have been a growing number of collection agencies trying to take money from people who do not have it right now. It was reported by CNN that harassing phone calls, abusive language and physical violence are becoming a bigger part of the collection agency business. It was reported by The New York Times that a single law firm can use computer software to file thousands of debt collection cases, often based on inaccurate or incomplete info supplied by creditors who sold the debt. As outlined by the Post-Bulletin in Minneapolis, accounts have been tapped, wages seized and individuals threatened with arrest for debts they don’t owe or for inflated amounts.
Collection agency harassment goes up dramatically
Complaints of collection agency harassment increased by 50 percent in 2009, as outlined by the Federal Trade Commission. The CNN article explained that they’re on track to jump 13 percent more in 2010 based on FTC complaints filed in the first six months. The biggest complaint is repeated calls. It is common for debt collectors to harass consumers with calls for. After someone answers the phone, they can be abusive. Complaints of collection agencies using obscene language spiked 35 percent last year. Complaints of debt collectors threatening or resorting to violence more than doubled last year.
Debt collection software sues indiscriminately
While harassment by collection agencies is increasing, they are also hiring lawyers to sue on a mass scale. The New York Times article said a debt buyer sends a law firm a database that contains consumer data including names, home addresses, outstanding balances and the date of default. The law firm runs the data through debt collection software that runs suits through the legal system automatically, such as the collection letters, summonses and lawsuits. Most consumers who get sued by debt collection software tend to fail to show up in court, and those who do rarely have a lawyer. A court judgment gives debt buyers the ability to collect on the debt through things such as wage or property garnishment.
Bankruptcy laws next fuel debt collection industry
The debt collection industry exploded starting in 2005 with sweeping changes to federal bankruptcy laws that made it harder for people in financial trouble to get a fresh start. People defaulted on loans which then expanded the debt buyers’ market. The Post-Bulletin article explained the nation’s five publicly traded debt buyers last year paid $ 835 million to acquire $ 20 billion in old debts. Credit card debt makes up the total Each and every type of charged-off debt, from unpaid cell phone accounts to hospital bills are for sale. Debt buyers base their claims on data that is up to 15 years old that could be impossible to verify, and they’re ready to hound individuals for years.
Consumers sue to get even with collection agencies
Aggressive tactics are becoming more common. According to the CNN article, collection agencies calling before 8 a.m. or after 9 p.m., demanding additional money than what is owed, revealing a consumer’s debt to a third party or threatening “dire consequences” like prosecution, jail time, property seizure or job loss. These practices are considered illegal under the FTC’s Fair Debt Collection Practices Act. Consumers can take a collector to state or federal court for harassment. If they win, the collection agency has to pay for any damages caused by the harassment, also as court and attorney fees.
More details about this topic at these websites
CNN on Yahoo
finance.yahoo.com/news/Debt-collectors-sock-it-to-cnnm-2499699064.html?x=&.v=4
New York Times
nytimes.com/2010/07/13/business/13collection.html?_r=1&emc=eta1
Post Bulletin
postbulletin.com/newsmanager/templates/localnews_story.asp?z=7&a=460512
