Debt collector horror stories

Bankrate.com ^ | 08-04-03

[Brian S]

By Lucy Lazarony • Bankrate.com

Sure, you're behind on some bills, but nobody deserves to be treated like this.

Badgering phone calls and threats, insults and outright lies -- these are just a few of the unfair and illegal tactics that some debt collectors unleash on consumers. These rogue collectors don't represent the entire industry, but they are not uncommon.

"It's just threats and intimidation, but you keep it vague," says Michael Flannagan, a former debt-collection supervisor in Tacoma, Wash. "A lot of things bill collectors do are downright dirty and illegal."

Third-party collectors, agencies hired by creditors to collect unpaid bills, are some of the most abusive.

Just ask Angela M., a mother of two, in Denton, Texas. She fell behind on four credit card bills in late 2001.

"When it went to the collection agencies, it turned really personal," Angela says.

"They called me a deadbeat. They called me a criminal. I had perfect, spotless credit before this happened."

Angela's roughly $40,000 in overdue debt stems from a small business. She opened a children's boutique in 1998.

One debt collector accused her of running up her credit card balances with no intention of paying.

One collector told her to sell her house. Another threatened her home. One debt collector scolded her for taking her children to Chuck E. Cheese for pizza. Another collector told Angela, who is expecting another child, that she had no business being pregnant.

The calls were constant and the insults seemed endless.

"They were calling all the time and I told them I couldn't pay and they would just keep calling," Angela says.

"I was terrified. I thought I was going to end up in debtor's prison or at least lose my home."

Intimidation usually works
And that's exactly how a debt collector wants you to feel. They figure if they harass you enough, you'll pay up.

"The collection industry is sometimes so motivated to collect that they'll do anything and I mean anything to accomplish that," says Peter Barry, a consumer rights trial lawyer in St. Paul, Minn.

It doesn't matter that you don't have the money or that you have more important bills to pay first. It doesn't matter that you were sick or had an accident or lost your job.

"You're just an account number they need to get money out of," says Mary Fons, a consumer protection attorney in Stoughton, Wisc.

It may not even matter that it's not your bill.

"Many times the abuse continues anyway, even though it's not that person's bill," Fons says. "They just expect people are lying to them and that's how they treat people."

Not only is this kind of harassment rude and uncalled for, it's illegal.

Know the rules
The Fair Debt Collection Practices Act was passed in 1977 to protect consumers from abusive debt collectors. There's a whole list of rules third-party debt collectors must follow when collecting a debt.

All those brutal insults and threats aren't supposed to happen. For a summary of federal debt collection rules, click here.

Unfortunately for consumers, some debt collectors violate the law on a regular basis.

They'll threaten to garnish your wages or take away your car or home when they have no right or intent to do so. They'll threaten to press criminal charges.

"They threaten to get the police involved as if not paying a civil debt is a criminal matter," Fons says.

A dirty debt collector will call you at all hours of the day. They'll threaten to tell an employer or spouse or relative about your debt. They'll call you at work after you told them not to contact you while you're working.

"Even if they told you not to call them at work, how do you prove they told you?" Flannagan says. "You bend the rules when they can't prove it."

They'll call your employer several times in a single day to frustrate and embarrass you.

"I had one case where they placed 16 phone calls in 10 minutes to a lady at work," says Jerry Jarzombek, a consumer attorney in Fort Worth, Texas.

A debt collector could even inflate the amount you owe. How much could a debt collector up your bill? One family bounced a $12 check to Papa John's. A debt collector demanded $140.

"It's just rampant profiteering," says Rob Treinen, a consumer attorney in Albuquerque, N.M. "They tried to collect a lot more than allowed by law, more than 10 times the amount."

Why do some debt collectors violate the Fair Debt Collections Practices Act so often? Because they know they can get away with it.

"The odds are very small that you're going to get caught," Flannagan says.

Few consumers are aware of their rights, so they take whatever abuse a debt collector decides to dish out.

"They don't know better," Flannagan says.

And many consumers feel so stressed out and demoralized that they keep right on taking the abuse.

"They think 'I didn't pay my bills so I deserve to be treated this awful way,' '' Fons says. "They don't know they can get help."

They don't know the law is on their side and they can fight back.

The Fair Debt Collection Practices Act gives consumers the power to strike back against abusive debt collectors.

The right to stop contact
If you can't take it anymore, you can stop a debt collector from contacting you by writing a letter to the collector and telling them to stop.

It's a good idea to send the letter certified mail, so you'll have proof that the debt collector received it. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action.

Will firing off a letter to debt collector that tells them to stop contacting you actually work? Will the threatening phone calls stop just like that?

"More than half the time, yes, because then you've made a paper trail," says Fons, whose handled debt collection cases for consumers for 15 years. "Some don't because they don't care. Some don't because they're disorganized."

Keep in mind that sending a letter to a collector will not make a debt go away if you owe the money. The debt collector or your original creditor may still sue you.

The right to dispute a debt.
Under the law, a debt collector must send you written notice telling you the amount of money you owe and the name of the creditor. If within 30 days of receiving this notice you send a debt collector a letter stating you do not owe the money, the debt collector may not contact you.

A collector may only renew collection activities if proof of the debt, such as a copy of a bill, is sent to you.

The right to sue.
If a debt collector has violated the law, you have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also may be recovered. A group of people may sue a debt collector and recover money for damages up to $500,000 or 1 percent of the collector's net worth, whichever is less.

For more details and tips on how to fight back against a debt collector, check out this article from Bankrate.com. Whatever strategy you choose, it's important to get proof of any harassment.

"I tell people all the time, 'If you can't prove it, it didn't happen,''' Jarzombek says. "That's my line of lines."

If a debt collector is breaking the law and harassing you, you'll need evidence.

File all collection letters and keep detailed notes of collection calls. Note the day and time of each call, the name of the collection agency, the first and last name of the caller and what was said.

Make a tape of each collection phone call. Flicking on a tape recorder is a great way to swing back at an abusive debt collector.

Thirty-five states and the District of Columbia allow you to secretly tape your phone conversations. For a listing of states, check out this chart.

In the other 15 states, you can tape with the other party's permission. And if you tell the debt collector you are going to tape and he or she keeps talking, that's considered giving permission.

"Just having that recorder on will keep a bill collector on the up and up," Flannagan says.

After contacting an attorney and learning about her rights, Angela M. started taping calls from debt collectors. She won't even talk to a debt collector if her tape recorder isn't going.

"Nine times out of 10 they say things they shouldn't," Angela says.

"If you don't have it taped, it's just your word against theirs."

Even with the aid of a tape recorder, going toe-to-toe with a debt collector is no easy task. These folks are experts at intimidation.

"It can be exhausting at first. It can be stressful when talking to people who are so mean and so brutal," Angela says.

"After awhile you feel like a crusader. You're out there and you' re not letting people get away with harassment."

She encourages other folks who are feeling harassed by debt collectors to fight back.

"Stand up to them," Angela says. "Look at it as you're standing up for the little people."

[chris1]

I do real estate closings and collections, for your information. Every attorney I know does real estate closings as well as practice in one orvmore areas. Its just the way it is. Why throw away business???? Closings are not difficult to do and everyone at some point will an attorney to do one, at least in NY. You have never heard of people doing more than one task???

[from occupied ga]

MCI was sleazy before worldcom and Bernie Ebbers took it over, but after they set new records. I had acquaintenances who worked as contractors, and the first thing when Bernie took over was that they didn't get paid until 90 days or more after sending their invoices (I doubt Bernie's check was ever late) The next thing they did was stick them for a couple of month's back pay when MCI filed bankruptcy - some of them were out $30k - $45k and several months of work that they never got paid for.

[FreeInWV]

I rent apartments, and have seen alot of this lately. That is why I am trying to get out of the rental business. Several (a large percentage) of my recent tenants have been playing the system for all they can get. It is very difficult to get money out of worthless deadbeats who have figured out how to manipulate the system. They start as clean cut college kids who take out huge student loans. Then they blow all of this money on beer, weed and other drugs. Then the utilities go behind and the credit cards go up. Then the rent gets behind. They still keep smoking and drinking. They tell you that they will pay you everything in 2 weeks. Then they say 1 more week. Then they write you a bad check. Towards the end they start buying really expensive stuff when they realize that their credit is screwed. By the time you get them thrown out, they owe you hundreds of dollars in back rent and have done hundreds of dollars of damage while they were drunk or all stoned. Amongst the trash that they leave behind, you find months overdue bills from the gas company, the electric company, the water company, the cable company, the phone company, the cellphone company, the ISP, Visa, Mastercard, Discover and Columbia House. One guy in particular from this past year had collection notices from all of these people, and even left his unfiled w2 statement behind. He just didn't care. He even had some utility bills in one of his friends name. He must've borrowed the guy's ID to get the water turned on. There were collection notices and a shutoff notice on this bill as well. Some day, his friend is going to apply for a loan and discover he has no credit. I took him to court and was awarded damages, but there is no good way to collect. It ruined his credit, but what does he care? I have half a notion to mail his w2 to the IRS with a nasty and insulting letter telling them where to stick it. Then maybe they can torment him some.

[Knight Templar]

There are more deadbeats and professional
debtors out there, than mean and nasty
collectors. Just don't spend more than
you can afford and pay your bills.

[FreeLibertarian]

Not paying for goods and services rendered is criminal it's called "stealing."

Only if they purchased the goods and services with no intent to pay. If they made any payments it is strictly a civil matter not criminal. Even if they did not make payments it would be almost impossible to prove their "intent" unless they lied on the loan application.

[ladyjane]

real estate brokers/agents do "under the table" deals

uh, some of them do.

[from occupied ga]

. If they made any payments it is strictly a civil matter not criminal.

Legally true; however, I still consider taking without paying as stealing.

Even if they did not make payments it would be almost impossible to prove their "intent" unless they lied on the loan application.

Likewise true, but again I've worked in a company where I've seen thousands of people run up large bills just before the discontinued service - pretty obvious that they never intended to pay even though they paid their monthly bill until shortly before the end.

[FreeLibertarian]

G.E. and Hallibuton-Brown & Root are other companies that are very bad about extended pay cycles. Typically they use a 60 day cycle with extra time on each end for mailing, processing, etc. I solved the problem by offering 2% off the invoice for 30 day pay. Then I added 2% back on top of my rate. Now they're regular as clockwork 30 day pay and I get all my money. We're both happy. LOL!

[FreeLibertarian]

I received a little legal education in the subject when one of my clients filed Chapter 11 immediately after I completed a project. I eventually managed to get all my money but others weren't so lucky.

[Psycho_Bunny]

I was in 3rd party collections for a couple years, then worked 6 years in a recoveries unit at a bank in the dealer/auto group.  I'd say only around 30% of the debtors who make it to 3rd party collections are responsible and decent people who have run into bad times and genuinely want to, but can't pay their bills. 

Maybe even only 20%.  And most bill collectors recognize them and leave them alone.

The rest are deadbeats, self-important "high flyers" or credit criminals.

[chris1]

If someone offers to make a reasonable payment plan, 9/10 times I and the creditor will agree to it because the debtor shows that he/she is acting in good faith.

[Twinkie]

Then, when she finally puts a man on the line say to him,
"Hey! What's the deal there? Do you discriminate based on
gender?! I demand to talk to a woman!" - One comedian told
how he handled telemarketers. When they called he would say
in his most red-necked accent, "Are you NEKKID?" and sort of
snort and breathe heavy. Guess it could apply here.

[John123]

I found your comments on real estate landlording interesting. I am curious on a few points since I am not familiar with West Virginia(?).

How soon must an tenant leave after receiving an eviction notice?

If an tenant doesn't pay by a certain date, ie: the first of the month, do you proceed with the eviction notice right away?

Is the rental market very soft in your area?

Do you collect a last month rent or a cleaning deposit when you first rent the place out?

What do you rent, apartments or single family homes?

[Alouette]

First, if the collector is a woman, ask her if there is a man you can talk to. Tell her it is your personal policy not to talk business with a woman. They usually go ballistic at that point. Then ask again if there is a rational person, a man, you could talk to. The reaction is priceless.

Get extra points by saying you are a Muslim and you will report this act of anti-Muslim harrassment to CAIR.

[jpl]

One time a family member of mine owed someone some money, and the scumbags actually started calling me and harrassing me at home, even though I had nothing whatsoever to do with the transaction. I had to threaten them with a lawsuit in order to get them to cease and desist.

[discostu]

You reminded me of one of Tucson's most famous businessmen, I won't give his name because he has lawyers but anybody who's done construction business around here will recognize him immediately.

He's a real estate developer. His habit is to contract with small firms, companies that won't be able to do anything but his contract if they accept, he offers a ton of money makes it look like the deal that will move them to the big time and eventually he finds one that accepts. The contracts he offers are heavily backloaded with just enough payment during the job to allow the company to meet salary, when the job is done he stops paying. Because the company was relying on him for sole revenue for a couple years they generally can't afford to chase him, nine times out of ten they go out of business and he gets multimillion dollar buildings made for pennies on the dollar.

All that being said some debt collectors go seriously over the top.

[Darksheare]

I had one woman tell me to get "f'd".
I asked her when she was available for the job.

[Smokin' Joe]

All you gotta do is read the 4 your spouse put in the 'hundreds' column as a 9 and you are on your way to having a problem....Separate checkbooks, please.

[Movemout]

Interesting. I have had about a half dozen calls over the last two years (I think it is the same woman) wanting to collect on a medical bill when I had to have some emergency services. My response has been the same each and every time. Send me a copy of the bill so I can check with the insurance types to see if the bill has been paid. She claims to have sent me copies but I know that to be untrue. I do not know what she is trying to do but $250.00 is a bit of dampness in the ocean of medical bills.

BTW my brother was a "debt collector" back in the 70s. He said it really stunk up the trailer park. It must have been pretty bad. He quit and spent a year down in Mexico carving chess pieces out of rock.

[FreeLibertarian]

Last November I completed a project as a sub-contractor where the prime contractor ended up waiting 6 months for payment. It turned out the end-users project was over budget and their project manager had hidden $500,000 worth of invoices in his desk for 6 months while he sought other employment. His employer found the invoices when they cleaned out his desk. If I had been the prime instead of the sub I would have been out of business and the project manager would have been the Ace of Spades on my personal deck of cards.