Towson Bankruptcy Attorney: The Dirty World of Debt Collectors
In an upcoming book, New York Times writer, Jack Halpern invites us into the dark and filthy world of debt collectors. Along with dirty tactics comes a fortune especially for debt buyers. Debt buyers are entities that buy old debt that traditional lenders such as banks have given up hope of collecting. Banks are happy to take a penny on the dollar for these types of debt. A debt buyer can therefore buy millions in debt for a paltry sum and immediately seek to collect the full amount. It is as close as minting money as you can get. In fact, some middle men will buy debt for a penny and turn around and sell for two pennies almost simultaneously. I have seen transactions that transferred the debt between three or more entities on the same day!
For consumers, this is often very confusing and comes as a shock. For starters, some are mistaken that in thinking that just because the debt is old and the creditor has not contacted them for a while then the debt is no longer collectible. If only it was that simple. There are statute of limitations for sure, but in many a case the debt collectors have a right to get paid.
For those who have being hounded by debt collectors, especially ones pursuing debts that are so old you do not recall them, then you know there are some unsavory types out there.
As a white marsh bankruptcy attorney, I have heard it all from clients with some comments coming just as recently as last week. To get you to pay, these collectors violate rule after rule often embarrassing and causing emotional wreckage on folks along the way. Relatives who have little to do with the debt get hounded. Jobs are threatened by constant calls to workplaces meant to again embarrass and threaten the alleged debtor. The real kicker that a lot of people amazingly still fall for is the threat of arrest or jail. Collectors have gone as far as to pose as law enforcement officers to collect the debt.
The above tactics continue to haunt the debt collection industry which for the most part has been fairly unregulated. As the author tells us, anyone including those with criminal backgrounds can become a collector. In fact, it seems from one company profiled the roughnecks were more likely to succeed as collectors than boy scouts as put in the article.
With boy scouts out of the way, the more aggressive and ethically suspect characters have moved to the forefront of debt collection form what my clients tell me. Everyone I talk to has experience a violation of the Fair Debt Practices Act which is meant to protect consumers from these types of tactics. Consumers can fight back in a several ways. First, from lies about the things they can do to collect to harassing behavior, most clients should be suing these entities. For more on the rules and what you can do see my FDCPA page. However, most folks simply do not know that they can or are too busy to pursue such action.
Secondly, with folks going about their day to day lives, it is imperative that regulatory agencies at all levels of government step up to the place. The creation of the Consumer Financial Protection Bureau brings hope that consumers issues will be addressed more proactively by having an entity whose sole focus is the consumer. The CFPB investigates and can take corrective action against debt collectors who violate the rules. The consumer and bankruptcy attorneys around the country are advancing ways that the CFPB can do more such as the suggestions made by the National Association of Consumer Bankruptcy Lawyers.
The world of debt collectors may be dirty and their tactics beyond the pale, but the tide seems to be turning and that is good for consumers. If you think your rights have being violated contact the CFPB and/or a lawyer to push back against these entities. In addition to helping yourself, you can save the next person from experiencing the same issues.