New Bill Collector Scheme
Bullying Innocent Consumers
By Daniel Muniz
Suppose you consistently exercise responsible credit behavior.
You are never late with your payments because you pay all of your
bills on time. Then imagine a collection agency incessantly
harassing you day and night for a charged off account belonging to
somebody else. Now imagine the same bill collector trashing your
credit with that unpaid written off account even though it is not
yours.
Such a practice is now becoming commonplace.
Deceitful bill collectors have always been the scum of the
financial world although in all truthfulness, the honest ones (which
are fewer in number) do play a legitimate role in our economy
because they follow the law and play by the rules. Unfortunately,
because of the lure of easy money, consumer ignorance and naiveté,
and the original creditors washing their hands from the dirty work,
the unscrupulous collectors will do practically anything to make a
fast buck.
But for collection agencies to target people completely
unconnected with a charged off debt is a new low.
This sleazy practice is the result of a new focus of bill
collectors. Their hard-nosed bullying tactics have worked so well in
the past that this shift is actually more of a natural progression
for them. And pursuing the wrong people has a perverse incentive
attached to it because it is actually tremendously easier to collect
from them. Someone with good credit has so much more to lose and
more at stake than someone whose credit is already trashed.
Consequently, a bill collector can hold the innocent person hostage
with the threat to ruin his or her credit.
Some of the wrong people have just been individuals with the same
or similar last name. For others, it can be something as asinine as
having the same first name. Still others are just at the wrong place
at the wrong time, like moving into the residence that once belonged
to a debtor.
Another shameful tactic is targeting “authorized users” of cards
that went into collections. Unlike being a joint member of an
account, an authorized user is simply anyone who can use the credit
line but is in no way liable for it. Collection agencies know full
well that they are not allowed by law to collect on authorized users
but they are preying on the ignorance of the consumers, especially
when it comes to harassment and bullying.
The results have become tragic. An individual wrongly accused of
a bad debt may be forced to pay it off in order to protect his or
her good credit score. For instance, someone may be waiting on a
mortgage or a car loan thus it becomes easier to pay off the
extorting bill collector instead of devoting several months or
longer fighting the bogus claim. And the collectors do not mind
making threats and false accusations since collecting on such an
account could represent a huge profit.
In addition to going after the wrong person, collection agencies
have also begun pursuing accounts that nobody in the industry would
have bothered to waste their time on. For decades, very old
charged-off accounts were once considered to be truly uncollectible.
Today, collecting on such accounts (especially if it is the wrong
person) is big business.
These organizations can acquire this old written off debt for as
little as 25 cents per $100 of face value. As a result, a small
outlay of cash for such purchases can generate a big profit even if
the bill collector is only able to obtain a small portion of the
amount owed. Now add some outrageous lying and strong-arm tactics
and that same uncollectible account becomes an enormous windfall;
hence the desire to be as ruthless as possible.
The prospects of big money have made the crooked bill collectors
even more aggressive and forceful. That behavior in itself is
creating the inclination for the collection agencies to pursue
innocent people. But to add insult to injury, it is not only the
wrong person that suffers. Bill collectors also harass their
relatives, neighbors, and employers even though it is a violation of
the law.
However, people are starting to fight back. Big collection
agencies, such as Capital Acquisitions and Management, Allied
Interstate, JBC and Associates, and a host of others have been
slapped with fines by state attorney generals and even by the
Federal Trade Commission. And more states are actively becoming
engaged in fighting these sleazy collectors.
But as an individual, the most important thing you can do to
stand up against the corrupt bill collectors is to be an informed
consumer. You have to know your rights and know which federal
protections you already have. And most importantly, you must be
assertive with the lying, disingenuous collection agencies.
First, everyone should frequently monitor their credit reports
from all three credit bureaus. Every few months, you have to be
aware of any adverse activity that may be the result of a bill
collector.
Next, if you are the target of collection activity for an account
that doesn’t belong to you, then you have to treat it with the
utmost seriousness and severity. All too often, there are people who
just laugh off the false accusations thinking that the bill
collectors are barking up the wrong tree. It is not until their
credit is wrecked that they realized the gravity of the situation.
The moment a collector makes a threat or sticks you with a bogus
claim, you must immediately send off a certified letter explaining
that you are wrong person and that this account does not belong to
you and that they must stop all collection activity on you. In
addition, you must also emphasize that you are diligently recording
each violation of the law if they continue to harass you.
Read up on the Fair Debt Collection Practices Act (FDCPA) and do
a Google search for debt validation. Under federal law, you have the
right to dispute the validity of a debt and to demand proof that you
do indeed own that debt. It is as simple as no proof – no collection
activity. And do all of this in writing. Do not talk to bill
collectors on the phone because everything needs to be in writing.
And if the harassment continues, contact the local office of your
state’s attorney general’s office, especially after you have
carefully documented each and every violation. The more documented
incidents you have, the better that they can help you.
Right now, these dirt bag collectors are taking full advantage of
the ignorance of consumers. And their greatest weapon is fear
because so many innocent people with good credit don’t want to have
their credit scores ruined. But the best way to counter the
unscrupulous collectors is to become familiar with your federal
rights, such as the FDCPA. When you can forcefully assert your
rights, then the power of intimidation from the collectors is
greatly diminished.
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