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13 KiB
Plaintext
1 line
13 KiB
Plaintext
What You Should Know About Collection Agencies
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"Cosmopolitan" (November 1984) pp 136-143
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Karen Hartney laughed when she pulled the lavishly illustrated book on
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Galapagos Islands wildflowers out of her mailbox. She hadn't ordered the
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book, wasn't about to pay for it, and felt no obligation to go to the
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trouble and expense of returning it.
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Two weeks later, she was billed $29.95, plus mailing and handling. She
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threw the statement in the trash. In time, the letters grew nasty,
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demanding payment and warning that her credit rating would suffer if she
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didn't respond promptly. When a collection agent began calling her at work,
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she snapped.
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"Leave me alone," Karen hissed. "I never wanted that dumb book
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anyway!"
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"You might have thought of that before you decided to keep it," the man
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responded. "I think the word for taking things that aren't yours is
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'stealing.'"
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Karen (whose name has been changed) was furious-- but also worried.
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Could the collection agency harm her credit rating, contact her employer,
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neighbors, landlord? Most of all, she just wanted the harassing calls and
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letters to stop. Though resentful, she mailed the payment-- now a full
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$37.50, including interest and collection charges.
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Karen's case is not an isolated one. Despite the strong new consumer
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protection laws passed in recent years, abuses still exist, and a sizeable
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minority of retailers and collection agencies engage in such illegal
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collection practices. Charging for unordered goods is only one of the many
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activities that are prohibited by federal law. (If, by the way, you receive
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unrequested merchandise as Karen did, you are under no obligation to pay.
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You may treat it as a free gift, but you should notify the sender, in
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writing, of your intention as soon as you receive a "bill".)
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The thorniest problems occur when a debt is truly owed and a consumer,
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through overextension or inadvertence, falls behind in paying it. In this
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case, the account is often turned over to a collection agency, which may
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behave unethically in its effort to recoup the money.
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"Some of the most extreme cases we see involve actual threats of
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violence," reports Diane Conner, staff attorney for the Credit Practices
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Division of the Federal Trade Commission (FTC). "Children have been told
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over the phone, 'Tell your parents they're going to jail tomorrow if we
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don't get the money.' We've also heard about collection agencies trying to
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add on illegal fees of up to 100 percent of the original debt."
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Federal law protects you against such abusive practices. By knowing
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which tactics are illegal and how to stop them, you can avoid being a
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victum.
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BEYOND THE LEGAL LIMIT______________________________________________________
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The following are violations of consumer protection laws:
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REPETITIVE CALLING OR CALLS AT UNUSUAL TIMES OR PLACES. Some collection
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agents will call a consumer repeatedly during a single day, or telephone
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late at night without permission-- both of which are clearly illegal under
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the Fair Debt Collection Practices Act (FDCPA).
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Calls at work are not considered "harassing" if an office is the most
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convenient place for you to receive the call-- but, says Diane Conner, "If
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the agent knows that your employer does not allow you to receive personal
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calls at work, or if you've asked not to be contacted there, then it would
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be a violation."
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CALLS TO PERSONS OTHER THAN THE CONSUMER. If a collection agent has
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business with you, you are the only person with whom he may discuss that
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business. "We frequently hear that a collection agent has called an
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employer, or perhaps a neighbor, and left an "urgent message' that the
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consumer should call XYZ Collection Agency regarding payment of a debt,"
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reports Bill McDonough, an FTC staff attorney. "The only motive would be to
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embarass the consumer, and it's against the law."
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ABUSIVE, OBSCENE, OR THREATENING LANGUAGE. Late bill payers have been
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called deadbeats and bums, subjected to rude and obscene language, and given
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veiled as well as direct threats of violence and imprisonment. If this
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happens, end the conversation immediately, requesting that you never be
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contacted again. Follow up with a brief letter barring future contact with
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the collection agency. You may then wish to file a complaint with the FTC
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or state consumer protection agency, or pursue private legal action.
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MISLEADING THREATS OF LEGAL ACTION. No one has the right to make false
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threats or to claim that legal action has been or is about to be instituted
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if that's not the case. Also prohibited are papers that look like official
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notices from a state agency or court of law-- including documents with
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headings that mimic a common legal form (such as "Ace Collection Agency v.
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Jane Consumer") or ones that use an agency name similar to that of a state or
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federal agency.
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OTHER ABUSIVE BEHAVIOR. Because debt collectors show infinite
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ingenuity, the Fair Debt Collection Practices Act covers scores of other
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forbidden tricks, from tacking on collection charges not authorized by
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contract or law, to using false names and publishing lists of consumers in
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debt. Realizing that it could not forsee every possible abuse, Congress
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even added a prohibition against any "harassing, oppressive, and abusive
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conduct"-- a general phrase that increases the power of the courts and the
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Federal Trade Commission to protect you against improper collection
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practices.
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STEPS TOWARD SELF-DEFENSE____________________________________________________
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What can you do if you're the victum of an overeager collection agency?
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Your first and simplest option under the FDCPA is to request in writing that
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all collection contacts stop. Once you do that, the collection agency is
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not allowed to call or write to demand payment; it can only advise you of
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new action, such as the referring of your account back to the creditor or
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the filing of legal action.
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if the harassment continues, you may wish to contact your state
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consumer agency. According to Cyra Narva of the Consumer Assistance
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Division of the Massachusetts State Banking Department, these agencies will
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often intervene to solve the problem. "Usually," Narva reports, "the
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consumer is content just to know that the rug has been pulled out from under
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the collection agency and that the abusive practices will stop."
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The agencies won't compensate you for their past harassment; however a
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successful lawsuit might. You could bring suit under the FDCPA and, if
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successful, recover a cash judgement of actual damages suffered, attorney's
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fees, sourt costs, and a special statutory award of up to one thousand
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dollars.
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"If a consumer has been truly injured," says Willard Ogburn, deputy
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director of the National Consumer Law Center, "he or she is entitled to be
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compensated. The fact that attorney's fees may be recovered in a successful
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case encourages some attorneys to pursue strong cases on a commission basis,
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while the possibility of an extra statutory award of up to a thousand
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dollars acts as an extra incentive to the consumer. Meanwhile, the public
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interest is served as collection agencies learn that violating consumer
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protection laws can be very expensive."
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Whatever decision you make, you're sure to reap some gratification from
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simply standing up for your rights and the rights of others like you.
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Rudeness and abuse need never be tolerated, and you can see to it that
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they're not.
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+----------------------------------+ +-----------------------------------+
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| STOPPING TROUBLE | | CONSUMER AGENCIES THAT CAN |
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| BEFORE IT STARTS | | HELP YOU PROTECT YOURSELF |
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| Healthy credit use is not | | THE FEDERAL TRADE COMMISSION |
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| inconsistent with sound | | (FTC). Your regional office |
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| personal finance management, | | can advise you of your rights |
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| but if you overextend, these | | and may even make an investi- |
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| measures should enable you to | | gation if a collection agency's |
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| resolve the problem without | | abuse has been severe or if |
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| becoming vulnerable to further | | yours is one of several com- |
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| embarassment or harassment: | | plaints against the same |
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| | | agency. Meanwhile, let both |
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| IMMEDIATELY CONTEST IN WRITING | | creditor and collection agency |
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| ANY INACCURATE CHARGES, AND | | know that you've alerted the |
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| REQUEST VERIFICATION. | | FTC. Their attitudes may not |
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| No collection activities may | | improve, but their behavior |
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| proceed until a charge is | | probably will. |
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| verified: Waiting may make a | | |
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| challenge more difficult. | | STATE CONSUMER PROTECTION |
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| | | AGENCY. In some states, this |
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| IF YOU REALIZE THAT YOU ARE | | government office can arbitrate |
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| NOT GOING TO BE ABLE TO MAKE | | a dispute and order that |
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| REQUIRED PAYMENTS ON A DEBT, | | abusive practices be stopped. |
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| CONTACT THE CREDITOR. Most | | If your debt is undisputed or |
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| are understanding and co- | | can be proved, the agency can |
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| operative if you propose an | | help you negotiate a reasonable |
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| alternate payment plan at the | | extended-payment plan; it may |
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| first sign of trouble. Review | | also have greater power to |
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| your own budget, determine a | | intervene in an individual case |
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| monthly amount you can afford | | than a regional FTC office |
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| to pay, then explain the | | would. |
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| problem to the creditor and | | To learn what state services |
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| offer to pay the lesser | | are available to protect you |
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| amount. | | against collection harassment, |
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| | | contact your state government |
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| DON'T ALLOW YOUR ACCOUNT TO BE | | information-office or your |
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| TRANSFERRED TO A COLLECTION | | state attorney general's |
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| AGENCY THROUGH YOUR OWN | | office. |
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| INACTION. Creditors use | | |
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| collection agencies to goad | | If the improper conduct comes |
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| the reluctant or forgetful. | | from an attorney practicing law |
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| A creditor who understands | | in the collection area, contact |
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| that you are overextended but | | your LOCAL BAR ASSOCIATION, and |
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| doing the best you can will | | ask for the disciplinary board |
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| have no reason to resort to | | or licensing agency that |
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| such measures. | | receives complaints against |
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| Many people are too anxious | | lawyers. They probably won't |
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| or embarassed to approach a | | step in directly; however, a |
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| creditor about dificulty in | | lawyer who knows that a |
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| making payments. Remember that | | complaint is being checked |
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| the creditor, whether a merch- | | generally takes more care to |
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| ant or a banker, wants to keep | | act within legal and ethical |
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| your business. An amicable | | bounds. |
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| resolution is in "everyone's" | | |
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| interest. | | CONSUMER CREDIT COUNCELING |
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| | | AGENCIES. Frequently the |
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+----------------------------------+ | problem is less one of outright |
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| harassment than of anxiety and |
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| increasingly short tempers on |
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| both sides. A nonprofit con- |
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| sumer credit counceling agency |
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| has no official enforcement |
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| power, but it "can" help you |
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| assess your financial situation |
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| and act as a mediator in making |
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| more mutually suitable payment |
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| arrangements. |
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+-----------------------------------+
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