Debt collection has been a growth industry thanks to the Great Recession. As millions of Americans struggle to pay their bills, creditors are unloading debt to collection agencies for pennies on the dollar. On consumers, collection agencies are coming down even harder. There are numerous more consumer complaints about collection agency harassment. Law firms that are using debt collection software are in all the courtrooms. But consumers should probably know that they can hire an attorney to sue debt collectors for abusive practices.
Collection agencies – abuse, violence and bogus claims
More collection agencies are trying to get money out of individuals. According to CNN, harassing phone calls, abusive language and physical violence are becoming a bigger part of the collection agency business. According to the New York Times, a single law firm can use computer software to file thousands of debt collection cases, often depending on inaccurate or incomplete info supplied by creditors who sold the debt. It was reported by the Post-Bulletin in Minneapolis that accounts are tapped, wages seized and people threatened with arrest for debts they don’t owe or for inflated amounts.
Collection agency harassment skyrockets
Complaints of collection agency harassment went up by 50 percent in 2009, as outlined by the Federal Trade Commission. The CNN article said they’re on track to jump 13 percent more in 2010 based on FTC complaints filed within the first six months. The top complaint is repeated calls. It is common for debt collectors to harass consumers with calls for. They could be abusive after somebody answers the phone. Complaints of collection agencies using abusive language spiked 35 percent last year. Complaints of debt collectors threatening or resorting to violence more than doubled last year.
Debt collection software sues
When harassment by collection agencies are certainly increasing, they’re 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, including 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 like wage or property garnishment.
Bankruptcy laws fuel the whole debt collection industry
The debt collection industry exploded starting in 2005 with sweeping changes to federal bankruptcy laws that made it harder for individuals to get a fresh start. Individuals defaulted on loans which then expanded the debt buyers’ market. The Post-Bulletin article said 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 type of charged-off debt, from unpaid cell phone accounts to hospital bills are for sale. Debt buyers base their claims on data up to 15 years old that could be extremely hard to verify, and they are ready to hound individuals for years.
To try and get besides collection agencies, consumer make an effort to sue
More common are aggressive tactics. 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 court for harassment. If they win, the collection agency may have to pay for any damages caused by the harassment, as well as court and attorney fees.
Discover more info
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
