Survey: Debt collection calls growing more frequent, aggressiveBy Marcia Frellick
Families facing mounting debt and uncertain economic futures
often also face increasing calls and letters from debt collectors. Now, consumer
debt attorneys say those contacts have become more aggressive, and a new survey
finds abuses of the laws that protect debtors are common.
Forty percent of respondents in a national Scripps Howard survey
answered yes to at least one of the following questions:
- Has a debt collection agency ever threatened you with violence?
- Have you or your family ever
received multiple calls from a debt collection agency, so many that it
seemed to you to be harassment?
- Has a debt collection
agency telephoned you or your family at inappropriate times of the day,
such as before 8 a.m. or after 9
p.m.?
All of these practices are against the law under the 1977
federal Fair Debt Collection Practices Act (FDCPA) -- the law that covers communications
and abuses in the collection of personal and household debts, including debt
from credit cards, a car loan, a medical bill or mortgage.
Some consumer advocates had reported in recent years that many debt collectors were taking a kinder, gentler approach to dealing with consumers in the wake of the recent economic crisis. This survey of 1,001 respondents, conducted
by the Scripps Survey Research Center at Ohio University from Sept. 27 to Oct. 21, 2009, shows that many collectors have not opted to make nice.
Legal experts also say the law is regularly violated, and
this is reflected in the volume of complaints about debt collection to the Federal
Trade Commission and the National Association of Attorneys General. Consider
these statistics:
- Debt collection was the
No. 1 consumer complaint listed by the NAAG in 2008, above auto sales and
home repair/reconstruction.
- The FTC gets more
complaints about the debt collection industry than any other industry it
regulates. In the first six months of 2009, consumers filed 45,050 complaints
with the FTC about third-party debt collectors -- collectors who buy up the
debt from the original lender. Those complaints are up 19 percent from the
same period in 2008.
Contact becoming more frequent, aggressive
Houston-based consumer debt attorney Dana Karni said
she is seeing an escalation in aggressiveness of the calls.
"I just recently
filed a lawsuit on behalf of a consumer who was threatened with arrest. She and
her four minor daughters were home at the end of August, and she got a phone
call from the collector," she said. Karni says the collector, who earlier had
told her client there was a warrant out for her arrest, left this message on
her client's answering machine: "I am making my way toward your area now. I do
need a signature here on the summons. I'm over here by a truck stop finishing up
my coffee, and then I'll be stopping by. If you have any questions or concerns,
I advise you contact this number immediately."
Sometimes it's the number of calls -- not the aggressiveness
of the calls -- that constitutes harassment, says Timothy G. McFarlin, an Irvine, Calif.-based attorney. This
has become a bigger problem over the years, thanks to innovations such as auto-dialing.
"What's really shocking to me is the frequency of the calls," he says. "Collectors have
always been very abrasive and angry and try to scare and intimidate people on
the phone. But what's new is how frequently. They'll call every hour whether
they pick up their phone or not."
David Cherner, director of state government affairs for the largest
trade group for debt collectors, ACA International, says he agrees that the
number of contacts is increasing. He says, however, that the jump is a natural byproduct of more
accounts going into collections over the last two years because of the economy.
The Government Accountability Office reports that about 6.6 percent of credit
card accounts were 30 or more days past due in the first quarter of 2009 -- the
highest rate in 18 years. But Cherner disagrees that collectors are crossing
legal lines.
"The debt collection industry understands that, although
volume of accounts has increased, the ability of consumers to pay has declined,"
Cherner says. "I don't believe aggressiveness is going to mean illegal
practices, but I think the collection industry is trying to help consumers out
by communicating with them about their financial obligations and trying to work
toward an amicable resolution."
He said while there are more contacts with consumers,
collectors are also increasingly willing to make deals, particularly in working
out payment plans. McFarlin says his clients also have seen collectors more willing to deal: "The collection agencies are in desperate times as well. They
demonstrate their desperation in being super-aggressive in collecting and then
taking anything they can get," he says.
Mistaken identity a common complaint
Among consumers' complaints about collectors is that they have
the wrong information when they call. In the Scripps Howard survey, 39 percent
of respondents said they were contacted by a debt collection agency about
a bill they did not think they owed.
Thirty-four percent said they were asked by a debt collection agency to
pay an amount they believed was incorrect. This is the kind of complaint that
has the FTC and the GAO asking for changes in the law. In its Feb. 26, 2009, report to Congress, the FTC recommended
requiring collectors to have more accurate information on the amount of debt
and the actual debtor, saying it could boost the prospects for collection and avert
collection calls to the wrong person.
The GAO echoed those concerns in September 2009 and noted
that delinquent accounts are frequently sold and resold, which can make
verification more difficult as the owner of the debt becomes further removed
from the original creditor. The office recommended that Congress modify the FDCPA
to help ensure that debt collectors and debt buyers have adequate documentation
about the debts transferred.
The good news for consumers, McFarlin says, is that if
consumers are informed "they can very easily get collection agencies to stop
calling them and stop harassing them by sending a cease-and-desist letter. It
just has to be worded properly and sent certified mail. It's easy to get them
to stop or to make it very illegal for them to continue."
Karni adds this caution about cease-and-desist letters,
however."The fact that you've asked them to stop communicating with
you does not mean they cannot sue you, so you may be bringing on a lawsuit or bringing
one on sooner than you would have without the letter," she says.
See related: Debt collection sample letters, Consumer credit woes mean boom in debt collection, 11 tips for dealing with debt collection and collectors, A look at the Fair Debt Collection Practices Act, Collectors to debtors: Let's make a deal
Published: January 28, 2010
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