Debt collectors getting more aggressive

The BBB files are full of complaints from people who get erroneous collection calls. They could be unfortunate enough to have the same last name as the person who owes money or their old phone number.

“We see this kind of problem when debt collection companies buy up old debt from other collection companies,” says the BBB’s Alison Preszler. “The farther away you get from the original debt holder it seems the more egregious the complaints are.”

It could be an honest mistake. It could be a scam. You could be the victim of identity theft. There’s no real way to know for sure without doing some legwork.

Why are there so many complaints?
“It’s a volume issue,” says John Nemo, spokesman for the Association of Credit and Collection Professionals. “There are going to be errors. There are going to be times where a consumer is contacted and it’s not the right person or the right number.”

Nemo says based on the millions of contacts between debt collectors and consumers every year, the percentage of problems is pretty small. He blames most of the serious complaints on “a few bad apples” in the industry. And he claims about 90 percent of the complaints are resolved to the consumer’s satisfaction.

• Know your rights: Don’t ignore a call or letter that says you owe money. You need to get this resolved because being sent to collection pulls down your credit score.
• If you don’t owe the debt: Send a letter to the collector and dispute the debt. Do this within 30 days and the collector must stop contacting you or send proof of the debt (such as a bill).
• If you do owe the debt: Try to work with the debt collector to set up some sort of payment arrangement. “It could be in your interest to talk to them,” advises the FTC’s Karen Hickey. You might also want to talk to a credit counselor. To find a reputable one near you, go to the National Foundation for Credit Counseling Web site.
• If you owe the debt but want the calls and letters to stop: Send a letter to the collector requesting they cease all communications. The debt doesn’t go away, but the collector will. By law they can contact you one more time to let you know what future actions, if any, they may take to collect the debt.
• If you are being harassed: File a complaint with the Federal Trade Commission, your state’s Attorney General or consumer protection office and the Better Business Bureau.

More information:

• FTC: Fair Debt Collection
• Debt Collection Practices: When Hardball Tactics Go Too Far
• FTC’s 2008 report to Congress on Debt Collection (pdf file)

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