January 17th, 2010 at 08:11am
Under Consumer Debt
If you read enough of what I’ve written around here, you probably know that I now have a complete and total hatred for being in debt. I think this whole system of credit, FICO scores, easy transactions using your VISA, MasterCard, American Express, or Discover is a pile of dog doo. It has led to dramatic increases in irresponsible behaviors, people becoming chained to jobs (even careers!) they hate, and the destruction of relationships. I hate it, I hate it, I hate it.
If we all learn our lesson, we’ll never borrow another penny again.
That being said, if you were going to get caught owing people a lot of money, this is a great time for it. I’m sure as heck not saying you should run out and apply for a bunch of credit cards… I’m simply saying that of all times (at least in most of our lifetimes) to find yourself buried in debt, this is a great time for it.
Why?
Well… partly because it’s happened to so many people. So many, in fact, that the credit card industry can’t keep up with the collections efforts. Sure… they have their automatic dialers pounding away at our phones. But they are so slammed with people who have fallen behind that they don’t have time to fry the small fish.
So… unless you owe an enormous sum of money to one company, you’re not likely to end up actually getting sued, for example.
In my case, we have a pile of accounts that are past due. Some of which, we haven’t made a payment on in over a year. Others, we got ourselves onto little miniature payment plans (small payments for 6 months while we tried to get our crap together) which expired months and months ago.
Aside from the phone ringing, there’s been nothing. Most of them have stopped sending us crap in the mail. A few days ago I got a nifty settlement offer from one of them which would save me 40 or 60 percent (I forget which) if I’d just fork over a buncha cash.
Here’s a clue: if I haven’t made a $60 payment in 6 months, chances are I’m not turning over a 4-figure sum to you today just to make you go away.
My wife and I are actually close to having a plan to get all of this straightened out. And we’ve had plenty of time to do so. And that’s my point: if this had happened to us 6 or 7 years ago (and actually we hit a rough patch back then that we got straightened out), we’d have been sued by everybody and their brother by now.
But since it happened to us at the same time it happened to everybody else… it really hasn’t been so bad.
There. I said it.
Look… I’m not recommending this. It’s stressful, painful, stretching, annoying, harassing, and just about every other negative adjective you can think of to throw at it. We’ve been through marriage counseling, any number of arguments, spats and fights, and much more that I’m not going to write about here.
Thankfully, we were committed to each other. Otherwise, this would’ve all ended badly before now.
But… my point is simply this: if you’re in a jam, it’s a great time for it. Be thankful that you’re in the company of lots and lots of other debtors. And let the advantages of the timing work in your favor.
By Average Joe
November 29th, 2008 at 04:16pm
Under Harassing Phone Calls
I’ve heard people tell stories about how many years ago you used to get bombarded by collectors via the U.S. Postal Service.
These days, thanks to the Fair Debt Collections Practices Act, they’ve found much better ways to harass you. 3rd-party collectors are required to send you a notice in the mail, but they’re highly incentivized to contact you by telephone. The reason? The FDCPA lays out significant regulations around telephone contact. If you deal with creditors by phone, you virtualy waive all your rights and give up any leverage you may have.
I’m not saying don’t ever talk to them. But, you can tell that they don’t want you to contact them by mail because they do their best to cause their dunning letters to look like junk mail. This should be a clue. If mail was something that worked to their advantage, you’d see a lot more activity there. Insteady, they want to send you the minimum notice to abide by the law, and then hound you to death on the phone.
By the way, under the law, a 3rd-party collector is required to send you the notice within 5 days of contacting you.
How To Avoid Harrassment by Phone
Here’s what you need to do right away:
- When you are contacted by a new debt collector, immediately make note of the date and time of the first phone call.
- As soon as you receive the written notice (it should be postmarked within 5 days of the first phone call), respond in writing. Your response should dispute the debt (even if you think you owe it, the amount may be wrong), request verification (they must stop contacting you until they mail you the verification according to the law), request that they prove that they have a legal right to collect the debt (this is actually an interesting legal question – particularly if it was a credit card debt), and document date received (send it certified mail, return receipt requested – this proves that they received your notice)
- Make notes about everything – whether they contacted you after receiving your written communication and before they mailed you the response, for example. This may come in handy if you ever want to sue them for violating the FDCPA.
- For your written request to protect you, it must be sent within 30 days of your receipt of their written notice.
- Then, mail a 2nd notice announcing to them that they are not permitted to contact you by phone. Specifically state that you are not permitted to be contacted at work, that they are not permitted to contact you or anyone else by phone. They will try to locate your relatives and harass them as well, unless you specifically state what they are permitted to do and not permitted to do. Send this notice certified, return receipt requested.
- Document everything. If they call again, it can only legally be because they are notifying you of some action they are taking (e.g. filing suit, canceling the debt, etc). If they call after they have received your written notice, and they’re only calling to ask you when you plan to pay or otherwise ask for payment, then you have an actionable violation of the FDCPA on your hands. At that point in time, it’s worth it to contact an attorney that specializes in protecting consumers.
Here’s How They Trick You
The debt collectors are highly experienced. They study what works and what doesn’t work. Harassment works. They wear you down until you do something that you would otherwise not do (borrow money from relatives, declare bankruptcy, etc). They also know how to get right up to the edge of what is legal under the FDCPA and push you. They also frequently violate the act, but because consumers are typically uninformed, they get away with it.
One stunt that they pull is that of selling the debt off. Once you have sent written notice to a 3rd-party collector (as long as you haven’t invited them to sue you by using words like “cease and desist”), they will typically sell the debt to someone else (or, if the original creditor still actually owns the debt, they will choose to reassign it to a different collection agency).
What this means to you is that the process starts all over again with a new debt collector — even though it’s for the same debt.
One nasty offender along these lines is American Express. They use a wide range of debt collectors, some of them “law offices,” which makes it sound very official when they call you. If someone contacts you from a “law office” regarding a debt to American Express, chances are extremely good that the person calling you is not an attorney. Nor do they have any intention of suing you. It’s far more profitable for them to remain in the debt collections business rather than the litigation business.
If someone from one of these bottom-feeding organizations tells you that they are an attorney, make a note of their name and ask them what state they are admitted to practice law in. They cannot tell you that they are planning to sue you (or take any other legal action) if they aren’t actually planning to do so. What’s interesting is if they aren’t licensed to practice law in your state, then they aren’t planning to sue you. Plain and simple.
If you aren’t vigilant about taking these steps with each 3rd-party debt collector that contacts you, be prepared for a barrage of calls.
One particularly nasty offender is NCO Financial Systems, Inc. They are a collector for American Express. They may collect for other companies as well, but I couldn’t tell you from any personal experience. What I can tell you is that they have contacted me hundreds of times. Frequently they hang up or leave automated messages. I’m willing to bet that someone will be initiating a class-action suit against them for violating the FDCPA. If so, you will see my name in the class (assuming that there’s decent representation in the case).
They are particularly annoying because their dialer goes nonstop.
One piece of advice: if you plan to pay the creditor(s) what you owe, then send them $10 a month or some basic amount on a consistent basis. If you do that along with taking the other steps I mentioned above, you can count on them not annoying you by phone.
Trust me, it’s worth it.
Read more about the Fair Debt Collections Practices Act.
By Average Joe
November 24th, 2008 at 11:33pm
Under Harassing Phone Calls
I truly hate being behind in my bills.
We’ve been here before… a couple of tough spots when we got behind a payment or two. Usually, it’s been because of something happening in my business (I’m self-employed). We’ve always managed to get ourselves caught up pretty quickly.
But if you fall behind on payments to credit card companies or mortgage companies, you find out right away that one thing you don’t have control over is the phone. Yes… there’s the Fair Debt Collections Practices Act. Yes, it dictates that they can’t call before 8am or after 9pm.
But you can bet your last nickel (I don’t recommend it) that they’ll start calling at 8:01am and stop at 8:59pm.
Hopefully, you’ve got more than a nickel laying around.
In our case, we’ve had some days where we didn’t. Like I’ve said before, we didn’t intend to get behind. We certainly haven’t skipped paying bills on purpose. It just happened.
But the nonstop phone calls can be enough to drive you batty. It’s as though each time the phone rings, it’s talking to you. It tells you that you’re a failure. It says, “See there? You’re not going to make it.”
Well… do yourself a favor. Unplug the darn phone. You’re not going to answer it anyway. Just unplug it. After all, it doesn’t matter if you just talked to Capital One yesterday… they want to talk to you again today. Citi, Chase, WaMu, Wells Fargo, American Express… they’re all the same way. You’re on the dialer. The person you’re talking to can’t stop it. It’s some other department. They’re in India. You need to talk to someone in America. You have to do it in writing. Just pay your bill… did you ever think of that? Believe me… I’ve heard it all.
If they would just listen to what you said and stop the dialers, it would be OK. But they don’t. The dialers are set up to call you until you pay.
What’s worse is that they have attorneys who decide just exactly how frequently they can call before it would be considered “harassing.” And they have money to pay those attorneys. You don’t. Otherwise, you’d pay your bill, right?
There are a few things I’ve found that can help. Which one(s) you choose to use will depend upon your situation. Are you considering filing bankruptcy? Do you think you’ll be caught up soon? Do you think you can at least work out a payment plan? Well… all of those are factors.
No sense pissing off one of your creditors to the point that they file a lawsuit and try to win a judgment against you… particularly if you can avoid it.
And by the way… with so many mortgages defaulting and so many people out of work… right now is a great time to call up your creditors and negotiate. They’ll try to push you into a cash settlement. But if you had cash, you’d have paid that payment, right? Who knows what they’re thinking. In any event, there’s a trained negotiator on the other end of the phone trying to sell you the solution that earns them the best commission. You need to keep pushing until you get a better arrangement.
What if you aren’t in a position to work out a deal?
More to come.
By Average Joe
