A Day in the Life of a Debt Collector

Just how cutthroat is the world of debt collection?  If you needed any further confirmation, “Inside Debt Collection,” a new book self-published by journalist and onetime-debt-collector Fred Williamson, takes you through a typical day in the office of his employer, which he identifies as a “large, well-established agency.”

The morning starts with a cheerleader cry from a manager: “Get the money!” But what about people who are victims of identity theft or fraud, or other people who found themselves on the bad side of a creditor through no fault of their own?

“Motivated strictly by cash, collectors manipulate, shame and threaten people into paying, without caring whether the bill is legitimate,” writes Williamson.

The agents sit down to their cubicles and call between 150 and 200 people a day. When they get someone on the phone, any bluff, distortion or manipulation short of an outright lie is fair game. To insinuate that the debtor may be facing criminal charges, the agents pretend to be paralegals or fraud investigators. They threaten to call the police. Agents pretend to gather information for a nonexistent form – debtor’s cell phone number, spouse’s work number – when in fact the information is used only to increase the pressure by harassing debtors everywhere they go.

If debtors agree to pay but don’t have the money, debt collectors give terrible financial “advice” – like draining your IRA, taking out a second mortgage, or even skipping a mortgage payment – in order to pay back the debt.

“(W)e are trained to give them financial advice that would make their accountant blanch, if they had one,” Williamson writes.

Collectors even play the oldest trick in the book: The good cop/bad cop routine. One agent pretends to be the angry manager demanding his money while the other plays the sympathetic grunt who’s just trying to give a man a break.

All of this helps to explain why the Federal Trade Commission receives more complaints about debt collectors – 300,000 over the last five years – than any other industry. It also explains why you don’t want to be caught on the wrong side of a collections agency. Here’s some advice:

• Avoid taking on so much debt that you can’t pay it back. Remember your income, and stay within your limits
• If you suspect you are a victim of identity theft, report it. If the thief runs up debts using your information, reporting a stolen identity before the bills come rolling in will make it easier to prove your innocence.
• Don’t talk to bill collectors. If you have a late or unpaid debt, talk to a trusted financial advisor about responsible ways to pay it.

Comments

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[Payday Loan Advocate]

The Arizona Credit Union System evidently wants the payday advance industry in the state to dry up and die. Their position is likely fueled entirely by self interest, and they are stepping up its lobbying efforts in order to drive the competition out and get their hands on their customers. The Arizona Community Financial Services Association is one of the organizations vying to pass Proposition 200, which will regulate the industry in the state, reforming the industry into a completely legitimate and regulated industry, which will benefit the businesses, but most of all the consumers. The bill will lower loan fees, create far more flexible repayment plans, and put greater restrictions on physical stores and further regulate the online lenders. These are real reforms, and they benefit the consumers, but they also will stave off the doomsday clock for payday loan lenders in the state, set to expire in 2010. Does anyone really think that ANY state in can afford to create more unemployment?
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