Getting Nasty Out There, Folks

The Federal Trade Commission notes that consumer complaints are on the rise across the board against debt collection agents, and in this economy it's getting worse and worse.

Complaints of harassment by debt collectors surged 50% to 67,550 in 2009, according to the Federal Trade Commission. And they are on track to jump 13% this year, based on the number of FTC complaints filed in the first six months.

The No. 1 complaint is repeated calls, and it is not uncommon for collectors to bombard consumers with back-to-back calls for days, weeks, months and even years.

When debt collectors finally get someone on the other end of the phone, they are more likely to use nastier language. Complaints of debt collectors using obscene or abusive language spiked 35% last year.

A 55-year old New York woman, who asked to remain anonymous, said a collection agent called her home repeatedly, personally attacking her and her husband. When she refused to answer the phone, the collector called her estranged sister, an ex-boyfriend and her husband's ex-wife's mother.

"This guy was out of his mind and he kept calling and calling, telling me 'you better talk to me, you deadbeat,'" she said. "He was very threatening and the whole thing was just really unsettling -- it made you wonder who was going to show up at your door."

She had reason to worry, since complaints of debt collectors threatening -- or actually using -- violence more than doubled last year, to 2,517.

Keary Floyd, an attorney who represents consumers at the Floyd Legal Firm in Atlanta, said that while most of his debt collection cases involve excessive phone calls, one of his recent clients recorded a disturbing phone conversation where a debt collector threatened that he or someone else would come to the client's house to get the money in any way that he could.

"I heard it, and if any phone call was going to worry someone, it would be that one," said Floyd.
Other aggressive tactics that are becoming more common are debt collectors calling before 8 a.m. or after 9 p.m., demanding more 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 not just inappropriate, but they are illegal under the FTC's Fair Debt Collection Practices Act, which has been around since 1977.

A friend of mine did this job for a while, and he's told me stories of how much of an utterly dehumanizing experience it is for both the agent and the debtor.   The agent is paid to get results, not to ask nicely.  The debtor often owes more than just the collection agency too.  It's not a fun, pleasant job for anyone involved, and yeah, tempers and nerves get frayed and bad things can happen.

But frankly, as our consumer economy continues to grind down the spiral ramp to deflationary hell, you're going to see a lot more of this happening.  Creditors want their money now, not years from now...because the creditors owe other creditors money, and they want to collect too.  It's a nasty spiral and eventually somebody's going to default...and if enough of that happens the whole system breaks down.

And much more of this is coming.