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What You Should Know About Collection Agencies
"Cosmopolitan" (November 1984) pp 136-143
Karen Hartney laughed when she pulled the lavishly illustrated book on
Galapagos Islands wildflowers out of her mailbox. She hadn't ordered the
book, wasn't about to pay for it, and felt no obligation to go to the
trouble and expense of returning it.
Two weeks later, she was billed $29.95, plus mailing and handling. She
threw the statement in the trash. In time, the letters grew nasty,
demanding payment and warning that her credit rating would suffer if she
didn't respond promptly. When a collection agent began calling her at work,
she snapped.
"Leave me alone," Karen hissed. "I never wanted that dumb book
anyway!"
"You might have thought of that before you decided to keep it," the man
responded. "I think the word for taking things that aren't yours is
'stealing.'"
Karen (whose name has been changed) was furious-- but also worried.
Could the collection agency harm her credit rating, contact her employer,
neighbors, landlord? Most of all, she just wanted the harassing calls and
letters to stop. Though resentful, she mailed the payment-- now a full
$37.50, including interest and collection charges.
Karen's case is not an isolated one. Despite the strong new consumer
protection laws passed in recent years, abuses still exist, and a sizeable
minority of retailers and collection agencies engage in such illegal
collection practices. Charging for unordered goods is only one of the many
activities that are prohibited by federal law. (If, by the way, you receive
unrequested merchandise as Karen did, you are under no obligation to pay.
You may treat it as a free gift, but you should notify the sender, in
writing, of your intention as soon as you receive a "bill".)
The thorniest problems occur when a debt is truly owed and a consumer,
through overextension or inadvertence, falls behind in paying it. In this
case, the account is often turned over to a collection agency, which may
behave unethically in its effort to recoup the money.
"Some of the most extreme cases we see involve actual threats of
violence," reports Diane Conner, staff attorney for the Credit Practices
Division of the Federal Trade Commission (FTC). "Children have been told
over the phone, 'Tell your parents they're going to jail tomorrow if we
don't get the money.' We've also heard about collection agencies trying to
add on illegal fees of up to 100 percent of the original debt."
Federal law protects you against such abusive practices. By knowing
which tactics are illegal and how to stop them, you can avoid being a
victum.
BEYOND THE LEGAL LIMIT______________________________________________________
The following are violations of consumer protection laws:
REPETITIVE CALLING OR CALLS AT UNUSUAL TIMES OR PLACES. Some collection
agents will call a consumer repeatedly during a single day, or telephone
late at night without permission-- both of which are clearly illegal under
the Fair Debt Collection Practices Act (FDCPA).
Calls at work are not considered "harassing" if an office is the most
convenient place for you to receive the call-- but, says Diane Conner, "If
the agent knows that your employer does not allow you to receive personal
calls at work, or if you've asked not to be contacted there, then it would
be a violation."
CALLS TO PERSONS OTHER THAN THE CONSUMER. If a collection agent has
business with you, you are the only person with whom he may discuss that
business. "We frequently hear that a collection agent has called an
employer, or perhaps a neighbor, and left an "urgent message' that the
consumer should call XYZ Collection Agency regarding payment of a debt,"
reports Bill McDonough, an FTC staff attorney. "The only motive would be to
embarass the consu
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