In the universe of unwanted calls, having a collection agency blow up your phone could feel like an attack from a death star.
That’s why a consumer protection group wants everyone, regardless of their debt status, to be aware of their rights. The Better Business Bureau of Charlotte, which covers York and Lancaster counties, reports numerous complaints from consumers who say they were targeted by allegedly illegal or unethical collection efforts.
One company, which listed a Fort Mill Post Office box as its address, made the BBB’s annual “Dirty Dozen List” because of complaints that it violated consumer protection rules while attempting to collect money from people listed in a data base. One of the problems in that case, according to the BBB, is that most of the people on the list who complained had no outstanding debt to collect.
That firm, which has since changed names and its business address to one outside the state, was removed from the Dirty Dozen list not long after it was released because the company has taken steps to address the complaints and reform its practices, said BBB President Tom Bartholomy.
The problem hasn’t gone away, however, Bartholomy said, because plenty of other collection companies are still operating outside the lines.
“The business model is pretty similar,” Bartholomy said.
“They contact people who had a credit card, hospital loan – any kind of unsecured credit and had since paid it off – and this collections agency comes in and says the final payment was never received. They say it will affect your credit rating. They’re just threats.”
Unscrupulous collection efforts often pay off for the companies because consumers are unnerved by bully tactics and the debt owed was far enough in the past that the consumer no longer has records to refer to. Rather than try to track down records, the person targeted by the caller agrees instead to make a payment. Bartholomy said if the money collected is not for a valid debt, the company that made the calls gets to pocket the full amount instead of taking a percentage and giving the rest to a creditor.
“The last payment could have been five or six years ago,” Bartholomy said. “Who keeps records of a final credit for that long? That’s what they’re counting on – just enough truth to make you think it could be legitimate.
The source of the names in the data base is also dubious, Bartholomy said.
“Where do companies find these lists? We have not been able to determine whether it’s from a data breach, but they cannot be legally obtained if these debts are legitimate,” he said.
“It appears they buy lists of data, which is what makes this work for them,” he said.
Consumers should not consider themselves powerless, Bartholomy said. Consumer protections under the federal Fair Debt Collection Practices Act make it clear the burden of proof is on the debt collector.
“Certain things that the act calls for – how they identify themselves, who they are collecting on behalf of, do they have the loan information or credit card information – they need to prove it to you,” he said. “They have to prove to you in writing this debt is still valid, and you have the right to say, ‘we’re not having this conversation’ until they do.”
Bartholomy said consumers armed with knowledge of the law have more of an advantage than they may realize.
“The Fair Debt Collection Practices Act protects consumers as well, and the key thing is that you want the phone calls to stop,” he said. “Whether paid or not, at some point, any debt ages out, so if it’s an old debt, chances are it’s not subject to collection.”
It’s important for consumers to not allow themselves to be intimidated.
“When you get these calls, they go on the offensive very quickly and you need to stick to your guns,” Bartholomy said. “You say, ‘look I paid this and you have to prove to me I still owe this. If you show me the proof, then we can discuss it.’”
For more information, call 704-927-8611 or go to bbb.org/charlotte.