Learn Not to Fear Collection Agencies if You Cannot Pay Credit Card Debt

These outrageous calls from debt collectors done by ABC News are all lies no one should have believed.

Each year debt collectors put more than $40 billion back into the U.S. economy, according to ACA International, a trade group for the debt collection industry.

According to CNN Money recent growth in the collection of personal debts is due to:

  • 2005 changes in the bankruptcy law which make it more difficult to erase debt;
  • The debt collection process also has become more efficient;
  • Some consumer debts are packaged together and traded between firms, so it’s more likely that older debts will resurface.

Learn How Not to Fear Collection Agencies if You Cannot Pay Credit Card DebtCollection agencies (CAs) are just as efficient as credit card companies. Their automated data processing enables them to process thousands of debt notices to account holders. Their call centers efficiently follow-up with account holders. A Sunday New York Times article stated “This new breed of collector, armed with an automated system that dials tens of thousands of Americans every hour and puts their Social Security numbers, addresses and credit histories at the operator’s fingertips, is chasing down late car payments, overdue credit card debt and lapsed installment loans.”

All collection agencies are regulated by the federal Fair Debt Collection Practices Act (FDCPA). Many states have their own version of the FDCPA. In addition, most states require that CAs be licensed to contact consumers to collect debts. CAs frequently violate these three areas of the law. Those violations are fertile ground for law suits by victimized consumers and/or their attorneys working on contingency.

Collection agencies work for the original creditors, the credit card banks, and for junk debt buyers who buy your debt from the banks. Some collection agencies are also part of integrated debt organizations which also include a junk debt buyer and a collection law firm.

Typically collection agency commissions are lower with the original creditor bank than with a junk debt buyer. In addition to commissions, CAs add their own fees and interest to the account balance they are collecting. Most individual debt collectors, particularly the better ones, are paid primarily on commission. They more the collect, the more they make.

There is a saying floating around the online debt forums; “100 percent of debt collectors lie 100 percent of the time.” Senior citizens can be easy prey for debt collector lies.   These people operate over the telephone because with the phone there is no record of the threats and lies they tell, which are usually in violation of the FDCPA.  Remember what is said over the phone by a debt collector means nothing. It is only a scary lie to get you to pay money to get rid of the debt collector.  Debt collectors are powerless.  They only have the power to scare you with lies about credit card lawsuits. They ARE NOT collection attorneys. And if a collection attorney gets your account, the debt collector makes nothing.

Collection agencies are keenly aware of the numbers. They know they are not going to collect from everyone. Their phone calls are scripted to get a fearful response, while their written communications are designed to get no response. With every account holder who does not respond to an initial mini-Miranda notice within 30 days by disputing a debt and requesting debt validation, they get closer to collecting money. With every account holder who dies not respond to a court summons, or a false court summons, they get closer to getting a judgment against them.

How to get rid of debt collectors

Collection agency mini-Miranda notices look like junk mail. Court summonses frequently do not make it to the account holder’s address.

CAs are known to pursue consumers for accounts well beyond their states’ statutes of limitations (SOL). While they cannot legally file suit after the SOL is up, there is no law against seeking debt collection or threatening a lawsuit to most un-informed consumers. Many people pay to avoid the bother. Others have lost or thrown out their old account documentation that demonstrates the SOL has lapsed. Some debt collectors trick consumers into making a small token payment which restarts the SOL.

The Fair Debt Collection Practices Act (FDCPA) provides ample protection and shelter to account holders afraid of being hounded by debt collectors. For you to get out of credit card debt, it is simply a matter of understanding how to use the FDCPA to get the collection agencies to understand they are wasting their valuable time with you.

If you have credit card debt you cannot afford to pay, the good news is things are not as scary as you may think they are. Here are some posts about other debt-related matters you should know given your situation.

 

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