Author Topic: the scary world of consumer debt collection  (Read 5936 times)

sekritdino

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the scary world of consumer debt collection
« on: August 16, 2014, 03:59:30 PM »
I just read this fascinating piece on consumer debt collection in the US. Obviously being in debt is very anti-Mustacian, but the thought of having all your personal information bought and sold like this is terrifying! Just one more reason to stay out of debt!

http://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html?WT.z_mob_rel=1
« Last Edit: August 16, 2014, 04:21:08 PM by sekritdino »

istbenz

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Re: the scary world of consumer debt collection
« Reply #1 on: August 16, 2014, 09:39:48 PM »
Very interesting read. Thanks for sharing.

BA

slugline

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Re: the scary world of consumer debt collection
« Reply #2 on: August 16, 2014, 10:11:39 PM »
Basic reform is sorely needed. Consumers absolutely need a reliable way of verifying if their debt has been sold off to another company.

Until that happens, it seems safer to just hang up on collectors.

MoneyCat

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Re: the scary world of consumer debt collection
« Reply #3 on: August 16, 2014, 10:37:51 PM »
In my darkest days, before I got my financial act together, I was being pursued by debt collectors.  It seemed really scary until I educated myself about debt and then it all became very simple.  I did not give any comment to anyone who contacted me by phone and, in fact, changed my phone number so they couldn't find me.  Then, I got the names of the debt collection agencies from my credit report and wrote to them asking for letters of authentication.  If they did not authenticate the debt, then I simply ignored it until it fell off my credit report.  If they did authenticate it, then I wrote back to them with letters that did not admit that I owed the debt or offer payment, but instead asked for a deal to settle the debt for a reduced amount in return for deletion of the negative account from my credit report.  If they responded affirmatively, I paid the settlement amount.  If they responded negatively, then I ignored the debt until it fell off my credit report.

The most important thing is to not admit the debt is yours to the collection agency or make any comment agreeing to pay for it, because that will reset the seven years before the negative account will fall off your credit report.  Even if you repay the debt to the collection agency, they are not obliged to remove the negative account from your credit report, unless you have a pay for deletion agreement in writing from them.  If the debt is really old past the statute of limitations and it is no longer on your credit report, then just forget about it.  Some people say that it will pop up again a a problem when you go for a mortgage, but that didn't happen in my case.  Nobody can do anything to you about it once it is past the statute of limitations, so the debt may as well not exist anymore.

lifejoy

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Re: the scary world of consumer debt collection
« Reply #4 on: August 16, 2014, 10:41:47 PM »

In my darkest days, before I got my financial act together, I was being pursued by debt collectors.  It seemed really scary until I educated myself about debt and then it all became very simple.  I did not give any comment to anyone who contacted me by phone and, in fact, changed my phone number so they couldn't find me.  Then, I got the names of the debt collection agencies from my credit report and wrote to them asking for letters of authentication.  If they did not authenticate the debt, then I simply ignored it until it fell off my credit report.  If they did authenticate it, then I wrote back to them with letters that did not admit that I owed the debt or offer payment, but instead asked for a deal to settle the debt for a reduced amount in return for deletion of the negative account from my credit report.  If they responded affirmatively, I paid the settlement amount.  If they responded negatively, then I ignored the debt until it fell off my credit report.

The most important thing is to not admit the debt is yours to the collection agency or make any comment agreeing to pay for it, because that will reset the seven years before the negative account will fall off your credit report.  Even if you repay the debt to the collection agency, they are not obliged to remove the negative account from your credit report, unless you have a pay for deletion agreement in writing from them.  If the debt is really old past the statute of limitations and it is no longer on your credit report, then just forget about it.  Some people say that it will pop up again a a problem when you go for a mortgage, but that didn't happen in my case.  Nobody can do anything to you about it once it is past the statute of limitations, so the debt may as well not exist anymore.

Whaaaat. I did not know it worked that way!

MoneyCat

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Re: the scary world of consumer debt collection
« Reply #5 on: August 16, 2014, 10:54:20 PM »

In my darkest days, before I got my financial act together, I was being pursued by debt collectors.  It seemed really scary until I educated myself about debt and then it all became very simple.  I did not give any comment to anyone who contacted me by phone and, in fact, changed my phone number so they couldn't find me.  Then, I got the names of the debt collection agencies from my credit report and wrote to them asking for letters of authentication.  If they did not authenticate the debt, then I simply ignored it until it fell off my credit report.  If they did authenticate it, then I wrote back to them with letters that did not admit that I owed the debt or offer payment, but instead asked for a deal to settle the debt for a reduced amount in return for deletion of the negative account from my credit report.  If they responded affirmatively, I paid the settlement amount.  If they responded negatively, then I ignored the debt until it fell off my credit report.

The most important thing is to not admit the debt is yours to the collection agency or make any comment agreeing to pay for it, because that will reset the seven years before the negative account will fall off your credit report.  Even if you repay the debt to the collection agency, they are not obliged to remove the negative account from your credit report, unless you have a pay for deletion agreement in writing from them.  If the debt is really old past the statute of limitations and it is no longer on your credit report, then just forget about it.  Some people say that it will pop up again a a problem when you go for a mortgage, but that didn't happen in my case.  Nobody can do anything to you about it once it is past the statute of limitations, so the debt may as well not exist anymore.

Whaaaat. I did not know it worked that way!

The only real risk is that if the debt is still within the statute of limitations the debt collectors can sue you for it.  However, unless the debt is absolutely massive, they probably aren't going to go through the hassle and expense of taking you to court.  If you have massive debt, then you can just declare bankruptcy and wipe it out anyway.  Debt collectors will threaten to sue people to try to scare them into paying, but they almost never follow through on it, so it's not really a problem.

lifejoy

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Re: the scary world of consumer debt collection
« Reply #6 on: August 16, 2014, 11:04:58 PM »
Right, I just finished reading the article. Wild!

resy

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Re: the scary world of consumer debt collection
« Reply #7 on: August 17, 2014, 12:17:07 AM »
In my darkest days, before I got my financial act together, I was being pursued by debt collectors.  It seemed really scary until I educated myself about debt and then it all became very simple.  I did not give any comment to anyone who contacted me by phone and, in fact, changed my phone number so they couldn't find me.  Then, I got the names of the debt collection agencies from my credit report and wrote to them asking for letters of authentication.  If they did not authenticate the debt, then I simply ignored it until it fell off my credit report.  If they did authenticate it, then I wrote back to them with letters that did not admit that I owed the debt or offer payment, but instead asked for a deal to settle the debt for a reduced amount in return for deletion of the negative account from my credit report.  If they responded affirmatively, I paid the settlement amount.  If they responded negatively, then I ignored the debt until it fell off my credit report.

The most important thing is to not admit the debt is yours to the collection agency or make any comment agreeing to pay for it, because that will reset the seven years before the negative account will fall off your credit report.  Even if you repay the debt to the collection agency, they are not obliged to remove the negative account from your credit report, unless you have a pay for deletion agreement in writing from them.  If the debt is really old past the statute of limitations and it is no longer on your credit report, then just forget about it.  Some people say that it will pop up again a a problem when you go for a mortgage, but that didn't happen in my case.  Nobody can do anything to you about it once it is past the statute of limitations, so the debt may as well not exist anymore.

wHat is valid authentication?? I am actually in the process of cleating up my credit from old debts (not 7 years old thouhj-or even close) so i really want to make sure my money goes where it n3eds to go. this is so overwhelming, i want to slap my younger self  .

acorn

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Re: the scary world of consumer debt collection
« Reply #8 on: August 17, 2014, 05:51:12 AM »
great read. thanks for the link

Zelda01

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Re: the scary world of consumer debt collection
« Reply #9 on: August 17, 2014, 10:57:05 AM »
Weirdly, about 15 years ago I had a medical bill that hadn't completely made its way through insurance.  For some reason, the medical provider sent the bill to collections, even though it was only a few months since I had gotten the charge (maybe 4 or 5 months after at most). 

I didn't realize this until I got a phone call from the collections agency.  And even then, it was a phone call, so I thought it was a scam.  I said, "No, I'm not sending you any money.  I'll pay the provider."

So probably by this time the provider had gotten the payment from insurance, then I paid them. 

Tl;dr:  I got $200 back from the state's Unclaimed Money fund last year, because I didn't understand the collections process.

franklin w. dixon

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Re: the scary world of consumer debt collection
« Reply #10 on: August 24, 2014, 10:14:27 PM »
It's not even a matter of whether you take on debts. Things are incorrectly sent to corrections all the time. As a for instance, in order to cancel a Verizon account I literally had to go to the media about it: http://consumerist.com/2013/01/09/verizon-has-no-idea-whether-i-get-fios-or-dsl-keeps-billing-me-after-i-cancel/

They kept fraudulently billing me for months, and the follow up to that article is that months later I got random calls from debt collectors for random amounts of money related to mysterious Verizon debts that got sold to them. In every case I provided the debt collector with documentation showing the debt was invalid and they left me alone after than... but then a different debt collector called me up a few months later with the same story. A full year after I made my extremely straightforward request (cancel my account) Verizon sent me a letter saying the account was **actually** closed. I haven't heard anything since then.

It was a really annoying hassle to me as a guy who nerdishly reads all the terms of contracts and has some working knowledge of how debt collection works and is willing and able to, like i said, literally put an article in the news about how Verizon was fucking me. To people who aren't savvy, who are ESL, who have lost documents etc., they're just completely fucked. The system is deliberately set up to extract false debts from people who are helpless. Turns out that capitalism was monstrous and exploitative the whole time, who knew?