Debt Collection

Interesting story about some of the hardball tactics taken by debt collection agencies. From my experience working in the field, I'm not really surprised. Even locally, we have some practices that seem to be in violation of ethics and the Fair Debt Collection Practices Act. For example, one local attorney sends out what appears to be a summons and complaint, except it's marked only with the office file number and has never been commenced in the court. The fear of litigation expenses and attorney's fees often has a huge effect on unsophisticated debtors, who pay rather than face a court. Which isn't a problem in (what the industry association rep describes as a "small minority") the cases where it's a scammer running up a debt he/she never intended to pay. It's more of a problem where the debtor doesn't have the money to spare or lives on a fixed income and may be eligible to have the debt forgiven or reduced. Another local attorney sends out letters which rely heavily on "the shame and public embarrassment" of a "publicly known" judgment as a debtor as a reason to pay ASAP.

I'm not in favor of anyone skipping out on legitimate debts. As in every situation, though, I see the rules as pretty much the boundaries to be followed. The FDCPA says no service of legal-looking papers that aren't actual pleadings, yet it continues. Harassing phone calls, day and night, continue even after orders to cease, as do calls to friends and relatives. Recently, I dealt with a case where the action for a deficiency judgment was being brought nearly two years after the statute of limitations had run. Anyone who could read the UCC (not a simple task, admittedly) or log on to Lexis could tell the suit was barred--but then again, the average debtor doesn't have those resources or access to an attorney, and coughs up some money, reaffirming the entire debt, on a (by definition) frivolous lawsuit.