Even a polite call from a debt collector could ruin your day --
but imagine if a collector called you names, swore at you, stalked
you on Facebook or even threatened to kill your dog.
Bad behavior by debt collectors is on the rise: in 2011, the
Federal Trade Commission received more than 180,000 consumer
complaints regarding abusive debt collection practices, almost
40,000 more than the previous year. "It was an unprecedented
number," says Thomas Pahl, assistant director of the division of
financial practices for the FTC. And in 2012 so far, Pahl says:
"Consumer complaint numbers continue to be very high."
The increase probably results from the bad economy combined with
the Federal Trade Commission's stepped-up enforcement of debt
collection practices, Pahl says. For example, in 2011, the agency
filed a lawsuit against a California debt collector, hired by a
funeral home, who threatened to dig up the body of the debtor's
daughter -- and also to shoot her dog. "The FTC has been more
active in bringing cases, so there's more awareness that people can
complain to us," Pahl says.
However, a growing number of consumer complaints does not mean
that bad behavior is rampant in the industry, says Mark Schiffman,
vice president of public affairs for ACA International, a debt
collector trade association that trains its members to comply with
debt collection laws. "It's really only a tally of complaints
to the FTC," Schiffman says. "Someone might say 'Joe's Collection
Agency called me at noon on a Tuesday and I didn't like it.' That's
a complaint, but [the debt collector] didn't do anything
wrong."
While it's true many complaints are fairly routine -- for
example, allegations of a collector calling too much or being rude
-- some collectors do resort to extreme tactics. "Most of the
industry understands that abusive behavior works," says Ira
Rheingold, executive director of the National Association of
Consumer Advocates. "There's a real pressure on and incentive for
people working in those debt-collecting outfits to collect. That's
how their compensation works."
These true stories show just how disturbing an encounter with a
rogue debt collector can be -- and what a consumer can do to fight
back.
Tale No. 1: Terrorized by text
The debt:
Jessica Burke had bought a used Pontiac Grand Am and fell a few
months behind on payments when she had trouble finding work after a
move to California. She called the financing company, and they
agreed to give her extra time to pay.
The first call:
The very next day, she got a call from a man who called himself
"John Anderson," which Burke later found out was a fake name. "He
started out by telling me he was a lawyer and would have me sued,"
says Burke, who found out that was a lie.
The harassment:
The bill collector got her address and other private information by
calling her cell phone company, impersonating her father and asking
to be added to her account. Then, he began a barrage of angry calls
and texts. The messages upset Burke so much she called the police,
who ordered the collector to stop contacting her. But the texts
continued for weeks, coming from a disguised number and implying
that he was watching her. In one, he called her "Porky Pig" and a
"200-pound slob" and added, "I got picture messages of you today."
Late one night, she says, he texted her, claiming he was outside
her house. She says: "It was 11 o'clock at night, I lived in a very
rural area and I was home by myself. I was terrified."
Fighting back:
Burke turned her car over to her creditor, got an attorney and sued
the debt collector for multiple violations of the federal Fair Debt
Collection Practices Act, including his lies, name-calling,
obscenity and repeated calls. "You can't go to jail for owing a
debt, but he made that threat a couple of times," says Jeremy
Golden, the attorney who represented Burke. "It was really
outrageous." But Golden says one of the worst things the debt
collector did was pretend to be her dad. "When you couple that with
the insults -- that's a really scary pattern," Golden says.
The outcome:
A federal judge awarded Burke a judgment of $33,312 against the
debt collector. But he told her lawyer he did not plan to pay.
Burke did some investigating of her own and learned he was broke,
so she gave up on trying to collect. She later found online
discussions about his tactics. She says: "A lot of people had been
getting the same types of phone calls -- he was telling them he'd
take their dog or have their grandmother arrested."
Tale No. 2: Get your gun
The debt:
A debt collector called West Virginia homemaker Diana Mey about an
old debt, possibly a credit card debt, allegedly owed by her son,
who had moved out eight years earlier.
The first call:
The debt collector left a message on Mey's home answering machine.
"It was a very ominous message that implied legal action," Mey
says.
The harassment:
The collectors continued to call, threatening to put a lien on
Mey's house and to sue her son. She sent a letter telling the
company to stop contacting her. Then she started getting hang-up
calls that showed up on her caller ID as coming from the local
sheriff's department.
"I called the sheriff's department and said, 'Is somebody trying
to get ahold of me?' They said 'No.'" One evening, the phone rang
again, from the same number. The deep male voice on the other end
asked for Diana, using a vulgar slur. He then went on to make
graphic threats of sexual assault. Horrified, Mey told him she was
recording the call. He responded: "Yay." After she hung up, Mey
called 911 to report the incident. Home alone, she got her
husband's gun and hung it on her bedpost that night. She says: "I
was literally shaking I was so scared."
Fighting back:
Later, Mey did some online research and found other complaints
about bill collectors from the same company making obscene calls
and disguising their phone number as that of the local sheriff's
department. Mey found an attorney and sued the company, Global AG,
also known by several other names, including Reliant Financial
Associates. Her attorney, Martin Sheehan, says Mey's case was
bolstered by the recording of the call. "When she came in with that
tape recording, that was a game changer," he says. "There was no
question how vile it was."
The outcome:
The collection company's attorney didn't show up in court, so a
judge listened to Mey's testimony and the tape with a local TV
station filming. The judge awarded Mey a judgment of more than
$10.8 million. "I was stunned," she says. "I never expected that
much." Now comes the hard part: trying to collect.
Tale No. 3: Followed on Facebook
The debt:
In Florida, Kathryn Haralson bought a used Jeep Grand Cherokee and
made monthly payments for more than five years until she fell
behind in February 2011. She thought she had only a few more
payments left. However, the creditor, MarkOne Financial, claimed
she still owed $7,400.
The first call:
A bill collector who called himself "Mr. Rice" started making calls
to Haralson at home and at the radiology center where she worked,
Haralson says.
The harassment:
The bill collector called her work number and asked a coworker
where Haralson usually parks her car, Haralson says. He also called
her father, her brother, her husband and her daughter, who was away
at college, according to her lawsuit. The collector dialed her
husband's cell phone so much that he had to stop answering it and
missed several business calls, she says. The collector called her
brother at work enough to jeopardize his job and refused to stop,
she says. Then he tracked Haralson down on Facebook and wrote:
"Good day. Please contact Mr. Rice at MarkOne regarding a personal
business matter," followed by his phone number. Haralson says:
"When I started getting Facebook messages, that was very
alarming."
Fighting back:
Finally, Haralson says she went online and found out that she
wasn't the only one having problems with the company. "Everything
was the same, the Facebook messages and all the harassment," she
says. "I thought they must be doing this to a lot of people."
Attorney Billy Howard of Morgan & Morgan law firm, agreed to
represent her and filed a lawsuit in state court for violation of
Florida law that governs collections practices by creditors. "It
got to the point where I couldn't deal with the harassment. It was
too much. I was just getting sick of it," Haralson says.
The outcome:
Attorney Howard says he and Haralson plan to take the case to
trial. "She tried to do the right thing. She was not ducking and
trying not to pay her bills -- she was in constant contact with
them," Howard says. "There was no reason for them to call and
bother her daughter and rest of her family but to terrorize her."
Haralson says: "I would love nothing more, if I walked away without
a penny, than to see them out of business."