COMPLAINTS ABOUT AGGRESSIVE TACTICS ARE UP
The recession has left many people with little choice but to take out loans and credit cards to handle their expenses. As a result, there's more debt and more debt collectors. And an ABC2 News/Scripps Howard News Service Investigation shows a rise in the number of Marylanders complaining about the tactics they use. Joce Sterman explains why some say they're borderline bullies.
For some, every phone call is a ringing reminder of the debt that's weighing them down. And some claim their tactics can be aggressive, so much so that a recovering cancer patient in Maryland received 255 phone calls from a debt collector in just 30 days. It may sound outrageous, but according to some who are behind on their bills, it’s a story that rings true.
Dundalk's Aleasha Lewis knows what it's like to be hounded by a debt collector. She says, “They won't stop. They're like the Terminator. They will not stop until they get you." Lewis says that when her fiancé lost his job last year, her family ended up thousands in the hole. And she says they've been struggling ever since, “We're not welchers and we're not deadbeats. You do all you can do. But sometimes there's not enough left to pay the debts you took out when you could pay them."
Lewis believes she's been targeted illegally by debt collectors who skirt the law. And complaints like hers are growing. A Scripps Howard News Service investigation found debt collection complaints to the Federal Trade Commission are up nationally over the past two years, rising more than six-percent. Between 2007 and May of 2009, angry Americans lodged nearly 228,000 complaints about debt collection. J. Dolan Reilly with the FTC says he’s not surprised by the increase, "I think that consumers are becoming savvier about their rights and are going to complain."
And the complaints are even louder here in Baltimore, up almost 25 percent in the last two years. The biggest gripes, according to consumers, are about collectors misrepresenting what is owed and which company is collecting, collectors who never send written notices and companies that continue calling even when they're told to stop. Those kinds of complaints could all be considered violations of the federal Fair Debt Collection Practices Act.
Towson attorney Jane Santoni is well aware that some companies are willing to walk outside federal law. She tells ABC2, "It is some of the worst bullying tactics I've ever seen. Their goal, in my opinion, is to get as much payment, as quickly as possible, with as little trouble as possible."
And to avoid trouble, Santoni says her clients have lived through threats that would make the Sopranos blush. She explains that her clients have dealt with companies threatening arrests, lawsuits and even bodily harm to those who don't pay up. Santoni has handled dozens of cases against debt collectors and says that she’s seen an increase in abuses of the system, often because people back down. She says, “Most of the time these companies bank on the fact that these people aren't going to fight."
People may not have the power to fight back, but the FTC does. The agency monitors 4,100 collection agencies across the country. But Scripps Howard News Service found one company sticks out. NCO Group, based in suburban Philadelphia, racked up nearly twice as many FTC complaints as any other company. The company is number one in complaints both nationally and here in Baltimore.
NCO CEO Michael Barrist says, "Our error rate, when we add up all the regulatory complaints we get, is negligible. It's such a small number. It has no statistical value." But since 2007, nearly 8,000 complaints have been filed against NCO.
Barrist says his collectors follow the law. And he blames some of their troubles on another collection company that handled the debt before NCO took over. Barrist says, "I think we have the best record in the industry statistically. With that said, I take every one of these complaints seriously. I'm a big believer that regardless of whether NCO is at fault or not, the first thing we should be doing is saying we're sorry and hearing what is going on."
But sorries won't stop the phone from ringing at Aleasha Lewis' house. She says, "I am dealing with these problems every day because you must leave no stone unturned." She wants to focus on battling her debt, instead of fighting the people who collect it.
EXPERTS EXPLAIN HOW TO GET DEBT COLLECTORS OFF YOUR BACK
Those who owe debt know one thing for sure, the companies who get paid to collect it can be very persistent. One Marylander, who asked us not to identify him, told us he was been getting as many as 14 calls a day from a collection company trying to settle up. He says his phone rings off the hook even though he told the company to stop calling months ago, “Every time they called me we had the same conversation. I'll pay what I can pay. Well, they said, collection efforts will continue."
And by law, those companies can try to collect. But that doesn't mean they can harass you until you pay up. The Fair Debt Collection Practices Act sets the rules so you’re protected. Towson attorney Jane Santoni has been fighting companies she says break those rules. She says, “People have more power than you think. Don't be afraid to stand up to them." And if you want to stand up, Santoni says you have to know your rights. She tells ABC2, "An educated consumer is a powerful consumer."
Consumers need to know that when it comes to debt, federal law bans collectors from harassing you, threatening violence, repeatedly calling or calling outside the hours of 8 am to 9pm. But you have other rights to remember as well.
Experts say you that if you want to fight back, your first step is to tell debt collectors to stop calling you. Then you need to send a certified letter so you've got proof in writing. The collectors can still pursue the debt or file a lawsuit, but by law, they can't keep calling you.
It’s also important to ask the company to put the debt in writing so you can verify it actually belongs to you. You should also be careful about agreeing to pay a small amount to get them off your back. Advocates say this could reset the statute of limitations, giving companies more time to pursue old debt.
A fourth tip - keep a close eye on your mail because debt collection notices may blend in with the junk mail. And if you get served with a lawsuit, you should not ignore it. Experts say you should show up in court and insist on seeing the actual bill. Ira Rheingold with the National Alliance of Consumer Advocates says, "In a fair system, even when the consumer doesn't show up, you would think that at the very least the court would demand proof that the debt is owed and that they've abided by simple rules that would allow them to get a judgment. But it doesn't happen."
That’s why experts say you've got to be your own advocate and fight against the bad operators. As Santoni puts it, "They're bullies and thugs and they need to be stopped."
