Bill Harassment, What are your rights?

I thought I would write a little bit about getting behind on credit card payments or other bills that you owe. There will probably be a mini series on dealing with creditors and what you should do if they come knocking.  There is no promotional material within these posts, it is just something that many of us deal with on a daily basis and can cause undue stress on relationships.  Thankfully my wife and I have not had to endure any of these tactics by creditors, but others are not so lucky.

If you get too far behind on some of your credit payments, there’s a good chance you’re creditor might sell your debt to an outside party at a discounted price. Why would a credit company do this? The reason is simple: Selling your unpaid debt will benefit the creditor because they get some of the money that is owed to them and are free from dealing with the situation. The reason a 3rd party agency would purchase a bad debt from a creditor is because they can pay less than the debt is worth and gain the ability to retrieve the full amount that is owed, thereby making a profit.

This tradeoff between the creditor and the 3rd party agency makes it more apparent why these debt collectors are often so harsh with their collection methods; if they can’t collect the money owed by the debtor, they lose the money they put up to buy the debt! However, some debt collectors get a bit greedy with this process, and have been known to use extreme (and unlawful in some cases) methods for obtaining money from debtors. This is usually done by continuously contacting the person who owes money and demanding the payment. This is called bill harassment.

Types of Bill Harassment
It’s strange to think of debt collectors as being creative, but it can’t be ignored that many strategies have been developed by these agencies seem to be very effective. It’s the nature of their business, they HAVE to be creative and form effective strategies or it wouldn’t be a financially worthwhile endeavor. It’s important to note that most of these collection tactics are effective due to their unexpectedness. A debt collector can only get the jump on you if you don’t know what to expect. Knowing their strategies is the key to parrying their efforts. Some bill harassment tactics debt collectors may use can include:

Threatening Calls- this is the most common collection method and is also called Phone Harassment. It can include rude language and intrusive demands. Callers will sometimes threaten to involve the authorities if a bill is not paid. Sometimes the threat is open ended, “pay up, or else”.

Contacting You Family- one particularly intrusive method is to pry into your personal life by contacting your family members about the debt. The ploy here is to annoy your loved ones to the point where they also get on your case about paying the bill, adding additional pressure to your situation.

Lying and Bullying- another method commonly used in bill harassment, which focuses on scaring the debtor into paying the debt. Bill collectors have been known to lie about the total amount owed in order to secure a more sizable profit from the transaction. It’s not uncommon for 3rd party agencies to tack on extra fees to your debt without telling you. This scare tactic can be used to bully people into paying extra money that they don’t actually owe.

Continuous Calling- this method aims to wear you down with the shear volume of calls you receive about your debt.

Is Bill Harassment Illegal?
Some of the above mentioned methods, though commonly used, violate the Fair Debt Collection Practices Act (FDCPA) and are against the law. Do you know your rights?

You shouldn’t have to deal with debt collectors who are breaking the law to get what they’re after.  Take a few minutes if you are being hassled to understand your rights.

What have your experiences been if you care to share?  If not drop an anonymous comment.

Photo by: Elwillo