Corporate Upper Class
Despite Federal and State laws against it, debt collection agencies employ threats, harassment and tactics aimed at forcing consumers to pay.
Richard Alderman, a University of Houston Law Professor who specializes in consumer rights, says while the law is clear on what is and isn’t allowed, it is becoming increasingly difficult to punish debt collectors who break the law.
Alderman says there are three reasons why it is becoming harder to protect consumer rights: one, the state legislature has capped the amount one may seek in damages; two, courts, juries and judges are increasingly less likely to award substantial damages; and three, there’s what Alderman calls a general “anti-lawsuit” mood of the public.
“I don’t think people understand how the system works,” Alderman says. “Private lawsuits regulate the market. Every time you make it harder to sue, every time the law binds the hands of a lawyer, you make it harder to regulate the way the system protects the consumer.”
The Federal Law, The Fair Debt Collections Practices Act, prohibits debt collectors from threatening a debtor, harassing them by calling at unwelcome times, calling a debtor’s employer and using obscene language, among other behaviors. State laws extend some of these provisions to limit any agency collecting a debt, whether it’s a third party or the creditor. For instance, if Foley’s is trying to collect a debt, they can call your employer, but they can’t threaten you in any way.
So why harass debtors?
“It’s all money,” Alderman says. “Their one motivation is to get you to pay.”
Debt collection is a billion-dollar enterprise, and a permanent fixture of the United States’ economy, as Americans are expected to accrue about 2.1 trillion dollars in personal debts by next year, according to Census Bureau reports.
While consumers swipe their credit cards and apply for loans, ignorance of the law is their enemy.
“The most common misconception is that there is no law to protect you,” Alderman says. “There is a law. If they harass you, you can say, ‘Maybe you didn’t know, but I’m in Texas, and in Texas, you can’t do that.’”
If that doesn’t end the harassment, there’s one easy step a consumer can take: write a letter.
For the cost of a postage stamp, consumers can write to the agency requesting not to be harassed and not be contacted except in writing. The law requires that agencies honor these requests; if not, consumers have a record to go by if they decide to sue the agency.
Unfortunately, when it comes to a court battle, consumers wield weak weapons against a formidable enemy.
With the right evidence, such as telephone recordings and written documentation, it easy to prove violations of the law, but juries are unlikely to award damages that would sting debt collectors’ pocketbooks. In fact, the law entitles the plaintiff up to only $1,000 in damages, unless excessive harm can be proven, such as mental anguish.
But the best way to avoid all this trouble, Alderman says, is to make a good faith effort to pay the bill by working out a payment system the consumer can afford. Most agencies are willing to work with you.
“They want the money any way they can get it, usually,” Alderman says. “You can’t let these people get you upset. Talk to them when they call. Be really polite. If you talk to them for 10 to 15 minutes every time they call, they’re not going to call very often.”
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