The New York Times published this excellent article exposing the shady underbelly of the debt collection industry. Here are some of the things it reported that should cause you to pause before paying a debt collector:
- Old debts “enter a financial netherworld where strange things can happen. A gamut of players – including debt buyers, collectors, brokers, street hustlers and criminals – all work together” in “an often-lawless marketplace . .”
- Some debt collectors “steal” old debts and trick consumers into paying them.
- The head of one debt collection outfit, Franklin Asset Management, wore $2,000 suits while describing his own collectors as “like thugs” because hustler were what he needed to get people to pay. And his right-hand-man was a former armed robber.
- Government agencies do very little to police the industry and root out the criminals.
What To Do If anyone other than the original creditor contacts you about a debt, contact an attorney if:
- They hesitate to give you their name or mailing address.
- They are not registered with your state as a debt collector. (In Rhode Island, you can check here.)
- The debt is more than 3 years old.
- The amount they claim you owe is more than 10% of the credit card’s former limit.
- They try to bully you, they threaten to call your neighbors, relatives or employer, or they bombard you with phone calls.
- They do anything suspicious.