Questionable Bill Collection Techniques (continued)

Hi,
In my last blog, I referred to a few questionable techniques employed by a small percentage of bill collectors. Some additional ones to be aware of are:
1) Bill collectors will often use the term "garnishee wages" as leverage to get a debtor to pay on an account. They often speak as though garnishment of wages will happen overnight. In reality, wages are only subject to garnishment after judgment has been rendered which takes 45-60 days minimum in most states.
2) Another form of leverage used by bill collectors is to mention highly inflated attorney fees that the debtor will be responsible for if a small balance isn't paid in full. For example, a debtor owes a bill of $400.00. The collector calls the debtor and tells him or her that the client is prepared to sue and the attorney fees will be $1,400.00-$1,500.00 to coerce the debtor into paying the bill. In reality, chances are the client will not sue for such a small balance. In addition, the attorney fees would not be as excessive as the collector claims, IE., four times the amount of the bill!
3) Another common form of leverage used is when a collector tells a debtor that a lien will quickly be placed on his or her house. Once again, in most instances, and for most debts, the only way a lien can only be placed on a house is after judgment is rendered and the judgment is registered in the county in which the property is located.
These are just a few more examples of inappropriate collection techniques that are highly illegal, and, if encountered repeatedly, should be documented and reported to the State Attorney General.
Until later,
Alan

Collections

Hi,
Yesterday I talked about the importance of the debtor to acknowledge communication from a collection agency. If a person chooses to completely ignore all written communication and repeated phone calls, in many instances the collector has no choice but to turn the account over to the attorneys for litigation. It is important to realize that even something as small as an ignored library fine may be reported to a credit bureau. This can result in significant increases in the cost of everything from insurance to mortgage costs. Remember when a collection agency makes contact, they want to resolve the matter just as quickly as the debtor. So when contacted, immediate response is in the debtor's best interest. The final collection remedy I have not yet discussed is litigation. Very seldom will a collector mention legal action if he or she has not already been authorized by the client to proceed in that manner if necessary. Once an account is transferred to attorneys, 99% of the time, the opportunity for account settlement has expired. If a debtor receives a demand letter from a law firm it is imperative that the debtor communicate immediately with the law firm. Otherwise, the debtor will start incurring high attorney fees and court costs. On many occasions, people are amazed that a relatively small bill (IE $500.00) has all of a sudden grown from $1,000.-$1,500. because it has been turned over to attorneys. The easiest way to prevent becoming involved in a long arduous collection process is to respond immediately to a collection agency and resolve the account. Next week, I will talk about when businesses should submit accounts to collection agencies.
Until then,
Alan