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Why Phone Conversations with Bill Collectors is a Bad Idea

By Debt Prison on January 13, 2009

A highly trained bill collector knows how to get the most money out of defaulted debtors. While you are nervously thinking of what to say they are taking notes… updating your credit file. A good bill collector normally has an outgoing personality and tough outer shell. Therefore collectors learn early on not to take the job personal. They also learn how to take everything you say to build a case against you. A bill collector will listen carefully to everything you say (while at the same time recording the conversation), as well as the way you say it, to develop a plan of action which will most likely generate a payment from you. See also all of my articles on Collection Agencies.

Bill collectors are not your friend, and though they may appear concerned, they are really only concerned about their paycheck. Collectors work off of commission, often receiving 10 to 25% of your payment to the collection agency. So if they get you to cough up $100… they just made $25 buckaroos. These collectors also have a monthly quota to achieve. If they fail to meet the monthly collection quota they can be let go. A collection agency needs bill collectors that can produce dollars while maintaining a level of conduct compliant with the Fair Debt Collection Practices Act.

The only time I would consider speaking with a collection agency is when I have an offer for them. For example, I would give the dollar amount paid monthly, the total number of months to be paid, and the conditions of how I wanted this reflected on my credit report. They would then have to agree with those terms, put them in writing, sign the contract, and send me a copy. This would be a no debate discussion… here are the terms… period. If you don’t agree with those terms then contact me when you do.

Controlling the Conversation

The bill collector needs to stay in control of the conversation to steer you towards a payment. Maintaining control is their number one priority. Using a sort of psychological authority, since you owe them money, they proceed to make demands in a civil tone. A good collector is looking for verbal cues from you which will indicate what buttons he needs to push to separate you from your cash.

Collecting Asset Information

While the collector is buddying up to you… he’s updating your file with any asset information you provide. For example, if you say times are tough because you are paying on a house or vehicle note… well you just gave them an asset to add to your file. They will also inquire as to any land, homes, vehicles, savings accounts, or stocks, that perhaps you could sell to satisfy this debt. If you tell them that you have a job they will rightly figure that you can produce some monthly payment amount.

Lump Sum Demand

A collection agency will almost always demand a lump sum payment the first time you talk with them. They do this because many debtors are intimidated and cough up the lump sum. However, they do not need the lump sum and can be worked down to a rational monthly payment plan. Their goal is to get you on the phone, intimidate you with fear tactics, and proceed to collect as much moolah as possible. Did I mention that talking with bill collectors on the phone is a bad idea? A bill collector wants you on the phone – they don’t want you ignoring the calls, and instead, writing those pesky debt validation letters.

Legal Suit

Through the process of updating your file they will determine if they stand a good chance of collecting the money by pursuing a civil suit. If they know your house is paid for; this is a perfect asset for them to seek a lien against via a court judgment. If they know that you have a decent job they will seek to garnish your wages, and if possible, take money directly out of any banking account you have. A good candidate is one with at least one asset, at least a $500 balance, and the account is not in dispute.

Here are some good tips I found at wikihow.com for talking with collection agencies on the phone (if this article didn’t convince you not to):

You must keep a calm, reasonable and well mannered tone of voice. Any yelling, name calling or other verbal tactics will damage the image you’re working to project.

If they speak to you in any way that you find objectionable, give them one warning, as mentioned in your opening statement. The second time you should ask to speak to their supervisor. When you’re connected with the supervisor start again from step one.

Write down everything, including: the date and time of the call, name and position on the rep calling you, what they want, what you’re offering, etc.

Many times the names of the collectors are not their real ones. One way to figure it out is to send the signature receipt letter addressed only to that one person. If they sign back with their signature on the letter, they must be that person (otherwise it becomes a federal offense of mail fraud).

Sometimes you just can’t win because they won’t listen to reason or acknowledge that you legally are not obligated to the debt. In this case – you should establish a long paper trail indicating that they did not wish to collect on the debt in good faith. When they file your collection with the credit agencies, mail copies of your paper trail to all three, with documentation that they violated the Fair Debt Collection Act and demand removal of the claim from your credit report immediately.

Be very careful about making any payments if the debt is past the statute of limitations or about to be since that may restart the clock and you may then owe the full amount even if the collector told you that you would only have to pay a small amount and then they would leave you alone.

Discuss this article and meet new people at Debt Prison Forums.

Related Articles

* Restrictions on Wage Garnishment for Debt Collection.

* Reasons not to file Bankruptcy or Settle Your Debts

How Bill Collectors Locate You

By Debt Prison on January 12, 2009

Thanks to the internet it’s easier than ever for bill collectors to locate your whereabouts. When you apply for credit or register to vote you are updating your information that collectors will use to find you. Initially a collection agency will review the file they receive from the original creditor. Within this file they will attempt to discover your most recent place of employment or a relative. They will then call your employer and ask to speak with you directly. If you no longer work there… they will inquire of your old co-workers if they know where your new job is. I once witnessed an employer give the State of Mississippi a previous employees whereabouts so they could collect child support. See also all of my articles on Collection Agencies.

Relatives and Neighbors

A relative can provide an abundance of information to collection agencies. If they aren’t careful, they will volunteer your place of employment, your assets, and perhaps even your current bank. A bill collector would love to get their hands on any of that information. This weekend I observed my father answer his phone to a polite bill collector. The collector was attempting to collect on a debt that belonged to someone my father knew. Being the nice guy he is, Dad simply told them the debtor had no phone and no job.

According to the Fair Debt Collection Practices Act it is legal for a debt collector to call your neighbor to try and dig up some information about you. However, they are not allowed to tell them they are attempting to collect on a debt. A collector will use a directory to search for your next door neighbors. They will then call them, if they find a phone number, and ask them if they know where you are. They may just say that they are an old friend trying to locate you for an upcoming high school reunion.

Using a Database to Search for You

If the above method turns up nothing the collection agency will submit your personal information into a database to see what turns up. I’ve even personally used some of the free online database sites to see what information it displays for me. For fun try running a search for your name and state at http://intelius.com. It shows my birth year and month… as well as my relative’s names and previous addresses. Collection agencies use a similar database but will get a better deal on the pricing than you or I. Moving to a new state will result in a new Driver’s License and this change will be documented in the government’s database.

Digging Through Your Credit Report for Information

When you apply for any new credit…. your credit report is updated with the information you provide on the credit application. Also, your credit report will show a bill collector other creditors to whom you are currently making payments. The collection agency will contact these creditors and attempt to get information from them to update your file. The credit report will also indicate your last known employer, the name of your spouse, and any public record information such as judgments or tax liens.

Limiting Your Information

If you have any outstanding defaulted debt you have no business applying for new credit. Applying for new credit will also signal the bill collector that you have enough money to make payments. Hence this may prompt them to pursue legal action to collect the debt. Inform any friends or family not to give any information (of any kind) to anyone over the telephone regarding you or your whereabouts. Lastly, conversations with debt collectors are best held on paper – so write registered letters and don’t answer their phone calls.

Discuss this article and meet new people at Debt Prison Forums.

Related Articles

* Restrictions on Wage Garnishment for Debt Collection.

* Reasons not to file Bankruptcy or Settle Your Debts

Francis Newton predicts Dow headed for 6250

By Debt Prison on January 6, 2009

With the Dow Jones currently at 9,000 points, Francis Newton (a Murrey Math high tech trader featured on the Gerry V radio show in New Orleans) suggests the Dow will drop to 6250 by April or May of 2009. I haven’t heard any forecasters throw out specific numbers like this so it caught my attention. These forecasters expect a small rally through March and then a fast drop. So why 6250 and how does she come up with this number?

Her reasoning on the swing of the Dow is based on the Murrey Math Line. Francis says if the Dow drops below 8437 (within the first quarter of 2009) – then it will definitely continue dropping to 7812. If the market has enough momentum to move 1/8 from the midline – it will continue moving until a 3/8 move is achieved. Sound crazy? If the market drops below 8437 you’d better cash out… well that’s what she says.

The Dow is expected to rise in the beginning of the year and will appear headed for 10,000 (as high as it can climb at this time). The Dow has the “opportunity to go up, but the obligation to go down.” The brief rise in the stock market is due to a rebound from the severe drop it took in the last six months, bounced back with the recent influx of capital by the Federal Reserve.

Why does the Dow have an obligation to drop?

Due to the rough economic news constantly being delivered over the airwaves: consumer confidence is weaker, investors are nervous, folks are getting out of the market, buying power is down, and credit is tighter. All of this uncertainty in the market makes it all too easy for the market to fall again and perform what traders call the “dead cat dance”.

Unemployment numbers are rising and unfortunately we don’t receive those numbers until after the quarter has already passed. Across the nation stores are closing and workers are being laid off – much more than what the spoiled American, whose economy has been artificially inflated for over a decade, is used to witnessing.

An introduction to Murrey Math Trading

Every activity in creation requires three fundamental elements: Space, Matter and Time.

Where every repeated activity creates a pattern or rhythm. Seasons, celestial movement, tides, growth cycles, etc. (what goes up must come down). Recording the repeated activity draws a picture of the rhythm. The fundamental rhythms in creation are the same. The math is the same, the picture is the same, the result is the same: predictable change. By knowing the TIME of a cycle we can consistently anticipate the likely future direction of the rhythm by knowing where we are NOW in the cycle. Half moon to full moon etc.

The Murrey Math Trading System is based on the precise measurements of these universal cycles.

In order to understand how stock market cycles are created there is one thing we must know. A few legal insiders, trade in such large volume that they almost single handedly determine the direction of the market. They in effect own the goose. These insiders make massive amounts of money by constantly changing directions as soon as enough people follow their previous move! These traders are the pied piper of Wall Street. Their functional control enables these legal insiders to make millions from small percentage profits (from 2% to 10%), EVERYTIME they change directions.

This constant flow of huge profits from modest percentages in BOTH directions enables the truth to be camouflaged through official explanations of the market Up and Down. The noise of the market place serves as a verbal smoke screen that hides the real profit taking activity.

Should I pay the collection agency or the original creditor?

By Debt Prison on January 5, 2009

When possible pay the original creditor and bypass the collection agency. If your creditor has ‘assigned’ your defaulted debt over to a collection agency for collection… call the creditor and ask if you can just pay them directly. If they agree to accept payments then pay them and eliminate the third party. See also, How to deal with collection agencies.

Dear Debt Prison,

Here is my situation. We are overdue on a fairly large American Express bill. We owe the money but can’t pay it off right away. We are not disputing the fact that we owe the money.

We have been sent over to a collections agency, NCO Financial Systems. I do not yet know if they have purchased the bad debt or if AMEX has just assigned the case to them. If I call the AMEX number on the back of my card, I get an automated message that I need to talk with NCO Financial.

Of course, NCO Financial wants all of the money and they want to setup a payment plan of something like 30% down and some other payments. None of this has been in writing, just phone conversations.

I was able to talk with someone at AMEX. They said that they could NOT accept any payment plans since NCO was handling the account now but they will still accept any payments that we make to them. So, while they can’t officially agree to any sort of payment plan, they will accept any payments that we send them.

This is interesting! I basically said to AMEX, “Well, if I just keep sending you money, I will eventually payoff my account and I won’t owe anyone any more money, right” “Yes”. I can still login to the AMEX site and see all of my account information.

So I wonder if it’s in our own best interest to just keep stringing along NCO while continuing to make payments to AMEX for the next 6 months until the debt is paid? I am sending NCO a debt validation letter. We know we have to pay AMEX, but I don’t have to pay NCO until they can prove to me that I need to pay THEM, not AMEX. It will probably only take 6 months or less to pay off the debt.

Steve

Debt Prison response…

Good question. Yes NCO has been ‘assigned’ the debt by Amex. I would continue to make scheduled monthly payments to Amex and no longer speak with or have any correspondence with NCO. You owe the money to Amex, and if possible, I would pay them. Have you still been receiving monthly statements from Amex?

I would try and avoid dealing with a third party if at all possible. By ignoring NCO Financial you eliminate the need for a third party and any corresponding paperwork they’ll bring to the table. However, you should keep all correspondence from both NCO Financial and American Express just in case there is a problem on down the road.

NCO Financial may ‘accidently’ place negative strikes on your credit report. If so, you’ll need all paperwork to correct your credit report – if the negative strikes are inaccurate!

Discuss this article and meet new people at Debt Prison Forums.

Related Articles

* Restrictions on Wage Garnishment for Debt Collection.

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* Restrictions on Wage Garnishment for Debt Collection.

Collection Agency Scare Tactic: We’ll Get Your Driver’s License Suspended

By Debt Prison on January 4, 2009

Collection agencies never seem to have enough tricks up their sleeves for scheming and lying to debtors. Most recently, it was brought to my attention by a reader that a collection agency had threatened to have his Washington State Driver’s License suspended if he didn’t satisfy a debt. Considering the circumstances of the situation, I can see how such a threat may have seemed possible. But was this a lie – or can a collector use a lawyer to contact the State and suspend your license?

In some states driving a vehicle without insurance is grounds for license suspension, fines, or even a suspended registration. In the following case, the debtor wasn’t driving the vehicle and therefore such legislation shouldn’t apply to him. However, the damaged parties have the option of suing the owner of the vehicle for damages, since he failed to maintain liability insurance on the vehicle.

I live in Washington State. My girlfriend rear ended a person (I was the registered owner of the car and was not driving. I know that doesn’t matter) But I didn’t have insurance on the car at the time… Almost a year has passed now and a collection agency is saying I owe $21,000 dollars… I have asked for validation for what they claim I owe. All they sent me was an estimate for car repairs (totaled $350 dollars). This is not very much damage to a car. I just don’t see how this could have done $21,000 dollars in medical bills to a car that was barley damaged ..

I have talked with the people that she hit and they told me that their medical bills didn’t exceed $4000 dollars. Anyway the creditor says they can’t give me the info on what medial expenses were paid. So how can they prove I owe that much money? Also, they say they are going to have my drivers licenses suspended if I don’t pay. Can they do this in Washington State?

I can’t afford a lawyer right now and I’m stressed out. Any advice?

There are many layers to this particular situation. First of all, the collection agency should provide clear answers on paper, showing from where the charges originate. Their failure to produce any paperwork related to the $21,000 is a good enough reason for the debtor not to pay this bill. Who in their right mind would pay anything like this? In this case the collection agency was assigned or bought the debt from an insurance company. Therefore it goes without saying that the insurance company had all of the necessary paperwork related to the claim. The collection agency’s refusal to produce validation means they are either trying to drive up their percentage of a settlement or they simply don’t have the necessary paperwork outlining the charges (they bought a debt with insufficient paperwork).

Without the necessary paperwork the collection agency would be unable to achieve a judgment via civil court. This is why the collection agency resorted to scare tactics. By threatening to have the debtors Driver’s License suspended, the collector hopes to squeeze some money from the debtor. But since the owner of the vehicle wasn’t driving the car (his girlfriend was) the collector can only seek to force the owner to pay the damages. It’s the girlfriend who stood to possibly have her Driver’s License suspended.

If the State was going to suspend the license, they would have done so after their initial investigation at the scene of the accident. The collection agency can only pursue this matter in civil court as an attempt to collect a debt. Thanks to their empty threats and faulty paperwork… I suggested this debtor ignore them for the time being. However, a clean credit report may require the work of a law office writing letters on behalf of the debtor.

Discuss this article and meet new people at Debt Prison Forums.

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