Fred Williams is a business journalist who has written about debt collection for Kiplinger’s and The Buffalo News. In 2008, he went undercover as a debt collector for 11 weeks at a collection agency near Buffalo. In Fight Back Against Unfair Debt Collection Practices, Williams details his experiences and describes what really goes on inside a typical collection agency.
What he found was pretty shocking. Lies, threats, and intimidation were considered standard practice for collectors trying to scare debtors into coughing up payment. And since these blatantly illegal methods were particularly effective, the agencies did little to rein their collectors in.
In fact quite the opposite was true. In his time as a collector, Williams learned that his employer had set up a system that allowed them to flaunt the law while maintaining plausible deniability. Individual collectors were tipped off whenever the compliance department was listening in to ensure they were following the law. On those calls collectors were polite and professional, but on all other calls it was anything goes.
This gave the company a great alibi in case anyone complained about their methods. If the authorities came knocking they could simply produce a stockpile of recorded calls in which collectors carefully followed the law and claim that the individual incident was an aberration.
Inside the Mind of a Debt Collector
But this book isn’t just about slamming the debt collection industry. While the author started his project firmly on the side of the consumer, it wasn’t long before he began to side another side to the story. Many of the debtors Williams dealt with were little more than scofflaws who simply didn’t want to pay their bills. After being lied to and scammed again and again he started to understand why collectors act the way they do…they’ve grown to expect the worst in people. I found this aspect of the book particularly fascinating as the author begins to drift more and more towards the collector’s point of view.
Mandatory Reading
In addition to describing the author’s short career as a debt collector, there is also a shorter portion that offers practical advice on how to deal with calls from debt collectors. This section should be considered mandatory reading for all consumers no matter what shape their credit is in. Even if your credit is perfect, you may find yourself being accused of owing a debt that doesn’t even belong to you. Unfortunately, it happens all the time (it happened to me!) and if it does you’ll find the collectors are not very quick to believe that they have the wrong person.
But with this book on your shelf you can rest easy knowing you can protect yourself from unfair debt collection practices.
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Join us for further discussion in the Yakezie Forums.
Hey Mike,
Thanks for doing the review. Do you think Debt Collectors get a bad wrap? If everybody did the right thing and paid their debts on time, there wouldn’t be a need for Debt Collectors!
Sam
Hey Sam,
That’s a tough question. I think on one hand they do get a bad rap. As the author found out, debt collectors aren’t all inherently evil. There’s always 2 sides to a story. But I do think their aggressive practices need to be scrutinized and penalized.
What are debt collectors supposed to do though if the dead beat debtors keep trying to evade them?
By all means they should be allowed to collect what is owed them, but they should do so within the confines of the law. Breaking down a debtor’s door and threatening his family would be a pretty effective method…should that be allowed?
It sounds like an intriguing book. In a perfect world everyone would pay their bills as agreed. However, since this isn’t a Fantasyworld some people are going to skip their bills just because they are deadbeats and some people have severe financial hardships that make it difficult for them to pay their bills. It’s a shame that the people with legitimate problems are lumped in with the scammers. I don’t think that excuses debt collectors from using shady tactics to collect.
Hi buffettt,
You’re right…there is a distinction between people who have legitimate hardships and would pay if they could and deadbeats who rang up debt with no intention of ever paying it. The problem is collectors don’t know who is who and so basically you’re guilty until proven innocent.
Mike, Great review of an interesting subject. What are some of the tips to be used if you think you are unfairly accused?
Hi Dr Dean,
Some of the basics would be to not offer more information that can be used against you, how to research a collector to make sure they are legitimate, and how to document and file a complaint.
Wonderful job on the book review. I’m amazed at how shady some collection companies are. I sounds like a very helpful book.
Thanks Elle. It was a real eye-opener and an enjoyable read.
Thanks for a great review! This book sounds very interesting. I’ve often wondered about debt collectors: who they are, how far they are allowed to go, the percentage of money they recoup versus the money that is lost. I think I might check this book out.
How much they collect varies depending on the type and age of the debt. Usually they are authorized to offer a settlement of far less than the actual amount owed.
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Hi Mike-Beautifully written review, concise, clear and too the point. I am fascinated by this topic. Never thought about it before!
Thanks Barb! It’s a good read…you should check it out.
uuuuuuuuuuugggghhh!!! I can’t stand debt collectors. Hope I never get another one of those calls in my life!!
I hope you can avoid them too thinktaylor! I don’t think anyone looks forward to dealing with them.
i don’t think it’s so much the act of collecting as it is the way in which many approach collection tactics. they are paid commissions so it is in their best interest to collect as much. many organizations violate regulations (Reg D, Reg AA, KYC, Revolving Credit Card Act, you name it) whether they are aware of it or not. many orgs do not record calls or have QA activities to detect these problems, that is why they end up spending so much in legal settlements. There are attorneys that do nothing but file class actions for this kind of stuff….
Hi Sunil,
There is surprisingly little regulation in the debt collection industry. Laws vary but in many states you don’t even need a license to start purchasing debts and trying to collect. That undoubtedly plays a role in unsavory types getting involved.
You know what I’ve found to be interesting? How debitors change their mobile numbers so often? Every time I get a new mobile number (have gotten 3 in the past 10 years for different purposes), I get calls from creditors for 6 months! Debitors are trying to avoid debt collectors like mad!
Can you blame them? Being harrassed, yelled at and threatened about a debt that you can’t afford to pay would sure make me want to crawl into a hole.
I might be called names for this, but I can’t find much sympathy for people being hounded because they owe someone money. If they don’t actually owe money, then that sucks and I’m sorry (I was hounded by Blockbuster for 6 months for a movie I had returned…they even found it on their shelf eventually). Otherwise….ummmm….sorry, pay up.
hey Crystal,
What do you think about collectors using illegal methods to get debtors to pay up?
Illegal is illegal, so no, I’m not in favor of that. But I would personally pursue whatever methods within in the law that are allowed.
Most definitely, I think most people would want to be repaid the money they have lent.
People that break the law are dumb. I’m gonna have to check this book out and see if I can’t pass some of the information on to some of my friends that get harassed.
Hi Ninja,
One thing I learned is that the penalties they pay per offense are so low ($1000 if I remember correctly) that they don’t care. their methods make them far more than that so they just consider fines and legal action as a part of doing business.
I’m surprised he went over to the dark side mildly but that is awesome as I guess it means the book has balance. I bet it’s an interesting read.
You’re right Forest, that does give it balance. You really get to see both sides of the story and that makes for an excellent read.
I had my checks stolen a few years ago, and I still have collectors hounding me for unpaid debts that the thief racked up! I’m glad this new law is in place, but every consumer really needs to know how to deal with debt collectors. Even with the law, the consumer has to do so many detailed activities to prove they don’t owe the debt (every letter certified with return receipt, etc.)!
There are a surprising number of cases like yours in which the debt was run up by someone else and identity theft is rampant. But collectors don’t care. Where the author worked, if they realized a debt was due to identity theft they made no effort to correct it. They just put that file back into the queue for another collector to worry about.
[…] at Saving Money Today wrote a wonderful book review at the Yakezie.com site entitled Fight Back against unfair Debt Collection Practices. An interesting look at both […]
I agree that Debt Collectors need to start following the laws. Some people are not debt beats when they have legitimate disputes with these creditors who try to rip them off as well. I won’t pay someone who is ripping me off. No, way never.