Posts tagged ‘Collection agency’

June 4, 2011

American consumers in trouble as US judges begin to imprison debt defaulters

[Tom Goldwater, Finance & Economy Contributor]

The Wall Street Journal:  In more than a third of American states now if you don’t pay your debts,  courts can imprison you.  In the UK, only local authorities have that privilege thus far as Britons can be imprisoned for failing to pay their council taxes.However, with British debt defaults increasing on a daily basis in the current severe economic times, it is likely that soon the country will follow American states providing for debtors to be jailed for non-payment of their debts.

Since 2010, The Wall Street Journal reports, over 5,000 warrants have been issued by US judges over nine counties against debtors. Furthermore, according to the Star-Tribune: “In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases people stay in jail until they raise a minimum payment….In January, a judge sentenced a Kenney, Illinois, man to ‘indefinite incarceration’ until he came up with $300 towards a lumber yard debt.”

The Star-Tribune reported that the man was a rooftop worker who had snapped his neck and back on the job and was off work due to his severe injuries and as a result could not pay debt was jailed for non-payment of the debt. His wife had to borrow the $300 from her credit card to get him out of jail.

Although in the USA, debtor prisons were outlawed in the 19th century, judges do not appear to be deterred from jailing debtors who fail to pay their debts and regulatory authorities are not intervening.

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April 18, 2011

US debt collectors facing criminal prosecution and compensation claims

[Faye Grinchgold, Financial Crisis and Consumer Rights Contributor]

AlterNet These are tough times for US debt collectors, as with the USA still in its most severe financial crisis since since the 30s, hard-pressed Americans are finding it more and more difficult to repay their debts.

As reported by AlterNet, it would seem that out of desperation, debt collectors are using illegal and criminal methods to try to get debtors to pay up. These range from collectors pretending to be attorneys, the use of racial and anti-semitic rants as well as sexually degrading comments to harass their victims. Some are reported even to have even urged their victims to commit suicide.

However, all this is backfiring for the desperate collectors as more and more of them are falling foul of the US’s criminal justice system and are being sued for compensation by their victims.

According to AlterNet, last month the Federal Trade Commission (FTC) said that complaints upon debt collectors were in the league with identity theft complaints and among the most it that came to it in 2010. In that year, it got 144,000 complaints concerning debt collectors,  4,100 of which had concerned threats of physical violence from the collectors.

Ira J. Rheingold of the National Association of Consumer Advocates (NACA) in Washington, DC comments: “The level of abuse and harassment in the debt collection industry is reaching epic proportions…..for example, calling people at work inappropriately, calling neighbors inappropriately, people on the phone being particularly abusive—we’re seeing more of that type of abuse than we ever have before.”

US debt collectors are regulated nationwide by the Fair Debt Collection Practices Act of 1977 (FDCPA). The Act specifies what they can and what they can’t do. For example, profane, abusive, insulting or threatening language is unlawful as well as deceitful communications, for example where debt collectors pretend to be attorneys or law enforcement agents. The FDCPA also prohibits debt collectors to discuss the specifics of a debt with third parties.

If you feel that a debt collector’s actions is threatening, or abusive you should inform the police forthwith and contact an specialist attorney, or the National Association of Consumer Advocates for assistance.