Understaning the Collection Agency

UNDERSTANDING THE COLLECTION AGENCY

The first step in knowing how to deal with a Collection Agency is to get inside their heads and understand the Psychology of the Collection Agency. Once you understand that part, you can successfully deal with the CA Collector. Nothing in this essay applies to Original Creditors, only third party debt collectors (3PDCâ??s). It makes no difference whether the 3PDC actually bought the debt or is just working the account for the Original Creditor (OC).

First, in most cases it is not generally productive to go back to the OC, since most 3PDC contracts with OCâ??s require the OC to bow-out of the collection picture. It is rare that the OC will override a 3PDC since the OC has already charged the account off as a loss, and the OCâ??s collection department has given up on collecting on their own efforts. Frankly, they really donâ??t care if you come back as a customer or not, but if you do, it will be as a CASH customer. The only time an OC will pull an account back from a PDC is if the 3PDC is behaving so reckless that that its actions are likely to land the OC in court along with the 3PDC.

The 3PDC may or may not have attorneys on staff. Those attorneys may or may not be licensed to practice your state. The CA itself may or may not be licensed to practice in your state. These are things you can generally check on your own, before actually talking with a 3PDC. While you are at it, research your stateâ??s Statute of Limitations (SOL) for the type of debt the 3PDC is trying to collect. The SOL comes into play when you have not made any payment within the statutory period and the creditor (OC or 3PDC) has not started a suit in the statutory time. In many states, making a payment â?? any payment â?? on a debt re-starts the SOL. The importance of knowing the SOL for your state cannot be stressed enough. If a debt is Outside of Statute (beyond the time frame of the Statute) then SOL becomes an Affirmative Defense if you are sued. The purpose of the SOL is simple: the 4th Amendment to the US Constitution (and most State Constitutions, but applicable to the States by the 16th Amendment) guarantees a speedy trial. His applies to Civil matters also. The reason is simple â?? over time witnesses die or move away and documents get lost or destroyed. The SOL fixes a time where the creditor must sue or forget about it, and eliminates the â??Justice to the Packratâ? problem. SOL applies to the state in which you live at the time, not where you lived when the debt was incurred or where the 3PDC is located.

Types of 3PDCâ??s

There are basically two types of 3PDCâ??s: Letter writers and Collection Agencies. Letter Writers only do just that â?? write letters. The letters will direct you to contact the OC and will not demand payment be made to the 3PDC. On eof the larger Letter Writer 3PDCâ??s is IC Systems. Remember though â?? just because they are Letter Writers doesnâ??t mean they are not governed by FDCPA â?? they are.

Collection Agency letters will want the payment sent directly to the Collection Agency â?? so they can be sure to deduct their commission before they send the remainder on to the OC. Both types must have the mini-Miranda on their correspondence and must honor to Validation and Cease-Comm letters.

What to do when the Collector calls

It is unusual, but not uncommon, for a 3PDC â??s first collection efforts to be by telephone. The reason has to do with the Fair Debt Collection Practices Act, which you should make yourself intimately familiar with. Also make yourself intimately familiar with the FTCâ??s Staff Opinion Letters. FDCPA requires communications from a 3PDC to have the â??mini-Mirandaâ? warning on it. Failure to do so is a violation of law and gives you the right to sue the 3PDC. Telephone calls, especially outgoing telephone calls, are much harder to document that the mini-Miranda has been given. The time between receipt of the first letter and receipt of the first call can be long (a week or more) or short (next day). Whatever it is, use that time to learn as much as you can about the laws and the particular 3PDC. How you handle the 3PDC will depend on whether the debt is still in Statute or not, how long before it is out of Statute.

Needless to say, if your debt is out of Statute you can play the 3PDC for all you want, and there is little he can do about it. The purpose of this would be to set him up for a FDCPA violation, then you can â??zingâ? him with a suit. Let him rant and rave and make all sorts of veiled threats. Document everything, ask him to put all hat in writing. Just remember, he cannot successfully sue you. Whether he knows this or not is questionable â?? probably not, since he calls every state in the nation and he canâ??t know every stateâ??s SOL laws. It is a certainty his employer hasnâ??t provided him with that information. Most collectorsâ?? training consists of â??hereâ??s your desk, hereâ??s your phone, hereâ??s your computer, now go collect the money.â?

If you are near (within 3 to 6 months) of SOL, then by all means send the 3PDC a â??Validation Letterâ? to stall for time. Also, include a limited Cease Communication letter, requiring Cease-Comm for all communications except by mail. Under FDCPA they are forbidden to dun you while the Validation Letter is unanswered. The Cease-Comm letter makes any communication with you other than by mail a FDCPA violation, actionable in Court. If they call, just remind them that there is a Validation Letter outstanding and unanswered. Also be sure to remind them of the limited Cease-Comm letter and that this telephone call is an actionable violation. If they persist in asking for money, remind them that FDCPA imposes on them the requirement to validate the debt to you upon request, which you have made. Then ask them when they will be sending you your $1000 Statutory Damages for the FDCPA violation in ignoring the limited Case-Comm letter.

If the debt is nowhere near the SOL, then you must take a more defensive stance. By now you should have read the section on â??Judgement proofingâ? yourself and have followed as many of those suggestions as are practical. By hiding assets that the creditor can attach, you are making yourself look like a more difficult case to actually collect from. 3PDCâ??s are paid commission, so they tend to concentrate on the bigger dollar cases (more commissions to collect) and the easier cases â?? the ones they can scare into fast payment in full quick commissions). The harder cases â?? both harder to actually contact, and the ones with no known assets or income to attach, with the smaller balances and who donâ??t scare easily, are a 3PDCâ??s nightmare and end to get somewhat less attention than the easier cases. This doesnâ??t mean they wonâ??t work I, but when they do you will have to convince them that thereâ??s nothing in your pot for them to get.

 

bump

 

Once you have paid the CA, they no longer have any incentive to give you what you want, and they will probably just ignore you. Your best bet for deletion is to dispute it with the CRA as "not mine". DO NOT DISPUTE IT AS "PAID", that self-verifies the damned thing.

If that doesn't work, you could try the goodwill letters with the OC, then the nutcase series. In the worst case, wait 2 years and it goes away all by itself.

 

Re: Re: Understaning the Collection Agency

I thought I posted it here but I obviously didn't. These posts (Understanding the Collection Process and Understanding the Collection Agency) are part of a web site I am trying to launch called "sue-your-creditor.com" and will be on that site when launched.
My home computer is down for a couple of days, so I will post "Judgement proofing" when it's back up.

 

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bump for the weekend warriors

 

Re: Re: Understaning the Collection Agency

As I said in apost long ago, these comments are based upon my years (many of them) as a Collector, a Credit Counselor with CCCS, a CCCS Branch Manager and being oln the debtor side of credit. In other words, I have been on all sides of the issue.

As with everything on the internet, you take the information or leave it as you please.

Now, if you would please point out an inaccuracy.....

 

Re: Re: Re: Understaning the Collection Agency

Sassy, if that's what you consider an "inaccuracy" then you really don't get the reason for the posts nor do you know anything about me.

I deliberately did not put "violation" in my posts because I was showing how the CA thinks and works. There are plenty of other posts here (mine included) that point out the violations. Heck, besides Lizardking I am one of the more MILITANT and LITIGOUS posters on these boards. At this very second I have suits pending against Sears and 2 out of the 3 credit bureaus.

These posts are a peek into the mind of the adversary. They are not to excuse any illegal behaviour (and besides, a lot of what you put "violation" on is NOT a violation. The CA can and does use veiled statements that on their face are NOT violations and lets the debtor's mind wander into its own little purgatory. The CA just provided the roadmap.

If you are in AZ I would like to meet with you so you can see for yourself that I am NOT an apologist for the CA's and in fact are in may respects their worst nightmare. I live in Tucson.

 

Check by looking at the contract you signed originally. If it says "This Contract shall be interpreted under the laws of the State if North Umbria", then it's the State of North Umbria's SOL taht prevails. If the Contract states "Any actions under this contract shall be brought in the State of South Umbria" then it's the State of South Umbria's SOL taht applies. Absent those two statements, the only State left is your resident state at the time of suit.