This can't be true!!!!

Of course it can happen.

If you ignore a legal notice, you can lose.

As far as deliberately billing a bunch of people for debts they don't owe, just look at CAMCO. FTC claimed 80% of what they collected was not owed, or from people who didn't owe it. They finally got shut down.

Yes, the system is rotten. It assumes people don't send out bills unless they have some reason to think it is owed by the person sent to. It assumes people don't sue in court unless they have some legitimate basis to sue.

The reality is that there are some people who will do anything that will get someone else's money.

But these are NOT rocket scientists, and the patterns of their actions are increasingly visible, given the Internet as a common medium to make and search for complaints.

 

Ontrack is definitely living up to his screen name. He is right on track.

But the greater question is whether or not it is happening to you or a family member or a friend right now. Your post seems to indicate that such might be the case. Is that true?

 

I think that most of us who spend time on these message boards have probably read their share of such horror stories.

Yep, there oughta be a law. :0)

 

The problem is that FTC itself does not have the power to file criminal charges under any of the usual Acts it enforces. In those cases where they have done so, it has been in cooperation with DoJ.

 

Yeah, I hate all the voicemail I get from CA's. My favorite one is a pre-recorded message in a male's voice that says "Please call Ms.Moore back today at 1-800-688-7929 ID#XXXXX" then it hangs up!

 

mistakes happen. accounts get crossed. ignoring the problem never makes it go away. in fact it makes it worse. if the account is not yours dispute it right away. it will give you leeway later on.

 

that is the best advice that anyone could offer.

 

Mistakes happen.

But when those mistakes are due to errors by the CA, or even the OC, and the CA's standard procedures are to press for collection even when the consumer claims there is a mistake, then some percentage of the time the CA will end up collecting money they are not owed, and a consumer will end up paying money they do not owe. When it occurs, it is generally an intentional policy engaged in to enhance profit on the part of the CA. It is not a "mistake". It is a deliberate, intentional, illegal act.

Some portion of bad debts are either erroneous, or may end up being dunned from the wrong party. When debts are resold multiple times the likelyhood of errors only increases.

CAs that do not properly handle disputes or validation are little different than scam artists. Unfortunately, the current non-criminal FDCPA and FCRA statutes do not address that people might actually intentionally break the law because it is profitable to do so. We actually deal with red light runners more rationally. As a result, there are people quite willing to do or say whatever extracts money, as long as they figure they can get away with it.

 

that is not true...if there is an error and it doesnt get resolved the way it legally should SUE THEM...many debtors will dispute things just because they dont want to deal with it or they are in hope that the ca wont respond in the time allowed and have the tradeline fall off until it is verified. with so many debtors with so many accounts the system is not perfect and it will never be perfect.

 

The Pulitzer Prize nominations came out this week and the "Boston Globe" series on debt and debt collection took honors. It's true.

http://www.boston.com/news/specials/debt/

 

Lawsuits may not be an adequately effective deterrent against illegal debt collection tactics. First, there is a barrier to access to the courts due to the costs of hiring competent council. Second, there is the uncertainty of outcome inherent in any legal proceeding. In addition, statutory damages are of decreasing effect as they have not been raised for a decade. Weigh these barriers against the low cost of causing damage available to debt collectors by simply placing tradelines on credit reports, with no liability at all until the consumer notices and disputes.

From experience, debt collectors are aware of what they are likely to be able to get away with with the average unsophisticated consumer, and if the number of consumer lawsuits is small enough due to the costs involved, simply backing out of collecting on a particular debt when a consumer turns up the heat too much may be enough to limit losses acceptably. In most cases the full extent of deception need never be revealed, so the possibility of punitive damages adequate to offset the economic advantage of deception is unlikely.

In most markets, repeatedly cheating your customers negatively affects your future business. Regardless of the availablility of legal recourse, if other potential customers start to find out what you are doing, your ability to continue doing it may be limited as consumers choose your competitors instead. This mechanism does not operate in the debt collection industry, since consumers do not "choose" to have a particular CA call them. The only limits are then whatever works, limited only by the possibility of legal or regulatory action.

The public policy question is not whether the legal structure and penalties are adequate to allow a consumer dealing with a particular debt collector behaving in an egregious manner to both stop that particular illegal behavior and obtain compensation. It is instead whether the existence of those penalties are adequate to achieve broad compliance with the law, making it unprofitable to choose to operate illegally. If crime pays, there is no shortage of people who want their "share".

Even a miniscule shred of deniability for deliberate deceptive collection may be adequate to limit risk, claim "bona fide error", and still allow routine use of deception in collection to result in a net increase in profits.

To the consumer, this is a one-off game, but to the CA, it is a game of numbers, where increased returns in most rounds can offset occasional losses. A CA can quite rationally, if illegally, choose to engage in deceptive and illegal behavior if the return from doing so exceeds the costs of dealing with occasional regulatory complaints or lawsuits. The main remaining risk is then whether accumulated complaints might result in corresponding accumulated penalties, in catastrophic fashion, only likely if the activity rises to the level that would attract the attention of either FTC or a state AG.

http://io.uwinnipeg.ca/~walton/papers in pdf/96deniability.pdf

 

Ontrack is right, this is a numbers game, in reality, the number of consumers who educate themselves by reading forums like these are a minority.

Thats why the collection business is highly profitable.
A lot of consumers have no clue about what rights they have, and therefore get used and abused by the system.

 

The fact that there seems to be no criminal sanctions for people who break the various consumer protection laws is just plain wrong. Why should John Q. Public have to resort to a civil lawsuit in order to protect his rights?