How Collection Agencies Prey on Borrowers

It should come as no surprise that the vast majority of people who fall behind on debt payments do so for financial hardship reasons -- not because they are simply deadbeats. Despite, this, however debt collection agencies often take steps to inflict the maximum amount of anxiety, fear, and embarrassment on borrowers who fall behind on loans, going so far as harassment and engaging in other illegal acts.

This article will describe some of the harassing actions that collection agencies take when pursuing debts. Although these companies have the right to purchase defaulted accounts and attempt to collect on them, they often engage in activities that serve little other purpose than humiliating borrowers; the collection of the debt seems to become a secondary objective to creating embarrassment and humiliation.

The first practice that debt collectors routinely engage in is pursuing debts that they know they can not validate properly, according to the Fair Debt Collection Practices Act (FDCPA). Despite not having the proper documentation, the companies keep trying to collect and go so far as to initiate lawsuits against borrowers for debts that the agency knows it can not prove it has a right to collect.

This is one reason so many collection agencies are law firms -- they can throw the entire issue into court, relying on the incomprehensibility of the legal system to the average person. The debt collectors take refuge in the confusing language of the law and the protection and violence of the state in order to pursue borrowers. This way, they can threaten judgments, wage garnishments, and even jail time.

Another shady practice that collection agencies engage in is having courts seize bank accounts that are used as direct deposit accounts for Social Security payments. Social Security payments are meant to be exempt from collection attempts, but the small issue of obeying the law does not stop debt collectors from going after such accounts. The law and the courts, it should be remembered, are only meant to protect lawyers.

Debt collectors will also routinely deny ever having received a payment from someone who is trying to make a payment on an overdue account. Acknowledging receipt of the payment would cause the collection agency to stop the fun of humiliating and embarrassing borrowers, which is, after all, the main purpose in the first place. Unfortunately, even sending proof that the payment was received and cashed can do little good.

The ways that collection agencies take advantage of the court system are nearly endless. The easiest way to get a fraudulent judgment against a debtor, of course, is to send the lawsuit paperwork to the wrong address. If the borrowers never receive the documents, they can not make a defense, and the collection agency gets a default judgment, which may be difficult to overturn later on.

Some collection agencies are aware of debtors' rights under the FDCPA, but routinely ignore them, instead moving further and further down the road of harassment and threats of lawsuits. If a company can not validate a debt, it must cease collection. However, few debt collectors follow this, instead refusing requests for validation and continuing with attempts to collect and then suing the borrowers.

All states have a statute of limitations during which a debt can be collected. Collection agencies are aware of these statutes, but are just as aware the borrowers do not know about them. They take advantage of this to pursue debts that may be years or decades old, and which can no longer be pursued. They engage in the same harassing practices to get people to pay debts that they do not even owe any longer.

It should be clear to any borrower that debt collectors, from mortgage lenders to collection agencies for personal loans and credit cards, routinely take advantage of widespread public ignorance of lending and collection laws. They do this in order to take advantage of hardworking people who ran into a financial hardship, while the collectors themselves provide almost no redeeming qualities to the productive society.

The worst part may be that all of the money that people borrow from banks is created by the lender out of thin air, based on little more than the signature of the debtors. The creditors provide absolutely no services, loan out devalued money, create only enough for the principal amount to be paid back but not the interest, and then pursue borrowers to or beyond the grave in order to collect.

In the end, all attempts to collect a debt represent attempts by parasites to attach themselves to a productive member of society who is simply unaware of the nature of the legal and financial system. With all of the fraud and deception in these systems, is it really any wonder that many more borrowers are beginning to reduce their reliance on debt and starting to save money again?

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