Debt Collectors and Their Unethical (and Illegal) Methods

I was reading this fantastic article on Truthout (a site that if you’re not reading, you should), and I was struck not only by the personal story of a woman and her husband being threatened by debt collectors, but by the sobering facts scattered throughout the piece. First, let me cover the surface of this story…

We’re gonna need a bigger boat!

Tara Burkholder was woken up by her phone ringing at 8:30 on a Saturday morning. The woman on the other end explained that she represented NCO Financial and that they were looking to collect $9,000 for an education loan that her husband took out years before. Tara was working as a teacher’s aide for free, hoping that this would be her segway into a full-time gig. Her husband was deployed to Baghdad and she was raising their daughter on a very tight budget. After explaining her story and politely telling this woman that they could not yet afford to pay this back, the woman suggested that she give up her dreams and just get a real job like everyone else. She then told her that NCO had contacted Ryan’s commanding officer in Iraq, and that if the loan was not paid, he would be dishonorably discharged. This shady phone call, along with these outrageous threats, are completely illegal, but this does not stop NCO, or the thousands of other companies just like them, from making them anyway.

The journalist delves further into the matter and finds that NCO, located just two hours from me in Horsham, Pennsylvania, incorporate many unethical and unlawful methods into their regular business practices. I won’t delve too much further into this, as I would just be repeating the article verbatim, but I did find some of these facts utterly fascinating, if not disconcerting…

NCO…is, like the other third-party debt-collection companies that comprise a $17.5 billion industry in the United States, relentless.

$17.5 billion industry…notice the use of the word “industry” there. Yep, every form of misery is just another business to those shallow enough to profit from it.

1952, according to a report by the think tank Center for American Progress, American families had less than 40 cents in debt for every dollar of disposable income; basically, for every buck in their wallet they could spend on food or gas or a new TV, they owed 40 cents to stores or banks. Manageable. Reasonable. But by 1990, it was 80 cents in debt for every dollar of disposable income. (By 2007, it was $1.34 in debt for every dollar.) Suddenly, organizations of all kinds – department stores, sports teams, dentists, surgeons, colleges, municipalities, even the federal government – found themselves unable to deal with the flood of consumers who owed them money. And now here were these nice men from Philadelphia – these businessmen, taking advantage of a shift in the culture – who were more than willing to handle that fraught and nasty business of collecting debts, in exchange for a cut of the action.

As if the gluttonous businessmen and their bloated corporations weren’t immoral enough, they now hire mercenaries (no better than, really) to do their dirty work with dirty tactics, such as threats, leaking personal information to family and co-workers, consistent harassment at work and home, and cloaking their identity by using fraudulent names and companies. And their employees do so because, if they don’t, they won’t meet their quotas through legal tactics, which means they don’t get paid either. A circle of debt, really. But I digress…the above paragraph scares me more than any threat of terrorism or any hate speech from whatever right-wing nut they’ve got on the media’s pedestal this week. We are so far under the thumb of debt that no other attack on our individual freedoms seems greater to me. Like all good followers, or slaves to the corporate gods, many defend the debt collectors as the guys “just doing their jobs.” Those who owe this debt must pay it back…that’s fair, isn’t it? They shouldn’t have borrowed beyond their means, right? It’s their own damn fault, they say…

And there is, of course, the classic defense of bill collecting: It may not be pretty, but it’s necessary, because without bill collectors, there’s no way to separate the people who make good decisions about how to spend their money from the people who make bad ones. The bill collector is a responsibility enforcer in a system that depends on responsibility for its very survival; he is basically the consumer economy’s obese and omnipresent umpire. The fans may hate the ump, but without the ump, the game grinds to a halt. The game stops being fair. The ump isn’t good or bad, he’s just a necessary part of the way the game is played, entwined with its fundamental structure. But this leads to the question that Barrist – and all of us – are now facing: Who’s good anymore? Who’s bad? How do you spot a deadbeat in the middle of a Depression? Is a laid-off worker at General Motors or Goldman Sachs a deadbeat? Is a recent divorcé? An uninsured cancer patient?

The nail has been hit on the head so hard right here that it’s been driven through the board completely. Who is bad anymore? Haven’t we all been manipulated by the American dream into believing that we can be whatever we want to be, that we can all have the rights and privileges that everyone else has? Let me leave you with a quick anecdote from my own experience with this sort of thing…

I am immersed in incredible debt right now. I’m a middle class twentysomething who went to college in hopes that a degree would help me get closer to my dream of being a full-time writer. I graduated two years ago, and after applying relentlessly for job after job, I found that my $100,000 piece of paper was worth about as much as the blank pieces of paper sticking out of the top of my printer. It meant nothing to most employers, and so I’ve taken on two jobs since then that have nothing to do with my desired profession. Meanwhile, Sallie Mae calls my home almost daily, even harassing me at work, to pay back a debt that I racked up, ironically, in hopes of getting a job that I could easily pay them back with. They lie to you and tell you as you sign your life away that they’ll work with your income, that you’ll have easy-to-manage monthly payments upon graduation. This is far from the case, and I have found that time after time, they have just outright refused to work with me and my current income. One day, frustrated after being harassed daily during a month when I knew I would have no extra money to give them, one of their operators snidely told me, “Well, you shouldn’t have taken out a loan for all this money that you knew damn well you couldn’t pay back.” And here I had thought these calls “were monitored for quality and insurance purposes.” I was stunned at her audacity, but I didn’t stay in my state of shock for long. I retorted, “Well, then your company shouldn’t have lied to me and told me that I’d be able to afford the very average college I attended. That college shouldn’t have lied to me and told me that a degree would help me achieve my hopes and dreams. I never would have bothered knowing what I know now. And my country shouldn’t have lied to me as a child and told me that I could grow up to be whatever I wanted to be. It shouldn’t have told me to trust in a crooked system full of people like you who only think about money, but never happiness. You don’t want to see anyone achieve anything because there’s no money in that, is there? I was told that if I just followed the rules and worked hard, I could accomplish whatever I wanted. Did you do what you wanted to do with your life? Did you try and go to college?” I received a quiet, “…no.” “Well, then don’t judge those of us who had the balls to look at the odds against us and stand up and at least try!” I slammed the phone down so hard that I thought I broke it. I was over my parent’s house at the time. Yeah, they were harassing me there, too. The only one home was my sister. She just looked at me for a moment, then turned back to her computer screen, pretending she hadn’t heard the conversation. I looked at her Marywood University hoodie draped over the chair in the living room. She would be in my shoes in another four years. “Where does my misfortune end and hers begin?” I thought. Isn’t it all our problem now?