Domestic abuse often goes unseen and undercounted. In the last few years, another form of domestic abuse has exploded in scale and it's every bit as destructive and hidden as the type you normally think of. This other form is perpetrated on entire households across America by debt collectors, and it's time we shed more light on it.
Buried in government documents are statistics that should make anyone retch: The Federal Trade Commission received over 164,000 complaints about debt collectors in 2011 -- more complaints than for any other category of business including mortgage lenders and used-car salesmen.
Those complaints didn't even count the ones made to the Do Not Call Registry, though debt collectors have been known to call a target as many as 50 times a day.
For every complaint, how many people did not complain because they felt ashamed about their debt, scared about the consequences of complaining, or simply thought that nothing would happen if they reported the abuse?
Next, consider how the entire family suffers when one person in a household is victimized by an abusive debt collector:
- One debt collector called and identified himself as an officer. The person answering the phone was the 10-year-old daughter of the target. The "officer" told her: "You better kiss your daddy goodbye. He's going to be arrested tomorrow or the next day."
- A man made more than 2,000 in payments to a debt collector and surrendered title to his car, even though it wasn't his debt. He was afraid the debt collector would put his 73-year-old mother in jail over funeral expenses for her husband.
- A woman was late in paying $362 on a car loan. The debt collector not only contacted her by phone and text messages, but also talked with neighbors and sent a courier to deliver a letter to her workplace. Because that was not enough embarrassment, he then sent messages to her and her family through Facebook, asking to have her call the agency about the debt.
Antiquated telecommunications laws work to the benefit of the abusers. In twelve states including California and Florida, the abused consumer must get permission from the perpetrator in order to record the abusive calls, or else the consumer is the one risking prosecution.
These facts are bad enough, but the sad truth is that they don't even include a much larger group of injustices that are currently legal but nonetheless immoral.
For instance, debt collectors are legally allowed to charge outrageous amounts of fees and interest on delinquent debt. A Minnesota woman paid off a $260 debt, but the credit card company neglected to record that fact. Instead, interest charges began to pile up until they reached $5,818 in the decade it took for her to get the harassment to stop. In another case, a telephone bill for 11 cents grew to $4,000 over seven years. Debt collectors know full well that when customers have enough trouble paying the initial balance, this perverse "miracle of compound interest" will only serve to compound the misery.
Then there are the grim reapers. Their specialty is to contact the survivors of deceased borrowers. Of course, if a loan was taken out jointly or if someone else co-signed a credit-card account, then there are legal grounds for asking the surviving spouse to pay. That's not the focus of this mutant breed of debt collector. Instead, they go after the relatives who have no obligation to pay the debt. One example was a 68-year-old woman whose husband died from colon cancer. Even though she was not legally obligated to pay her late husband's credit card bill, that detail did not deter the debt collector from calling her as often as ten times a day. Consumer-rights attorney William Howard says: "Collectors are starting to realize just how much money you can get from someone when they are at their most vulnerable."
It's no wonder that Richard Cordray, head of the new Consumer Financial Protection Bureau, has wasted no time in putting the biggest debt-collection companies under the microscope -- companies that have made a science out of perpetrating this form of domestic abuse. Still, Cordray can't do it alone. It's up to state and federal lawmakers to eliminate the legal-but-immoral tactics that create more victims every day.
Bill Bartmann is CEO of CFS II, a debt-collection company. His companies have helped to settle debts of more than 4.5 million people without ever filing suit against a customer.