Milwaukee, WI Bankruptcy Law Blog

Tuesday, February 6, 2018

Don’t Believe Everything A Debt Collector Tells You

Don’t Believe Everything A Debt Collector Tells You

If there is a scummier industry than debt collection, I don’t know what it is. Despite being heavily regulated, it is full of lowlifes who lie, threaten, and harass you just to shake a couple dollars loose.

A recent article from Bloomberg Businessweek that details the lengths one man went through in order to fight back against a debt collector that threatened to rape his wife if he didn’t pay up is an eye-opening look at the shady debt-collection industry.

Andrew Therrien started getting threatening phone calls from debt collectors about a debt he knew he didn’t owe. They claimed he had taken out a payday loan and never paid it back. Although Andrew had taken out a payday loan a few years prior, he had paid it back promptly. He knew the people calling him were in the wrong, and he told them so. One collector was so incensed by this he threatened to rape Andrew’s wife. That’s when Andrew snapped.

Andrew spent the next year drawing information out of each and every collector who called him. He put his sales skills to use to gain their trust, and worked his way up the chain of command. He now suspects that a debt kingpin named Joel Tucker sold a list of fake debts to a bunch of collectors in order to raise some quick cash. Andrew gave the evidence he had gathered on Tucker to the FBI and the Federal Trade Commission (FTC), and they brought a successful civil lawsuit against Tucker. Andrew, however, remains unsatisfied. He thinks someone should go to jail, and on top of it all, he’s still getting calls trying to collect on the phantom payday lending debt.

Andrew’s story is unique because he fought back against the collectors who are harassing him. But he is not the only one getting these calls. Thousands of people are haunted by phantom debt. Andrew learned that, “Scammers often sell the same portfolios of debt, called ‘paper,’ to several collection agencies at once, so a legitimate IOU gains illegitimate clones. Some inflate balances, a practice known as ‘overbiffing.’ Others create ‘redo’ lists—people who’ve settled their debt, but will be harassed again anyway. These rosters are actually more valuable, because the targets have proved willing to part with money over the phone. And then there are those who invent debts out of whole cloth.”

There is so much deception in the debt collection industry, it can be difficult to know whether a debt you are getting calls about is one you need to pay off or one you never owed. It’s extremely frustrating.

If debt collectors are harassing you, and you want to do something about it, you can submit a complaint to the Consumer Financial Protection Bureau (CFPB) online or by calling (855) 411-CFPB (2372). You can also contact the Wisconsin Department of Financial Institutions.

If the calls you are getting are about legitimate debts you owe, you might also want to talk to a bankruptcy attorney. Filing for bankruptcy puts a pause on collections, and gives debtors an opportunity to get their financial life back on track. This won’t stop unsavory collectors calling about fake debt, but it should cut down on real calls.

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