Tuesday, June 25, 2013

How Debt Collectors could improve their public image.

Debt Collectors are in a strange profession. A Debt Collectors job is to suck whatever cash blood remains out of the barely breathing money strapped victim while delusionally believing they are the do gooder superhero keeping society safe from blood sucking opportunists. The Debt Collection disconnect between how they perceive themselves and how others see them results in stasis.

I think Debt Collectors would probably prefer less overall antagonism both from those who hire them to collect credit card debts and the debtors they call to try and collect debts from.

The solution for a "kinder, gentler" debt collection industry stems from how they view credit card defaulters. Apparently in many if not all instances; credit card companies, debt collectors and judges do not make a distinction between different types of defaults. Deciding "Whether a credit card default has occurred, or not" is how most judges see their role. Unfortunately, this credit card default or no credit card default meme creates a self perpetuating stream of "rubber stamping justice".

The problem is that courts treat an "involuntary" credit card debt defaulter who lets say previously had a perfect payment history but perhaps lost their home in a fire and their place of work to outsourcing; no differently than a strategic default credit card debtor who ran up a huge credit card debt quickly and irresponsibly. 
If the courts make no distinction between an involuntary credit card default and a strategic credit card default, why should the credit card companies or debt collection companies do differently? 
And this brings us back to involuntary credit card defaulters versus strategic credit card debt defaulters. Judges apparently DO NOT  differentiate between who CAN afford to pay off a credit card debt, or at least keep making payments, versus someone who involuntarily has credit card defaulted because of a circumstance beyond their control.
As a society we should ask ourselves...Is it really ok to treat a credit card defaulter who previously had an excellent payment history but has a life changing event occur beyond their control the same as a credit card defaulter who strategically defaults?
I think most people would say that someone who purposely or strategically credit card defaults has committed a more egregious act than someone who has a life changing event occur beyond their control and basically needs a time out before they can pay off or begin paying down their credit card debt.

Apparently the judges, credit card companies and debt collectors  don't see it that way. 

However, were debt collection agencies to simply agree to give involuntary credit card defaulters more latitude, and focus their courtroom resources on strategic defaulters instead, Debt Collection companies would instantly gain the gratitude of most of the credit card defaulters that they presently hound on a regular basis.

Perhaps debt collection agencies don't want the courts to give more latitude to involuntary defaulters and less latitude to strategic defaulters because it might create a huge migration of competition into the debt collection field.
Or, is Debt Suspension Rights the first to think of the idea of splitting the difference when it comes to credit card defaults, and treating involuntary credit card defaulters differently from strategic credit card defaulters?
Just how differently would judges treat an involuntary credit card defaulter versus a strategic credit card debt defaulter? Not that much really. Both involuntary and strategic defaulters would still have to pay their debt, however the involuntary defaulter could simply be given better repayment terms. 

How about involuntary credit card defaulters have their debt frozen at the amount it was at the time the last  transaction was made on the credit card, with no more interest rates, penalties or fees accruing. 

Also, the credit card default could be scored neutral on a person's credit score. Once payments, even payments well below the minimum are regularly made, it would actually slightly help the involuntary defaulter's credit score. 

Just the slight change of distinguishing between involuntary credit card defaults and strategic defaults would have a profoundly positive affect, not just on the involuntary credit card defaulter, but to the general economy as well.

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  1. Here's how I dealt with a collection agency:



    Greystone Alliance LLC
    PO Box 1810
    Buffalo NY 14240-1810

    To whom it may concern,
    Re: Account Number xxxxxxxxxxx

    Due to my limited funds and other obligations and debts, I am unable to pay the amount specified by you, that is $2397.21. Because of my limited resources, I have decided to settle only those alleged debts for which I can meet the conditions agreed upon between myself and those companies to whom my former creditors sold their bad debt. While I am unable to offer the amount specified in your letter, I am able to pay a lesser amount which still provides Greystone Alliance LLC a large profit on its investment. According to the SEC, buyers of bad debt typically pay, at most, 6 to 7 cents on the dollar of the original amount owed. Thus, your costs in buying this debt would have been, at most $106.64, which is 7 cents on the dollar of the original amount owed, $1,523.44. Considering this, and allowing for a very large but not overly usurious profit for Greystone Alliance LLC of 200% on their investment, I will agree to pay a settlement of 300% of what I have calculated to be your purchase price to fully expunge the debt, that is $319.92. This amount is to be paid by increments which we will negotiate (or paid fully if I so choose or depending on the details of our negotiated agreement).

    This letter is not an acknowledgment or acceptance of the alleged debt, as I have not received any verification of the debt. Nor is this letter a promise to pay, and it is not a payment agreement unless you provide a response as detailed below. I am willing to pay the above settlement ONLY in return for your agreement to remove all information regarding this debt from the credit reporting agencies within ten calendar days of payment. If you agree to the terms, I will pay the amount of $319.92 in exchange for having all information related to this debt removed from all of my credit files. As granted by the Fair Debt Collection Practices Act, I have the right to dispute this alleged debt. If I do not receive your postmarked response within 15 days, I will withdraw the above offer and request full verification of this debt.
    If you accept this offer, you also agree not to discuss the offer with any third-party, excluding the original creditor. If you accept the offer, please send me a letter agreeing to the terms . Your letter should be signed by an authorized agent of Greystone Alliance LLC. The letter will be treated as a contract and subject to the laws of [State].

    To accept this settlement offer, please write to me at the above address.

    Because of the inconsistencies and amazing claims made to me on the phone, such as that negotiation by mail would cost hundreds of dollars in postage, and the claim that you did not buy the debt from Bank of America in spite of the fact that your letter to me says that you did1, I am not willing to negotiate by phone, and calls between Greystone Alliance LLC and myself or my representatives will not be accepted unless initiated by me or my representatives. Please also be informed that any calls between Greystone Alliance LLC and myself or my representatives may be recorded. Further note that I was shocked by your rudeness and your invasive and threatening attitude on the telephone, and have no wish to deal with you further in that venue.



    They could have gotten the money, but they did not respond, and so they got nothing. Stupid eh?

  2. Thanks for sharing your letter. I wonder if you still could be taken to court. And if yes, beware of what is known as "robo servicing" in which the service company simply claims they did a sub service to what basically is a made up person, or, "Jane Doe", who just so happens to be of average height and average weight so there is the greatest flexibility in terms of being "off a few inches and 10 or 20 pounds either too much or too little.


Hi, Your comments matter greatly. If you post anonymously it helps if you briefly explain how your prior experiences relate to the comment you are leaving. Please no link ads unless you contact me first.