I talked to a friend recently who was surprised how popular get-out-of-debt stories are. He pays all his bills every month on time and can’t imagine not doing that. Lucky is he. And perhaps a bit naive. Not only do roughly half of credit card carry a balance, but plenty of folks are in debt badly enough that someone is chasing after them for the money. How many?
Thirty million! Roughly one in eight Americans. And they owe an average of $1,400.
So says the Consumer Financial Protection Bureau, which today issued a report about the questionable practices of those chasing after the 30 million debtors. The bureau began accepting complaints about debt collectors last summer, and it already has a pile of 30,000 of them. About one-third of those complaints come from consumers who say they don’t owe the debt, either because they were a victim of ID theft or the debt is already paid. About 14 percent of complainers say debt collectors have made illegal threats, such as threatening jail time. Plenty of other complaints involve abusive language, calling workplaces or late at night, etc.
This is not a small problem. And it’s not a problem to be ignored by those who are lucky enough to pay their bills on time. Through ID theft, mistakes, or simple humanity, anyone can end up 30 days late on a bill. A few years ago, my mortgage company changed my monthly escrow payment by $11 a month and I didn’t notice the letter. In a month, my mortgage payment was $11 short, I was hit with a $79 late fee, and in a few weeks started getting collection calls.
Everyone knows someone in this situation. Help them understand their rights. The Fair Debt Collection Practices Act makes it illegal to contact an alleged debtor after the consumer tells the collector to stop (outside legal notices, such as lawsuit service). Consumers are also entitled to paperwork authenticating the amount owed. Here are sample letters from the CFPB that consumers can send debtors/collectors to invoke their rights.
And if you don’t need them, share them with someone who does. And think, “There but for the grace of God…”