The headlines tell the story - business is bad out there, but the Better Business Bureau (BBB) reports that one category of business is growing fast in Upstate New York and it’s associated with a sometimes dreaded word – collection. With unemployment rates at almost 8% - combined with the general economic downturn, chances are you or someone you know will be contacted by a debt collector.
The BBB reports collection agencies as their number one complaint area, totaling over 1600 complaints in the past year alone, which exceeds most other complaint areas by a long shot. The BBB adds a new collection agency file about every six days, with 55 new collection businesses opening in the past 12 months. 38 of them in the Buffalo area. “If our region was expanding manufacturing jobs at that rate, we would lead the nation”, said David Polino, Better Business Bureau President.
Call centers have certainly found a home in upstate NY, with collection agencies leading the pack. “Western New York offers the collection business and many other businesses a significant back office infrastructure with a solid work ethic you don’t find in other parts of the country,” said Brian Peek, of American Coradius International LLC (ACI), a BBB Accredited Business. “Companies have good options for telecommunication needs here, the absenteeism rates are much lower than in other parts of the US or Canada and we’re able to find the personal skill sets here that supports the service level we strive to offer.” “While there are good players in the industry, 13 are accredited by the BBB – there are also 84 with an “F” rating, which is the lowest BBB rating.” said Polino.
The BBB now reports on over 230 collection companies located in the upstate area and stories of abuse are plenty. New York State Attorney General Andrew Cuomo recently announced a reform deal for three debt collection agencies who agreed to substantially change their business practices. “We’ve had collectors tell clients to sell their home, borrow money from friends or relatives, or obtain a loan” said Larry Curtis, Director of Counseling for Consumer Credit Counseling Service. Collection agency complaints are also at the top or near the top at the FTC and the Attorney General’s office.
“Whether resulting from job loss, a medical emergency, or unsecured debt, bills are mounting for many Americans. And for a variety of reasons, many are not being paid. While that means more business for the Accounts Receivable industry, it also means consumers should know their rights if they are contacted by a debt collector,” added Polino.
The following tips are provided to help consumers understand the Fair Debt Collection Practices Act and help to work through a collection agency call.
Learn the rules – Understand the legal limits of debt collection. The FTC, which enforces the Fair Debt Collection Practices Act (FDCPA), has an informative booklet available for free. Click here for a copy. In brief:
- Debt collectors can not harass or threaten consumers
- They can not make false statements
- They can not invade your privacy or lie
- You can request contact in writing to control their method of contact
Fight invalid claims – If a collector is demanding payment of a debt you don’t owe, or more than you owe, you can dispute the debt in writing. The formal terms are “debt verification” or “debt validation.” Within five days of first contacting you, the FDCPA requires debt collectors to notify you of your right to validate the debt. You must write to request verification within 30 days of when you are first informed of the debt. Sending your request by certified mail is wise.
Keep good records - Keep copies of all collections-related correspondence. Pay debts only after receiving written notice of the amount due. Keep records of all payments.
Choose your communications route – Debt collectors may not force you to respond immediately. If they catch you off-guard, ask them to call you back in an hour so you can plan. If they call at work or a relative’s home, tell them you are formally requesting they not call you at that location and document it.
Report violations – New York State and federal laws prohibit collectors from posing as attorneys, threatening lawsuits or other legal action that can’t be taken, saying a consumer committed a crime or will be arrested, and talking with third parties except to get a consumer’s location. If you believe a debt collector is breaking the law, you can report the collection agency to the Federal Trade Commission at www.ftc.gov and NY State Attorney General’s office at www.oag.state.ny.us.
Get help – Consumer Credit Counseling Services community offices can help if you are struggling with debt – without the hassles and pressure of debt collectors and sort through options. Click here to locate one. Many web sites can provide resources, education and tools to help you understand your financial situation.
For more information or to schedule an interview with a BBB spokesperson, contact Peggy Penders at 800.303.4490.