Archive for June, 2011

Complaining to BBB About Debt Collection Harassment

Saturday, June 18th, 2011

I don’t want to sue in court, but my family and I have been harassed by a debt collector and I don’t want to let them get away with it. Should I complain to the Better Business Bureau (BBB)?

No, I don’t see that as getting what you want, which is to not let them “get away with it.”  Debt collectors are looking to collect as much money as they can on the debts they are responsible to enforce.  They maximize recovery by filing lawsuits, reporting the accounts to the credit reporting agencies, and making calls.  They know that people pay more when they are afraid and not thinking clearly, than if the situation is calmly presented without any stress from imposing phone calls, fear of a lawsuit, or adverse credit reporting hanging over the debtor.

Logically, debt collectors have no concern over their ratings with people who are the subject of their collection calls.  There are several debt collectors who boast about such things, such as having web sites that emphasize how ruthless they are towards the debtors and how they can get money from them, almost no matter the circumstances.  The BBB rates people who are comparing services, but debtors have no choice as to who a company hires to perform collection and many collection companies collect their own debts, which they purchased from other companies.

Finally, the BBB’s ratings have become almost meaningless, in my opinion.  A report by ABC News in 2010 found that the BBB rating system had been rigged by highly-compensated BBB local managers to increase “membership” fees and membership numbers.  BBB dues-paying members received a superior score. Companies that failed to pay dues to the BBB fees were downgraded, often substantially.  ABC News’s investigation found business that members received top ratings simply for joining, while non-members (such as the well respected Ritz Carlton Hotel in Boston) received bottom ratings when they did not join.

In any event, at some point debt collection agencies who are not paid will likely file a debt collection lawsuit in court against the debtor, which will force the consumer to play defense against the debt.  If you are harassed by the collection agency, it may be smart to consider taking the first move, rather than sitting back and waiting. Also, the statute of limitations period could work against you by waiting, because you have one year to sue them for collection harassment, but they have several years (depending on the debt and when it went into default and was last paid) to file a debt collection lawsuit, so they have the luxury of time that you may not have. See my blog posting on default judgments, linked here: Default Blog Posting.

Also, sometimes these debt collectors file a lawsuit, but fail to deliver the papers to you, as required by Due Process. When that happens, the court may mistakenly enter a default judgment against you, because the process server falsely stated that they gave you the papers. Thus, if you don’t wait for a default judgment, perhaps you can prevent a debt collection lawsuit and default judgment by hiring counsel and taking on the debt collector for harassment.

Robert Stempler