Debt Collectors Using New Strategies and Technologies to Get Your Cash

As the economy slides and consumer debt and delinquencies rise, debt collectors are having an increasingly difficult time coercing cash-strapped people to fork over payments. Many are getting more creative – and often, more aggressive – in their efforts to collect payments.

According to an article in Newsweek, some collectors are even resorting to the types of harassing tactics that were made illegal years ago.

See You in Court
Collectors are taking people to court more often these days. Interestingly, some are going to court to defend themselves. Minnesota Attorney General Lori Swanson told Newsweek that she sued a debt collection agency for using illegal tactics, and expects this to be a growing trend among other AGs.

Debt Profiling
New software helps collectors assess debtors "most likely to pay big" by calculating what type of debt is owed, how old it is, how big it is, when the account was opened, credit reports, bankruptcy filings and the debtor's socioeconomic status.

Consumer advocates believe the software unfairly profiles debtors, as the data shows almost all of the people sued by debt collectors lived in low income, predominantly African American communities.

Telephone Tech
Collectors are using offshore call centers and automated dialers to find debtors. And about half of collectors are using automated calling systems with recorded messages. The problem with this method, however, is that many calls don't disclose who the debt collector is and what the call is about. Courts have held that this is deceptive. Even more problematic is that recorded messages may be left on a voice mail system used by more than one person – which could be considered unauthorized disclosure of the debt to a third party.

More and more collectors are calling cell phones – which often means that those in the lower-income bracket are paying for minutes spent on calls from collectors.

Negotiating Payment Plans
Under the philosophy of "a bird in the hand is worth two in the bush," collectors are becoming more open to negotiating partial payment plans.

Remember: debt collection agencies must identify themselves, and if you request it, they must prove that the debt is, in fact, yours.