Over the last 4 years we have seen an epidemic of late monthly debt repayments. Many of the borrowers have never been late on payments before. However, during the recession people often have to deal with multiple problems. It used to be common that someone just had to work through unemployment and get hired within a short period of time. Now unemployment usually lasts longer, savings runs out sooner, and money invested in stocks drops in value, as in March of 2009 when the market plunged more than 40%. Unemployed people are especially vulnerable to financial setbacks, since often they can’t obtain or afford health insurance, they face inflating prices on gas and food, and many stressed-out couples go through money-stripping divorces.
The debt collection industry, either organized with massive call centers or as law firms, often buys the outstanding debt from the original lenders. The lender’s collection department or the collection companies have to follow strict guidelines and regulations outlined by the Federal Trade Commission, but they often break the law in their efforts to collect.
The Columbus (OH) Dispatch ran an article last May investigating the problems with the credit rating agencies, and this month it is extending the Credit Scars series about collections firms. The Dispatch is running what I have found to be one of the best series of articles on this subject in the entire country:
- Credit Scars: A Dispatch Investigation
- Debt collection a top consumer complaint
- Primer on debt collections
- Debt deception
- Take fast action if a debt collector comes calling
- First Credit Scars article brings action