When Betty Perez bought new bedroom furniture for her children earlier this year, she never dreamed that being a few days late on her payments would result in a collection agency barricading her front door and threatening to call the police.
Perez is just one of an untold numbers of consumers, many of them struggling to make ends meet in the midst of the worst economic crisis since the Great Depression, who are facing increasingly aggressive tactics by debt collectors determined to do whatever it takes to make people pay up.
Allied Interstate, for example, was recently fined $1.75 million by the Federal Trade Commission for using abusive language, calling people many times a day for weeks or months and threatening legal action against consumers who didn't even owe the debt in question.
A couple of years ago, Cassandra Bonomo of Downers Grove, a Chicago suburb, started getting repeated and often nasty calls from several debt collectors who were actually looking for someone named "Sandra" with a nearly identical last name. At first, she took the calls and patiently explained she wasn't the woman they were looking for. Some of them believed her, but more often than not, they didn't.
"Sometimes they leave me alone," Bonomo told Consumer Ally. "But sometimes it does no good, since they think I'm lying to try and get out of paying. Then they become belligerent and call back again and again and again."
While the calls sometimes stop for a few months, they always start up again, usually from different companies, despite complaints to the Better Business Bureau. Bonomo now screens all her calls, and if a debt collector gets through, "I just say it's the wrong number and that ends it," she said.
Jude, a Chicago police officer who prefers not to give his last name, experienced similar behavior from Nationwide Credit, which paid $1 million to the FTC in 1998 when it was caught harassing consumers.
"They called my house at all hours, even late at night, and would wake my little baby up," Jude told Consumer Ally. "It really alarmed me when they started calling my job ten times a day."
Jude said Nationwide employees ignored his repeated requests to cease the harassing phone calls. Despite filing a complaint with the local Better Business Bureau, the calls continued for six months until he filed for bankruptcy.
"They were extremely rude, and used to ask why I borrowed money I couldn't pay back," he said. "They don't care what you say, and will do anything they can to get their money back."
Betty Perez's Bedroom Furniture Fiasco
Perez, a San Antonio physician's receptionist and single mother, purchased $2,500 worth of bedroom furniture for her children from a local Ashley Furniture outlet in March. Since she didn't qualify for in-store financing, they referred her to another finance company on the premises, TRS inc., which she didn't realize is an acronym for "The Rental Store."
"If they had told me it was The Rental Store, I would never have signed the contract, since they are notorious for overcharging," Perez told Consumer Ally. "First they said they [TRS] were a finance company for Ashley Furniture, but they're really a rental collection agency."
Although she put $1,000 down, TRS, recipient of an "F" rating from the local Better Business Bureau, called her 15 times the day after her first payment was due, the first of the month, saying there was no grace period so she had to pay up immediately. Perez told them she got paid twice a month, and since her first paycheck went entirely to rent, asked if she could pay on the 15th of each month instead. TRS said only if she paid a $200 fee, which she couldn't afford.
Perez says she never missed a payment and always paid between the 1st and 5th of each month, often getting friends and co-workers to help her out. But employees from TRS continued calling her at home and work, day and night, using company phones and personal cell phones.
"One of them called me numerous times on my son's birthday and said 'we're going to take back your furniture, so your kids better get used to sleeping on the floor,'" she said. Although Betty complained to the local Better Business Bureau, they were unable to help, since TRS didn't return calls. A request for comment from TRS was not returned.
"One time they showed up at my house with a moving van threatening to take the furniture when my mother and sister were there watching my children," Betty explained. "They blocked the door and told them to call me or they could call the police. My mother was frantic."
Desperate to get them off her doorstep, Betty borrowed her boyfriend's debit card for that month's payment. Soon afterward, when Betty finally convinced TRS to move her due date to the 15th, they debited his card $200 without his permission, causing his next rent check to bounce. Betty and her boyfriend filed a complaint with the police and received a refund from TRS. She is now making her payments on the 15th of each month, which she says have increased over the months due to hidden fees and additional taxes.
Betty's determined to pay off the furniture with her tax refund in January, and offers the following advice for anyone making a large purchase in installments: "I would tell people to check any second-hand financing companies out before signing any contract."
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Debt collectors using aggressive tactics to pursue payments