Debt Collection Horror Stories

debt collectorBy Blake Ellis

Debt collector horror stories abound: There are threats to dig up the dead relatives of those who couldn't pay their funeral bills, promises to imprison debtors or take their children into custody -- even warnings that pets will be killed.

Under the Fair Debt Collection Practices Act, collectors are prohibited from threatening violence, using profane language, calling incessantly, inflating a debt and implying they are attorneys. And they can't tell consumers they will arrest them or garnish their wages or property unless they actually plan to take that action and are legally able to do so through a court order. Many states have their own rules governing debt collector practices as well.

These are some of the latest outrageous allegations of abuse:

Threatening to take away children: Last week, the Federal Trade Commission shut down a Texas-based debt collector, Goldman Schwartz, for using deceptive and abusive scare tactics to force people to pay their payday loan debts. Among the alleged offenses: collectors called consumers incessantly, saying "we can take you to jail" or "we'll send the sheriff's department to your job and take care of this the hard way," even though they had no legal basis to do so.

Collectors went so far as to tell consumers that when they go to jail, police or child protective services would take their minor children into government custody, according to the FTC. Goldman Schwartz hasn't responded to the complaint filed by the FTC, and its attorney declined to comment on the case.

Posing as a law firm: To scare consumers into paying, Goldman Schwartz also allegedly posed as a law firm or claimed to work with law enforcement authorities -- even charging unauthorized attorney's fees that it referred to as "juice."

One consumer, who asked to remain anonymous, filed a complaint against Goldman Schwartz claiming its collectors pretended to belong to a law firm one day, and the next day said they worked for local law enforcement. After calling her incessantly over a $300 payday loan debt -- which she said she already paid -- a collector even called her workplace and told her coworkers he was going to come arrest her and they would have to pick her out of a lineup.

Pretending to have legal authority has become a popular tactic among debt collectors. In a separate lawsuit filed by the Pennsylvania Attorney General that's still pending, a debt collector, Unicredit, was charged with decorating an office to look like a courtroom and holding fake court proceedings. The attorney for Unicredit's vice president said "he was not personally involved" in the activities that the lawsuit alleges, and the president's attorney did not respond to a request for comment.

Threatening to dig up dead bodies: Another collection agency, Rumson, Bolling & Associates, was fined more than $700,000 last month for taking harassment to a whole new level. One of the worst offenses listed in the FTC's lawsuit: collectors allegedly threatened to dig up the bodies of debtors' deceased children and hang them from a tree or drop them outside their door if they failed to pay their funeral bills. The defendant's attorney, Christopher Pitet, said the company's owners did their best to ensure collectors complied with the law -- so if any wrongdoing was done, it was done by employees and was against company policy.

Promising to hurt pets: The harassment didn't stop at dead bodies, according to the FTC. Collectors at Rumson, Bolling & Associates also allegedly threatened to kill a debtor's dog. Specifically, collectors told a woman they would have her dog "arrested ... shoot him up and ... eat him," before sending the police to her house to arrest her, the FTC claimed.

Collecting debts owed to other companies: Along with all the harassment, the FTC has seen a new collection scheme pop up: scam artists are stealing customer information from payday loan websites and then disguising themselves as debt collectors and going after the loans customers take out, said Tom Pahl, an assistant director at the FTC.

In one case, a phony California-based debt collection outfit run by a man named Kirit Patel allegedly collected more than $5.2 million in debts that were owed to payday loan companies -- or weren't owed at all, according to the FTC. The defendant's attorney, Andrew Steinheimer, said Patel was duped into opening the company by someone else and was unaware of any wrongdoing.

The case was referred to the Justice Department, and a federal grand jury indicted Patel last year. If convicted, Patel will face up to 20 years in prison or a fine of $250,000 (or both).

"[These debt collection agencies] continue to taint the professionalism of the vast majority of collectors that do it the right way -- respectfully and in compliance with federal and state laws," said Mark Schiffman, a spokesman for debt collection trade association ACA, which represents more than 3,000 debt collectors.

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Report any problems you have with a debt collector to your state Attorney General's office at and the Federal Trade Commission. Many states have their own debt collection laws that are different from the Fair Debt Collection Practices Act. Your Attorney General's office can help you determine your rights under your state's law.

There is also a free consumer site called "Bad Credit MD" that offers free advice for these types of situations.

February 23 2013 at 1:04 AM Report abuse +1 rate up rate down Reply

Dig a hole, live in it.

February 12 2013 at 9:50 PM Report abuse -1 rate up rate down Reply

I hope the American people don't come after me with the 5 trillion in debt I stuck them with.

February 10 2013 at 4:26 PM Report abuse +1 rate up rate down Reply
hello Randy!

nothing wrong with that, Asians eat dog meat (and cat) daily.

February 10 2013 at 8:51 AM Report abuse rate up rate down Reply
1 reply to hello Randy!'s comment

Yeah, that's because they're savages...

February 10 2013 at 10:04 AM Report abuse rate up rate down Reply


February 10 2013 at 6:53 AM Report abuse +1 rate up rate down Reply

If you're really far, far over your head in debt, with no reasonable expectation of being able to pay, and you're getting nasty collection calls...just file Chapter 7 bankrupcy. It'll stop them in their tracks, and remove the debts. Find a good attorney in the phone book, or look one up online. Shop around for the lowest cost. It isn't the end of the world.

February 10 2013 at 2:28 AM Report abuse rate up rate down Reply

I had a small shop with a monitoring system, company name similar to "Monitoring", 19 yrs ago. Glass door was broken, shop burglarized, discovered next day when I arrived to open for business. police said "monitoring" Co. didn't call them. They also did not phone shop (no message) or my home, where I was that previous evening. My shop was on (for real!) N. Main St, three blocks from police station in a town of about 5000 people. I phoned company, they said they'd sent a LETTER. I cancelled, they said I owed $50 for this month (2nd or 3rd of month, bill due 5th of month). I retired to Florida, still get calls and I have a credit score in mid 800's but this $50 "debt" is still showing after 19 years, only now it's $60.

February 09 2013 at 11:20 PM Report abuse rate up rate down Reply

any one calling about a debt you owe has to prove in writting and sent you a copy
on your request if they can not prove the debt with orginal paper work they can not collect it
this is federal law under fair debt credit collection act
also record all phone calls and tell then call is being recorded
that way you can sue them for illegal acts
turn all threats they make over to law inforcement

February 09 2013 at 4:10 PM Report abuse +1 rate up rate down Reply

Debt collectors are the lowest slimey scum of the earth, and will knowingly break the law by saying ANYTHING, or DOING ANYTHING, without regard for said law. I hope that sleeze-bad Patel gets the longest possible prison sentence possible.

February 09 2013 at 3:37 PM Report abuse +2 rate up rate down Reply

These collectors prey on the weak of mind...people who are educated and know and understand their rights laugh them off...ludia, you have obviously never been in a position of being in the hospital, told you have a 30% chance to live, and have a bill collector call and threaten you (and I hope you never do but part of me says I hope you DO so you will "grow some compassion and understanding" because not all people who get into debt are deadbeats! Try being hospitalized for 8 months with a pancreatic disease then paying off the bills or repairing your credit!) One learns that these collectos are SLEAZEBALLS trying to make money themselves OFF of other people's tragedies; illness, family deaths, abandonement, natura disasters, victims of violence...they can all lead to desitution and bankruptcy due to circumstances beyond one's control. But if one KNOWS ONE'S RIGHTS there no reason to be fearful of these horrible, horrible people who call themselves debt collectors...they are only vultures, parasites and scavangers who can't make their own money honorably. DON'T lose sleep over the likes of them!

February 09 2013 at 3:23 PM Report abuse +2 rate up rate down Reply
1 reply to jleamer's comment

It doesn't hurt to know your rights, because they differ by area. Years back I had calls for someone else, but after a few months of the occasional call they decided to dial it up to threats and insults, claiming that if I wasn't the person I knew him. I had already contacted someone about the calls and I had to send a letter to the company and, I belileve, a letter to the city office letting them know they had crossed the legal line. They waited a couple months and called claiming appology for the earlier call, yet they still asked if I knew that person; and, I reminded them they'd crossed the legal line agan and hung up. I'll never forget it, because I had a hospitalized family member and I must have mentioned it, so they figured I was going to answer the phone and just went nuts calling. People like that deserve no respect.

February 09 2013 at 4:00 PM Report abuse rate up rate down Reply