Debt collectors covet your coronavirus check
I’m Business columnist David Lazarus, with a look today at how debt collectors are responding to the coronavirus. It’s not a pretty picture.
There were reports earlier this month that debt collectors are ready to pounce on the stimulus payments being deposited in people’s bank accounts by the federal government. There’s nothing in the law that authorized the payments to prevent debt collectors from garnishing the money.
Meanwhile, the Assn. of Credit and Collection Professionals, a lobbying group, has called on lawmakers to avoid any measures that limit debt collectors’ reach during the pandemic.
Mark Neeb, the association’s chief executive, said he’s concerned that “certain lawmakers have suggested that eliminating the work of the ARM Industry is a prudent action that should be taken in response to the coronavirus.”
ARM stands for “accounts receivable management,” which is the fancy way debt collectors like to refer to themselves.
It goes without saying that people who owe money are responsible for fulfilling their financial obligations. But turning the screws on consumers during a public health crisis is the sort of predatory behavior that federal and state authorities should be guarding against.
The Frontier Group, an advocacy organization, examined recent complaints filed with the Consumer Financial Protection Bureau.
“Since March 1 — around the time the COVID-19 crisis began to affect American lives —consumers have submitted more than 4,000 complaints about issues with debt collection,” said Gideon Weissman, a policy analyst with the group.
Among the complaints was one from March 19 describing a late-night visit by a debt collector — sorry, make that accounts receivable management representative.
“The amount the summons is stating is much more than I remember accruing,” the consumer reported. “Also, no one had contacted me regarding this debt prior to the man arriving unannounced.”
Another complaint filed March 25 describes a consumer’s frustration with being hassled by debt collectors while out of work because of the pandemic.
“They call all day every two hours, and when I ask to speak to a supervisor, they hang up on me,” it says. “They are rude [and] don’t answer any questions.”
Some states have placed limits on debt collection during the crisis (California isn’t one of them). At the federal level, the Departments of Education and Veterans Affairs have said they’ll temporarily suspend some debt-collection activities.
But it seems clear that Congress needs to enact nationwide protections for consumers during this extraordinary event.
Sen. Sherrod Brown (D-Ohio) introduced a bill that would amend the Fair Debt Collection Practices Act “to provide additional protections for consumers and small business owners from debt collection during a major disaster or emergency.”
Rep. Maxine Waters (D-Los Angeles), chair of the House Financial Services Committee, has announced a plan that includes “eliminating debt payments for the duration of the crisis.”
Neither of these proposals will get anywhere until Republican lawmakers recognize the severity of the problem, and that seems unlikely. They’ve so far shown themselves to be much more interested in protecting business interests than those of ordinary working families.
In the meantime, remember you have rights under federal law. A debt collector can’t harass you or be abusive. He or she can’t contact you early in the morning or late at night if you tell them not to.
Most importantly, you have a right to request proof of your financial obligation.
That may not stop some of these guys from going after your stimulus money, but it helps.
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