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.
Tips for how you and your finances can get through the pandemic.
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.
Now then, here are a couple of recent stories from our pages worth highlighting:
Square deal: The toilet paper promised to be “gently textured” yet “durable enough for the task at hand.” The package’s lettering was in Chinese, save for one word: “Face.” It wouldn’t come for several weeks, and at $23.90 for 10 rolls, it seemed pricey. And thus began an adventure in global e-commerce.
Safer Zooming: If you’re among the tens of millions of people who have become regular Zoom users in recent weeks, you may be wondering how safe the videoconferencing platform really is. Here’s a primer on some of the notable privacy and security lapses — and how to keep your calls and data safe. (Times owner Dr. Patrick Soon-Shiong is an investor in Zoom.)
Conagra Brands is recalling more than 130,700 pounds of Healthy Choice Power Bowl chicken products because they may contain small rocks. The U.S. Department of Agriculture says the products should be thrown away.
Guan’s Mushrooms and H&C Food have recalled enoki mushrooms imported from South Korea because of listeria fears. Three dozen people have been sickened by contaminated mushrooms, including at least nine in California, and four deaths have been reported.
Not surprisingly, there are a lot of songs about owing money. Lou Reed sings about the burden of IOUs. Destiny’s Child laments bills, bills, bills. Tennessee Ernie Ford talks about the weight of being deeper in debt. On the flip side, as Hall and Oates remind us, some people can rely on the old man’s money.