I recently helped out a friend whose Los Angeles business certificate/tax debt was turned over to Alliance One only after 4 years (!) of delinquency, and with no correspondence or notices whatsoever being sent to him prior or during the collection. He found out about its existence when he pulled his Trans Union credit report. Turns out, the city of Los Angeles had a wrong address for him, and never once during the 4 years bothered to check with DMV or otherwise what the correct address was; they just sent it to a collection agency after 4 years. I think creditors and government entities alike should be required to first verify the correct current address of the debtor and send the debtor a letter, certified mail return receipt requested, before they go ahead and just turn it over to collectors. Please help draft legislation to that effect!!!
I have been contacted about a collection agency that stated that an old prescription charge was unpaid. The total was like $1500. When I asked for proof, I received a piece of paper that had three numbers on it that added up to $1500. Nothing more. Literally.
When a consumer asks for proof, they should at the very least receive a fully itemized listing of what it is is being collecting upon. (e.g. a detailed statement of account, or the un-paid invoice(s).) Additionally, consumers should receive documentation as to why they are legally responsible. (E.g. an agreement that they signed.)
I realize that for businesses that traffic in unpaid consumer debt this is going to be a huge burden as this information has long been lost. Too bad.
At the very least, this should be the standard for any debts incurred after a certain date.
Just like mortgage servicers are required to send "goodbye letters" (a notification of when loan has been sold) and "hello letters" (a notification of when another company is buying a debt), so also should debt collectors. Also, they should be required to disclose the amount for which they bought the debt... the discounted price. Also, there needs to be full disclosure as to who is buying the debt along with the disclosure of the owners of the debt collection company and the street address of the company so face-to-face meetings can be arranged. Full transparency and full disclosure should be required related to any company trying to collect debt.
The CFPB should require debt sellers to contact the debtor and inform them the debt has been sold. Additionally, ALL pertinent information must be given to the debtor to eliminate any confusion. Furthermore, the seller of the debt must be required and enforced to annotate the debtors credit report with the sale to help eliminate confusion and in a way to not increase the bad debt. Essentially, debts that are sold sometimes appear as two seperate debts on a consumers report which increases the penalty of having bad debt. A consumer should not be penalized twice for 1 debt.
Every debt I've ever had go in to collections has supposedly been given notice in advance. In the case of 2 hospital bills many years ago they claimed to have notified me by mail several times but I had never even received the initial bill let alone the follow ups. Since I was insured at the time I only had to pay a reasonable co-pay and would have readily done so had I gotten the bills (as additional information, in both cases I offered to pay at the time of visit and was told they only bill). This particular hospital has an "in house" collections department so I get the impression that they often neglect to actually send info to patients so that they can then collect the additional fees and interest as profit.
When a debt is turned to collections I feel it might be best if a mandatory 30 day notice outlining what the debt is for, previous contact attempts, amount due, available options such as payment plans and the exact effect of the collections process on the debt is sent to the person in a manner that is trackable and shows the intended recipient had the notice in their possession-perhaps a registered receipt type of delivery.
dkossenko
1I recently helped out a friend whose Los Angeles business certificate/tax debt was turned over to Alliance One only after 4 years (!) of delinquency, and with no correspondence or notices whatsoever being sent to him prior or during the collection. He found out about its existence when he pulled his Trans Union credit report. Turns out, the city of Los Angeles had a wrong address for him, and never once during the 4 years bothered to check with DMV or otherwise what the correct address was; they just sent it to a collection agency after 4 years. I think creditors and government entities alike should be required to first verify the correct current address of the debtor and send the debtor a letter, certified mail return receipt requested, before they go ahead and just turn it over to collectors. Please help draft legislation to that effect!!!
View this comment in the discussion thread
TaxGuy
2
I have been contacted about a collection agency that stated that an old prescription charge was unpaid. The total was like $1500. When I asked for proof, I received a piece of paper that had three numbers on it that added up to $1500. Nothing more. Literally. When a consumer asks for proof, they should at the very least receive a fully itemized listing of what it is is being collecting upon. (e.g. a detailed statement of account, or the un-paid invoice(s).) Additionally, consumers should receive documentation as to why they are legally responsible. (E.g. an agreement that they signed.) I realize that for businesses that traffic in unpaid consumer debt this is going to be a huge burden as this information has long been lost. Too bad. At the very least, this should be the standard for any debts incurred after a certain date.
View this comment in the discussion thread
OneFrustratedConsumer
3
Just like mortgage servicers are required to send "goodbye letters" (a notification of when loan has been sold) and "hello letters" (a notification of when another company is buying a debt), so also should debt collectors. Also, they should be required to disclose the amount for which they bought the debt... the discounted price. Also, there needs to be full disclosure as to who is buying the debt along with the disclosure of the owners of the debt collection company and the street address of the company so face-to-face meetings can be arranged. Full transparency and full disclosure should be required related to any company trying to collect debt.
View this comment in the discussion thread
Sertas
4
The CFPB should require debt sellers to contact the debtor and inform them the debt has been sold. Additionally, ALL pertinent information must be given to the debtor to eliminate any confusion. Furthermore, the seller of the debt must be required and enforced to annotate the debtors credit report with the sale to help eliminate confusion and in a way to not increase the bad debt. Essentially, debts that are sold sometimes appear as two seperate debts on a consumers report which increases the penalty of having bad debt. A consumer should not be penalized twice for 1 debt.
View this comment in the discussion thread
erisgrrrl
5
Every debt I've ever had go in to collections has supposedly been given notice in advance. In the case of 2 hospital bills many years ago they claimed to have notified me by mail several times but I had never even received the initial bill let alone the follow ups. Since I was insured at the time I only had to pay a reasonable co-pay and would have readily done so had I gotten the bills (as additional information, in both cases I offered to pay at the time of visit and was told they only bill). This particular hospital has an "in house" collections department so I get the impression that they often neglect to actually send info to patients so that they can then collect the additional fees and interest as profit. When a debt is turned to collections I feel it might be best if a mandatory 30 day notice outlining what the debt is for, previous contact attempts, amount due, available options such as payment plans and the exact effect of the collections process on the debt is sent to the person in a manner that is trackable and shows the intended recipient had the notice in their possession-perhaps a registered receipt type of delivery.
View this comment in the discussion thread