Consumer Law

What Do These Difficult Economic Times Mean For Consumers?

By M. Stan Herring

We understand that the economy is in a serious slump. The government is buying shares in banks. Companies are going bankrupt. Billions of dollars of value are being wiped out in stock market declines. What does this mean for the average Alabama consumer with respect to debt collectors and credit reports?

It is now harder than ever to pay debt collectors. On the other hand there is and will be even more bad debt sold to debt buyers or assigned to collection agencies. The legitimate and honorable debt collectors will stay within the law and will be creative in finding ways to help consumers pay debts that are owed. But many debt collectors will cross over the line. The idea is when there is a lot of noise, you have to shout louder to be heard. So many demands now exist for our money that for debt collectors to get our attention, they have to (in their minds) violate the law in order to be paid.

These violations will include threatening to garnish wages or put a lien on your house before filing suit and before having a judgment. It will also include threats (either directly or indirectly) that not paying for a credit card is a crime that can lead to prison. It will also include filing suit on cases well beyond the statute of limitations. Calling third parties - neighbors, co-workers, family members, church members, etc.

With respect to credit reports, debt collectors will be more tempted to put false information on credit reports knowing how important it is, with tight credit markets, to have an excellent credit score. Its hard enough to get credit right now but trying to do so with false collection accounts on your credit report is truly difficult.

Its not just debt collectors that understand the power of credit reporting to "wrench payment from debtors" (as one federal court famously said) - credit card companies know this as well. We have seen more and more cases of credit card companies tell, for example, widows who were not on the credit card that they are responsible for paying their dead husband's debts "because you were married". We have seen credit card companies say that there is no identity theft if your spouse or child stole your identity. We have also seen identity theft victims be rejected by credit card companies who say since a single payment was made by the innocent spouse that somehow the innocent spouse had "agreed" to pay the entire $15,000 balance. Absurd positions but everyone is wanting to get paid and so many companies are willing to cross the line in order to persuade Alabama consumers to pay debts that they do not even owe.

The solution is to educate yourself. If you have questions consult with an experienced consumer attorney. Document all your experiences and interactions with debt collectors very carefully Pull your credit reports and monitor what is on there carefully and dispute false accounts and false information.

Please contact us through our website or by phone at 205-879-2447 if we can be of assistance to you in any way. If you would like one of our free reports on debt buyer lawsuits, collection calls, or collectors calling your neighbors or co-workers, let us know and we'll send those out to you right away.

(I wrote this in October and then forgot to "publish" it - just ran across this and decided it is even more true today than when I wrote it last year. Hope it is helpful to you).

Full post as published by Alabama Consumer Blog on June 07, 2009 (boomark / email).