I used to work in debt collection. I know a bit about the industry, at least the way it is practiced in Europe. And I have been pursued by debt collectors in the USA.
There is never a time when it is advisable or a good idea to speak to a debt collector. The system is complex, and completely corrupt. Every word you say to them gives them more information and leverage.
If it ever comes down to it, either pay the debt off completely, or have every communication go through a lawyer.
You will never win against a debt collector. Ever.
You will win if it goes through a lawyer. I had to do that two years ago for a debt that was sold without any communication provided to me prior to seeing a credit hit and call from the collection agency. After sending out some legal requests that situation went away very, very quick. Debt collection is scum.
Diamond Parking used to send me to collections all the time. Probably because I never paid them. They'd call up and say "You owe Diamond Parking $180" and I'd say "you're charging 400% interest on a $40 debt that you bought for $3 and the sun will be a cold dead cinder before I give you a dime. But I'm happy to call you names and tell you terrible things about your mother for as long as you want to stay on the line. Pyrrhic victories are a hobby of mine and I will gladly add your scalp to the collection." Fuck Diamond Parking and anyone who buys their debts.
I used to get calls from debt collectors about my mother's medical bills. Not even my debt. My solution was an Asterisk box that would play /dev/random on demand, then call them back and do it again when they hung up and keep going for an hour, then remember the number so it could answer and screech white noise for an hour automatically if they called back. It took a few months, but they stopped calling me.
I can answer this, to a point. If your credit score is under 650, a new derogatory mark is not going to have that big of an impact. If your score is 650-720, a new mark can drop you 40 points depending on the number of credit cards you have open, your credit utilization etc. I've seen a single bad mark drop a friend from 740 to 690. If your score is over 800, and you get a new mark, the impact will be more, but again, that depends on your credit utilization, the age of your credit and number of lines of credit. I had to deal with a hit due to my accident which dropped my score from the 810's to the 710's. In short, it hurts. When you pay an old debt you need to negotiate the holder to remove the mark from all your credit reports, get that in writing and then send that letter to each of the Bureaus so that the bad mark is gone. Why care? Insurers use your credit score to assign rates (in part at least. I got a discount of 10% due solely to my credit score off my home and auto). It also helps when you need to put down security deposits, when you have to rent cars, if you need a security clearance, and some employers will make hiring decisions based on credit score. That last one, other than Finance, should not be legal, but it is what it is. Credit over 750 opens doors. Credit scores under 680 slam doors shut.
AT&T charged me like $140 for DSL after I moved out an apartment and transferred the address. I still can't add another phone to my AT&T acct because of the outstanding charge, but hilariously, I can't even pay it if I wanted to because it's too old. Every once in a while, I'll see that someone new bought the debt: "Mr. mk, this will affect your credit rating." "LOL I don't care! Bye!" Even when the debt is legit, I think there's an argument for once the debt has been sold to a collector, it has been settled. The person you owe got what they are going to get, and you don't owe the collector for providing a service. I know that's not legally the case, but when the bill is small and it's been sold to a collector, who cares? It's not like the collector is going to fix your credit rating upon payment anyway. They'll likely just resell it as if you didn't pay it.
Where in Europe did you do work related to debt? Last year, a phenomenal Dutch documentary called Schuldig! brought the debt industry in public view. It's not as awful here as in the article, but the incentives in debt collecting are such that it only costs a few eurocents to hire a debt collector. If the debt is collected, the collector gets a large share of the interest and fees IIRC. Companies are also free to add late payment fees as they please. One woman in the documentary ended up with a debt of 12,000 on a 1,900 euro large bed. Another problem we have is that there is no way to declare bankruptcy. Instead, judges can order people to be put into a 'debt solvency programme', which means that government gets to control your finances until most of the debt has been paid off. It's humiliating, demoralizing and insulting, especially when so much debt consists of interest and late fees. The title of the documentary means both 'guilty' and 'in debt' - we don't have a word to distinguish the two. Calvinism has influenced a lot of our culture around money. On the one hand it means that we have a reputation for being frugal and less exuberant with money, but the flip side of that coin is that debt is still seen as a sin, as an obligation that must be paid back (instead of a risk that the other party took and maybe shouldn't have).
I read the story today and that was so crazy. People in this story killed themselves because of the guilt of their sins. This whole thing could be a movie really. This all sounds like the beginning of some drama movie but it’s all real life and people are getting screwed over as we speak.Lending money to people who don’t have any is surprisingly profitable. In states where such stores are legal, such as Missouri, they’re more common than McDonald’s franchises. But in the 15 states where such stores are against the law, there are millions of desperate people willing to pay for fast cash and no one to give it to them. Scott pioneered what he thought was a clever legal loophole that would give him access to that market: He created websites that were owned on paper by an American Indian tribe, which could claim sovereign immunity from regulators. Those sites charged as much as $150 interest on a two-week, $500 loan—an annualized interest rate of about 700 percent.
I used to have some debt collector call me all the time while I couldn’t pick up my phone but I was always pretty nice to them when I actually did get to pick up the phone. Then one day they called while I was napping in my closet with a terrible migraine, and it made me so angry my migraine actually went away. This ended with me bringing up the time they were successfully sued in some year and they backed down hard, yaaay google. Oh ya, forgot to add they were looking for some dude but every time they said it on the phone you could barely understand the name.
I had a debt collector after me for years, but they were chasing a lawyer with a similar name to mine. First name the same, different middle name, minor vowel change in the last name. They never checked the Social Security number on the debt. When I told them to do that, they went away.
I've now got two civil lawsuits under my belt in dealing with debt collectors. The whole process was not at all fun, pleasant or enjoyable. But I got paid in the end and I now tell everyone that will listen to me that each and every time a debt collection style person contacts you, treat it as a terrorist holding you hostage. Go full hostile. Demand everything in writing, demand paper trails, and learn the tools you have under the Fair Debt Collection Practices Act Be firm but polite, never use foul language, and for the love of the Spaghetti Monster, KNOW THE DAMN LAWS. I live in a one party state so I can record everything, your laws may be different. Paper and recordings will always win over he said-she said sort of arguments. DOCUMENT EVERYTHING. Second case I went to the judge and had all my paperwork and about four hours of phone recordings. The judge made a comment that he had not seen one of these cases so well prepared before and I got the max at the time. With so much paper being bought and sold and no oversight, and with all the massive data hacks, Equifax, everything, I've been telling people to get a Credit Karma account under an email only used for credit reporting, banking etc. They offer free monitoring. They also send email when new loans are taken out in your name. If you have a credit score over 700 or so, expect a wave of identity theft in your future in 2018. This time next year the debt collectors will be out in full force as all these stolen identities' accounts come up for demand payments. Fuck Debt Collectors. Vermin, all of them.
See with mine since I couldn’t understand the name of the person they were asking for I made sure never to say my name so they couldn’t just respond as if that was the name being said. I assumed they were a scam from the start so I skipped all civil steps and went full crazy. Turns out they were actually a real company and just terrible at their jobs.