by AnalogKid82

Created on: August 19, 2008

In the immortal words Kathy Bates, the mother of Bobby Boucher, collection agencies "are the devil."

In a phrase, that sums up my view of these bottom-feeders.

These proverbial leeches buy delinquent accounts for mere pennies on the dollar from either the client or another collection agency. Then the letters start, which is followed by the phone calls. Oh, the phone calls! You know what I'm talking about - they start early in the morning, often accompanying the sunrise, and occur every 30 minutes, through breakfast, lunch and dinner - right up to the point where you want to channel Albert Finney from "Network" throw open the window and scream "I'm mad as hell, and I'm not going to take it anymore!"

You have to love the tactics these lowlifes take. If you've ever answered the phone when they've called, they'll try anything in the book to get you to make a payment immediately. Cajoling "you have no money? can't you ask a friend or relative?" to intimidation "we're considering legal action against you" or anger "how could you go this long without making a payment!" It's hysterical. Some of these guys like to fearmonger - and in all reality, they can't do anything to you, especially if you tell them you're broke and on the verge of bankruptcy. Given today's current economic climate, it's an explanation that's more than plausible.

Ignore them long enough, and eventually your account will get passed on to another collection agency - and another, and another, and another. The good news is that by law they cannot tack on finance or service charges - your balance stays stat after it goes into collections. But your credit score will take a hit.

As a matter of fact, once your account reaches collections, they usually don't update your credit score with them until you have paid off the full balance. Your original creditor, however, would be more forgiving and give you a satisfactory report if you enter into a payment arrangement with them.

So, other than it affecting your credit score (by the way original creditors can damage your credit just as good as collection agencies) what purpose really do they serve? What happens between you and your original creditor should stay between you two (and the credit bureau).

Another reason for going NO - never, EVER work into a settlement agreement with a collection agency. This is another tactic they like to employ. You might think you're getting a deal out of it, but in reality the buck you're paying doesn't stop there. For example, if you agree to a settlement of $500 on a $1000 loan, the collection agency will report the remaining $500 to the IRS - and now you'll have to answer to Uncle Sam come tax time. Unlike they like to assess interest and penalties to unpaid balances.

Betcha didn't know that?

Sneaky, deceptive, manipulative - collection agencies are snakes in the grass. They should be banned, but they won't - because as long as they continue to bring in revenue, creditors and the government will continue to employ them.

So what's the solution? Work with your original creditor. If you're behind on paying your bills, call them before things get out of hand - try and work out a payment arrangement with them, even if it's not much. Make it even easier by setting up an automatic payment by which it comes directly from your bank at a certain predetermined time of the month. It'll stop the letters, the incessant phone calls - and give you peace of mind while you work on catching up.

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