by T. Lynn Wright

Created on: July 26, 2010

Ethics in debt collection is a matter of perspective. There are many fair and law-abiding collectors and agencies, just as there are many people who want to pay their debts but are unable. The trouble starts when large companies sell collections to fringe groups. The scenario goes something like this: A man calls a person's place of employment, he sounds decidedly of some uncertain ethnic group and says his name is Officer Smith of the National Crime Institute, and if the debt is not paid by that afternoon, the charges will be downloaded at the local court and the person will be arrested. Most people who are familiar with the law know that there is no such thing as charges being downloaded at the local court, and they wouldn't be advised of it by someone calling from a crowded room in Florida full of people who can barely speak English let alone who know or follow the collection laws of the United States. However, there are many people who have no idea that this collection subculture exists and have no knowledge of the law or their rights.

This is a vague description of an all too common case. A person enters into Chapter 13 bankruptcy in order to try and pay a portion of incurred debts. Even after the individual's attorney phoned these third party collection rogues, they continued to argue with the attorney and hound the person on the job. Eventually, the result was termination because of the constant barrage of phone calls. Sgt. Smith, upon learning this, seemed genuinely shocked and dismayed, and ironically, insisted it was against the law for the employer to discharge them. The fact that the attorney attempted to locate these shadowy characters to take legal action came too late.

 Those who know history know that in Victorian London, debtors languished at Newgate Prison. The US corrections system can't absorb another class of non-violent criminals. Being indebted is not considered a crime. Unless the intent to commit fraud can be established, collectors are supposed to be regulated by law and must follow civil procedures. The United States persists in being a nation living on credit. Because of this societal mindset, there will always be people who make poor, maybe even deliberate financial decisions. As long as there are unscrupulous lenders and consumers, it is to be expected that the National Institute of Crime, the man from Georgia pretending to be a police officer, the woman insisting she was from the FBI, will continue their scurrilous tactics. Making indebtedness a crime will not pay. Making it legal for collectors to become financial bounty hunters will not recoup financial loss.

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