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 Ask the DebtBuster Collection Agencies Can Communicate ...Not Intimidate Listen
Many consumers who find themselves in financial trouble choose to avoid calls and letters from their creditors, but that is a mistake. You want to talk to creditors sooner than later because the creditor has more flexibility in providing some breathing room before the account is sent to collections. The longer an account goes unpaid, the less likely the consumer will receive any kind of assistance. Your goal should be to find ways to prevent your accounts from moving to collections. The creditor would prefer to keep the account in-house and accruing interest, and it will try to accommodate you, to a point. Many creditors will offer some sort of short-term assistance, such as accepting reduced monthly payments. But the consumer must be talking to the creditor early in the process to receive such help. If internal collection efforts fail, however, the creditor eventually must write off the account as uncollectible, and it will place the account with an outside collection agency. The agency then begins its own efforts to collect on the debt. The consumer now must deal with a company whose only objective is to collect as much of the debt as possible, as soon as possible. The collector may try various tactics, including threatening phone calls and letters, to convince the debtor to act quickly. The federal Fair Debt Collection Practices Act offers consumers protection from abusive behavior. For example, debt collectors may not use threats of violence or harm, publish a list of consumers who refuse to pay their debts (except to a credit bureau), use obscene or profane language, or repeatedly use the telephone to annoy or harass someone. Debt collectors may not imply that they are attorneys or government representatives or that you have committed a crime or will be arrested. They may not misrepresent the amount of your debt or collect any amount greater than your debt, unless your state law permits such a charge. Debt collectors may not state that they will seize, garnish, attach or sell your property or wages unless the collection agency or creditor actually intends to do so. The debt collector must not telephone you at your workplace if your employer prohibits such communication or at any place known to be "inconvenient" to the customer. Calls at home are permitted only between 8:00 a.m. and 9:00 p.m. local time. You can stop a collector from contacting you by writing a letter to the collection agency telling it to stop. (Send all such correspondence via certified mail, return receipt requested.) Once the agency receives your letter, it may not contact you again except to say that there will be no further contact or to notify you that the collector or the creditor intends to take some specific action. However, sending such a letter and stopping the phone calls does not make the debt go away. You may be sued by the debt collector or the creditor. You should formulate a plan to repay your debt in a reasonable time frame with a monthly payment you can afford, and offer your plan to the collection agency. Once it accepts a repayment plan - in writing, of course - stick to it and pay off that debt! Know your rights! Read the entire text of the Fair Debt Collection Practices Act at the Federal Trade Commission website: www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#806. # # # Mike Schiano, "The DebtBuster" is a syndicated radio host and personal Finance Expert. Send your questions and comments. |
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 Q: Is the Cash for Clunkers program a good one to take advantage of? DebtBuster: Lena Pons, Policy Analyst, Public Citizen?s Congress Watch Division says the Cash for Clunkers? Program Yields Dubious Benefits. Here is what Ms. Pons had to say: "The program has been touted as a way to get cleaner cars on the roads while restarting sluggish auto sales. But the program is unlikely to be effective at achieving either goal. Its fuel economy benefits are vague, and NHTSA estimates that the increase in sales for each dealer will be only 12 vehicles. This number is probably an overestimate, since NHTSA has not attempted to account for purchasers who would buy new vehicles anyway. Under CARS, consumers who trade in cars and light trucks that get less than 18 miles per gallon up will receive $4,500 to buy a new vehicle from the program. A car may be traded in for a new car that gets as little as 22 miles per gallon; the owner of a large pickup truck that gets 15 miles per gallon or less may be eligible for a $3,500 voucher to purchase another large pickup truck of no better fuel economy if it is ?smaller or similar? in size. Already, dealers are jockeying for Congress to provide the program with additional funds. Auto dealer analysts estimate that the $1 billion already allocated will be exhausted by Labor Day. Appropriations for the program were deliberately limited so that NHTSA and lawmakers could determine whether the program is working before spending any additional funds on it. That approach from Congress is sound. Before providing another giveaway to an industry that has received $66 billion in bailout funds, we need to evaluate whether the program has any benefits. The only way to do that is to evaluate the trade-ins as they occur-but NHTSA?s regulations do not permit this. NHTSA?s regulations outline dozens of pieces of information it will collect to track how the program is working and to avoid fraud. But the regulations do not require it to make any of this information available to the public immediately. Instead, advocates will need to request the data from the agency, which will prevent timely analysis of the trade-ins by independent organizations before Congress considers additional funding for the program. NHTSA?s regulations also attempt to prevent fraud by requiring dealers to label vehicle titles with the words ?Junk Automobile, CARS.gov,? and requiring that the National Motor Vehicle Title Information System (NMVTIS) provide a classification for vehicles in this program. NHTSA will fine dealers or individuals $15,000 for each fraudulent transaction. Public Citizen has been involved in efforts to prevent fraud in the used car market and will continue to watch how this program interacts with NMVTIS." The real irony, in my opinion, is the fact that those so called "clunkers" will be resold to the public completely erasing any beneficial environmental effect, however small. With consumer credit in terrible shape, these cheap cars will be a haven for those who need transportation they can buy without a car loan. |
