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Next time debt collectors call, it may help to know that the collectors may be just as afraid of you as you are of them.
In July 2015, debt collection comprised 31 percent of consumer complaints to the Consumer Financial Protection Bureau. The CFPB reported that for 23 consecutive months, debt collection complaints outranked gripes about other financial products or services, such as student loans or credit cards. Consumers reported collectors for trying to collect a debt not owed, for lying, for threatening to send them to jail or sue them, and for calling at inconvenient times or at work.
Most legitimate debt collectors follow federal debt collection laws curtailing abusive behavior, but many have a few complaints of their own about being on the receiving end of bad behavior.
Take Michelle Dunn, a former debt collector and collection agency owner who's now a consultant and author of books for debt collectors, including "The Guide to Getting Paid." She remembers the day an angry debtor showed up at her office.
She was making collection calls in New Hampshire for a local heating oil and propane company. One customer was so late paying his bill that Dunn told him a driver from the company would stop by to pick up his propane tank.
"He hung up on me and drove over," Dunn says. "He came right into my office -- he was screaming and yelling." The man put his hands on her desk and leaned forward, shouting until his face turned red. Dunn tried to squeeze around the side of her desk, but couldn't escape.
The cops forced the customer out and came back every afternoon for a week to escort Dunn to her car after work. "It was shocking," Dunn says.
Who's collecting your debt?
While many debtors lie in fear of debt collectors, that angst goes both ways, says Dunn, who holds webinars to teach debt collectors the tricks of the trade.
Though about 75 percent of debtors are polite and cordial, that doesn't calm the anxiety of newbie debt collectors, Dunn says.
"Most people are nervous about making the calls, especially if they've never done it," she says, adding that many debt collectors want to avoid confrontation. "They're trying to learn how to effectively make those calls so it isn't so scary."
Doesn't sound like your image of a debt collector? That might be because some of the public perception of debt collection agencies is based on media coverage of the actions of scam artists and criminals posing as legitimate debt collectors, says Mike Bevel, an editor at insideARM.com, a debt industry publication.
"So, when a consumer gets a call from debt collection agency, they're primed to think, 'This is going to be the fight of my life,'" Bevel says.
Also, the collection industry is becoming somewhat kinder and gentler, partly due to the actions of the CFPB, Dunn says. For example, the industry has moved away from paying commissions and toward rewarding and promoting collectors who follow laws and regulations, says Terri Haley, a former debt collector who is now director of compliance at insideARM.com.
So who are these new debt collectors? Many come from customer service backgrounds, Haley says. The industry tends to attract job seekers looking for schedule flexibility, she says. "I started because I was a single mom," Haley says, adding that she needed to be able to be available to get her kids on and off the school bus.
When she owned her collection agency, Dunn says she hired former secretaries and hairdressers. "They're people from all walks of life," she says.
Collection jobs can include working in-house for a business -- such as a credit card company -- making calls on past due accounts before they get sent to collections. Debt collectors also can work for agencies, which range in size from mom-and-pop shops that collect for local dentists, doctors and hospitals, to "mega agencies" with thousands of collectors.
The average full-time debt collector job, including commissions, pays a modest $38,000 a year, according to ACA International. In fact, some debt collectors have firsthand experience with debt problems. That's what happened to Dunn when she got divorced and became a single mom of two boys.
She got behind on her mortgage, payments on a freezer the couple had bought on credit and on credit card bills. While she was going to work every day to make collection calls, her own phone started ringing. One debt collector tried to pressure her to pay a balance in full by implying she was a deadbeat, asking what her kids would think of a mom who didn't pay her bills.
"It was pretty horrible, so I know bill collectors do this," she says.
A day in the life of a debt collector
About a year ago, when Candace Ames (who asked her real name be withheld to protect her privacy) worked for a third-party agency collecting on bounced checks and overdrawn checking accounts, along with car, personal and student loans, she worked 20 to 30 accounts an hour, making about a call a minute. After a year, she quit.
She says it was "exhausting" to explain the same things over and over, such as that even if one spouse overdrew the joint checking account, the other was just as responsible for overdraft fees. "It was surprising how little people knew about their loan contracts or checking accounts," she says.
Collectors also face several other common stresses on the job:
- Getting cursed out. When Dunn opened her own small collection agency, her first client was a local veterinarian. She called a man who had an unpaid vet bill, and he started swearing at her. "I'm not paying that bill you [expletives deleted] -- my dog died!" the man told her. She tried calling him a few days later, and got an earful again. Ames says she frequently got cursed out by debtors, but would hang up and make a note on the account to warn the next collector, Ames says.
- Hearing wild excuses. In her books for debt collectors, Dunn gives advice on dealing with crazy excuses from consumers. The worst excuse Dunn ever got? One man told her he'd been at the post office ready to mail the check when a mugger grabbed the envelope. "I'd wonder, what are they going to tell me next week?" Dunn says.
- Dealing with bad behavior. Some debtors would play games, pretending not to know who Ames was, even though they'd spoken a few days earlier, Ames says. And some would answer the phone, then barely say a word. One man would always ask what Ames was wearing.
No matter how tough the job gets, debt collectors must follow the Fair Debt Collection Practices Act and cannot lose their cool or make derogatory remarks.
"I've had my life threatened, but I've also gotten thank you letters," says Dunn, as some consumers are appreciative of the help in figuring out how to get their balance paid off.
Inside tips from debt collectors
Now that you know that unpleasantness can go both ways, how can you use that to your advantage if you ever get a collection call? Here are four tips from the mouths of debt collectors:
- Know it's not personal. In her first collections job, Dunn made calls on past-due business accounts, which was easy compared to dealing with consumers, who tend to get emotional and take things personally, Dunn says. Remember, it's not. "This is a business call, that's all it really is," Haley says.
- Don't overshare. Facing a job loss, illness or divorce? You can describe your situation, but don't say too much. "Some people tell you their whole life story -- their mother-in-law is in the hospital, their husband lost his job and their dog just died," Dunn says. But divulging too many personal details -- for example, about the symptoms of a medical condition -- isn't necessary and won't help your case. "Because you're sicker than the man I spoke with an hour ago, I can't give you a better deal," Haley says.
- Don't be afraid to ask for a supervisor. If you're trying to work out a payment plan or other settlement that fits your budget, and the collector says no, ask for a supervisor, Dunn says. If the collector doesn't have the authority to agree to a plan that works for you, the boss might, she says. Before you get transferred, ask for the supervisor's name and extension. "Then next time you can skip the person who couldn't make a deal with you," she says.
- Know the collector is not your friend. The most successful debt collectors take a collaborative approach, listening and suggesting ways you might be able to pay your bill. So, remember that even the most affable debt collector's interests are different from yours, says Jared Strauss, who owns a debt settlement business and worked as a debt collector years ago. Take your time and look at your overall financial picture and all of your debt before agreeing to anything, he says. "Do the math and figure out if there's a way to tackle everything at once," he says.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
