Debt Collection Powers Up Against the Consumer

As Americans become more and more reliant on debt, it is only natural that delinquincies on this debt would rise. The issue for consumers in debt is not only that the chance of delinquincy is rising, it is that the army of collectors chasing them is increasing with it. In the last decade, the number of debt collectors in the U.S. has doubled, to over 160,000.

Debt collection has become big business and is one of the fastest growing sectors of the financial services industry. Markets for once uncollectable debt are maturing, with opportunistic companies purchasing old credit card and auto debt at cents on the dollar. The majority of these debt collectors are fair and reasonable; however, there are some who consistently cross the line of fairness.

In certain areas of the country, the small claims courts have become veritable extensions of collection companies. The sheer volume of lawsuits over credit card debt grants latitude to collection companies for such documentation as proof that the debt is actually owed. Granted, in most situations, the consumer actually owed the original balance of funds. However, beyond the standard issue of compounding fees and interest, is today an increasingly fierce collection process.

Lawsuits are filed and notification is given to the debtor, but what if the consumer address has changed? Most collection companies use prudence and care in their diligence to ensure the consumer is properly notified, however, many move forward regardless. This finds many consumers waking up to early A.M. sounds of a tow truck seizing their vehicles. The court date had came and went, without the consumer ever knowing about it. By the time they realize it, it is too late.

The moral of my thoughts today is that with the rising delinquincy rate comes a consumer debt collection industry that is becoming more and more aggressive, and consumers should be prepared for it. Large credit card companies no longer simply "write-off" bad debts; these days this bad debt is sold to companies who make it their business to collect it. Unfortunately, in many cases this translates into tougher and tougher tactics against the consumer.