You should record all collection calls if it is legal for you to do so.
You need to keep a record of any agreements you make with the debt collector (like a payment plan) or promises the debt collector makes (like stopping collection activity while you are current on your payments). Without a recording, any agreements or promises will be difficult, if not impossible, to prove.
You also need to protect your legal rights. If a debt collector violates the Fair Debt Collection Practices Act during a call, you need to be able to prove what they said or did to violate the FDCPA. And if a debt collector does violate the FDCPA, you are entitled to up to $1,000 — or even more for egregious violations. A jury in Texas awarded [$1.5 million for 8 especially racist voicemails](](http://caveatemptorblog.com/3627/jury-awards-1-5-million-to-consumer-abused-by-debt-collector/). While that sort of verdict is far from ordinary, the point is this: it can be well worth your time and a little bit of money to record your calls.
Yes, it is technically illegal to put people in jail for not paying a debt. However it is perfectly legal to put people in jail if they don’t pay a court fine, which isn’t technically a debt because a court isn’t technically a creditor. Even though you owe money to it. Make sense?
No, not really. Because whatever you call it, you can end up in jail if you don’t pay it.
I have a quibble with this quote from the New York Times‘s Jessica Silver-Greenberg, which she uses to set the stage for her reporting on the Encore Capital Group settlement:
The same problems that dogged the foreclosure of homes — and prompted public outcry and a multibillion-dollar settlement by some of the nation’s biggest banks — are increasingly showing up in the practices of large buyers of bad consumer debt.
Debt buyers were engaging in assembly-line litigation long before the foreclosure firms started. I’ve been writing about it here for years, but it’s just never gotten the same kind of exposure as the foreclosure industry’s callous disregard for the courts briefly did.
From the Washington Post:
The measure, championed by Senate Democrats, would cut Pell Grants in order to free up money to pay companies that collect student loans on behalf of the Department of Education.
Sounds like robbing the poor to give to the rich.
That title is a little over-simplified, so here is the ABA’s actual summary from Formal Opinion 469:
A prosecutor who provides official letterhead of the prosecutor’s office to a debt collection company for use by that company to create a letter purporting to come from the prosecutor’s office that implicitly or explicitly threatens prosecution, when no lawyer from the prosecutor’s office reviews the case file to determine whether a crime has been committed and prosecution is warranted or reviews the letter to ensure it complies with the Rules of Professional Conduct, violates Model Rules 8.4(c) and 5.5(a).
Basically that says prosecutors who just hand off their stationery to a debt collector (to collect parking fines or fines for bounced checks, for example) are engaging in unethical conduct. If they want to do this, then a lawyer from the prosecutor’s office has to actually take the time to review each file to determine whether a threat of prosecution is actually warranted.
Felix Salmon built Bad Paper around Jake Halpern’s book and New York Times Magazine piece of the same name. By playing the game, you can put yourself in the shoes of a debtor or collector and explore the different scenarios. You win when you get the case dismissed or collect a judgment.
It’s an interesting exercise, but the game is misleading about what it takes to win in court. According to the game, all you have to do is show up in court and say “Excuse me: Where’s the proof that this is my debt?” to the judge.
Two weeks ago, it was big news when a Salt Lake City school took lunches away from students when their card was declined at the register. (Students at many schools use a card to buy lunches, and parents are responsible for depositing money to the student’s lunch card account through the school’s website.)
It turns out that many Minnesota schools do the same thing. According to the StarTribune:
A majority of public school districts in this state deny hot lunch — or any lunch at all in some cases — to children who can’t pay for them. Some schools take the meals from students in the lunch line and dump them in the trash when the computer shows a deficit in their lunch accounts.
A “child-nutrition manager” in Salt-Lake City, notified of an unusually-large number of students who owed money for lunch at Uintah Elementary School, came up with a brilliant plan: take away their lunches. Students with delinquent school-lunch accounts went through the lunch line as usual, but when their card was declined at the register, the lunch-room staff tossed their meal in the trash.
Several parents told the Salt Lake Tribune that they were not notified that they owed money for their children’s lunches. It doesn’t seem like anyone was notified that their children would have their lunches taken away from them, either. The school has said it is “currently investigating to see if [notification] guidelines were followed correctly.”
The Minnesota interest rate for debts due to overdrawn bank accounts is 6%. Bradstreet & Associates was trying to charge 21.75%. According to Minnesota Attorney General Lori Swanson,
Since 2009, Bradstreet and its predecessor company bought at least $18 million in debt that originated with Wells Fargo and U.S. Bank. This affects, we believe, at least 16,000 Minnesota consumers.