“FTC proposes new guidelines for collecting debt from dead people“, reads the Washington Post’s headline. As it turns out, debts don’t die with the debtor, and debt collectors don’t let a little thing like a funeral slow them down. They keep calling, implying that relatives ought to discharge the deceased’s “moral obligation” to pay the debt, even if that means paying it out of their own pockets.
The proposed FTC rules would make it clear a debt collector may not talk about moral obligations or try to get relatives to pay the debt themselves. But the proposed rules may also weaken the Fair Debt Collection Practices Act’s prohibition against discussing a debt with third parties.
You can read the proposed rules or submit a comment to the FTC before December 1, 2010.
Words fail me. Landlord Asks Mother To Pay “Early Termination Fee” After Son Fails To Honor Lease By Dying | Consumerist
The New York Times article on debt collectors who shake down the living for the debts of the dead made a big splash nationwide. It was an especially big deal in Minnesota, since DCM Services, featured prominently in the article, is a Minnesota company. KSTP, channel 5 in the Twin Cities, interviewed me for their follow up to the story:
[Video no longer available]
Morally sound? Golden Valley company collects debt from the dead | KSTP
Debt collectors love the dead. In Minneapolis, DCM Services (that’s “Deceased Collection Management”) specializes in shaking down grieving relatives for cash. Those relatives usually have no obligation to pay, but they often do, just to stop the collector from calling.
“Dead people are the newest frontier in debt collecting, and one of the healthiest parts of the industry” says the New York Times. DCM Services says it collects with the utmost sensitivity to the grieving human being on the other end of the line.
But, of course, it will not come right out and tell the innocent victims that they have no obligation to pay, and they will not stop calling.
The worst part?
DCM executives say some of the survivors not only gladly pay but write appreciative notes. They offered up a stack, with the names deleted, as proof.
One widow wrote that a collector “was so nice to me, even when I could only pay $5 a month a few times.” Saying that money was “so tight” after her husband died, she added: “It was very hard for me, and to get a job at my age. Thank you.”
You’re Dead? That Won’t Stop the Debt Collector | New York Times
(photo: Curious Expeditions)