Consumers took on millions of dollars of credit card, medical, and other debt in the last five or six years, creating lots of work for debt collectors. But debt collectors say they are hurting along with everyone else in this recession, because fewer consumers are able to pay off those debts.
Apparently, more consumers are just "refusing" to pay their bills. Minneapolis debt collection lawyer William Hicks from Messerli & Kramer estimates a 25-40% drop in recoveries for some portfolios over the last sixteen months. According to University of St. Thomas professor David Vang, and finding out in the process that most debt collectors are really bluffing: "They really aren’t going to pursue their borrowers very hard."
Vang apparently does not consider harassment to be "very hard" pursuit by debt collectors. If debt collectors are recovering less, they seem to be trying harder than ever, if complaints to the Federal Trade Commission (PDF link) and the Better Business Bureau are any indication. Perhaps unsurprisingly, complaints about debt collectors are on the rise.
Collection revenues down; harassment up. Just a sign of the times.
Collectors hurt by recession as consumers walk away from unpaid bills | Finance & Commerce (via Caveat Emptor)
(photo: Wikimedia Commons)