Debt Collection Reforms Are Needed
If a man could not pay a debt in biblical times, the collector cut off his hand. Today, debt collecting remains barbaric. People go to jail over less than $100. Collectors threaten violence and demand sex for repayment. Abusive language is the status quo.
My family and I were targeted by hostile debt collectors after a business failure many years ago. That awful experience showed me there must be a better way to collect debt. So I started my own debt collection business in 1986, and it became the world’s largest. I’ve been on both sides of this $40-billion industry, and I know it’s out of control.
Getting It Right
Massachusetts was the epicenter of the issue on May 18. Attorney General Martha Coakley hosted a public hearing on tougher regulations for debt collectors. The changes come as consumers struggle to pay ever-mounting credit card bills and complaints against collectors soar.
Americans filed 17 percent more debt-collection complaints in 2010 than they did in 2009. Total complaints reached 140,036, according to the Federal Trade Commission. The Consumer Financial Protection Bureau is training its sights on this shifty sector.
I never imagined when I first started that I could make a fortune purchasing and collecting on bad debts. I did know from my own experience that people will pay what they can if they are treated fairly. This is not some academic theory. It’s based on the 4.5 million debts my company has resolved without a single lawsuit. This conclusively proves that people will pay what they owe if they are treated with dignity and respect.
It’s a fairly simple model, but many in my industry don’t follow it. Each day, collectors harass, trick and threaten people. They prey on the elderly, uneducated and vulnerable. They answer to nobody.
Coakley’s amendments will protect consumers and level the playing field for debt buyers, both of which will only improve the business environment in Massachusetts. The new provisions will adapt to changing communication technology (social media, texting) and further prohibit abusive collection practices. They also will forbid creditors from collecting on time-barred debt without required disclosure and close other loopholes.
Usually the business world is repelled by the word “regulation.” Nobody wants more red tape to hamper business and make their jobs more cumbersome. I may be a lone voice in the collection industry in favor of these changes. But I am proof that debt collecting can be an effective business where nobody gets hurt.
I also understand the world of business, having been named National Entrepreneur of the Year and having creating 10,000 jobs over the course of my career. Coakley’s amendments are a big step in the right direction. Elected officials in other states need to understand the scope of this problem and take action as well.
Bill Bartmann is the president and CEO of the Tulsa, Okla.-based debt collection firm CFS II. He can be reached at bill@billbartmann.com.
WBJ Web Partners
Most Recent
Most Recent
0 Comments