Though the first contact with a collection agency that almost all lapsed borrowers notice remains the phone call – the first of many to come – there’s almost certain to have been a letter sent ahead of time. Debtors in such financial straits that they need to worry about bill collectors are often prone to ignoring what they honestly believe to be junk mail. Indeed, many collection agencies purposefully make the exterior of their letters of introduction seem like just another harmless sales promotion so that the initial phone call may come as more of a shock. Also, as a means of minimizing borrower embarrassment, the collection agency is not allowed to mark the envelope with any hint as to what the correspondence genuinely entails; government regulations even limits the size of the return address.
By law, however, the formal letter must come first and contain a Federal Trade Commission-specified list of information to aid the borrower in satisfying their debts fairly and prevent the collection agency from preying upon the fears of confused citizens. Foremost among the steps that the collection agency has to take would be a coherent explanation of the borrower’s rights. In other words, the bill collectors must admit that the debtors could at any time question the legitimacy of the loans and force the collection agency to submit a verification including copied documents given out by the original lender. Also, importantly, this initial correspondence must identify the bill collector as a bill collector and admit that any data garnered from future communications will be employed to further the recovery of a debt.
While the better bill collector posts will make it seem like they’ve been written personally to appeal to an individual head of household, they’re virtually certain to be one of thousands of near identical mass mailings. Typically, they begin somewhat conversationally before resorting to the more outrageous threats about lawsuits, bank account attachments, and the garnishment of wages. If a borrower immediately writes back offering some sort of payment schedule and asking about the damage to credit reports, it’s unlikely the nastier form letters will ever be sent. If, on the other hand, the borrower continues to avoid contact of any kind, the collection agent in charge of a given case file will push a different button on his computer and a succession of ever more terrifying missives shall be mailed to the borrower’s address.
Over time, collection agencies have had the opportunity to study the effects of different sorts of strategies to see which have been the most successful in forcing the recovery of debts from borrowers who’ve already demonstrated some unwillingness to pay what’s rightfully owed. By far, the most effective (and, therefore, now the most prevalent) method has been essentially falsified deadlines that attempt to impress upon the borrower some sense of time running out. Generally, the conditions of the ultimatum are willfully vague in case the scare tactics do not work since, in almost all instances, the only penalty for passing a deadline will be even more threatening responses. Above all, the repeated refrain of these letters will be a demand that the borrower contact the collection agency over the phone immediately in the hopes that person to person live communication will lead the borrower to making a mistake such as giving out bank account information. As a result, consumer rights organizations stress that you should only ever contact the bill collectors through the postal system so as to ensure you do not end up surrendering more than you wish.
