Buy now, pay later

In pre-industrial society. 

Scotty: Procure 'em

Successful? According to Whom?

Judge ain't gonna like that advertisement on the left.

Long ago Collector Magazine advice

Are the stats higher or lower today?

Collector is a publication of 

ACA International

Old Advice Handout

A little overdone, but eye-catching and still makes the point.

Window Envelope Commentary

Envelope History

The envelope. The ubiquitous envelope.  The famous bill-containing window-type envelope.

Americus F. Callahan of Chicago, Illinois, received the first patent for a windowed envelope on June 10, 1902. Originally called the "outlook envelop", the patent initially anticipated using thin rice paper as the transparent material forming the window, though this material has since been replaced by clear plastics. The design has otherwise remained nearly unchanged for 112 years. Now it has been recently judged, albeit erroneously,  a window into a complete panoply of one’s  private credit, or shall we say one’s collection on-goings, not by showing a name-which, of course is allowed, but by showing one of over 4000 collection agencies’ or attorneys’ proprietary,  unknowable and esoteric  identification number .

Unintended consequences

In the federal policing of collection agencies and collection attorneys (over which virtually no one would shed a tear)  , the sometimes arcane and convoluted world of the Federal Fair Debt Collection Practices Act (PL. 95-109), the eleven decade old window envelope has finally been adjudicated a menace to privacy*.

This ruling does not affect the consumer's HIPAA privacy of health insurers' mail--or payments, or current 41 pounds of junk mail each person in the US receives every year (gulp, 100 million trees), but rather creditors’ third party representatives--collectors and lawyers, who attempt U.S.  Mail communication regarding consumer debts.  (Phone is a whooooole ‘nother but equally litigious problem)

Since 1978 the law has been basically a victim of the boiled frog theory. On its face, and on first reading, it appeared fair (the ironic first word in its name) for both consumers--the author was in the business pre-1978 and will attest that the industry  was unrestrained to say the least-- as well as legitimate collection agencies and attorneys—but what a gold mine for the manufacture of predatory legal community members’ fees.

Every time this law evolves via a hyper-sensitive ruling like the one mentioned above-specifically Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014), it’s another windfall for the legal representatives and their attendant and arbitrary “fees”.  Let’s face it, there is a place for this line of reasoning written into the law: notations such as government agency, important, immediately, now, can not only violate both the letter and the spirit of the law in making a consumer anxious and apt to react not in their best interest or worse—side-stepping the “least sophisticated” consumer’s right to dispute. In the 1970’s that we remember, by firsthand knowledge,  much worse was written on envelopes—thus the congressional thinking was to address this particular problem in the legislation.

However a proprietary and nondescript number appearing on the envelope has not harmed the debtor—nor does the debtor even know he was harmed until, with this ruling, a legal advisor informs him that, yes; he was indeed harmed and by law, could recover $1000.00 for their suffering. Wink, wink, nod, nod. “…You know, now that I think of it, yes, yes, I was harmed by the number ‘172883-182HHG-18-8-3G’, my  neighbors, any the public seeing the letter and my postman all may know that’s a collection agency or legal-type number” –shall we get started and sue?

Would it be wrong in stating the vast majority of suits have swept up legitimate agencies in minor and technical cases such as the above? Maybe. Also, there are probably hundreds of thousands of threats of lawsuits that were settled with the debtor’s legal advisor and never made it to the filing, or court argument stage. One attorney requested $5000.00 from our company, ten years ago for specious violations of the law—where it doesn’t even apply-on a commercial (business to business) case!

Even the consumer is affected by exorbitant legal costs

There have been times when too-precise wording and [mis-] interpretation by the consumer may have been detrimental to their situation. One such example, of many, is when they believe that if they tell the third party collector to cease and desist albeit with no explanation as to why, the collector will simply put their tail between their legs, close the file and go away. The reputable collector will cease;  but for fear of possible lawsuit, and to still protect the balance his client is claiming, he may recommend that his client, the creditor to whom the consumer allegedly owes money, that a lawsuit be instituted—thus causing increased time and expense for all parties, including the court system.

Business Conspiracy

George Bernard Shaw, in a play in 1906, first wrote the phrase, “All businesses are deemed conspiracies against the laity”-a very applicable quote to think about in your own business dealings—whatever they may be.

Is collection, by its definition and purpose more so? It is extremely doubtful-but arguable. Enter “car dealers” (an oft-derided industry) in your favorite search engine.  Not bad—many ads for dealers and deals. Then enter “debt collection.” Quite a Big difference. Debt collection searches yield all the ways a lawsuit or threat thereof will “stop them in their tracks” and assuage the debt. In fact, if the proper word string is typed in, you may get a particular attorney in New York who has made  YouTube videos where he has dubbed in individually, virtually  every collection agency and collection attorney in the metropolitan area (how did he find the time?). So the video says in effect (paraphrasing), “Have you been contacted by [xyz agency] recently? We will protect your rights and bring them to justice for their violations of the FDCPA” Or some such speciousity. 

Be aware that of the hundreds of thousands of lawsuits that have entered against collection agencies in the federal court system since 1978, there have indeed been numerous bad actors in the collection business—as in all businesses, and members of the collection trade association ACA International would be glad to root them out so all are not painted with the same brush. This could happen via an onerous suit or after numerous real violations, or their being dropped by their insurance company or Secretary of State Bonding Division—or in more egregious violations, the state attorney general.

Talkin’ Technicalities but nonetheless Dept.

The Fair Debt Collection Practices Act, 15 U.S.C. §1692f(8) (“FDCPA”), forbids debt collectors from putting on the envelopes of debt collection letters “any language or symbol, other than the debt collector’s address.”

* In Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014), the debt collection agency mailed the consumer a collection notice that contained the consumers' name, address, and a sequence of letters and numbers in (some accounts say a) “misaligned” clear plastic window on an envelope and poorly formatted letter, that let a QR Code (barcode) and a bare account number show used by the collection agency to internally track the consumer's collection account.

All of this information, including the internal tracking number, showed through the address window of the envelope. The Third Circuit ruled that the disclosure of the consumer's account number on the face of the debt collector's envelope was an impermissible language or symbol, which violated § 808(8) of the FDCPA.

The court was not technically wrong, only misguided. Keep those windows clean!

Watch your Christmas Spending...

Debtor's Prison - 1829

From Jenni's Birmingham Blog

Bleak House - Charles Dickens 1853

Recently a learned counsellor to the NJ state association, in a comment, referenced this book. It may be well to read it or re-read it. 

Remember “red tape,” in Dickens’s time, still bound legal papers

The case of Jarndyce and Jarndyce or any case for that matter can seemingly go on forever. 

Bleak House

The entry below is nearly 15 years old, but still relevant.

To Sue or Not to Sue...

By John Debold © 2000 

In collections, suit is sometimes a necessary remedy. But its not the only remedy and shouldn’t be the first.

Whenever possible you should try to avoid suit. Why avoid suit?

1. Because cost of litigation may not be practical.
2. Because a contested case may require a Plaintiff’s representative to appear in court.
3. Because a judgment may prove a hollow victory if the defendant has no assets.
4. Because (in some contested cases) it may trigger a counter-suit.

How to avoid suit?

Try to resolve any dispute that may be an honest block in the way of payment - It’s faster than court.

Negotiate. Even a small discount may be cheaper than court.

Offer special payment terms consistent with the debtor’s capacity to pay.

Get as much information as possible on new customers/patients on the chance that there is always the possibility of default.


When all else fails.

Your next move should be to call in a professional collection agency.

The collector has the training, experience, incentive and the technological tools to effect collection (most reputable collection agencies never charge a fee unless they collect.) He or she must move the debtor to a resolution in the quickest possible time for the collection to be profitable for his office (an attorney’s overhead usually makes it unprofitable to handle balances under $1000.00 or to pursue disputes, or to monitor part payers).

If the agency concludes that suit is the only alternative, you can be sure of their affiliation with the best attorneys specializing in the collection field.

And you can always call your professional collector with your questions.

Mark Twain - Bust

Mark Twain filed for bankruptcy in 1894. His debts were absolved. He paid his creditors back however. He went on an extended lecture tour in Europe for the next four years. He earned enough money from these speeches to pay back his "former" creditors. 

Ma

Debtor's Prison - Medieval Europe

During Europe's Middle Ages, debtors, both men and women, were locked up together in a single large cell until their families paid their debt. Debt prisoners often died of diseases contracted from other debt prisoners. Conditions included starvation and abuse from other prisoners. If the father of a family was imprisoned for debt, the family business often suffered while the mother and children fell into poverty. Unable to pay the debt, the father often remained in debtors' prison for many years. Some debt prisoners were released to become serfs or indentured servants (debt bondage) until they paid off their debt in labor

(above) A mid-Victorian depiction of the debtors prison at St Briavel Castle (left) in Gloucestershire England. From Henry Nicholls' 1858 book "The Forest of Dean"
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ASK Dr. Debt...

Our national association, ACA International has a great site for consumers' questions. It's called "Ask Dr. Debt." There's a good section for your questions on Credit Reports and Scores. 

There is so much we all could learn from this sometimes confusing area of credit.

Give the site a try.

Antique Collection Agency Tactic

Here's a good one that was definitely pre 1978 (the year the federal government enacted the Fair Debt Collection Practices Act, PL 95-109).



Can you tell what makes it illegal?







Here's another oldie from 1938... It wasn't a collection tactic, but rather an ad by Seagram whiskey to show responsible drinking. So basically, pay your bills first, then drink!






Thanks to Matt McGrath of Canada for giving his students this print many years ago.