Dirty Tricks Used by Student Loan Debt Collectors
Not once, not twice, but multiple times. They don’t give up! That’s how debt collectors use unfair, sometimes even illegal, tactics to get their payments back. However, with student loans, these collectors have an advantage. Student loans cannot be discharged due to bankruptcy. Also, depending on the type of loan you took out, it’s possible that payments can be made by attaching your wages and Social Security check deductions. Borrowers of these loans also lack leverage when dealing with the collectors. The huge loans burdening young Americans is a reason why they’re unable to take off as independent adults. With studies showing that 1 in 3 young American adults between 18 and 31 still live with their parents. Without any further ado, here are some of the unorthodox methods debt collectors use.
Odd Hour Calls
It’s annoying enough for a friend to call you up late in the night when you’re asleep, but when a student loan debt collector calls you at such odd hours, it’s an unfair practice, rude and wrong. In a Consumer Financial Protection Bureau examination, one of the student loan debt collectors had an automated dialer that placed calls to defaulters either late in the night or early in the morning. This, the CFPB, terms as unfair practice and harassment.
The same examination revealed that at least 5,000 calls were made at odd hours within 45 days.
Requesting Bank Account Information -Besides calling you during out-of-the-ordinary hours, debt collectors will try and persuade you to give them your bank account details, debit card details, or your checking account. Their argument is that this info makes it will be more convenient for you to pay off the debt as fast as possible. They sometimes claim to help you clear any late payments and then take over the mantle from there. This is a scam. In fact, they’ll take more than what’s required and wipe off your account to pay off any balance leaving you with nothing in the account.
Demanding Payment on Priority Before Others.
Some collectors try to convince you to pay their debts first. This means ignoring bills from other debtors and using that cash to pay off a select debtor. By all means, this is not a good idea because you’ll simply switch from one debt to another. In some instances, you might end up in more difficult situations financially. What’s more, if you choose to ignore credit card debts to clear a student loan, you’ll invite trouble from other areas.
Refusing to Send Settlement Offers in Writing
First off, anything in writing provides a paper trail for when you might evidence to challenge any entry. When dealing with collectors, it’s important to have everything in writing, including settlement offers. If you haven’t received anything in writing, for example by email or letter, don’t send anything to the collector.
Should you send any type of payment without a written consent or agreement between you and the collector, the latter will take your payment and will be on your neck soon after. If they don’t send an agreement in writing, it means they were never serious in the first place.
On the other hand, if you receive an agreement in writing, make sure you file along with the payment checks you make within the settlement. Some collectors will revive settled debts and then haunt you into paying them again. According to a CFPB report in 2014, at least 4,262 people filed complains about harassment by collectors on debts that were already cleared.
Asking for Postdated Checks
Don’t fall into the trap of sending post-dated checks to a collector, either They may promise to cash the checks on the specific dates corresponding to the date indicated on the check, but that’s not what happens. The collector will cash each check the moment they get it. What’s worse is that you can’t do anything since you owe them money.
Calling Your Work Place
The debt collectors will even go a step further by calling your workplace, specifically the payroll department. Their main aim is to verify whether you work at the company. If so, they’ll try and find out whether the person on the line can process make your wages pay for realistic loans, a process called garnishment. The process isn’t illegal but will be if they disclose details about the debt. This is a tactic aimed at scaring the borrower into thinking about a possible garnishment of wages, which is the same as attaching them.
False Reports to Credit Bureaus
According to the Ontario Consumer Reporting Act, any unpaid account should be scrapped from the credit report after 6 years since the last payment was made. But collection agencies don’t always adhere to this. Instead, they use a dirty tactic to keep the six-year cycle going. These agencies make non-existent payments or even make a small payment to indicate that payment was made by the borrower to start the six years again.
Late Fees While on Grace Period
Like student loans, some loans have a grace period after the due date. If you make a late payment, but within the grace period, then you shouldn’t suffer from late fee penalties. However, CFPB found that a number of lenders charged late fees to borrowers who made payments while on the grace period.
Conclusion Clearing debts are crucial to unlocking a financial freedom and stability in life. But with such underhanded tactics employed by various debt collectors, it is important to understand how they work so that you stay in control of the situation. With these tactics exposed, you will be able to dictate your own terms.