Their isn’t a category for this, but here goes. The American private debt collection industry is a multi billion dollar leviathan that uses harassment and, at times, strong arm tactics to collect unpaid unsecured debt from medical bills to overdue credit cards. If the first company cannot collect, they package the debt and sell it to another company, and so on and so on and this can go on for decades.
Many people do not realize that every state has a statute of limitations for every sort of debt: Once the last payment you made moves past that amount of time, the debt can no longer be legally collected. These companies know this, and coerce people to promise payment on recorded phone calls or make a small payment, which resets the statute of limitations to make the debt legally collectible.
Once a debt is FAR past the point of being legally collectible, their are agencies still trying to reset the clock and collect this debt. These are the zombie debt collectors. They tend to be the agencies that bend the consumer protection rules the most and use the most aggressive tactics to collect.
If they can reset the statute of limitations, their are numerous debt collection Attornies in every state that work strictly for the legal fees. For instance, in Louisiana an attorney can ask for up to 25% of the entire debt as their fee.
Most debt collection suits go unanswered, because most people that were unable to fully pay their bills also cannot afford and attorney and most have not idea how to defend themselves. This results in a summary judgement and the attorney getting the full 25%. The attorney then earns a percentage of the debt they collect via garnishments, levies, and even the forced sale of a person’s unprotected assets.
Their needs to be federal legislation banning the sale of unsecured debt that has been sent to collections if said debt is older than 6 years old; which is on average the longest statute of limitation in most states for this sort of debt. People do not need to live with constant harassment over a debt that has not be legally collectible for years.
Ban Zombie Debt and Debt Collectors by Codifying a Federal Statute of Limitations for unsecured debt
We need to get rid of collection agencies altogether. If a company is owed debt, let them handle the issue through their own collection department without outsourcing. All correspondence needs accurate entries. A paper trail of all billing, phone calls and documentation needs to be recorded. End “Sewer Service” as well. The Collection Agencies CLAIM that they have served you, but in reality, they do not. You only find out when you receive a “second” notice of court hearing while never receiving a first one. My experience was billing for services not rendered, yet they claim you have to pay “the debt” in order to have the billing corrected. These conglomerates have gotten away too long without being held responsible for their compartmentalization of departments without actually taking care of the discrepancy. It IS a form of harassment and must be stopped.