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Friday, July 18, 2014

Overzealous or Legitimate Debt Collection Practices

By Myanna Dellinger

A woman owes $20 to Kohl’s on a credit card.  The debt collector allegedly started to “harass” the woman over the debt, calling her cell phone up to 22 times per week as early as 6 a.m. and occasionally after midnight.  What would a reasonable customer do?  Probably pay the debt, which the woman admits was only a “measly $20.”  What did this woman do?  Not to pay the small debt, telling the caller that they had “the wrong number,” and follow the great American tradition of filing suit, alleging violations of the 1991 Telephone Consumer Protection Act which, among other things, makes it illegal to call cell phones using auto dialers or prerecorded voices without the recipient’s consent.

Consumer protection rules also prohibit collection agencies from calling before 8 a.m. and after 9 p.m., calling multiple times during one day, leaving voicemail messages at a work number, or continuing to call a work phone number if told not to. 

Last year, Bank of America agreed to pay $32 million to settle claims relating to allegations of illegally using robo-debt collectors.  Discover also settled a claim alleging that they violated the rules by calling people’s cell phones without their consent.  Just recently, a man’s recorded 20-minute call to Comcast pleading with their representative to cancel his cable and internet service went viral online.

The legal moral of these stories is that companies are not and should, of course, not be allowed to harass anyone to collect on debt owed to them or refuse to cancel services no longer wanted.  However, what about companies such as Kohl’s who are presumably owed very large amounts of money although in the form of many small debts?  Is it reasonable that customers such as the above can do what she admits doing, simply saying “screw it” to the company and in fact reverse the roles of debtor and creditor by hoping for a settlement via a lawsuit on a questionable background?  Surely not. 

I once owned a small company and can attest to the difficulty of collecting on debts even with extensive accurate documentation.  The only way my debt collecting service or myself were able to collect many outstanding amounts was precisely to make repeat requests and reminders (although, of course, in a professional manner).  As a matter of principle, customers should not be able to get away with simply choosing not to pay for services or products they have ordered, even if the outstanding amounts are small.  If companies have followed the law, perhaps time has come for them to refuse settling to once again re-establish the roles of debtor and creditor.  This, one could hope, would lead irresponsible consumers to live up to their financial obligations, as must the rest of society.

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