No, not Congress! The vulture collection agencies. What are vulture collection agencies? I happen to know from personal experience. A vulture collection agency is a collection agency that buys collection accounts from other collection agencies. Huh? Here’s how it works:
If you get into a dispute with a creditor and a collection or judgment gets placed on your credit report, a collection agency is usually hired to help collect the debt for the creditor. If the collection agency is unsuccessful in collecting payment, the account gets written off as uncollected, eventually. It will still show up on your credit report, and would cause you a problem in getting a mortgage, no matter how small or large it was. However, some people do not settle these out of anger, spite and hatred towards a creditor they usually feel has wronged them. Then, sometimes, along comes the “vulture collection agency.” They buy the rights to collect the collection account from the first collection agency, often times for pennies on the dollar. Then they try some more harsh techniques to collect, and if they collect a dime on each dollar due, they have a huge profit margin! A few years ago I read articles that vulture collection agencies were some of the highest profit margin businesses around.
I want to tell you my real life story. In 2001 I had a land line telephone account (I know, old school, huh?!) with Sprint Long Distance. They charged me .10 cents a minute for long distance. I got a bill in 2002 for $1.00 a minute, which was a mistake on Sprint’s part. Long distance has not been $1.00 a minute for decades! So I called Sprint, they assured me I only owed $42.63 and not $426.30, so I paid the $42.63 and forgot about it. Five years later in 2006, you guessed it, Sprint Long Distance sent me a bill for the difference between $42.63 and $426.30. You would not believe the run around, the hours I spent, the angst, the bureaucracy, and the insanity that I had to endure! I had people tell me verbally that I did not know any more money, but no one put it in writing. After about 30 hours of phone calls, emails, letters and hard work over three months; I simply decided not to worry about it. I was fed up. I stopped responding, and forgot about it. Bad idea.
Fast forward another three years to 2009, and I found out I had a collection account on my credit report. My credit score had dropped 60 points as a result! I was incensed! After getting a lawyer involved, and pointing out the statute of limitations was long past, they took the collection off of my credit report. Problem solved, right? No! Six months later I found out that collection agency #1 sold the collection account to a vulture collection agency for pennies on the dollar. I would then get letters and calls saying, “if you’ll just pay $120 we can resolve this”. My answer was, “no”. The response, “if you’ll just pay $80 we can resolve this”. My answer was, “no.” “if you’ll just pay $40 we can resolve this”. No! “if you’ll just pay $20 we can resolve this”. No! I figured they must have paid around $10 for the collected account, and at $20 they still would have doubled their money. I got the same lawyer involved that helped me with the first collection agency, and they went away. But now I feel like I have to look over my shoulder, and check my credit regularly, to see if some other scamming, conniving, lowlife collection agency will come after me.
The moral of the story? Never ignore your credit or your creditors! Resolve all issues, or else be ready to fight for your rights!