If the thought of getting a debt-collection call gives you the chills, you’re not alone. The Consumer Financial Protection Bureau reports that debt collection is one of the top complaints for older Americans.
A recent CFPB report shows that older Americans voiced more complaints about debt collection than any other financial product or service. Of the 8,700 complaints made from July 10, 2013 to Sept. 30, 2014, one out of three were about debt collection.
Debt collection is big business. According to the bureau, approximately 30 million Americans had, on average, $1,400 in collections last year. Debt collectors make it onto the list of some of the financial woes older Americans complain most about. A few of the issues that get under their skin are repeated calls about medical debt, making an attempt to collect on debts of family members who have passed away, and making illegal threats to garnish federal benefits.
In response to this issue, the CFPB released an advisory to assist older Americans with debt collector harassment. Says the CFPB in a statement, “Some older consumers say they are unable to afford debt payments especially when they are retired and live on a small fixed income. They also express concern that the distress of being harassed by a debt collector aggravates existing medical conditions, and thereby endangers their health. The CFPB has recently noted that older adults with cognitive impairments are particularly vulnerable to harassment and scams, especially when seniors have memory problems or cannot keep track of finances.â€
Some of the research findings:
- Collectors are harassing older Americans about medical debt. Older consumers say they experience confusion and frustration because collectors attempt to collect medical expenses while the consumer is also attempting to correct billing mistakes or waiting for providers and insurers to resolve medical disputes.
- Many debt collectors have made attempts to collect on debts of deceased family members. Even worse, many consumers say the collectors continue to harass them even after they’ve been informed that the consumer is not personally responsible.
- Some collectors are downright sneaky. Older consumers say debt collectors sometimes threaten to garnish Social Security, Supplemental Security Income or Veterans’ benefits. However, these funds are not usually subject to garnishment by collectors.
The CFPB offers this advice:
- Protect your federal benefits: Most federal benefits are protected in debt collection. Also, when federal benefits are received by direct deposit to a checking account, the bank or credit union is required automatically to protect up to two months of these benefits. If the consumer receives benefits on a government issued prepaid card, they are usually protected as well.
- Dispute inaccurate debts: Many consumers complain that they inform collectors that they don’t owe the debt, do not recognize it, or believe the amount is incorrect. The CFPB provides a sample letter to contact the debt collector in addition to tips for disputing the debt.
- Stop harassment: One of the most common complaints is that debt collectors use abusive tactics to intimidate consumers into making payments. Older consumers complain that debt collectors make constant calls using profanity, condescension, indignation, or rage. The CFPB includes a sample letter that consumers can send to request that debt collectors cease collection communications.
For more on this topic, see Dealing with Dirty Debt Collectors.