Debt and Its Discontents: The Depressing World of Collections, Part One

This series is by Patrick Sahr, a Naked Capitalism reader and a former debt collector. Sahr is a graduate of Buffalo State College’s Print Journalism Program. This series is running because it’s important to understand the culture of debt collectors, who are increasingly a form of policing in our society. One in seven Americans is currently being pursued by a debt collector.

Admittedly, my perspective on the Great Recession is especially negative.  My excuse is that I’m from Buffalo, the nation’s third poorest city, where I’ve set fire to my career in the miserable business of debt collections.  I have no future business plan in place other than avoiding the grim, dull and brutal world of third party debt collection.    The whole experience has given me a seemingly incurable case of existential paralysis, where the future appears bleaker than the past and the past was pretty bleak.   From this vantage point, while shopping for careers, it appears the entire economy has adopted the characteristics of the collection agency: rude, short-sighted, greedy, corrupt and pathetic.

The clipped nature of customer relations, the constricting focus on short-term profits and the sarcastic vulturing of remaining wealth have long been features of the collections industry in good times and bad.  Now we see these features in the “race to the bottom” with cost-cutting regional airlines and in the arbitrary fees assigned to our cable and electric bills.  Is it only in a recession where these features of corporate behavior divine themselves in other industries?

The General Function of the Collection Agency and Individual Commission Structure

A little about collections for the unfamiliar.  The collection agency purchases or leases debt from banks, credit card companies, virtually any company that issues financing as well as debt purchasers, companies that act as debt wholesalers to collection agencies.   The agencies then load the individual account information into a software program linked to an automated dialer.  An army of phone drones in comfy cubicles then extract money from these delinquent accounts.

This is labor intensive as you only make contact with maybe fifteen targets out of 200 calls or more.  Of those fifteen only three will agree to pay.  Of those three, one will bounce a check and avoid future calls.  The business model is pretty simple.  The accounts are purchased for pennies on the dollar and you turn a profit once you’ve collected more than you paid for the portfolio of debt.  Your overhead is mostly the army of collectors, whose starting base pay is low and bonus is generally 2 percent of the overall collected at larger agencies.

The agency usually pays 5 to 20 percent of “fee” to the collector, which is usually 20 to 40 percent of the overall amount collected.  So if the collector collects $35,000 in one month, generating (at 35%) $12,250 fee for the agency, the final payoff is anywhere from $800 to $1350 for the collector depending on the agency.  Not bad.  That’s why people in Buffalo do it.  In addition to the hourly wage, they pay a bonus that you’re not going to earn as a security guard or a bus driver no matter how much overtime you put in.

Buffalo: Former Manufacturing Mecca Turned Collections Capital of the World

The debt collection industry is huge in Buffalo and has been for almost twenty years.  There are approximately 5,000 bill collectors and over 100 agencies in Buffalo.  Buffalo, a working-class legacy city with a population of 260,000 and falling, is not the manufacturing mecca it was in the 1940s.  Manufacturing has slowly disappeared over the last thirty-five years and the city has struggled to find a new identity and defined purpose.  Buffalo is a remarkable place with many and varied cultural attractions, distinct architecture and great restaurants, but the high cost of doing business along with high taxes, corrupt poltics and inhospitable winters outweigh the less obvious virtues and discourage industries from situating here.

At its peak, Bethlehem steel employed almost 20,000 people in a massive facility not far from the shores of Lake Erie.  That facility is a brownfield now and Buffalo’s economy is scattered and unmoored, corralling a large working-class with dim prospects, low income and less resources to fund the aging and oversized infrastructure in the absence of large-scale manufacturing.  The call center economy proliferated in Buffalo largely because of cheap and available workers and office space, the sorts of incentives that don’t entice reputable, growing industries to the area.

Collection agencies and call centers have replaced some of the jobs vacated by manufacturers, but the compensation is far less and the jobs themselves are unstable.

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About Matt Stoller

From 2011-2012, Matt was a fellow at the Roosevelt Institute. He contributed to Politico, Alternet, Salon, The Nation and Reuters, focusing on the intersection of foreclosures, the financial system, and political corruption. In 2012, he starred in “Brand X with Russell Brand” on the FX network, and was a writer and consultant for the show. He has also produced for MSNBC’s The Dylan Ratigan Show. From 2009-2010, he worked as Senior Policy Advisor for Congressman Alan Grayson. You can follow him on Twitter at @matthewstoller.


  1. Jim Haygood

    Those who aren’t articulate enough to work the debt collection phones can always sign up to fight in Afghanistan.

    It’s called ‘career choice.’

      1. The Dork of Cork

        We hate them for their Fiefdoms.

        This is a natural consequence of the Post 1980 Volcker world.

    1. Up the Ante


      It’s called ‘career choice.’ ”

      The Spoofers would call it love of country. I’ll save myself the trouble and fix it now. It’s called Love of Corruption.

  2. Clive

    “From this vantage point, while shopping for careers, it appears the entire economy has adopted the characteristics of the collection agency: rude, short-sighted, greedy, corrupt and pathetic…”

    Wow Patrick, you really do speak for many of us — in places further away than you might imagine. I wonder just how many of us can echo your experiences as you relay them in your feature ? As someone who grew up in the often troubled but still basically optimistic 1970’s, it’s definitely not the future we thought we were going to get.

    But the what — and how — of changing things for the better… that’s the challenge. I must confess to being somewhat short of bright ideas on that score.

    Still, I hope that you find a better life tomorrow than you have today. Perhaps that’s the one enduring export from America — try as we might, we can never really truly give up on hope. No matter how much (and that’s you I’m looking at, Obama) that concept gets betrayed.

    Good luck,


  3. damian

    would be interesting to do a psychological profile on the city population with so many workers in one industry dedicated to creating negative energy for 20 years.

    is there a lot of drinking and drugs? do they beat their wives and kids? what do theyd do for recreation?

  4. Jack Hammersmiller

    Weird post. Being a Legal Aid attorney and someone who, from time to time, aggressiveness pursues debt collectors for their harassment, often winning very significant judgments, I find this perspective odd. Not trying to disparage anybody, but most of these companies are downright despicable, and most of them are breaking the law constantly, as all states I know of have criminal statutes against telephone harassment.

    While it may be said that crime does pay, that doesn’t mean I’m going to cry for people who turn to shaking people down because they can’t bring themselves to move somewhere else. I hope that’s not where this series is gong.

    1. Faith

      Jack, I think you’re missing the point. For one thing, it is so easy to move to a different city. Moving takes money and/or some kind of connection. You have to figure out where you’re going to live, how to pay for it and of course, have a job in the first place. If you’re broke and under/unemployed, it’s not so easy to move unless you have relatives or friends in a different city with a better economy. Not to mention that employers are almost always going to hire someone from the geographical area they’re in before hiring out.

      As for shaking people down, I get the sense that collectors don’t like what they do. If they did, there wouldn’t be such a high turnover in that industry ( I’m sure many would love to do anything else but that. We need to look at the economic system that allows these companies to thrive so much off the misery of both their employers and the debtors they harass.

        1. Jack Hammersmiller

          Having moved from one city to another before, it’s really not that bad. I refuse to cry for debt collectors. People choose their work. People choose debt collection because it pays well. As I said before, yes, crime pays, but don’t ask me to cry for them when they get depressed. They are criminals who just happen to avoid jail most of the time. Most criminals probably don’t like their job, and a lot of them are depressed. But there is a big difference between crimes with little to no victims and shaking people down like debt collectors do. I do feel bad for their victims though. Those people are depressed for a reason. They have criminals calling them over and over, and that’s depressing.

          § 240.30 Aggravated harassment in the second degree.
          A person is guilty of aggravated harassment in the second degree when,
          with intent to harass, annoy, threaten or alarm another person, he or she:
          1. Either (a) communicates with a person, anonymously or otherwise, by telephone, by telegraph, or by mail, or by transmitting or delivering any other form of written communication, in a manner likely to cause annoyance or alarm; or
          (b) causes a communication to be initiated by mechanical or electronic means or otherwise with a person, anonymously or otherwise, by telephone, by telegraph, or by mail, or by transmitting or delivering any other form of written communication, in a manner likely to cause annoyance or alarm;…
          Aggravated harassment in the second degree is a class A misdemeanor.

    2. scraping_by

      Jay Gould famously said, “I can get one half the working class to kill the other half.”

      In our enlightened age, substitute ‘harass’, ‘pursue’, ‘threaten’, ‘intimidate’, ‘club’, ‘spy on’,’arrest on no grounds’, and a whole lot more.

    3. Ray Phenicie

      “but most of these companies are downright despicable, and most of them are breaking the law constantly, as all states I know of have criminal statutes against telephone harassment.”

      But unless court action is taken, they illegalities will continue. The police are not going to get involved as they can’t make a determination of what constitutes legal evidence of proof to pay or proof of ownership when the issue is a dispute over putative violation of contracts. Some of the illegalities, as I point out below, are kindred to the Sicilian Mafioso with harassment, stalkings, intimidation through followings and gang up appearances on streets and the roadways.

      I suspect you are incorrect about the numbers involved; my research shows that the original owner of a debt almost always follows their own in house collection actions first. Then the debt is sold of to the highest bidder, with the first go round starting at about $0.15-0.25 on the dollar. After that collector gives up the second go round the debt is sold off for roughly half. The bottom feeders get the most out of being nasty because they may earn up $950 for a $50 investment. Great incentive to do your worst, I would say.

    4. Ms G

      As a Legal Aid attorney do you have any patience or sympathy for clients who take on more debt than they can pay — because they too could just move somewhere more affordable or refrain from borrowing what they can’t pay back. This is rhetorical, obviously. Your take on the point of the story is oddly nasty.

      1. YankeeFrank

        Can people just move somewhere more affordable, “Ms G”? Can they? Tell us about it. Can people live on the meager salaries they are paid and not have to take on debt to pay for medicine, shelter and food? Tell us about it. You seem to have the comfortable answers for low wages, high prices for necessities, and no prospects for raises, better jobs are even keeping the jobs we have. You seem terribly comfortable with rationalizing away the miserable economic state of the bulk of the American citizenry. Tell us about it. Tell us all about it.

        I’m sure it makes you feel better to look down on people who take on debt “they can’t afford” when most often the debt they can’t afford is for necessities they can’t afford. But you’ll sit back and talk about flat screen televisions and all those wasteful lazy people who buy stuff they can’t afford. I guess its easier than admitting what is really going on in this country, and really giving a care for other people.

      2. Bam_Man

        Ummmm….I would think that the reason they are in Buffalo to begin with is that there is no “someplace more affordable” for them to move to. Buffalo is basically rock bottom. Although I suppose they could give Detroit or Camden, NJ a try.

        1. Mr C

          Ms G,
          Be careful with sarcasm in a medium such as the internets [sic]. It is not usually so obvious as say, speaking to someone in person with accompanying facial clues.

  5. David Chaney

    After fighting bank fraud on my mortgages post Chapter 11, with two banks refusing my court ordered payments, and Chase Bank foreclosing on my current for two years but expired loan – and taking a $350K loss – I am now dealing with the credit card companies whose debts were discharged under the plan.

    I made my final “defeiciency”{ payments in Marh, as required by the plan – and AMEX decided that was their chance to collect on the debt, nevermind it was a final payment on a discharged dect, since by making a payment I reset the clock on the debt.

    They call daily, their claim being that by paying that money I acknowledged the debt, ,

    They even have reported me back in default to the credit agencies after doing that all four years ago, every month for years.

    Despite me paying off all my creditrs as required by the plan,which was the condition of mhy Chapter 11 discharge, my bank loving Federal Judge Sandra L. Klein has refused to dishaarge my Chapter 11. So I get to have an open Chapter 11 around my neck forever I guess, since I don’t know what would get this criminal judge to release me. Also I can’t even send the discharge papers AMEX (other banks started to try collections, but gave up.) Six years after this crisis caused by the banks, and I am treated like criminal every day. And yesterday the NY Times finally called for criminal prosecutions of banksters. A day late and an dollar shotr!

    1. chris

      This honestly makes me glad I didn’t try to deal with mine the right way. I stopped paying on ~$8k over two years ago on a chase credit card they were dumb enough to give me while I had an internship.

      I’ve changed addresses and phone and now anything important goes in the girlfriends name. I am used to dealing with the underground economy so I was already used to being off the books.

    2. Michael Olenick

      David – you need a new lawyer. No bill collector should be calling anybody in bankruptcy. Ever. They may be given a pass, once, if they’re told to call your lawyer and given their number.

      Everybody here; be really careful dealing with collectors and/or lawyers. They know what they’re doing and people usually don’t.

      I worked with a consumer bankruptcy lawyer for years — that’s how I ended up with the beginning of my housing/foreclosure data — and people make the strangest mistakes. Paying anything on discharged debt can and does rehabilitate, essentially removing the discharge. Paying once can also reset the statute of limitations for otherwise unrecoverable debt. Collectors regularly violate the FDCPA, which they can be sued for. [Jack – I’ve always thought FDCPA contingency suits would be a good way to bring more funding to Legal Aid; the cases would fund themselves then probably everything else to.]

      I get why this post sounds kinda’ creepy but, but being raised in a small Midwestern town myself, I also get what the author is saying; he didn’t see another option. I’d rather see us collectively focus our attention and anger on the tiny group of people that caused this mess rather than go into fields like debt collection and focus on shaking down one another. By posting this he probably also ensured he’ll never work as a collector again.

  6. Kofka

    So, let me get this staight.

    I can break the law and make a fortune by self-serving the the unfortunate to the dogs of finance? Why not tie the indebted to train tracks.

    End the Fed, burn Fraud Street to the ground (sorry NY you have no respect left) and high time for a currency backed by equity, not dogs, liars and thieves.

  7. Lambert Strether

    I would really like to be able to go off the financial grid. But how?

    * * *

    Interesting how often the word small-d “depression” comes up when discussing our current political economy. That not a bug. It’s a feature.

    1. Crazy Horse

      A number of years ago i knew a guy in his 30’s who had a machine shop behind his house. I used him for specialty items that required more creative thinking than you could get from standard machine shops. One time I was discussing a project with him when a scrap of paper fell out of his pocket. As I picked it up and handed it to him, I noticed the following: Gold $78,000: Silver $12,500.

      My friend commented, “You were not supposed to see that, but I guess now you have to hear the story”. “My dad never did believe in the Government, so he taught us kids to avoid it like the plague. So, I never became a person. I’ve never worked for a salary in my life, accept only cash or gold in payment, don’t have a social security number, didn’t register for the draft, won’t fight in Vietnam, bought my drivers license on the street for $200, never have paid taxes, own my house free and clear, and never had a bank account.”

      Two years later we experienced what was known as the Ronald Regan Depression. (bet you young fellers don’t remember that one?) Interest rates at 12%, 25% of the houses in the city for sale, people walking into the bank, slamming the keys onto the bankers desk, getting in their cars and driving to Texas to work in the oil fields. I sold my house for $600 net cash after putting $12,000 in 1970 dollars into it. My friend bought a hilltop view lot next to the cities’ doctors and lawyers and built a large home with the entire lower level a machine shop with his gold.

      Just saying—-.

      1. bmeisen

        Government is not by definition the problem. Do you like to drive? Your friend seems to be the type who would enjoy pick-ups, and lots of them, as big as they come. Do you want justice, bridges, sewage treatment? Machinists, creative and otherwise, have bad income prospects in pre-industrial societies.

        1. Crazy Horse

          The extreme individualist that I described is of course a freeloader, driving on the roads and being protected by the firemen that his neighbors paid for.

          My point is that existence is possible outside of the financial system behemoth.

  8. GeorgeK

    After I lost my business, due to an extended health crisis, the debt collectors started calling. I loved the experience; I understood the structure of finance and the problems with the securitization of credit card debt; as well as the legal ramifications of making one payment.

    I would politely listen the collectors pitch on how I owed the thousands of dollars of interest and penalties on top of the original debt. Then I would start my lecture: First was the banks legal requirement to write off bad debt after 6 months of non-payment, then some info on Tier 1 – 2 & 3 tier assets and how if the bank has placed a non-performing debt into tier 3 they were committing fraud. Then I would explain securitization and the problem of establishing who actually owns the debt. Then tell them how the company they were working for bought the debt for less than pennies on the dollar and that additional interest and penalties was BS to scare consumers.

    After a few weeks, they would send me up the debt collecting food chain until I got to the leg breakers. They would spin their web of BS about how my world would end if I did not send them $. I would beg them to take me to court and how I looked forward to having them explain to the Judge how they owned the debt they claimed to own.

    Then the process would repeat itself, new collector from a new company and it would end up with the collectors hanging up when I answered the phone. The calls stopped after 6 months; can’t say I miss them but I tell anyone who will listen that a good offence is the best defense against these jackals.

  9. kevinearick

    of course the rats are jumping off the ship. of course the Fed is backstopping Europe.

    surely, by now, that we have popped the process of History off the stack, not so divine providence, and the middle class finds itself in the same position it was in before WWII, you can see that the US Constitution is just another civil contract, a pig with pearls, in a long line of contracts written by capital, to be broken by capital at its convenience, enabling yet another demographic ponzi of stupid consumers addicted to debt leverage, exploiting natural resources for the purpose of subsidizing nonperforming capital.

    and the middle class, as a peer pressure group, cannot change its course, because civil marriage is based on the habits of fear, greed, and lies, seeking security and codification in law, to the profit of capital and the debt slavery of the to be born. look in the mirror. capital pays its middle class civil servants to hunt down and expunge natural labor, and then expunges the middle class with the same laws they themselves voted to establish, with increasing efficiency.

    the only way not to lose is not to play. i am not telling the kids anything they do not already know about physics. i am showing them the true nature of the middle class and civil marriage, the achilles heel of capital. step aside and the entire system collapses, of its own dead weight.

    So, everyone has seen the sh-show cycle, with a little edification, treasuries got hammered, we are back to currency again, monetary velocity is terminal, and the bailouts are targeting deflation into hyperinflation…if you don’t want your neck broken…did you open the door for that currency trader you needed? How are you going to spend that next coin?

    When you enter university, the student is the teacher, the professor is the student, and the boss is never the one assumed by the majority. The point of the mythology is gravity, from which you must emerge.

    1. Garrett Pace

      “i am showing them the true nature of the middle class and civil marriage, the achilles heel of capital. step aside and the entire system collapses, of its own dead weight.”

      So, no more children and the system will collapse? I suppose all systems would. Kill the host and the parasite dies. Atom bombs would do just as well.

      Or is it okay to still have children, and the problem is specifically with marriage? You know that kids and families with kids are vulnerable whether their parents are married or not.

      You’re highlighting the right issue, but getting the wrong conclusion. Capital and debt slavery feed off of us, yes, but the answer is stronger relationships between people, more mutual obligations, not less. And I’m not talking just (or even primarily) about families. The highly isolated and fragmented nature of communities and groups is a powerful weaknesses, one that has been cultivated very successfully by the same wage slave profiteers we are both decrying.

      1. kevinearick

        there are as many alternatives to civil marriage as there are people, and more…religion is what you choose to define it to be, not what the state defines it to be…it’s always a test of principle vs convenience/expedience…the latter is always wrong, the former is replaced in quantum leaps accordingly. certain values are timeless…

  10. Garrett Pace

    I remember walking through the collections center of a bank HQ where I once worked. Prominent in my memory was big letters up on the wall with some such rubrick as “TAKE THEIR FRIDGE!”

    This isn’t really redistribution busywork as much as an incubator for sociopaths.

  11. Jb

    After you receive your “notice”, respond in writing only.
    (letter of debt validation:)


    Your name
    Name and address: of Scumbag Collection Agency
    Re your ref # 12345555

    To Whom It May Concern:
    I received a notice from your organization on Feb.16, 2012, pertaining JOHN H. DOE,  a fictional legal-entity.
    In response to your notice, I am giving you notice pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b),  that your claim is without merit, disputed and validation of your claim is requested.

    I respectfully request that you provide me with competent verifiable evidence of this debt and show me I have a legal obligation to pay you.

    Please provide me with the following documentation:

     Provide me with documentation this debt even exist:
     Show me this is not a zombie debt and/or an expired SOL:
     Show me what the money you say I owe you is for:
     Explain and show me how you exactly calculated the “amount” you claim I owe:
     Provide me with documentation that show I agreed to pay you what you claim I owe:
     Provide me with a copy of the original loan application bearing my signature:
     Provide me with documentation showing you own or was assigned this debt:
     Show me that you are licensed to collect in my state: and
     Provide me with your license numbers and Registered Agent.    

    If your organization have reported invalidated information to any of the three major Credit Bureau’s (Equifax, Experian or TransUnion), said action might constitute fraud under both Federal and State Laws.
    Due to this fact, if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you personally and your organization for the following:

      Violation of the Fair Credit Reporting Act
      Violation of the Fair Debt Collection Practices Act
      Defamation of Character
    If your organization is providing me with the proper and verifiable documentation as requested, I will require at least 30 days to investigate this information and during such time all collection activity must Cease and Desist.

    Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel. This includes any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is.

    If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be mailed to me immediately.

    I am also requesting, in writing, that no telephone contact be made by your organization to my home or to my place of employment. If your offices attempt telephone communication with me, including but not limited to computer generated calls or correspondence from any third parties, it will be considered harassment and I will have no choice but to file suit against you.

    All future communication is to be conducted in writing and send to the address noted in this letter by means of USPS.


    (do not sign but type your initials only, i.e. JB)
    mail registered mail return receipt requested

    1. DM


      Why do you suggest not signing the document? It seems that if you are threatening legal action you should sign it. I have seen a similar template before but have never mailed it to the organizations threatening action.

      I like your take on it, but curious about this last step.

      Thanks and good post.

      1. Wombatpm

        I believe the admonishment to not sign the letter is to prevent your signature from being photoshopped onto fake documents. Let them fake it on their own.

  12. Max424

    Just the other day, a young fellow Buffalonian approached me, and asked: “Max 424, you are older and wiser than I, what should I do? I recently received a BA in BS. I have student debt up the ass. I have no prospects. Should I forge ahead and get my Masters? My PHD? Should I leave town?”


    I replied: “Outside of drug dealing, and other off-the-radar things, you have four choices if you stay.”

    “One, you can forge ahead with the Masters Plan and we can have the same discussion we are having now, two years hence.”

    “Two, you can take a service job. I would suggest becoming a bartender, or a barista at Starbucks, or waiting tables at the Spaghetti House. These jobs are all preferable, dignity and pay wise, to dishwashing, flipping burgers at Micky Dees, or manning the register at Wholesome’s Supermarket.”

    “Three, you can get in to collections. In this town, collections is were the money is. If you have a ruthless heart and a sinister mind, you will do well. If you don’t have these traits, you can patiently develop them.”

    “Four, you can take command of the control center at Bethlehem Steel. There will be no health care and the pay will not be great. But the perks are, you will be answerable to no one, as you will be in charge.”

  13. scraping_by

    One of the Big Lies of modern finance is ‘Loans without collateral.” I’ve seen it come up in stories about Greece, student loans, and mortgages. My head still reels from that last one.

    The collateral you’re giving is your future earnings. In other words, your future work. In other words, your future time. In other words, your life. Just like the ancient Hebrew tradition, loans are repaid with slavery.

    That’s why declaring default on a loan so horrifies the banksters and their little grubbies out here in the world. It’s not a financial act as much as a unilateral declaration of liberation. And freedom is nasty.

    1. Ms G

      … unless the bank (or a “counterparty” or a bondholder or an “insurance” company) is the one on the verge of welching on its financial obligations, in which case, we the Taxpayer (led by Geithner/Paulson/Obama/Goldman Sachs/AIG) swoop in to make sure that welching never happens.

  14. Ray Phenicie

    Having worked the collection cycle myself for a short while and having researched the job offers after I left a that short stint, I would like to offer some insights on the workings of collections.
    1. The folks who work collections, even from in house at places like the phone company-which believe it or not is the most benign level-are tacitly allowed to lie to callers about the status of their account. Shut off notices to consumers are a way of warning the customer that there is a past due amount and the phone company does play games on this so one may receive warnings that services are about to go off unless a payment is made but that is seldom the case and some consumers know this and play the system waiting for the ‘real’ shut off notice. Mind you, some accounts do get shut off notices if the account is not paid the day after the amount is due. And those accounts-about 1-2%-do get shut off as the credit ratings are at the lowest point on the scale. This undefined scale ranges from no tolerance to some to a lot. Most consumers learn where they are, if they choose to play the game of not paying the phone to pay the rent, by trial and error. A few Reps at the call center I worked at regularly told ALL customers who had notices that their services were going off in three days as a way of forcing the caller to pay. Those customers in the know would be aware this was hype and would work out a payment plan of their own knowing just what they had to pay at the minimum to keep the account open. The reason the reps would lie is because there were incentives in the way of a bonus for each dollar past due that was collected after a call placed to the rep. When in doubt about the minimum amount to pay, if you need to, the best advise I can give is to keep asking questions about what will happen if ‘x’ amount is paid. But beware of the liars on the collection circuit who need that bonus. Don’t expect much sympathy from utility companies if you are regularly in collections; when the account passes into the failing grade you may have to be diligent about paying on time for over a year to avoid shut off notices with a short fuse, and pay a deposit to get into the passing score again. With phone and utility it’s better to use as little of the services as possible if one can; most utility services are way overpriced. We all pay for urban sprawl and the cost of new development in exurbia is always passed on to ALL consumers in as much as state regulators allow.

    2. Collections outside the major utilities, banks, credit card companies can get really, really ugly. I mean into break the knee caps ugly. This is not an exaggeration. I know several people who are in collections and the horror stories are close to Mafiosi level with stalkings, threats, and implied violence. I was about to start a support group after hearing these anecdotes for several years with one account of a hit and run attack on a poor fellow who could not pay his car note. I kid you not-he was run down on the street about one month after he stopped paying on the car. He abandoned the car after the head gasket blew off on the freeway, the city towed it and it disappeared off the records. The collection agency then sent out Guido and his brother to serve a warning. The guy was struck by the attacker’s car at 15 mph, and survived, fortunately with mere concussions and bruises. True story, I swear.

    3. The trawlers, catfish, bottom feeders and other kindred life forms at the bottom of the food chain in the world of collections are a rough lot because they themselves are often times on the edge and will do almost anything to keep a job. The lowest paying status is actually a ‘no pay check unless you collect’ status where the slough working the route of stalkings, watching, following and drive-by gets paid nothing on the account unless a payment is made by the hapless victim. Various sliding scales are set up on this on a percentage basis. So if the victim does not fork over any payment the troller is not paid and may survive because somewhere an account he is working is paying. I can only guess what the pay range is but it runs from a few dollars a week to hundreds of thousand depending on the luck of the draw of the accounts that are passed out to the shrimp that is feeding on the detritus of left over consumer debt in the US. Stalking is illegal except when it serves the needs of the collection agencies.

    4. If in debt and the collection sewer life has been called up to hound you:
    Be aware that threats should be ignored and one can
    Court orders can sometimes be ignored as local legal authorities and police view the order to appear in court as a nuisance to enforce unless the amount is say over $5,000 as the border to grand larceny approaches. If garnishment results even after a court appearance there is usually compelling evidence presented to the judge who then has no choice. Always be ready with a lawyer anyway when the court notice appears. Or, again, ignore it and nothing may result because as we know, at least 85% of the time, the collection agency is not ready with any hard facts. Pay close attention to the level on the food chain as to who is behind the court order. The top of the food chain is the original guarantor or owner of of the loan or debt. If they decide to take you to court-be ready. Court orders signed by The trawlers who bought the debt for $0.02 on the dollar can be ignored.

    1. Ray Phenicie

      “Be aware that threats should be ignored and one can”
      Should read
      Be aware that threats should be ignored and one can report these but good luck with that unless it is actually criminal in nature and you have proof in the way of a recording. Even then ,. . . . .
      ” the pay range is but it runs from a few dollars a week to hundreds of thousand”
      Should read
      the pay range is but it runs from a few dollars a week to several hundred OR 1-2 thousand.

  15. kevinearick

    capital always employs the middle class for the purpose of extortion. you adjust the empire, the black hole, with distance to demographic collapse. you have the empire’s attention. what you want to do, charge it for a bridge to somewhere at some feedback rate of return, or let it collapse and start over, is up to you. my counsel is the former, but i am old. labor is quite democratic, but counter-intuitive relative to the empire.

  16. Crazy Horse

    Good to hear that the system is producing so many highly qualified debt collection technicians with valuable skills like kneecapping. Now all we need to do is form neighborhood corporations to hire them to collect the billions stolen from us by deadbeats like Jamie Dimon and Jon Corzine. We can guarantee a lucrative retirement income in Miami Beach if they do their job properly.

    1. Ms G

      How about that Jamie Dimon and that John Corzine; they haven’t been in the news much lately. Does the press stop covering these guys when they are summering?

  17. MacCruiskeen

    Hey Patrick, can you clarify a point? You say:

    “The agency usually pays 5 to 20 percent of “fee” to the collector, which is usually 20 to 40 percent of the overall amount collected. So if the collector collects $35,000 in one month, generating (at 35%) $12,250 fee for the agency, the final payoff is anywhere from $800 to $1350 for the collector depending on the agency. ”

    If the agency takes in $35K, puts $12K into its own pocket, then throws the poor schmuck on the phone a small piece, who gets the rest? Does it go back to the original lender? But they’ve already been paid off, right?

    1. patrick

      When collection agencies contract with banks, they typically lease the debt so the difference goes back to the original lender. When the agencies purchase the debt they keep everything collected in most scenarios. Large collection agencies like leasing paper when dealing with the big banks because the accounts are closer to charge-off and therefore more collectible

  18. jake

    pay your bills. dont take on what you can not afford.

    be a MAN. live on top ramen and sleep on the floor.

    quit the whining. ex buffalo in the city of angels

    with 22 employees who did all of the above. and we pay our bills.

    1. skippy

      Until your costumers can’t pay you… or some other mob rubs you out of the market for your share.

      Skippy… don’t get sick now….

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