Thursday, September 23, 2010

5 Reasons to IGNORE Collection Agencies, The Henchmen of the Banking Mafia

John Galt
Activist Post

I wrote an article a while back titled 5 Reasons NOT to Pay Your Credit Cards. Understandably, many e-mails came in asking, "But what happens if I don't pay?"

Just as the Mafia has their collections department, so do the banks. A Mafia enforcer might employ a pipe to the knee, threats to your family, or other nefarious means of collecting debts for the boss. Much the same, collections agencies use guilt, the credit rating system, threats of legal action, and many tools of harassment and deceit from their bag of tricks.

If you are one of the many who have fallen into the hands of the enforcement division of the banking cartel, there is good news: they are not the true Mafia. There is not much they can do to you or your family that their boss the credit card companies haven't already done. The best suggestion is to ignore them until you plan a proper strategy to defend yourself.

Here are 5 reasons to ignore collection agencies:

  1. Realize that you are not defined by your credit rating:  Americans have become accustomed to revealing their credit rating practically by way of introduction.  Realize that this is a number, and not your identity: the higher the number the more virtuous, honorable, hard-working, and moral you are supposed to be.  Rather, it is has produced a type of caste system where a bad credit score can render one untouchable by potential employers. This system encourages class distinction based on economic viability and should not be encouraged by submitting to it.

  2. Their bankster bosses manufactured the economic collapse:  Never forget who created this problem to begin with.  And they haven't suffered a bit -- thanks to we the taxpayers. Big banks already have seen the return of pre-credit-crisis profits. But they are still not happy; now they want more, even from those who have paid on time.  While small and mid-size banks struggle, or are eliminated, the large banks that benefitted most from the taxpayer bailouts continue to consolidate wealth with record profits, as the rest of the nation suffers.

  3. Understand that unsecured debts carry no obligation:  This gets into the realm of rather complex contractual law, so one should do their own research and receive legal advice where necessary.  In the most basic sense, collection efforts are regulated under the Fair Debt Collections Practices Act.   Under this Act, the collection agency must obtain the consent of the debtor to accept the obligation to pay this third party that has provided no services or products.  Essentially, the moment your debts are turned over to collections, your true obligation to pay the original debts has been released. This is probably why this zombie debt is sold to collection agencies for as low as three cents on the dollar. But you are expected to pay back the full amount, of course.

  4. These agencies often use fear and harassment: We all desire a way to feed our families, but the collection agency business truly is a racket, and anyone making their living this way is supportive of a criminal endeavor on many levels.  Their tactics only reinforce the criminal element, as they have been documented to utilize unethical, unprofessional, and even illegal means to force cooperation.  By law, they are not supposed to contact family members, friends, or employers, but this practice has become almost routine. Many reports have been issued about the verbal abuse that often ensues, including profanity. They have been known to lie, citing their "right" to seize your property for non-payment. The last resort is the threat of legal action. These people have no power other than their words. You shouldn't even be on the phone long enough to hear their threats and abuse.

  5. You might not be free even if you pay them: There are countless forums describing countless collection agency horror stories. One forum I found addresses one of the more notorious agencies, NCB. I was able to obtain the company's Pennsylvania office phone number, which led to a more specific thread documenting first-hand experiences. This company is known to be one of the worst, and even has allegedly been tied to identity theft. Additionally, a fair amount of people have reported that they still were hounded for payment even after paying their debt.  Because of the increased competition in debt collections -- and so many new agencies coming and going -- there are many abuses of the FDCP. Please read the thread and judge for yourself.

Learn your lesson well: First, accept responsibility for believing that money grows on trees. Yes, the system used every weapon in its arsenal to sidestep common sense and logic, but realize this creature for what it is: debt slavery. Make a commitment never to send yourself willingly to the clutches of the racket known as unsecured credit. Forget the 67" plasma 3-D TV if you don't have the cash for it (and plenty to spare); and forget any purchase that does more for them than it does for you.  Resolve yourself to understand this system and to teach your children what they invariably will not learn in school. The textbook is The Creature From Jekyll Island; the movie, The Money Masters.

Above all, realize that there is not much that they can do to you and your family if you ignore them. There have been reports of successful court judgments using an end-around civil contempt of court charge (leading to a limited return of debtors' prisons), but the economy has fallen too far, too fast. They can't lock up the 1 in 3 Americans who have serious financial problems.  They only can prey upon your pride, your honor, your ignorance, and your fear.

Please share your own stories in the comments section to help others learn as much as possible about this system, and what we can do to protect ourselves from these henchmen and the bosses they serve.

5 Reasons NOT to Pay Your Credit Cards
10 Ways You're Being Fleeced by Banks
Our Future in Chains: The For-Profit Debtors' Prison System

This article may be re-posted in full with attribution.


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Tony said...

What about garnishment?

h5mind said...

The fact is, modern banks operate criminal Ponzi schemes, and as victims of their fraud, you have no repayment obligation to them whatsoever. A valid contract requires 'valuable consideration' provided by one party, given freely to another, in exchange for some 'interest'. The 'interest' in this case is the APR you pay on the loan or credit card, and it is provided to cover the risk of loss of the bank's money. Herein lies the rub-- the bank actually HAS no consideration in the deal-- they created it out of thin air the moment they received your signed loan application. You literally financed an IOU to yourself; you are the literal source of those funds. The bank cannot create a loan unless they have your IOU, and they do makes loans from the deposits of other customers or their own ample profits. In other words, there is no 'consideration' because there is no risk. All loans and credit lines in the US function in the same manner.

Sally said...

What about school loans thru the US Dept of Education? Can they garnish your wages?

Thebes said...

Defaulting on credit cards makes sense if your household is having money problems. Garnishment requires them suing, winning, perhaps bringing suit in a second jurisdiction to enforce the judgment, etc- for what? They don't want your car, you owe money on it or its a junker, or it will be by the time they get it. Unless you have tens of thousands in ready cash assets or a huge income, they are unlikely to sue- they spend thousands in legal fees which they will not recover if you have no money. Unpaid credit cards get sold to collection agencies who resell them to other agencies, odds are good that the statute of limitations will run out before your finances improved to the point you are reasonably suable.

NEVER agree that the debt is your's, never make any payment or agree to a payment plan, this restarts the statute of limitations in many cases.

BTW, everytime someone defaults it takes about 5 times that amount of bank credit out of the economy, because the buck finally stops and someone's got to pay it up instead of relending or reinvesting it. Thats how bank credit works and is the core of the "financial crisis"

So, Spread the Wealth - Burn the Money; if you are pissed it makes good sense to default- if you are rich and hate how the banks run America- 1% of America could run the banks and it would ruin them, pull your money out and destroy that bank's ability to multiply it!

Gary said...

I would also add that in order to avoid contempt of court charges if sued: Just show up for the trial/hearing. It won't matter if you win or lose as it's only a civil matter. But make sure you show up so they cannot claim you disobeyed a court order:

My company specializes in preparing people what to expect and shielding them from the consequences of "ignoring the collectors". If you get sued and they win:

1. Your salary may be garnished
2. Your Bank accounts may be frozen
3. Your Home May be Liened against and in worst case (very rare) a forced sale may take place.
4. Your Car may be leined against (rare).
5. Your safe deposit box, stocks, 401K, and other money market accounts may be seized.

My company can help you understand to remain safe in the face of such risks.

rklawson1 said...

If you have stopped payment on a credit card and the company turns it over to a collection agency you do not have to pay the collection agency. Why? You might ask? Because you never had an account with the collection agency, you never had a contract with the collection agency and you have never established a business relationship with the collection agency. If they contact you and demand payment tell them you will only communicate in writing through the U.S.Mail. Then respond with the following:
I am in receipt of your recent communication. This is not a refusal to pay, but a notice that your claim is disputed. This is a request for validation made pursuant to the Fair Debt Collection Practices Act. I dispute your debt assertion, deny the same, and demand strict proof and verification thereof. This dispute, denial, and demand are made in accordance with Federal Law. I cannot consider your claim until you complete and return the attached disclosure request form and produce all assignments, invoices, agreements, and/or contracts pertaining to your right to demand payment from me.
Please limit your communication with me to writing only. If I receive and telephone calls from your employees, representatives, assignees, or associates, I will consider them to constitute harassment and I will file appropriate complaints against you, including but not limited to an arbitration claim for violations of the FDCPA. the Federally regulated fine for such violations is $1000.00 per occurrence. You may wish to consult an attorney.
Should you choose to contact myself, my employer, my neighbors, a credit reporting agency, or any other individual or company concerning this alleged debt, it will be an infraction of the FDCPA and you will be making an undisputed agreement to arbitrate these issues with an arbitration company of my choosing.
I maintain a telephone log of each call and your failure to comply with my request will be construed as your agreement to allow audio recording to be made when necessary and agree to allow the recording and any other information obtained to be used against you and your employees in a court of law. I will accept only written communication.
Your failure to satisfy this request within the requirements of the Fair Debt Collection Practices Act will be construed as your absolute waiver of any and all claims against me, and your tacit agreement to compensate me for costs and attorney fees.
Best Regards:

rklawson1 said...

Your claim can not be considered if any portion of this form is not completed and returned with the required documents.

1.) Name and address of collector (assignee)

2.) Name and Address of Debtor

3.) Account Number(s)

4.) What are the terms of assignment for this account? Attach a facsimile of any records relating to such terms.

5.) Have and insurance claims been made by any creditor or assignee regarding this account?

6.) Has the purported balance of this account been used in any tax deduction claim?

7.) Have the purported balance or any portion thereof been charged off?

8.) Please list the particular products or services sold by the creditor to the debtor and the dollar amounts of each.

If collector fails to validate this collection action within thirty days, collector agrees to waive all claims against the debtor named herein and pay account holder for all costs and attorney fees involved in defending this collection action.


Please return the completed form and attach all assignments or other transfer agreements that would establish your right to collect this debt. This is a request for validation made pursuant to the Fair Debt Collection Practices Act. If you do not respond as requested by this law, your claim will not be considered and you may be liable for damages for continued collection efforts.
Send this registered mail/ return receipt requested.
You are now finished dealing with the collection agency. There is no possible way they can provide the requested information, the validation or any contract between you and them. End of story. You may hear from another agency after this one dumps the file to someone else but just repeat the process.

Activist said...

Thanks to everyone for the great comments! -- John Galt

Lukiftian said...

Collection laws are very different in Canada. Collection Agencies are an amusing nuisance here, they can't do much other than make empty threats. However some of the American ones routinely break the law here, particularly harassment laws, and can be spanked SEVERELY for it if you have your wits about you.

Lee Murray said...

I really like that comment from rklawson. The letter is similar to what I've used in the past, but better and more comprehensive, but the disclosure form is spectacular, I hate to admit it but that never occured to me, and it's great.
I'm converting to pdf and will be using in future though as I expect that it may be necessary in the future.

rklawson1 said...

The simple fact is that these credit card companies have no legal standing to collect because they have never suffered a loss. They created the money out of thin air. The money never exsisted untill you signed the credit application. So in reality you are the creditor not the debtor. The credit card companies collectd membership fees and also recieved payments from you by leading you to believe that they loaned you money, which they did not. Also they collected interest payments on money they never had. The whole thing is a big fraud.
In order to sue one must prove a loss so that the court may make you whole again. These parasite credit card companies never lost a penny because they only benifited from the start by charging you for something they never had to begin with.

bosscauser said...

If your rich enough they come after you. But you should be able to pay your bills in the first place, why should anyone care about you then. The normal unemployed broke dick is safe because you can't get blood from a stone.

ordoriviera said...

This is a great post and great comments. I always instinctually felt that collection agencies have no right to payment, because the debtors never entered into a contract with them.

Nothing can be taken from you unless you are sued, the plaintiff wins, and they know what and where to collect. I don't agree that it's okay to go to court when sued (assuming you know you will lose), unless you are under court order to do so. Ask the clerk of the court if you do not know. "Have to" appear means you will go to jail if you don't, not that you ought to appear because you are interested. Collectors know nothing unless you tell them, and that would be hard to escape doing if you are in court and the judge orders you to give them information.

Never speak to collectors on the phone, and insist everything be in writing. Use the law, as described by rklawson1.

I have a good credit score now, but will never willingly use credit. Years ago, I was sued for credit card debt, and a lien was placed on my name with the county. I owned no property on which to place a lien. That was after being sued and losing, in 2002. I wonder now what would happen if I tried to put a home in my name in the same county. I wonder if it means I can never have property in my name. I wonder this because it seems to me that judgements can be renewed every 10 years, so one could actually be screwed forever.

Jack said...

Ordo- Check your credit score and profile. The judgment might have expired by now. If not, perhaps you can call the party you owe and settle for less than the owed amount. It would show that you want to make up for your irresponsible ways and give evidence of your rediscovered integrity and honor. If you do this, you will feel much better in life. Best of luck to you.

Anonymous said...

This is a great help. People need to share stories and "intel" against those who would seek to devour us. I have counseled so many to stay in their homes and quit paying the mortgage on a home they are going to lose anyway. They are in denial and are spending their savings vainly hoping for an uptick in the economy and believing they will get a job. Ain't gonna happen. Stop paying-stay in your home; Save everything for your eventual move in 2-5 years. ( Yes I know one woman in the next town who has been in her house that is in foreclosure for 5 years. I do not know how she is doing it but I heard she is planning on putting in a patio!). There needs to be need groups and support for people to talk to each other and share stories and tips for surviving.

Calitron said...

What about from the standpoint of the UK?

H.R.Markham said...

I hate to state the obvious to you folks but if you took the money and spent it that means you should pay the company back. I see your point if you are broke. I only wish to convey that if I borrow money from you and go broke would you sue me to get it back.

Rude said...

I had a credit card hire a collection agency that seized my bank account. & they waited till I received a large insurance settlement on my home after a disaster. As soon as I deposited the homeowners insurance check into my account, they took my whole bank account. If you are seriously in debt like I am you might want to take any little bit of money out of the bank.

ordoriviera said...

Thanks, Jack. My credit score is good. Do you know whether a judgement would be shown on Credit Karma? I don't check credit any other way, because it involves giving information to the credit bureaus that they do not have. There is no evidence of the judgement on Credit Karma. I'd never pay a debt collector one red cent, and don't expect that I would rediscover integrity or honor by doing that. Inviting exploitation is just dumb. Legality is my concern, not ethics. Also, it should be noted that when people pay collection agencies, those agencies do not care whether they fix the credit report. It may not help at all. Collection agencies are as unethical as they can be, and nobody should feel that they owe money to them.

Anonymous said...

I took a look at my original credit card agreement and it reads: If you default on your balance with us, you agree to allow us to try and collect any unpaid balance through any collection agency we are doing business with.
Take a good look at all credit card agreements; it will always refer to a "collection agency."

Anonymous said...

I just went thru this myself so i know it works.
a collection agency sued me for $40,000.00
the first thig i did was ask them to VALIDATE the debt. rklawson1 said...

which is exactlly what RKLAWSON1 said to do.
funny thig is is that they cant and never will Validate the debt. at that point its good by collection agency forever. Mike

Anonymous said...

Thank you for this interesting article.
I learned a lot reading you.
It will definitely help me solve issues I encountered with collection letters.

Sarah C.

Anonymous said...

I have been ignoring my past debts for at least 8 years. I have kept my name off of applications no phone numbers in my name or utilities.I have tried to avoid anything that might inform any creditors of where I might be. It is now past the statute of limitations.
Do I need to be carefull about things still?
A collection agency has just sent me a notice for something that is over 8 years old.
What should I do so as to not resurect the debt.

I finaly opened up an accoutn at an S&L 12 months

Anonymous said...

I go through a 8 year cycle on credit cards, cars, rnature companies..I get as much good credit as I can and then I spend, spend spend, As soon as they start to close my accounts or freeze them I switch banks, I change my phone number and I get PO Box. When the collection companies start calling I switch number and I switch banks. I do all my banking online and I do use cash from my job as much as possible.I don't own a house but I own my own car and I apartment. In canada they cannot send you to jail for being in debt. I've "made"over $100,000 each time this way . Screw the system. It makes me feel good. And Americredit, AMEX, Leons and Scotia Bank..Go F##K yourself...LOL Seee you in 8 years !!!!!!

Anonymous said...

Regarding the post would you do all the spending, get bad credit, then basically you can't do anything credit related for 8 years when you apply for a new card to build your credit to start the process over?

What if you owe the money from bank over drafts and they now have a collection agency calling you and sending letters? It's only for $250 anyways...

Anonymous said...

I can't imagine a judge ignoring a collector pleading that he bought the debt to get all of it due to contract. Are there any cases to use showing judges needed proof of loss? That would be very good if there were.

Anonymous said...

anonymous in n.j. just so you all know nj has the good old boys club i have be through hell over a bank of america line of credit debit card that was defaulted on for 600 dollars they turned that into 1900 dollars and sold it to 3 different collection agents went to court over and over for same debt they do not care it just makes money for the courts they get a percentage of garnishments good luck all

Anonymous said...

If you have zero income and zero ability to pay, do you inform them by phone or mail? The reason this debt went to collections in the first place was that I didnt know charity care didnt apply to out of network doctors, and after I mailed the doctors office a letter asking them to waive since I was below federal poverty level, they sent to collections. Do consumers with no money have any rights when it comes to collections? Is the worst that could happen that since they claim the debt as mine, it will go on my my credit report? And if the account being closed, leave me unable to get future loans?

Bill Collectors Hate Me !!! said...

Great advice. Debt collectors could care less about your financial situation. In the current economy, a lot of people are out of work and simply do not have the ability to pay. Debt collectors act like terrorists in their pursuit to squeeze whatever they can get out of you. They don't care if your kids eat or if you get kicked out your home. All they care about is the commission they earn at your expense.

Anonymous said...


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