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Sen. Franken Wants to Curb Abusive Collections Practices

Sen. Franken Wants to Curb Abusive Collections Practices

The recession hasn’t been bad for every industry.  Just take a look at debt collectors.  As consumers struggle to meet their obligations in the wake of the housing collapse and widespread job losses, business for collection agencies has soared.

With the boom in business has come a newer, more aggressive strategy including the increasing use of arrest warrants and the seizures of paychecks and bank accounts.  In fact, the practices have become so aggressive that consumer advocates are arguing that something needs to be done to level the playing field between debtors who are struggling to make payments and collection agencies looking to profit off of another’s misery.

Minnesota Sen. Al Franken’s office has fielded hundreds of such calls, and, when the Senator read an investigative series by the Minneapolis Star Tribune about this aggressive new breed of collections agent, decided something needed to be done.  He plans on introducing legislation that would make it an unfair practice, under federal law, for private firms to use arrest warrants in debt collections and grant consumers the right to sue collectors over the practice.

The proposed bill would not limit a judge’s authority to issue a warrant against a debtor who can pay but refuses to show up in court once a creditor sues.  But the current practice allows for creditors to seek a warrant prior to the consumer even having the ability to contest the debt. 

Even when consumers do challenge a debt there’s no requirement, under the current law, that requires the collectors verify the money is still owed.  That is a practice the Senator would like to see changed.

There is no doubt that the current system is broken.  Aggressive private firms and overwhelmed courts have allowed the reemergence of debtors prisons that benefit no one but the bill collectors.  The proposals put forth by Senator Franken are reasonable and in no way take away from the power of businesses to collect on money rightly due to them.  They should receive bi-partisan support, though given the decidedly pro-business bend to most of Congress such support is likely a long shot. 

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photo courtesy of Marcin Whichary via Flickr

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45 comments

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7:08PM PDT on May 10, 2013

The easiest would be to allow tax deduction for uncollected debt. Or in the cases of fine work for the city,county etc to pay the fines.

5:18PM PDT on Jul 15, 2012

since the Federal Government is in debt to the tune on $14 trillion dollars (give or take a few trillion), can the agents of the Federal Government (Congresspersons) be jailed for not paying their debts????????????????????????????????????????????????????????????

9:32AM PDT on Jul 15, 2012

Collection agencies are the scum of the earth! They lie, they steal, they discuss your personal business with your neighbors, they hound, harass and threaten you, they purposely get you fired from your job, they stalk you, call you names and make robocalls in the middle of the night. They double, then triple, then quadruple the amount of money that you owed in the first place, then they file papers with the court without you even being there to defend yourself and get "lawyers fees" and "collection fees" added on. I'd rather owe money to the Mafia than owe a doctor bill, at least they'd only break your arm if you couldn't pay. Bless you Al Franken! These people need to be reined in and punished for their treatment of people who have committed no crime other than the "awful sin" of being poor!

1:48PM PDT on Jul 14, 2012

Being Canadian it is hard to understand why the government allows creditors and debt collectors to actually arrest and place the debtor in jail for unpaid debts.........are you sure that America is the land of dreams?
In Canada we abolished "debtors prisons" way back when, we cannot be sent to jail because we cannot pay a debt it is an idiotic idea, much like placing a cement block on the back of a drowning man. The best way for creditors to get the money that is owed to them (assuming it is a legitimated claim) is to work with the debtor in arranging monthly payments that he can afford, reducing the amount, have a financial expert or arbitrator work with the debtor to make a payment plan that will help him get out of debt.
Here in Canada the Government actually has a help line for people who are on the brink of bankruptcy or are in debt for what ever reason (usually it is loss of job, divorce and alimony, sickness or health related accidents ect). Sometimes it is over use of their credit card, but even this is not enough to send someone to jail, as we realise that this will only compound the problem, not relieve or remedy the problem.
Why, with all the intelligence in America would they allow such backward methods to continue, the outcome will just be more people in prison, who when released will be angry, frustrated and broken citizens.....is this what America wants?

3:18PM PDT on Oct 4, 2010

Gregory F., you need to stop your whining since the article has nothing to do with child support. I hear a guy like you whining and I remember numerous conversations between guys who bragged about working under the table for cash so they wouldn't have to pay child support. And I mean numerous since I worked with carpenters & the like. They had a system worked out & networked so they knew who would pay them under the table across the good ol' USA. They had a drug/alchohol/gambling addiction that was more important than the kids they helped create or they just wanted money for themselves for new trucks & toys.

We the taxpayers & underemployed have now bailed out the wealthiest financial companies who managed to bankrupt themselves and us. Now they send their hitmen/women forth to squeeze more money out of us because what they stole previously wasn't enough. Good for Al Franken standing up and getting something done even if it is late.

1:59PM PDT on Oct 3, 2010

If the government provided better conditions for job creation, and corporations offered jobs at a living wage, there would be a lot fewer people in debt. Right? Let's see, salaried job gone, working for an hourly wage of half the previous rate, savings gone, facing rent/mortgage, medical bills, tuition bills, car payment, food, gas, etc. -- the use of credit cards as a bridge loan or a last resort is inevitable. By arresting and punishing people for crimes they didn't commit the 'system' only proves how heartless it is. Borrowers were in good graces when the masters of the universe were tossing around cheap credit and flawed loans, but failure to keep feeding their kitty gets you the unenviable title of persona non grata. Funny how they got loans at 2% or less but credit f***s us for 16%, and then they punch millions of bled-dry Americans in the face for inability to carry the burden of their usury. Go ahead, Al, sign an equitable law, but it should have been written long ago.

12:52PM PDT on Sep 30, 2010

Noted and Thanks, Al but you need to go further with corraling collectors..Yes, it is terrible to owe money for anything BUT sometimes circumstances causes us to get into debt. Its very hard to pay bills when there is NO MONEY coming into your home...Please, Al, keep on pushing for a different system that would enable people to repay their debt or erase it entirely..I'm in Minnesota and I'm willing to help you out.Thank you!!

9:24AM PDT on Sep 30, 2010

In my state women do pay child support. So does CO, as a matter of fact I have a female friend who lost her license to for not paying it.

9:00AM PDT on Sep 30, 2010

I never said it had this had anything to do with child support. And child support is a debt it is money that is owed. They pull tactics that keeps you from ever getting caught up like taking licenses turn you into the credit bureau for beeing behind and throw you in jail and all this while you have very good reason why your not working and paying it. I have a dream that one day fathers will be 90% of the custodial parents and going after the mothers for child support and see how the mothers like it.. cause if you all is bitching about these creditors calling about debts you owe I hate to see what happens when it is child support pulling it all on you guys... O WHAT A WONDERFUL DREAM COME TRUE THAT WOULD BE!!!!

7:38AM PDT on Sep 30, 2010

Thank you Diana. All you said is very true. What I hate is when you are wil;ling to catch up and they wont let you. They want all the money now. Makes no sense. Thanks to bush its now even harder to file bankruptcy so you can eat again.

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