Debt collectors: Harassing the elderly
by Carol Thompson
Patricia Sullivan spent the final months of her life harassed by debt collectors. The retired 77 year old had remarried, twenty years after the death of her first husband. Her second marriage ended only a year later when her husband John died of a heart attack.
Unbeknown to Sullivan, her late husband owed a debt dating back to 1998- a debt he had incurred with his first wife, who was also deceased.
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As executor of his will, Sullivan settled all of the outstanding debts that she was aware of. That was in 2005. In 2010, Sullivan began receiving telephone calls from a debt collection agency for her late husband’s outstanding 1998 debt. Her son, John Morris, had moved in to her home to take care of his ailing mother, and being her only child, she had transferred the deed to the home shortly after her second husband’s death.
The calls came from a debt collection company who, on more than one occasion, threatened Sullivan with arrest for “mismanaging the estate,” according to Morris. “They told her that as executor of the will, she was legally obligated to pay the debt or face prosecution,” Morris said. She was also told that they would foreclose on her home, a home she owed free and clear.
At first the calls came once a week, increasing to daily, and eventually three or four times a day. Morris said he was often at work when the calls came in, but had instructed his mother to let the answering machine take the calls.
“I’d come home from work and there’d be three or four nasty messages,” he said.
One Saturday morning, around 8 a.m., the phone rang and his mother answered. Morris had been in the shower when he heard his mother crying uncontrollably.
“We’re being evicted,” Sullivan said his mother told him as he emerged from the bathroom. “That’s all she said over and over,” Morris said. She then collapsed and died in his arms while waiting for an ambulance to arrive.
“As the ambulance was taking my mother away, the phone rang. It was the same bill collector again threatening to evict us,” Morris said. “I told the man, ‘don’t worry, she’s dead thanks to you.'”
Morris settled his mother’s estate and discussed suing the debt collector with his attorney. “He advised against it because it would be too hard to prove that the threat of eviction caused her death,” he said.
Morris said he heard nothing from the debt collection agency until 2012 when he received a threat of eviction in the mail. He took it to his attorney who, after the threat of a lawsuit in a harshly worded letter, brought an end to the harassment.
Elderly harassment not uncommon
The Consumer Financial Protection Bureau (CFPB) recently reported that for older Americans, debt collection is the top complaint. About one out of three complaints submitted to the agency by seniors is about debt collection. The major complaints include being hounded for medical debts currently in dispute, attempts to collect the debts of deceased family members from their relatives, and illegal threats to garnish Social Security and other federal benefits.
“It is increasingly common for older Americans to carry debts into their retirement years, and consumers living on fixed incomes often struggle to pay off these debts,” said CFPB Director Richard Cordray. “Older Americans deserve to be treated with the respect they have earned.”
Debt collection is a multi-billion dollar industry with more than 4,500 debt collection firms nationwide. Banks and other original creditors may collect their own debts or hire third-party debt collectors. Original creditors and other debt owners also may sell their debts to debt buyers. Approximately 30 million Americans had, on average, $1,400 of debt subject to collection in 2013.
Since September 2013, older Americans have submitted more complaints to the CFPB about debt collection than any other financial product or service. The CFPB analysis shows one out of three complaints were about debt collection. Today’s report analyzes approximately 8,700 complaints made by older consumers to the CFPB from July 10, 2013 to Sept. 30, 2014.
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, according to the CFPB.
Tactics used by debt collectors, according to the report include:
Collectors hounding older Americans about medical debt: Older Americans describe being confused and frustrated because collectors attempt to collect medical expenses while the consumer is simultaneously attempting to correct billing mistakes or waiting for providers and insurers to resolve the medical disputes. For example, older consumers report frequent and repeated attempts to collect medical bills already covered by insurance. Another common complaint from older consumers is first learning about an overdue bill from checking their credit report.
Collectors attempting to collect on debts of deceased family members: Older consumers describe collectors’ repeated attempts to collect debts of deceased family members. Many of the consumers complained that debt collectors continue to call or send collection letters after they have informed debt collectors that they are not personally responsible for the debt, or that there is no money left in the deceased borrower’s estate. Some complaints describe collection attempts made years after probate is concluded. Many consumers express anguish about collectors ignoring their requests to cease attempts to collect the debt of a deceased relative.
Collectors illegally threatening to garnish an older American’s federal benefits: Older consumers report debt collectors sometimes threaten to garnish Social Security, Supplemental Security Income or Veterans’ benefits, even though these funds ordinarily are not subject to garnishment by collectors. According to the complaints, these threats cause older consumers significant distress, especially when they rely on federal benefits to pay essential living costs.
Steps for protecting senior citizens from debt collectors include:
Protect their federal benefits: Consumers need to know that most federal benefits are protected in debt collection. Also, when a consumer receives federal benefits 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 usually are protected too.
Get more information to identify the debt: Older consumers report that collectors often reject or ignore their attempts to correct instances of mistaken identification. Today’s advisory tells consumers how they can obtain more information to identify the debt. It also includes the CFPB sample letter that consumers can use to find out information about the claims being made against them.
Dispute inaccurate debts: Older consumers report that it is difficult to obtain accurate or trustworthy information about alleged debt from collectors. Many consumers complain that they often inform collectors that they do not owe the debt, do not recognize it, or believe the amount that debt collectors demand is wrong. Today’s advisory tells consumers how to dispute the debt. It provides a sample letter to contact the debt collector
Stop the harassment: One of the most common debt collection complaints that the Bureau receives from older consumers is that debt collectors use abusive communication tactics to intimidate, aggravate, or coerce them into making payments. Older consumers complain that debt collectors make successive calls using profanity, condescension, indignation, or rage. Today’s advisory includes a sample letter that consumers can send to request that debt collectors cease collection communications.