 |
| From 401Kcalculator.org |
What happens if your older teen moves out and gets a credit card? We all hope that he will use it effectively and will pay off the bill each month. All those years of talking to your child about handling his money has made a difference. In that scenario, credit cards are a great tool for money management.
But...what if your teen spends the limit of the card and can't pay it? If he ignores it, then he will find himself dealing with debt collectors. Does he know what to expect with debt collection? What are fair and legal debt collection practices? What practices are shady and illegal? I have realized that this needs to be part of what I teach my teens. I hope that they never get themselves into a debt collection scenario but having the knowledge to handle the situation is crucial.
Jason at FrugalDad.com recently posted an excellent infographic detailing the American debt collection practices, legal and illegal. Thanks, Frugal Dad, for letting us share this information.
Source: http://FrugalDad.com
I love how Dave Ramsey absolutely rips debt collectors a new one everytime he talks about dealing wtih them. These people are criminals using criminal tactics to get money back. The statistic above that shocked me the most is that a company is collecting over $1 billion a year on debt from fammilies of people that have died and are not obligated to pay. That is absolutely ridiculous and illegal.
ReplyDeleteThat was shocking to me as well. I recently hear Clark Howard talking about this on the radio. I just went to his website and found a great post that specifies your rights when dealing with debt collectors. http://www.clarkhoward.com/news/clark-howard/consumer-issues-id-theft/your-rights-when-dealing-debt-collectors/nHRHp/
DeleteMarissa just had this same post! Craziness!
ReplyDeleteConsumers would be much better off if they just took a few minutes to find out about debt collection practices and what's legal and what's not.
Much about debt collections is getting a person emotional. The more the consumer can control the process, and the more empowered they are, the better they can handle the situation.
Great point about getting people to be emotional. Such a wonderful lesson about making logical choices instead of reacting to emotions.
DeleteI had the same infographic up yesterday!
ReplyDeleteI saw that! It just shows that great minds think alike! :) Frugal Dad is a great resource and has some amazing infographics to share.
DeleteIt's a great info graphic. You often have to be careful what you say. Especially if you are in a bankruptcy. Many debt collectors will try and trip you up in a phone conversation so that they can get a bankruptcy dismissed.
ReplyDeleteNice infographic you’ve got there. Really brings out the essence of the FDCPA Act. Recently FTC allegedly filed a complaint against a debt collection operation that had been going on since around 2006. It involved a company which used to buy old debts, and worked in collaboration with a law firm to collect on them. The accused parties had collected around $800,000 as fees from consumers. However, they have accepted the charges and are willing to reimburse the amount as compensation. Apart from the excess fees, the collection efforts also included false threats to make the consumers into paying.
ReplyDelete