ONE DAY LAST SEPTEMBER, Janis Toohey answered her office
phone and the person on the other end of the line demanded an
unspecified sum of money. “He said that I had better send money or I
would be publicly arrested and, quote, ‘Misery would fall upon me,'”
recalled Toohey in front of an Oregon Senate hearing committee in
February. “I hung the phone up and he immediately called back.”
The sinister phone call was not the mafia or a blackmailer, but
someone much more mundane: a debt collector. In the last 10 years, the
number of debt collection agencies in Oregon has more than tripled.
There are specific laws limiting what debt collectors can do to collect
unpaid money, but thanks to a loophole in Oregon law, there is
currently no state agency charged with enforcing rules against debt
harassment.
It turned out that Toohey didn’t owe any money. But that did not
stop the debt collector from calling her office eight to 10 times a day
threatening her with arrest if she didn’t mail a check out immediately.
Finally, her boss had to step in and change Toohey’s phone number.
The only thing people who are illegally being harassed by debt
collectors can currently do to fight back is to sue the company
harassing them. But since the vast majority of the debts supposedly
owed are only several hundred to several thousand dollars, consumer
advocates say that for most people it is not worth the time and money
to hire a lawyer.
“There are laws that [debt collection] industries are supposed to
follow and there’s no cop on the beat to enforce the law,” explains Our
Oregon advocate Angela Martin, whose consumer advocacy group is pushing
for change.
Martin hopes a new bill, which moved out of a house committee in
Salem last Friday, March 20, will allow the state to crack down on debt
collection harassment. The bill, the Unlawful Trade Practices Act,
would put enforcement of the current law into the hands of Attorney
General John Kroger’s office. Kroger says the legal change would not
cost any more than the current system, since his office already has
consumer protection investigators on staff.
“Some people are being browbeaten into paying more than they owe. We
at the Department of Justice can’t do anything about it when [debt
collectors] break the law,” says Tony Green, communications director
for Kroger. “These agencies have a business model that requires
collecting as much money as you possibly can. To survive, you’ve got to
have some aggressive tactics.”
Gerald Shepard, a Eugene doctor, received 10 to 20 calls daily last
summer, hounded by debt collectors for money owed by someone with a
similar last name, and for someone who had his same phone number 20
years ago. Shepard told the Senate committee shaping the bill that when
he asked one of the incessant callers for their company’s name and
address, the caller replied, “You want our address? It’s 1313
Mockingbird Lane, Transylvania, Pennsylvania.”
Another time when Shepard says he complained of receiving a
mistaken-identity call at 4 am, the debt collector at the other end of
the line said, “I can fix our records, but first I need to ask you some
questions. Do you fuck your wife very often?” That was when Shepard
says he decided to file an official complaint with the Federal Trade
Commission.
In the last decade, debt collector harassment has topped the list of
Oregon consumer complaints. In 2008, the attorney general’s office
received 1,088 written complaints alleging that certain debt collection
companies called constantly, used racial epithets, or threatened
arrest. This year so far, 208 people have complained to the office.
And these are “just the tip of the iceberg,” according to Kroger,
who testified in the Senate in late February, noting that the people
who take the time to call or write in are probably just a handful of
those actually experiencing problems.
The morning that he testified before the Senate’s Consumer
Protection Committee about the bill, Kroger himself received a mistaken
debt collection call on his private BlackBerry demanding $437 from
someone named Louise. Kroger asked to have his number taken off their
list. “They said they’d do so, but the person said, ‘You know, we have
these phone numbers in our database and we have no idea who they belong
to,'” recalled Kroger.