Written by Craig D. Robins, Esq.
What drives many clients to my Long Island Bankruptcy office is the constant harassment of debt collectors — daily phone calls, collection letters, contact at work and home, etc.
Some delinquent consumers are actually hounded more than others. This is because large collection companies pay for research on which credit card customers are more likely to pay an outstanding bill.
Armed with such valuable data, the debt collectors can then use their resources more efficiently. That means that some unlucky people will be harassed much more than others.
Collection Scores Are Often the Reason for Aggressive Bill Collecting Harassment
The three main credit reporting agencies (Experian, TransUnion and Equifax), as well as FICO, offer credit scores which most consumers are pretty familiar with. The higher the score, the easier it is to obtain new credit.
However, what most people do not know is that these agencies also offer “collection scores.” These are analytics based on a statistical analysis that they claim will help collection companies prioritize accounts to determine who they should concentrate their resources on to collect.
The Higher the Collection Score, the More Aggressive the Debt Collector Will Be
All large collection companies use highly specialized computer software that essentially determines what consumers to call (by using an account prioritization system that relies on these collection scores). These debt collection mills actually have the software automatically dial the calls. Debt collectors sitting in cubicles then take one call after another, all day long.
One company that sells these scores touts them as a great collection tool, stating that “collection scoring facilitates debt management decisions. Used in debt collection systems, collection scoring helps improve collection and recovery efficiency, reduce write-offs and decrease staff costs.”
Of course, bill collectors can manually enter info into their debt collection system to increase the priority of going after a particular person.
Other Ways Collection Companies Become More Aggressive
Some of the credit reporting bureaus also offer services which alert debt collection companies to become more aggressive with an older delinquent account if there has been recent activity reflected in the consumer’s credit report that might indicate that the consumer may now have a greater ability to pay something.
The credit bureaus also offer “bankruptcy risk scores.” Although these are most often used by lenders at the time they are processing a request for credit to ascertain the likelihood of default and subsequent bankruptcy, they can also be used by creditors to ascertain the likelihood of bankruptcy filing — which would mean that the creditor will not get anything.
Filing for Bankruptcy Stops Debt Collectors Cold
Of course, filing for bankruptcy will enable a consumer to immediately stop all collection calls. Usually, consumers can totally discharge all credit card debt through bankruptcy.