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Collector Conservatism, Part 2: The Long Arm Of The Law

November 22, 2009

Editor’s Note: To read part 1 of this series, click here.

One thing I’ve learned after years in the collection industry is that once the Government gets involved in your business, it grows ever more intrusive.

And the bureaucrats that craft laws are also not above throwing in sanctions to force their dream on the rest of us.

The recent battle over Obamacare illustrates this belief. Take a look at this House session from C-Span:

As Peter Roskam (R., IL) points out, if H.R. 3200 (not to mention the Senate version of the same legislation) is such manna from heaven, why would there need to be any kind of punitive element to the bill?

Mr. Roskam states:

“You look inside that bill and you find handcuffs.”

“Now I’m not talking about figurative handcuffs: I’m talking about criminal penalties!”

To be honest, I am not aware of any criminal penalties in my field unless someone were to threaten violence towards a debtor – but the civil penalties are omnipresent, and I can tell you that over my years as a bill collector, manager, and operations manager they haven’t lessened – at all.

The growth – and corollary arrogance – of regulatory bodies in the world of collections should be a lesson to all who think Health Insurance “Reform” is anything other than a massive power-grab by Socialist elements in the Democratic Party - who will use the might the finished legislation gives them to bully everyone (insurance companies, employers and even you and me) if we don’t just shut up and go along.

Public Law 95-109, or The Fair Debt Collection Practices Act, is my livelihood’s own pint-sized version of the monstrosity currently being crafted in Washington, D.C.

Passed in 1977 (during the halcyon days of the Carter administration), the FDCPA has never shrunk in scope, and in fact, has been added to seven different times since the original legislation passed.

Covering everything from the definition of “harassment” to what language can be used in a dunning notice, the Law puts the “burden” of any kind of alleged “wrongdoing” “squarely upon the shoulders of the debt collector,” which means that if anyone accuses you of any kind of malfeasance, even when you’re innocent (hate to say it, but we almost always are – bullying customers is not what the banks look for when they hire you,) you had better settle, or you’re going to pay a ton – and maybe even have your license suspended or nullified by the Federal Trade Commission, or one of the 50 States Attorney’s Generals.

Want to get out of a just debt that you owe? Just accuse the collector of a string of shady goings on – each “violation” of the law nets the accuser $1,000, not counting pain and suffering and all the rest of it.

The Plaintiffs’ Bar just l0ves this sort of regulation: A crack Barrister has more to exploit when there are numerous codicils and asides and muddy language contained in an edict.

And they know that even if you have a recording of a conversation that proves you to be as clean as Howdy Doody, you will probably pay – because the aforementioned FTC and State AG’s (and even the American Collectors Association) also look at the frequency of lawsuits filed against you – too many and you’ve got a big target on your for-profit enterprise.

Have we discussed activist judges as well? Well, maybe next time. Let’s just say that collection agencies aren’t the most popular folks out there.

And we’re just small-fry. Many other businesses have been the victims of this kind of meddling – and have war stories that are far more painful than mine.

As Nancy Pelosi (D., CA) and Harry Reid (D., NV) shepherd their latest exploitation of good people’s best instincts (“Let’s help the less fortunate”) through the negotiating process, just remember this:

The FDCPA is only 22 pages long (although the case law and associated commentary pushes it to over 800).

The House and Senate Obamacare travesties are each how lengthy?

Somewhere I hear an attorney filing his fangs.

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18 Comments
  1. clyde griffin permalink
    November 22, 2009 4:41 am

    It’s becoming more understandable as to why the D.C.Elites want to discredit the Holy Bible. Its because that book contains the Prophesy: “THERE WILL BE WARS AND RUMORS OF WARS”, and sometimes a revolution can evolve into just that,a War.!

  2. John Davidson permalink
    November 22, 2009 6:17 am

    The bug difference between the government corporation and the private ones is the fact that you do not have to buy the product from the private ones.

  3. November 22, 2009 6:17 am

    If Fox is the right arm of the conservatives, then the democrats are the left arm of socialism. Nancy Pelosi, Harry Reid, Steny Hoyer, Chris Dodd, and Barney Frank are five of the most dangerous politicians in America. All they want is to grow government and have the rest of us become surfs.

    • John Davidson permalink
      November 22, 2009 7:32 am

      Let’s not issue a pass to those who follow them blindly. One of our Ohio senators does not show up and the other hides.

  4. Ted permalink
    November 22, 2009 7:59 am

    One small error; Harry Reid (R, NV)??? Not the last time I looked.

  5. ThomasPaineII permalink
    November 22, 2009 8:03 am

    This was sent to me by e-mail yesterday and needs to be shouted from the highest points of our beloved land:

    I don’t know about you, but I have arrived at the below suggestion.

    All that is asked is that you consider the suggestion here.

    The entire Congress of the United States is corrupt. And I mean both Houses, and I mean both major parties..

    We realize that a few Members of each House are trustworthy, but, as a group they are absolutely the most corrupt bunch to ever disgrace our Nation.

    In November of 2010 the entire House of Representatives will stand for reelection; all 435 of them. One third of the Senate, a total of 33 of them, will also stand for reelection. Vote every incumbent out.

    And we mean every one of them. No matter their Party affiliation. Let’s start all over in the House of Representatives with 435 people who have absolutely no experience in running that body, with no political favors owed to anyone but their own constituents. Let’s make them understand that they work for us. They are answerable to us and they simply have to run that body with some common sense.

    Two years later, in 2012, vote the next third of the incumbents in the Senate out.

    We can do the same thing in 2014 and, by that time we will have put all new people in that body as well.

    We, the People, have got to take this Country back and we HAVE to do it peacefully.

    That’s what the Framers of our Constitution envisioned.

    We are also suggesting term limits on the new bunch: 8 years for Representatives and 12 years for Senators – no exceptions.
    The longer they stay in office, the more power they get, and they love it and will do anything to get reelected.

    We have term-limited the President, now let’s term-limit the Legislators.

    Please, if you love this Country, send this (as I have done) to absolutely everyone whose email address appears in your address book.

    This thing can permeate this Country in no time. Let’s make it happen.

    Don’t just delete this—please pass it on and give our Country a fighting chance.

    VOTE THE POWER ABUSERS OUT……….LET’S TAKE AMERICA BACK !!!!!!!!!

    IF YOU LIKE THE WAY THINGS ARE GOING IN OUR COUNTRY, THEN DO NOTHING………

    • Tom March permalink
      November 22, 2009 9:20 am

      It’s not that simple. Voting out the incumbent may take out a conservative and put in a progressive. For the most part, it is important that you research the candidates well and look to the primaries for alternates. Getting rid of a moderate republican by voting in a progressive democrat isn’t an answer. Some thought and planning is required. You have to find conservatives and get them on the ballot to get them in. Just voting in another group of progressives doesn’t work. There are things about John Boehner that doesn’t thrill me, however, I am not about to vote for the democrat just to oust all incumbents. Just getting rid of all incumbents is too simplistic.

    • F. Swemson permalink
      November 22, 2009 9:53 am

      Tom:

      I totally agree, however I wonder if that truly solves our problems long term.

      Isn’t the very nature of the systems such that only the wrong kind of people are tempted to seek political office.

      The following tidbits are from a November 10th 2009 article I got from CATO. You can read the entire article here:

      http://www.cato.org/pub_display.php?pub_id=10956

      Alan Greenspan, in his 2007 memoirs, describes a constitutional amendment he’d been “pushing for years.” Wrote Greenspan: “Anyone willing to do what is required to become president of the United States is thereby barred from taking that office. I’m only half joking.” It’s no laughing matter. After all, what sort of person wants the job badly enough to spend years living out of a suitcase, begging for cash, glad-handing through primary states, and saying things that no intelligent person could possibly believe?

      Greenspan’s point was that people who seek the presidency today display a pathological power lust that ought to make us uncomfortable, given the powers the modern president enjoys.

      George Washington was called “the American Cincinnatus,” after the Roman hero who took power reluctantly and returned humbly to his plow when crisis passed. That’s the model Americans once expected presidents to follow. Things have changed, and not for the better.”

      In a fascinating article, presidential scholar Richard Ellis writes that “in the beginning, the presidency was envisioned not as an office to be enjoyed but as a place of stern duty.” “Powerful cultural norms” told 19th-century presidents to approach the role humbly, with a keen awareness that power corrupts.

      In public and in private, early presidents often acknowledged their deficiencies. “No event could have filled me with greater anxieties,” Washington said of his election. Likewise, in his first inaugural, Jefferson worried that the task he’d undertaken was “above my talents.”

      While it would certainly be great to get rid of the leftists / progressives in all levels of our government, in order to really fix the problem, we need to make some major changes to the Constitution.

      After all, power is the MOST addictive of all drugs !

    • November 22, 2009 10:47 am

      Good Comments. I agree with most of your comments. But 8 and 12 years term limits, that a little too long for me. Too much time to do too much damage. To me that is what term limits are all about – damage control. Maybe 4 and 6 years – then they are gone , bye – bye.

      • F. Swemson permalink
        November 22, 2009 11:27 am

        QC;

        You’re right, they are too long, and I don’t think term limits are enough for us to get these criminals out of our lives. Here’s my suggestion for the 2 Constitutional amendments that would solve the problem:

        The first new amendment that we need might be called the Congressional Term Limits & Compensation Amendment. It would define specific term limits for the presidency and all congressional offices. The primary goal of this amendment would be to protect the American people from the creation of a permanent ruling class, and to insure that we elect leaders who seek election out of a sense of obligation to our country, and a genuine desire to serve their country, rather than to enrich themselves. Most greedy liars and thieves with political aspirations, would be far less interested in running for office, if our Constitution put powerful controls and penalties in place that would restrict how much they could steal, or how many lucrative contracts they could direct to their friends, family members and supporters.

        1: Members of congress should be limited to one 4 year term, senators should be limited to one 6 year term, and the presidency should be limited to one 8 year term. And while they’re in office, their perks and expense accounts would remain at reasonable levels. Never again would the American taxpayers have to foot an annual bill of over $10MM just to fly the speaker of the house home on weekends.

        2: Said lawmakers would receive no pensions or benefits after their term expires.

        3: Additionally, this amendment would create a simplified process through which the constituents of any lawmaker, can recall said lawmaker from office if they do not do what they promised the voters they would do, or if they act in any manner clearly at odds with the principles of the platform upon which they got elected.

        One of the stronger provisions of this amendment would be to require an immediate removal from office and criminal prosecution for any lawmaker who uses his or her position and influence to create or propose any new rules or regulations, or to influence the awarding of any governmental contracts, that they personally would benefit from financially. The criminal prosecution provision would also extend to any family members, business partners, of financial supporters of said elected officials.

        There are some other interesting ideas floating around, including private sector management experience as a requirement for seeking office, and I can even make the argument that attorneys should not be eligible either since it’s virtually impossible for them to avoid conflicts of interest in promulgating new legislation. I found the following on Answers.com:

        Far too many U.S. Congressmen are lawyers. Bloomberg recently reported that one quarter of newly elected Congressmen are from the legal profession and a web site for the ABA young lawyers division claims 36% of all Congressmen were lawyers before being elected. Being a lawyer should be a noble profession where one seeks to advocate the law either in defense of someone or to prosecute someone. This is not what has happened in the legal profession as it appears that lawyers have conspired to create a form of language not easily understood amongst the common people which makes reading legal documents too complicated and thereby ensuring the need for lawyers. This legalese that exists in the world of lawyers is arguably unethical and presents an elitist view of the law. However, when those very same elitists with their fancy schmancy legalese run for Congress the people are in serious trouble. Who amongst us has actually read the Internal Revenue Code? This is a darn fine example of legalese at work and who dares to say they understand this “law”? If the law can not be understood by the average person of average intelligence then the statute written is in serious need of re working if not repealing.

        The second amendment that we need could be called the “Fairness in Taxation Amendment”. This amendment would require rational limitations on what our lawmakers can raise taxes for. Its primary purpose would be to prevent politicians from using, or promising to use public funds to buy votes.

        The amendment would create a list of specific limitations on what the government could raise taxes for.

        1: It cannot be allowed to raise taxes for the purposes of any kind of income redistribution. The Constitution doesn’t give Government the right to “TAKE” anything from the citizens, without due process.

        2: It cannot be allowed to raise taxes to support social engineering programs such as the “Community Reinvestment Act” which is the direct cause of the Sub Prime debacle and our current economic crisis.

        3: Neither federal nor state governments can be allowed to raise taxes to fund any form of welfare other than for FEMA or other such emergency disaster relief services that no individual state could afford to pay for on its own.

        4: All corporate and business income taxes must be eliminated. They are the most destructive form of taxation in the world. The stockholders and owners of all businesses pay income taxes on the dividends and profits they receive from their companies. Why should they pay double the taxes on that income than on any other form of income? There is no better way to stimulate growth in business and the economy than to eliminate all taxes levied against profits earned by American business. Every penny of their profits that business can save will go right back into the pursuit of more profits. that’s how a free economy works. Business creates jobs and wealth. All Governments can do is spend it.

        5: It would restrict “paid in” entitlement programs such as Social Security and Medicare from disbursing funds to anyone who has not paid into that specific program, and insure that the capital reserves of such funds would be kept segregated from the government’s “general operating funds”.

        6: It would guarantee that when tax refunds or reductions are made, that they must be returned to or accrue to the benefit of the tax payers in the same proportion to the amount that said taxpayers paid in the first place. The people who pay the most taxes, get the most benefit from tax reductions or refunds. Individuals who didn’t pay any taxes cannot receive any benefit from tax reductions or refunds on those specific taxes. That’s not a tax reduction, that’s income redistribution, aka: welfare.

        Contrary to the liberal’s belief, the “have-nots” wouldn’t all just starve and die if this amendment were passed. What would happen, is that the vast majority of them would figure out how to make a living in order to survive. The truly helpless ones will be taken care of by private charities and the church. The American people have always been very charitable.

        Americans give an average of 1.67% of our gross national product to charitable causes, unlike people in countries like The Netherlands, which give less than 0.5% of their GDP. In 2007, Americans set a record for charitable giving by donating a record $300 Billion. You can rest assured that if our taxes went down, our charitable giving will go up. If I want to give some of my hard earned money to charity, I’ll choose which charity I give it to. I’m more likely to support music scholarships for minority groups at schools like Julliard, than to the rebuilding fund for New Orleans. The helpless will still get the help they need to survive. As Dennis Miller said, “I want to help the helpless, but I don’t give a damn about the clueless.”

        If we can change our government by adopting these changes, we can eliminate the vast majority of the complaints that hard working and honest American’s have about our government, and renew and reinforce the basic freedoms and liberties that our founding fathers had in mind when they created our country.

        T.A.N.S.T.A.A.F.L.
        ( There Ain’t No Such Thing As A Free Lunch )

  6. November 22, 2009 8:58 am

    Well, Ted, at least when I make mistakes I make them BIG.

    I have asked Mr. Swindle to fix the error.

    Good eye.

    • John Davidson permalink
      November 22, 2009 10:35 am

      Taken on the whole, you point was well received by all of us. Thanks.

  7. November 22, 2009 11:32 am

    I don’t think we need to change the Constitution; how about a test for would-be voters instead?

    Yeah, yeah, I know that’s elitist, but Leno and Hannity have been proving how ill-informed people are for years with their “Street Idiot” interviews.

    If you can’t tell Joe Biden from the Qwest Cable guy, you shouldn’t be allowed to fill out a ballot.

    (Does that go for Bloggers who think Harry Reid’s a Republican?)

    Tuesdays are kind of busy anyway.

    • F. Swemson permalink
      November 22, 2009 1:05 pm

      John;

      I agree that there’s a way to help solve the problem through changes in voter rules.

      Elections in this country have devolved into phony advertising campaigns run by immoral and unethical politicians trying to buy votes with money that’s not rightfully theirs to spend. Why should voters get to decide how other people’s money should be spent, and why should someone who contributes nothing to the system, have an equal right to decide where the money goes?

      When I was 5 years old, my parents bought their first house, and I remember going to the department store with them to buy a basic boy’s bedroom set. I remember telling them that I liked the light oak better than the dark walnut, but they bought what they wanted, and they were right to do so. After all THEY had earned the money being spent not me.

      I’d like to see voter eligibility set up along similar grounds, so that in order to vote, one must have contributed a token minimum of perhaps $100 to the IRS. But I go one step further, and believe that everyone would get another vote for each additional $100 that they pay over the $100 minimum. It wouldn’t be hard to do in this new world of computers and networks. A persons voter registration card could have one of those magnetic strips on the back that’s linked to a database showing each voters average tax payments since the last election. The voter could swipe his card through a card reader when he gets into the booth, and the proper number of votes would go to the candidates the voter selects.

      The left of course would scream that such a system would enable the rich to exploit the poor even more. That’s of course absurd, because contrary to the progressive mantra, it’s not in the self interest of the more productive members of society to keep the poor down, because as the public becomes more prosperous, they’re able to buy more products and services from them.

      Of course, there’s zero possibility of ever seeing such a solution become a reality. So for that reason alone, I must respectfully disagree with your premise.

      We’re supposed to be a Republic, based on laws, however our current political system has become virtually a pure democracy… actually more of a mob rule, as power hungry politicians enable the public to unlawfully TAKE their bread and circuses from that small minority of people who produce far more than they consume. The entire principal is contrary to the most basic principals of our Founding Fathers. It’s unconstitutional, and morally and ethically wrong.

      The Founding Fathers created a truly miraculous document 233 years ago, but it only survived in the manner intended for roughly 150 years. Since then it’s been eroded by evil power hungry politicians (Sorry, I know that’s redundant :-))

      No… The Constitution and the idea of the Republic worked, and the fact that it lasted 150 years is testament to it’s greatness. But like almost everything else, it needs a bit of fine tuning and adjustment over time. If we were not so lazy and complacent, we would have done that in the early 1900′s. And look at us now.

      Since the Constitution, the basis for all of our laws, was intended to protect our freedom and liberties from government abuses, I believe that it’s fair to place the majority of the blame for what’s happened on the lawyers.

      The oath they swear to upon admission to their state bars, while different from state to state, basically contains the following provisions:

      1: I am fully subject to the laws of the State and the laws of the United States and will abide by the same.
      2: I will support the constitution of the State and the constitution of the United States.
      3: I will abide by the Rules of Professional Conduct approved by the Supreme Court of the State.
      4: I will not counsel, or maintain any suit, or proceeding, which shall appear to me to be unjust, or any defense except as I believe to be honestly debatable under the law, unless it is in defense of a person charged with a public offense.
      5: I will employ for the purpose of maintaining the causes confided to me only those means consistent with truth and honor. I will never seek to mislead the judge or jury by any artifice or false statement.

      There ARE some good and honorable attorneys, but they probably represent well under 5% of the total profession.

      Try to imagine what America would be like today, if all the attorneys had kept their oaths.

  8. benwaitin permalink
    November 22, 2009 4:37 pm

    The majority of you people think there is going to be an election in 2010. How come it is you don’t realize we are dealing with criminals?

    Even if there are any future elections, do you really think they will be fair? ACORN and SEIU will see to it that only Zerobama’s Marxists will get “voted” in.

    It is either time every producer in this country get’s the idea that we are going to have to fight for our freedoms or leave. Where you going to go? There’s no telling. I have heard all my life about people getting out of some oppressive country with nothing but the clothes on their backs. Get used to the idea.

    • F. Swemson permalink
      November 22, 2009 6:21 pm

      I agree…

      I think that the chances of our defeating these bastards is slim to none….

      I also think that we’re getting pretty close to the point where the first shot is fired in the 2nd American Revolution.

      I just wish I wasn’t too damn old to re-enlist !

  9. November 22, 2009 7:54 pm

    Mr. Swemson;

    I don’t much care for attorneys either, although I do deal with some o.k. ones in my job.

    Usually they are polite when they extort me – thank God for small blessings.

    How about a “loser pays” system?

    I just get nervous advocating passing MORE laws when the ones we have aren’t followed.

    The Constitution has its amendments, and there can always be more I guess, but the more rules the less people take them seriously.

    If we just started by putting criminals AWAY when they were found guilty, a lot of the problems would disappear. Especially if some of those jailed were high-profile leeches from Capitol Hill.

    If….

    Of course, just like you and some of the other people who have commented here, I don’t hold out much hope that any of our fabulous ideas will get implemented.

    Sure is fun to fantasize though.

  10. F. Swemson permalink
    November 22, 2009 11:47 pm

    John;

    If, as I suspect, the attorneys are the root cause of the demise of our Constitutional Republic, then half measures like that, while they would help, are just that.. half measures. You can’t treat the symptoms and not the disease.

    The main trick that they have at their disposal, which enables them to run footloose over the law is the atty client privilege . It was the key to LBJ’s political success. He had a major Texas lawyer / power broker, run all of the campaign affairs. Since he was Johnson’s atty, he was the perfect buffer between Johnson and the law. When LBJ finally won a seat in congress, there was at least one county, in which the votes he received were in excess of the total number of registered voters there.

    They have their own little club, and they control the rules so they can’t ever lose.

    We need a major reformation in America that will change the ground rules, and perhaps, dare I hope, Obama’s own arrogance and narcissism will expose the ugly truth about socialism and communism once and for all, and do so in such a blatant manner that even the average Joe’s will arise and give us the 65/35 win that we need to make the necessary changes that the left will be unable to overturn after the country get’s back top prosperity. Once we pass the kind of amendments that I mentioned, and we need an overwhelming 75/25 majority todo this, as long as we keep the country free and prosperous, the left would never be able to overcome those numbers, and the new laws we would put in place wouldn’t even let them get their foul camel’s nose under the tent of freedom and liberty after that.

    I’m not optimistic, but it could happen.. What we need is for Obama’s megalomania and lust for power to overcome his rational sense of the limits to which he can go… And he wouldn’t be the first one to do himself in in this manner.

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