DEBTOR DIRTY TRICKS
(Contrived Schemes to Stop Collection Efforts)
Because of the emotional and tremendous financial strain that a debtor is under, there are a number of “tricks” that a debtor will resort to in order to alleviate the collection pressure. The only way to obtain relief from an aggressive pursuer is to terminate the collection process. Debtors are not naïve but rather sophisticated in their psychological thinking, as it is not the first time they had to resort to tricks for day-to-day survival. The following are common dirty tricks that are implements. If a creditor is drawn into a debtor entrapment scheme, the creditor forfeits professional liability protection (See DEBTOR COMPLAINTS ABOUT THE AGENCY and PROFESSIONAL LIABILITY INSURANCE.)
CUSTOMER DISPUTES – REAL OR BOGUS – The number one stalling tactic used by a financially troubled debtor is a quality dispute. We have developed Uniform Commercial Code strategies to defeat bogus claims of non-conformity. For more details, see CUSTOMER DISPUTES – REAL OR BOGUS.
UNDERMINING THE AGENCY – A debtor will attempt amicable dialogue with the creditor, as the previous tone set forth by the creditor is far more palatable to a debtor than having to now negotiate with Williams & Williams. Listening or entertaining such dialogue serves as reinforcement to the debtor that having a creditor’s attention means that the priority to pay is not as pressing as the agency portrays.
CHARACTER ASSASSINATION – These are attempts by a debtor whereby false allegations are made using made up pretenses to give the impression that the agency is unprofessional, unethical and has done something illegal in the collection process. This approach is obvious because the debtor wants to talk about what the agency did, as opposed to monies that are owed.
FAIR DEBT COLLECTION PRACTICES ACT – Commercial collection activity is not subject to this federal legislation. Fair Debt specifically and exclusively pertains to end user consumers and not overdue balances created from business-to-business transactions. For a debtor attorney to allege a violation of Fair Debt in a commercial transaction is a violation in itself and thus the debtor’s attorney is subject to reprimand, penalties and pursuit by the party that the complaint was originally directed at.
BETTER BUSINESS BUREAU – A complaint to the Better Business Bureau can only be brought by the party that is receiving services in a contractual relationship. Our relationships are with our clients – not with debtors; therefore, there is no basis for a complaint by a debtor to the Better Business Bureau. We are in good standing with the Metro Louisville Better Business Bureau. A debtor realizes that a complaint to the bureau automatically triggers inquiries that must be dealt with, even though there are no grounds.
STATE BAR ASSOCIATION – The practice of law claim is immediately distinguished when our response is that the Williams & Williams, Inc. letterhead appears on all correspondence that emanates from this office anytime there is meaningful exchange with a debtor. Our Inc. designation is a business entity recognized under Kentucky law. In Kentucky attorneys utilize the designation of PSC (Professional Service Corporation). Signatures and titles also designate agency capacity. The debtor knows that a complaint without merit to the State Bar Association mandates a response in which the debtor hopes to buy additional time. Further, we represent a creditor, which is an adversarial position to a debtor. If we represent a client with interest opposite a debtor, then it is impossible for us to render legal advice to the party we oppose.
COUNTY AND STATE CONSUMER AFFAIRS OFFICES – This is another public agency that investigates upon receipt of a complaint without first determining if there is a valid basis for a complaint. Commercial business-to-business transactions are outside the jurisdiction of a county or state attorney’s office.
LIBEL & SLANDER – If nothing else works, the debtor will throw up libel and slander. Libel and slander constitutes blatantly false statements communicated to parties outside the transaction relationship. Williams & Williams, Inc. is not a reporting company nor do we communicate any of our claim information to other parties. Opinions and even false negative comments are allowed in a one-on-one transaction relationship and this includes an agent that is retained by either party in the transaction relationship.
INADEQUATE IDENTIFICATION – Williams & Williams, Inc. always states the company name and provides ample information for a debtor to re-establish contact. We work on a contingent basis and it serves no purpose if we do not identify our involvement and ourselves.
NOT GOING TO WORK WITH THE AGENCY – This is the most common debtor response. If a debtor is referred back to us, he has no choice and will do so if the debtor senses he cannot communicate with a “sympathetic ear.”
LEGAL ACTION THREATENED AGAINST THE AGENCY – We live in a litigious society and it is common to make a statement without thinking that legal steps are going to be taken against an aggressor. Anyone is entitled to his or her day in court; however, a lawsuit will not prevail if there is no substance to it. This is nothing more than an alleged threat.
THE AGENCY USED PROFANITY – Debtors can get so worked up that they become emotional and use profanity. When we do not back off and continue to advance arguments on behalf of a client, the debtor erroneously assumes we utilize profanity because we remain engaged. Further, debtors are always in pursuit by collection agencies, some of which may be of questionable character. The principals of Williams & Williams, Inc. have exposure with insurance packages and; consequently, our activities are not going to be of a nature that can be construed as a negative contributing element.
SUMMARY – The sophisticated debtor has been there before and knows that dirty tricks can be used to buy additional time. Also, the only way to cut off the collection pressure is through a request made by the creditor of the agency. The WWI client should never be entrapped by a debtor and find themselves “listening” to a complaint. This will jeopardize the protection afforded our clients through our liability insurance.