Advice from Nashville's Financial Guru Dave Ramsey

Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
11/30/2004

Hey Dave, lay off of the debt collectors!

Dear Dave,

Lighten up on collection agencies. I’m a debt collector and we’re not all bad!

Tom in Charlotte, NC



Dear Tom,

OK. You’re right. What I need to do is not lighten up on you, but tell you the truth. Not all collection agencies or debt collectors are bad. 

Let’s discuss collectors for a moment so that people dealing with them know what’s going on. Mortgage collectors are generally the most classy, stable and knowledgeable. They will deal with you in a tactful, respectful manner, but they’re up front. If they say they are going to pull the trigger on something, you’d better duck because there’s a bullet coming. There are a few who are scum, but by and large they do what they say they will do – including come after you. 

The next best grade of collector is a local, small town collection agency. These are generally good guys who live in your neighborhood and they do a good job just trying to collect a bill. Most of those people have good hearts and, while they may get tough on you, they’re truthful and don’t harass you just because it’s some tactic they learned in a class. Tom, I would guess that you’re probably one of these types of collectors. I’ll give you the benefit of the doubt here. 

The next rung down on the ladder would be national collection agencies. I’d say 60-70% of those people are morons and you’re going to have trouble working with them. About 30% are OK, but you just don’t know which you’re dealing with until you’ve been talking to them for a while.

Then there are the local finance company managers who are generally just punks. I had a client the other day who said when she got home the local finance company manager was sitting in her driveway in a folding chair waiting to collect a bill. He was trespassing and harassing her. 

The bottom of the barrel is the credit card collector. I’ve never met one yet for whom I could have any respect. They lie, cheat and steal. You can tell when they’re lying because their mouth is moving. They violate federal collection laws on a daily basis. They call people 22 times a day. They tell someone they’re going to draft their account for one payment and then draft it for three payments – causing people to bounce checks. They ask people to send postdated checks, promising not to deposit them early, and then they do. They lie to people all the time. We deal with them daily in our office. Do not deal with credit card collectors except clearly in writing. You can’t trust anything they say. Tom, if you’re one of these people I suggest you go get another job. But if you are, you were probably about to do that anyway because the average credit card company collector lasts about 92 days in the job.
Dave

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