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Collection Agents Increasingly Belligerent

Millions In Debt Feel The Threat

Kirstin Cole
Reporting

(CBS) NEW YORK "Hello, this is Mary can I help you?" When Mary picked up the phone at work one morning she says she got the shock of her life.

"He said,  you have two hours to get the money you owe us,' " Mary told us. When she ran to her boss for help, he was scared too. "They made threats," her boss said.

Mary owed money, not to the mob, but to a debt collection agency for a $400 Internet loan she was late in paying.

"I thought I was going to go to jail because he told me if I didn't get it within two hours that I was going to have a criminal record," Mary said.

With millions of Americans up to their necks in debt, experts say collection agents are now becoming more and more abusive, terrorizing consumers. They curse, use racial slurs, even threaten physical violence, breaking the law, experts say, to collect money for their clients.

Consumer law attorney, Sonya Smith Valentine says her clients have been called every name in the book. In one outrageous example, a collector for a funeral home threatened, to "rip the bodies" of the plaintiff's parents out of the ground, "put them on his lawn" and chop their heads off.

With new bankruptcy laws making it harder to wipe out credit card bills, experts say collection agencies feel justified doing whatever it takes to collect.

"I've actually threatened people that if they don't pay then I'll serve a goods and lien on Christmas morning," former debt collector Mike Flannagan said.

He's now exposing industry abuses and says he used to take 10 percent of the truth and stretch it into 100 percent of a threat to get you to pay up.

"If I beat you hard enough, long enough, often enough, you'll pay the bill, if for nothing else than to get me to go away," Flannagan said.

Attorney Joseph Mauro says debtors do have rights. He's successfully sued countless collection agencies and says collectors can't garnish your wages, they can't have you arrested and they rarely sue for the money. But, you can sue them if they contact you at inconvenient times or places when you tell them not to, if they call neighbors or co-workers and if they don't provide you with documentation substantiating the debt.

"You shouldn't be ashamed that you may owe the underlying debt," Mauro told us.

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