Debt collectors are dunning the dead, seeking payment from deceased debtors or their next-of-kin by using sophisticated databases that scan probate court records and other information sources as a way to bolster revenues in depressing economic times, according to news reports.
The New York Times is reporting that though many banks may need a bailout and some homeowners can't make their mortgage payments, the departed are definitely paying down their part of the debt.
Post-mortem harassment is the latest trend in debt collecting, and one of the thriving parts of the reviled industry.
In Minneapolis, Minn., teams of debt agents labor on the third floor of DCM Services, are dialing up the departed dear ones' next of kin and thoughtfully asking if they want to settle the balance on a credit card or bank loan or make one last utility bill or mobile phone payment.
Generally, the living have no legal obligation to assume the debt of a spouse, sibling or parent, although laws vary by state.
“I am out of work now, to be honest with you, and money is very tight for us,” one man declared on a recent phone call after he was apprised of his late mother-in-law’s $280 credit card bill, and which he promised to pay $15 a month, the paper reported.
New collectors train for three weeks in empathic, active listening skills, which merges the comforting air of a funeral director with the nonjudgmental tones of a liberal social worker.
The practice is not generating a lot of accolades, and new regulations may be in the offing.
According to a report on MarketWatch, the Federal Trade Commission issued a report indicating that the debt-collection legal system must be reformed and modernized "to reflect changes in consumer debt, the debt collection industry and technology."
The FTC took in approximately 105,000 complaints about third-party and creditor debt collection in 2008, according to the numbers released last week.
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