What drives many clients to my Bakersfield and Temecula bankruptcy offices is the constant harassment of debt collectors — daily phone calls, collection letters, contact at work and home, etc. In fact, I would say that the annoyance of dealing with constant creditor/collector contact is a major factor in motivating my clients to pick up the phone and give me a call.
Some delinquent consumers are actually harassed more than others. This is because large collection companies pay for research on which debtors are more likely to pay an outstanding bill. Armed with such valuable data, the debt collectors can then use their resources more efficiently. That means that some unlucky people will be harassed much more than others. Certainly, analytics and “big data” are the goldmine of modern business, and the collections industry is no different.
Collection Scores Are Often the Reason for Aggressive Bill Collecting Harassment
The three main credit reporting agencies (Experian, TransUnion and Equifax), as well as FICO, offer credit scores which most consumers are familiar with: the higher the score, the easier it is to obtain new credit.
However, what most people do not know is that these agencies also offer “collection scores.” These are analytics based on a statistical analysis that they claim will help collection companies prioritize accounts to determine who they should concentrate their resources on to collect.
As an example, Experian calls their version “PriorityScore for Collections”. The company refers to this as a Debt Collection Scoring and Recovery Model. That is to say that Experian (and the rest) have algorithms that determine both the chances of repayment as well as the expected dollar amount that can be recovered based on the debtor’s credit scores, amount of debt, typical repayment patterns, etc. They even break down the types of debts in addition to the amounts and “ripeness”; different types of debts (even in different industries) and the age of those debts get paid back with differing frequencies and in different amounts.
This data helps collectors be more efficient by aggressively targeting debtors who-the analytics and the models based on those analytics show-are most likely to pay delinquent debts and in higher amounts.
The Higher the Collection Score, the More Aggressive the Debt Collector Can Be
All large collection agencies use highly specialized computer software that essentially determines which consumers to target by using an account prioritization system that relies on these collection scores. These debt collection mills can actually have the software automatically dial the calls (“robocalls”). Debt collectors sitting in cubicles then take one call after another, all day long.
Experian sells collection services in addition to the analytics/predictive recovery models. For a monthly fee, Experian can leverage their data collection and offer collection agencies an internet-based back-end that targets consumers who have these high collection scores. Experian touts 1.3 billion updates per month to their database.
Over 1.3 billion updates made each month, including new phone numbers, new addresses, employment data, and payment history.
To give you an idea of the size of the debtor pool Experian tracks, their service allows collection companies who subscribe to their service to:
Access both noncredit and credit data sources, including information on more than 220 million credit-active consumers in the United States (emphasis added).
That’s a lot of data on a lot of people.
Other Ways Collection Companies Become More Aggressive
Some of the credit reporting bureaus also offer services which alert debt collection companies to become more aggressive with an older delinquent account if there has been recent activity reflected in the consumer’s credit report that might indicate that the consumer may now have a greater ability to pay something. I see this all the time. What that means is if you try to obtain new credit-like a new credit card or car loan-your credit profile can be flagged for easy follow up by collectors. If you’re applying for a car loan, have recently moved, or some other event has occurred that created a change on your credit reports, there may be a presumption on behalf of collectors that you have an ability to repay what is often old, bad, debts. Thus, activity on your credit history can alert collectors to start contacting you, and the level of aggressive collection techniques correlates with your “collection score”.
The credit bureaus also offer “bankruptcy risk scores.” Although these are most often used by lenders at the time they are processing a request for credit to ascertain the likelihood of default and subsequent bankruptcy, they can also be used by creditors to ascertain the likelihood of bankruptcy filing — which would mean that the creditor will not get anything in most cases. That is to say that your probability of filing bankruptcy-based upon factors like level of debt, age of existing debt, your age, income, family size, etc.,-is quantified and used by lenders to make credit lending determinations. But it can also be used to determine how aggressive collectors should be in targeting you for collection efforts. Debtors with high bankruptcy risk scores can be pursued more aggressively that debtors with low scores because creditors know that for most bankruptcy filers, all of their debts are successfully discharged. If a collector believes a debtor is at a higher risk of filing bankruptcy, and that the debts owed to the creditor will most likely disappear as a result, that collection agency will raise their efforts to collect while they still can. I can’t tell you how many of my clients have called my offices in a panic because they were just told by a dent collector that their debts could not be discharged in bankruptcy.
How did the debt collector know to call just as my client was on the brink of filing bankruptcy? Now we know.
Of course, filing for bankruptcy will enable a consumer to immediately stop all collection calls. Usually, consumers can totally discharge all credit card and other types of debt through bankruptcy.
How Bakersfield and Temecula Bankruptcy Lawyer Scott Bell can help
If you have found yourself in unmanageable debt, but are still hesitant to file for bankruptcy, come discuss it with us with a free consultation. You can reach us at (661) 243-1737 or (951) 296-6775. You can also speak with us directly through the Live Chat feature of our website.
Don’t let your debt ruin your life. There is a way out. Let us help.