A thank you to one of my students, Scott Wilson, for pointing me toward yesterday’s front-page article in the Wall Street Journal about the growing phenomenon of "civil demand" that retailers are using against shoplifters. It was a new topic for me, although I am sure some Credit Slips readers were aware of it already. The article is worth reading.
It’s very difficult to get people to see what is wrong with this system. No one could responsibly argue that shoplifters should not be held responsible for their actions and make restitution to their victims. What I see in this article, however, is troubling. It’s the same pattern with the broader debt collection system, a system where a few abusive private actors essentially have become a law unto themselves. Their threats against uninformed consumers become shakedowns where the consumers have no choice but to pay.
This is not an indictment of debt collectors generally. Some of my best friends are debt collectors. Hey, I even did a few debt collections myself when I was in practice. The debt collection industry needs to stop its own bad actors before they get more regulation.
Comments
3 responses to “A Law Unto Themselves?!”
I hope the collection agencies do get more regulation.Outlawed would be even better ! I only had dealing with one in my life, but they knew I was a scared, vulnerable woman and they took advantage of me. Keeping me in the dark about interest they were charging. Refusing to answer simple questions I was asking them.
I was so scared and unable to pay the balance they said I owed that I agreed to monthly payments.
After paying them almost $2000 over a period of months I found out they were not reducing the balance, but were increasing it!
I don’t understand how a credit card co can charge off a debt, and probably get a tax break from it, and then turn around and sell this debt to a collection agency who piles on more high interest.
It’s no wonder so many end up filing bankruptcy !
I don’;t blame them one bit !
I would love to see collectors who push civil demands, subrogation claims, and other things that look like debts but aren’t debts brought under the regulations of the Fair Debt Collection Practices Act. They employ all the tactics outlawed by the Act: false threats of suit, invasion of privacy, fraud, harassment, illegally calculated interest, you name it. It’s a giant loophole that should be closed.
Did anyone else notice that in the WSJ story Home Depot appears to have ignored evidence of the handyman’s purchase? The prosecutor dropped the charges when he produced it. I wonder if the reason that these so rarely result in actual litigation is that no attorney could justifiably sign the complaint under a state’s version or Rule 11 and the return is high enough to justify not filing suit because many of these shoppers are from economic groups that are intimidated into payment by the prospect of legal process?
Not to get too far to the left and betray my politics, but I will, I wonder how often clearly middle class people who are reasonably well spoken get stopped by store security?
For instance today, I bought a laptop case at Walmart. I was in a hurry, went through the self checkout and didn’t get a bag. I was not in the line of sight of the “greeter,” and so he didn’t see me paying. I breezed past him waving my receipt. He just waved. I wonder if the result would have been different if I was of color and wasn’t wearing my usual chinos, soccer shoes, and button down shirt.