Miami residents who are hounded by collection agencies know how upsetting some of their tactics can be. But when governmental agencies hire private debt collectors to recover what is owed, it can really go from bad to worse.
The consumer protections that keep debt collectors in line and prevent harassment of debtors are seemingly erased by privatization. Suddenly that unpaid traffic ticket that originally cost $75 now costs thousands and can send a debtor to jail if payment isn’t rendered.
One man found this out after getting a speeding ticket in 2010 for $100. When he failed to pay it, assorted penalties and fees accrued to a whopping sum of $2,200. The city then turned the debt over to an agency for collection. Now both broke and homeless, the man was unable to pay the greatly inflated amount and was repeatedly jailed over the matter. To add insult to injury, he was then charged $35 daily for jail fees.
These private debt collectors for government agencies can claim sovereign immunity from lawsuits and prosecution efforts. They can pursue decades-old debts from the public, which are now grossly inflated from the original amount.
Outsourced debt collection allows for drivers’ licenses to be suspended and paychecks to be garnished as well. But instead of 40 percent collection fees, these fees begin at 100 percent and rise from there. Under most state laws, a debtor can only be garnished approximately 20 percent of their income. But governmental agencies can garnish 100 percent of a debtor’s wages after taxes.
It’s no wonder that debtors can feel powerless when up against entities and agencies who relentlessly pursue them for years over unpaid fines and tickets. One way to get back in the driver’s seat is to make your debt more manageable. This can sometimes mean that filing for consumer bankruptcy is the best offer on the table.
Source: Freedomouptpost.com, “What Happens When Big Brother “Privatizes” Debt Collection?” Mark Nestmann, Mar. 15, 2015