Gripes about debt collectors are the most common complaint filed by older Americans, the Consumer Financial Protection Bureau said Wednesday.
Collection gripes are roughly one out of every three complaints the bureau gets from seniors, it said. Confusion over medical bills, attempts to collect debts of deceased family members, and illegal threats of garnishing federal benefits like Social Security top the list.
“It is increasingly common for older Americans to carry debts into their retirement years, and consumers living on fixed incomes often struggle to pay off these debts,” said CFPB Director Richard Cordray. “Older Americans deserve to be treated with the respect they have earned.”
The harassment often adds to struggle and grief consumers are already suffering. Collectors badger consumers who are in the middle of red-tape wrestling with healthcare providers, for example. In some cases, collectors spend months or even years bringing up bad memories of lost loved ones whose debts should have died with them.
Among the complaints, the CFPB received:
- Collectors hounding older Americans about medical debt: Older Americans describe being confused and frustrated because collectors attempt to collect medical expenses while the consumer is simultaneously attempting to correct billing mistakes or waiting for providers and insurers to resolve the medical disputes. For example, older consumers report frequent and repeated attempts to collect medical bills already covered by insurance. Another common complaint from older consumers is first learning about an overdue bill from checking their credit reports (which you can get for free once a year).
- Collectors attempting to collect on debts of deceased family members: Older consumers describe collectors’ repeated attempts to collect debts of deceased family members. Many of the consumers complained that debt collectors continue to call or send collection letters after they have informed debt collectors that they are not personally responsible for the debt, or that there is no money left in the deceased borrower’s estate. Some complaints describe collection attempts made years after probate is concluded. Many consumers express anguish about collectors ignoring their requests to cease attempts to collect the debt of a deceased relative.
- Collectors illegally threatening to garnish an older American’s federal benefits: Older consumers report debt collectors sometimes threaten to garnish Social Security, Supplemental Security Income or Veterans’ benefits, even though these funds ordinarily are not subject to garnishment. According to the complaints, these threats cause older consumers significant distress, especially when they rely on federal benefits to pay essential living costs.
The CFPB offered sample letters for older adults who feel like they are being harassed. This CFPB sample form letters help consumers demand accurate records of alleged debts, dispute the existence of a debt or put an end to harassment.
The CFPB also clarified that federal benefits enjoy special protections.
“When a consumer receives federal benefits by direct deposit to a checking account, the bank or credit union is required automatically to protect up to two months of these benefits. If the consumer receives benefits on a government issued prepaid card, they usually are protected too,” the agency said.
A collection account hitting your credit history can drop your credit scores significantly. You can spot a collection account by monitoring your credit scores regularly. You can get your credit scores for free every month on Credit.com.
More on Managing Debt:
- The Credit.com Debt Management Learning Center
- Understanding Your Debt Collection Rights
- Top 10 Debt Collection Rights