Debtors Learn Rights the Hard Way

Feb. 9, 2005 -- -- When Grace Lee got a call from a debt collector seeking $3,000 for an 11-year-old credit card bill, she was shocked. She was sure she had paid off the debt more than a decade earlier.

After getting the call from a debt-collection agency called Capital Acquisitions and Management Corp., or CAMCO, in early 2002, Lee explained that it was a mistake.

But CAMCO's collectors didn't want to hear it. They started calling her at home and even at work on an almost-daily basis, even threatening to put a lien on her wages.

Like millions of Americans who receive calls from debt collectors, Lee didn't know what her rights were -- and CAMCO took advantage of that, federal officials say.

The problem of aggressive collectors is especially acute starting in January after the busy -- and expensive -- holiday shopping season, federal regulators say.

"People often overextend themselves," said Steven Baker, director of the Federal Trade Commission's Midwest office. "There are really problems in January."

The debt collectors remain busy through the tax season, assuming debtors have more money from holiday bonuses and tax refunds.

Baker says that although the majority of debt collectors do adhere to local and federal regulations, understanding your rights as a debtor can protect you from being taken advantage of.

"It caught me totally off-guard," recalled Lee, a customer service rep who lives in Ronan, a small town in northwestern Montana. "I told them that I had already paid it and that I wasn't going to pay it again."

Lee, 44, says the barrage of phone calls and threats from CAMCO wore her down. "It was a constant hassle," she said.

Frustrated and anxious for the harassment to end, Lee settled with the agency for $1,000.

"I sent them a wire for the money and received a paper that confirmed it was complete," she said. "I figured that was the end of it."

But that wasn't the end of it.

"I couldn't believe it -- they contacted me just a few months ago for the same debt," said Lee. "I was livid."

This time around, Lee decided to do a little research on the Internet to see what she could find out about her rights and about the collectors calling her.

What she found infuriated her.