- This story is part of South Carolina Public Radio's continuing coverage of the eviction crisis in the Palmetto State. For additional stories, click HERE.
Debt collection is a thorny issue. Complaints about unethical, aggressive debt collectors dwarf all other complaints filed with the South Carolina Department of Consumer Affairs, the Consumer Finance Protection Bureau, and the Better Business Bureau.
The popular image of debt collectors does little to dissuade consumers (that includes renters in South Carolina) from trying to find ways to duck collection agencies.
‘That kind’ of debt collector — the one who will threaten to send the police to your apartment or garnish your wages or tell your employer that you can’t be trusted — greatly worries Sue Berkowitz, the director of Appleseed Legal Justice Center in Columbia.
Berkowitz is afraid of a dangerous confluence for tenants who fell behind on their rents. Some renters are still unaware that there is rental assistance money available to help them pay off rents that have accumulated over the course of the pandemic (click HERE to find links to agencies that provide these funds).
Others have tried to tap into these funds but ran into landlords who would not accept the money.
Berkowitz fears tenants in situations like these will turn to high-cost loans like payday or auto title loans to help get their rents paid — which could lead to an entirely other set of problems, she says, and none likely to be more long-lasting than running afoul of a debt collection agency.
While Berkowitz says that while landlords who’ve not been able to collect rent for several months deserve what’s owed them, she worries that more aggressive debt collection companies will convince many landlords to turn to third-party collection services.
She says she would far rather see landlords and tenants try a preemptive tactic. Like talking to each other. Communication, she says, can go a long way to having something worked out that keeps a tenant housed and a landlord paid, and keeps a bad situation from turning into a legal one.
If there’s one thing Berkowitz and Chad Echols, a Rock Hill-based attorney who represents debt collection companies, actually agree on, it’s that talking things out as soon as possible can help get an issue resolved before lawyers and collections agencies need to get involved.
But Echols does bristle at the representation of debt collection companies as dens of predators. He says that debt collection is a result of someone not paying a bill that was contractually agreed upon and that getting money to businesses that is due to those businesses is in the interest of all involved — and in the interest of the greater economy at large.
And while he acknowledges that shifty practices and extreme stories revolving around debt collection do exist, Echols says these “outlier stories” warp the reality that most collection firms are ethical and try to work with clients to resolve a financial issue in a way that reduces debt and keeps businesses (which he reminds have their own financial obligations) making money.
Debt collectors in South Carolina are governed by a strict set of protocols outlined in the Fair Debt Collection Practices Act. There are things a collector cannot legally do, like threaten to send the police to your apartment, or garnish your wages, or tell your employer that you can’t be trusted. Echols says he rarely comes across anything like that with his clients, which do include property owners, and that a firm practicing such business is just bad business.
But Berkowitz says she’s heard her share of horror stories from exactly those kinds of agencies that prey on people who might have found themselves in a spot they don’t fully understand. She says that tenants (or any consumer in the state) who’s being harassed for real by a collections firm probably has legal grounds to sue.
Despite their differing positions, both attorneys say that they do expect landlords to turn to third-party vendors to help them recoup money never collected over the course of the pandemic. They just don’t agree on how fair it is for every tenant in South Carolina that debt collectors will come calling when eviction moratoria permanently end.
