The Economy: Don’t Pick Up the Phone

The tanking economy isn’t exactly your fault, but America’s biggest debt-collection company — headquartered in Horsham — will still hunt you down

AND THERE IS, of course, the classic defense of bill collecting: It may not be pretty, but it’s necessary, because without bill collectors, there’s no way to separate the people who make good decisions about how to spend their money from the people who make bad ones. The bill collector is a responsibility enforcer in a system that depends on responsibility for its very survival; he is basically the consumer economy’s obese and omnipresent umpire. The fans may hate the ump, but without the ump, the game grinds to a halt. The game stops being fair. The ump isn’t good or bad, he’s just a necessary part of the way the game is played, entwined with its fundamental structure. But this leads to the question that Barrist — and all of us — are now facing: Who’s good anymore? Who’s bad? How do you spot a deadbeat in the middle of a Depression? Is a laid-off worker at General Motors or Goldman Sachs a deadbeat? Is a recent divorcée? An uninsured cancer patient? “We’re on the Main Line here,” Cary Flitter, a Narberth attorney who represents plaintiffs in FDCPA cases against debt collectors and buyers, including NCO, told me. “We’ve got a lot of [clients] who make healthy six-figure salaries. I’m not talking $100,000. They’ve got homes over a million dollars. And they’re getting collection letters.” Here’s the weirdest part: Barrist actually agrees with Flitter. He admits that the profile of the average debtor is changing.
If Barrist never describes the people who owe his clients money as deadbeats, it’s not merely because they simply aren’t; it’s also strategic, his concession to the fear and panic of the moment, the feeling of pervasive doom that’s enfolding America like a Snugli. “The new economy we’re in, while overall it’s good for people in our business,” Barrist says, “the reality is, it’s harder and harder to collect from consumers, because they’re in a tough spot.” (Sure enough, NCO has reported net losses for the past eight quarters.) The number of debtors has gone up, but the average payment has gone down. Barrist claims that NCO is softening the tone of its collection calls and offering more payment options to debtors: workouts for 80 cents on the dollar, installment plans. Getting a call from a debt collector is never going to be “the best part of the day,” but still, “We want them to see this as a professional, reasonable process,” Barrist says.
That might not be spin. For a time, it paid for the debt collectors to be nasty on the phone, because you, the debtor, probably still had something to lose; you still had a little bit of wiggle room in your budget, or a slightly decent credit rating. You could still buy a house or a car, assuming the debt collector didn’t spray shrapnel into your credit report. But today, even people with amazing credit can’t get a car loan or home loan. A debt collector who threatens to destroy your credit doesn’t seem quite as scary in a climate when good credit is increasingly irrelevant. Even as collectors see their business growing, they see their leverage shrinking.  
This month, President Barack Obama will be sworn in, and life will get more difficult for debt collectors; the federal laws, which haven’t been substantially revised since they were enacted, when Barrist was a teenager, are about to be tightened. What this means, for someone like Tara Burkholder, is that help is on the way. The next call from NCO is likely to be a little bit nicer, a little bit sweeter, a little bit gentler. And what it means for Michael Barrist — this guy who built a billion-dollar company by predicting and molding the sorts of consumer behaviors that nobody else wanted to deal with — is that maybe it’s a good time to diversify into businesses “that are not directly tied to consumer behavior.” NCO has all these call centers, see, and many don’t have anything to do with debt collecting. They’re just buildings full of phones and headsets and Successories posters. You call a company about something you bought. You think you’re talking to the company. You’re not. You’re talking to an NCO employee. This may be the debt collector’s greatest trick. Envy his wiliness, his resilience: To wait out the coming Depression, he manages to disappear.