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Posted on Mon, Dec 24, 2012 : 5:57 a.m.

As retailers rejoice in December, debt collectors despair

By Ben Freed


A collector speaks to a debtor on the phone on the "collection floor" at the Ann Arbor Credit Bureau.

Melanie Maxwell |

The holiday season is a great time to be a retailer, but a rough time to be a debt collector. Not only do people often not want to pay their outstanding financial obligations, now they have the added burden of shopping for gifts.

“Everyone’s thinking about the family getting together, the exchanging of gifts, and they start to think about the disposable money that might otherwise be used to pay down bills,” Ann Arbor Credit Bureau vice president Thomas Oldani said.

“There’s just more competition for every dollar, and when consumers think about the priorities for those dollars, fulfilling their outstanding obligation falls pretty low on that list.”

Bill collection is a very difficult industry in the best of times. While common perception is that debt collectors are successful 50 percent of the time or more, collectors say it’s not so easy.

According to the Association of Credit and Collection Professionals, debt turned over to third party collection agencies was only collected at a rate of 17 cents on the dollar until the economic recession began in 2008. Major contributors to the low rate included bankruptcies, death of debtors, and simple inability to pay.

Since the recession began, the collection rate has dipped to under 10 cents for every dollar of debt passed onto the agencies.


Ann Arbor Credit Bureau vice president Thomas Oldani said he tries to focus his collectors on their mission of helping people with debt resolve their obligations.

Melanie Maxwell |

“It really comes down to jobs,” Credit Bureau owner and president Bob Barden said.

“When the payments start to dry up that’s because there’s either an inability or an unwillingness to pay because there isn’t work available.”

Maslow theorized in his hierarchy of needs that humans prioritize their efforts first based on survival, then safety, then belonging, then esteem.

Similarly, Oldani said that consumers go through prioritization when they decide what they will pay as they look at their various bills and obligations.

“Things that are urgent — the roof over their head, the mortgage or rent, food, the car they take to work, the telephone bill, nowadays the mobile phone and internet — those are all going to be paid first,” he said. “And then other bills fall down to the bottom.”

Both Barden and Oldani said that the goal of debt collectors is not to be a burden on consumers, but to help them manage their obligations in a way that allows them to raise their credit score and be free of obligations.

“Communication is the best thing for us, keeping that link open between us and the consumer,” Oldani said.

“It’s a cooperative endeavor. We don’t want to collect disputed debt or debt caused by fraud. With the cooperation of the consumer we can work together to an agreeable solution.”

As the economy improves, Oldani said that the bureau starts to field more calls of consumers who want to repay old debts.

“What typically happens is that it was not at the front of their mind, but now that they have a job they’re looking at replacing their old car, or looking at getting a home,” he said.

“And that requires a financial review of their credit file. Then these debts show up and they realize they have to take care of their old payments before they can take on new ones.”

There’s no typical “January bump” of people following through on New Year's resolutions to put their financial houses in order, Oldani said, but he thinks it would be a great idea for people to consider as they do their last minute shopping.

“The key is planning,” he said.

“Make a budget and stick to it. Recognize that you can get yourself into real tough troubles when what you’re trying to do is get in the spirit of the season.”

Barden agreed that making a budget was key, and he went even further in his advice to consumers.

“If you don’t have the money, don’t spend it,” he said.

“Don’t buy on credit because it will snowball on you. It happens to everybody. Sooner or later the collector will come to call.”

Ben Freed covers business for You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at Follow him on twitter @BFreedinA2


Jeff Wendel

Mon, Feb 4, 2013 : 8:31 p.m.

Good luck


Tue, Dec 25, 2012 : 5:26 a.m.

Sure. I admire our Garbage Collectors. Good Guys! Credit Bureau employees are in the same category. However, if a Debtor files Federal Bankruptcy, then I respect their assertion of their Constitutional Right. (Google "Constitution, Article One, Section Four"). Do it Clean! Quit Quibbling! Yer an American! Right?


Mon, Dec 24, 2012 : 11:35 p.m.

I really wish we could get past the false dichotomy of good vs bad. Not all debt collectors are bad. Not all debt is created with bad intentions. There are debt collectors who are kind and compassionate and are willing to work with people who are going through some difficult times. Then there are the vultures, who prey on the poor and the high risk. Often times accounts are turned over to a debt collector because it allows a variety of repayment options. It's not simply a matter of good vs bad and we need to start acting like it.


Mon, Dec 24, 2012 : 9:19 p.m.

Under-appreciated debt collectors? In this town folks grumble when people living in tents ask for spare change on the street. Next time you don't want to be bothered on a 5 hour flight, very enthusiastically tell your seatmate first thing how much you love the lucrative world of being a bill collector.

Milton Shift

Mon, Dec 24, 2012 : 9:55 p.m.

And how you're selfless enough to be a debt collector, who makes great sacrifices to help consumers.

Milton Shift

Mon, Dec 24, 2012 : 8:53 p.m.

Debt collectors can't collect debts? Good.


Mon, Dec 24, 2012 : 7:58 p.m.

Actually, never in the world's history were taxes cut while a war was waged.


Tue, Dec 25, 2012 : 4:21 p.m.

You know what, Basic Bob, I agree with you! At the end of he day, both parties have warmongered and are, in no way, parties of peace. Our country is the cheif purveyor of violence. I think, however, those who are staunchly anti-war associate with the left, while the "any war's a good war" crowd, are on the right side of the fence.

Basic Bob

Tue, Dec 25, 2012 : 3:22 p.m.

"The Vietnam War escalated over time." "Vietnam did not pick up until AFTER Kennedy died" Yes, it escalated over the duration of the Johnson presidency. He was a Democrat and, as vice president, advised the Kennedy administration to send advisers (training staff) to Vietnam. How the Democrats were perceived as the party of peace after 1969 is incomprehensible. The next two (Republican) presidents pulled back, scaled down, and ended the war.


Tue, Dec 25, 2012 : 2:47 a.m.

@M-Wolverine. Yep, I love it. "We never declared war in Vietnam followed by: "If we want to split hairs" Typical.


Tue, Dec 25, 2012 : 12:37 a.m.

The Vietnam War escalated over time. The Iraq War was a large, expensive surge. Had Kennedy tried to lower taxes when it full-blown, he would have failed, as i would have been irresponsible fiscal policy. My point was, traditionally, countries do not lower taxes and go to war at the same time. It is wildly asinine to do so. If we want to split hairs, we've almost always ben involved in some conflict throughout our history, so any tax break would have coincided with a military intervention. Vietnam did not pick up until AFTER Kennedy died, while Iraq's apex was in the beginning.


Tue, Dec 25, 2012 : 12:22 a.m.

We never had a formal declaration of war in Iraq which is it? You have interesting double standards.


Mon, Dec 24, 2012 : 10:48 p.m.

We never declared war in Vietnam.


Mon, Dec 24, 2012 : 10:31 p.m.

So: "never in the world's history were taxes cut while a war was waged." I take it, that wasn't part of "history" or "never". Sorry, the old: 'bad if a Republican does it, good if a Democrat does it' is tired and busted. Just man up and say you were wrong.


Mon, Dec 24, 2012 : 10:14 p.m.

Those Kennedy tax cuts were before the escalation of the war. When they were inacted, the war was having a minimal inpact on the budget. It doesn't change the fact that Bush put an expensive war on a credit card.


Mon, Dec 24, 2012 : 8:41 p.m.

Do you ever even do the most basic research before writing down an incorrect fact? 1964 26 16% 77% $400,000 $2.85M Tax reduction during Vietnam war 1965 25 14% 70% $200,000 $1.42M That took like 8 seconds.

say it plain

Mon, Dec 24, 2012 : 5:49 p.m.

Yes, the retailer/debt-collector dichotomy, so timely. The beginning of the Christmas season...which of course in our modern world is almost exclusively an economic called Black Friday for its bringing retailers out of red and into black for the year. And it's the buy buy buy of this final stage of the Christmas season that has been chronicling that had me wondering whether it's really a 'better' year or not economically. If sales are up at many retailers, does that merely mean that the debt-collectors' burdens are 'up' as well? Any "reality" associated with our commerce is so obscured by its basis in easy credit. But we've seen what happens when the too-rich/big-too-fail get the collector's phone call! It's a tricky balance, to get consumers to buy enough to keep 'sentiment' positive in the face of a jobless 'recovery', but not to spend so much that they get hopelessly behind in their debt payments...maybe the Fed can offer some advice!


Mon, Dec 24, 2012 : 5:13 p.m.

Ever hear of the Kyoto Protocol. It was signed in 1997, but the US didn't ratify it despite widespread protests Go look it up, for it was well-documented. I do care about debt, that's why i beleive we should slash pentagon spending, invest in education and infastructure, and tax those who have benefited the most from our great country. Having wealth concentrated in the hands of a few benefits almost nobody.


Tue, Dec 25, 2012 : 6:53 p.m.

Pssst: 127 + 300 = 427, the deficit was $1203 you have a LONG way to go. You don't get to "not count" social security, since it IS included in the 1203, but nice try. or, you get to go fin another $800 or so in reduction/taxes. You can't have it both ways (you know, like only count 'wars' as 'wars' if they happen during a Republican's term - see yesterday' double standard)


Tue, Dec 25, 2012 : 3:48 p.m.

Here's blan B since you asked...$773B to social security comes off the top, as it is a seperate entity, and has been, at least in theory, already paid for. A $127B cut to defense spending (don't worry, we'd still be spending more than the whole world combined). Finally, another $300B in higher taxes. There you go, almost no defecit!

Tom Todd

Tue, Dec 25, 2012 : 4:22 a.m.

And Jealousy rears it's ugly head.


Tue, Dec 25, 2012 : 2:37 a.m.

Still waiting for plan "B"?


Mon, Dec 24, 2012 : 11:44 p.m.

Try again, we did sign; we didn't RATIFY.


Mon, Dec 24, 2012 : 11:29 p.m.

The US never signed the Kyoto Protocol. Just sayin.


Mon, Dec 24, 2012 : 8:32 p.m.

Yeah, i guess Clinton-era tax rate is punishment.

Basic Bob

Mon, Dec 24, 2012 : 7:56 p.m.

"tax those who have benefited the most from our great country" Well, that is a long list: retirees, children in poverty, public school teachers, investors, manufacturers, homeowners, single parents, illegal immigrants, doctors, lawyers, farmers, and oil tycoons have all benefited. I'm sure you have your own idea who has benefited the "most". As with most Ann Arbor progressives (not easily mistaken for liberals), you would like to financially punish everyone except themselves - the obscenely rich, the inner-city poor, households with more than one child, and anyone who works hard and receives a check from a non-government entity, a.k.a. "capitalists". I am personally thankful to have received a nearly free college education from a large public university. Unfortunately too many people older than myself require unfettered access to free health care and endless government cash to maintain their second homes and European vacations. I won't be so lucky.


Mon, Dec 24, 2012 : 6 p.m.

"I do care about debt, that's why i beleive (sic) we should slash pentagon spending" US tax receipts 2011: $2303 B Expenditures 2011: $3598 B Deficit Spending: $1203 Stay with me now..... Defense spending $700 B (this is less than $1203 B) - so even a reduction to ZERO won't cut it. Pssstt - Social Security, and Medicare/Medicaid total $1560. What is your plan "B"?


Mon, Dec 24, 2012 : 5:19 p.m.

My mistake, i meant to hit reply to a previous post. Sorry if there is any confusion.


Mon, Dec 24, 2012 : 4:28 p.m.

Get real. Debt collectors are predators. We don't care if they are suffering, as they are, as a general rule, unsavory and unscrupulous.

Milton Shift

Mon, Dec 24, 2012 : 8:57 p.m.

We don't care if they are suffering? Not true. We enjoy their suffering.


Mon, Dec 24, 2012 : 3:22 p.m.

@ EyeHeartA2, re "Obama's" loan from China: You're talking about the debt that Bush ran up, then handed off to Obama, along with the rest of the financial mess, right?


Mon, Dec 24, 2012 : 11:50 p.m.

No Eyeheart. I said that you need to use appropriate measures. Nominal measures of quantities measured in dollars at different locations in time are not appropriate.


Mon, Dec 24, 2012 : 7:36 p.m.

We are paying for two wars and the tax cut that gave the most to the richest. Never before, did the U.S. have such a tax cut while fighting a war. The cost of the Iraq War shouldn't be seen as an unexpected cost due to 9/11 because Iraq wasn't involved in 9/11 and Iraq didn't have WMD's.

Unusual Suspect

Mon, Dec 24, 2012 : 5:07 p.m.

"where were all of the budget hawks from 2000-8? Nobody was bitching then." We were bitching then as well. This is the basis of our statement that George Bush was not a conservative. Actually, the spending that he and many Republicans participated in gave us the even more disastrous Obama era. When we point out the obvious that Obama has made things even worse, it doesn't mean we're making excuses for George Bush.


Mon, Dec 24, 2012 : 5:05 p.m.

^^^Yep, same as I said about the debt, there was "bitching" going on back then. I guess you just told me there was "bitching" going on about climate change as well. I'll take your word for it. Which still leaves my question to you unanswered. Are you saying debt doesn't matter? Has the window of opportunity to say anything expired now that a Democrat is in office?


Mon, Dec 24, 2012 : 4:52 p.m.

What???? We emplored, we begged but nobody would listen about climate change. Now there is no debate to be had, as all major scientific bodies agree that global warming is anthropogenic. We were right all along, but I wish we wern't.


Mon, Dec 24, 2012 : 4:43 p.m.

@radlib2 "where were all of the budget hawks from 2000-8" Where were all the "climate change" hawks in 1995-2000? What's your point? Are you saying debt doesn't matter? BTW, plenty of people were "bitching" (your word, not mine) about the debt then, myself included.


Mon, Dec 24, 2012 : 4:25 p.m.

sure sounds like Governor Granholm all over again. Took 8 years for the state to figure her out...


Mon, Dec 24, 2012 : 4:24 p.m.

It is not one person's fault, however, where were all of the budget hawks from 2000-8? Nobody was bitching then.


Mon, Dec 24, 2012 : 4:05 p.m.

So, Alan, you are saying debt isn't going up? Or are you saying we are only a little pregnant and it doesn't matter since the last guy did it too?


Mon, Dec 24, 2012 : 4:02 p.m.

Here we go again. Nominal dollar debt is not a comparison. Try total debt as a percentage of GDP. 1/1/2001, 56.8%, 1/1/2009, 79.9% for an increase of over 40%. 7/1/2012, 101.6% for an increase of 27%. Looks about the same over 2 terms. Reagan increased it by 62%, the worst in the last 50 years. The first Bush increased it by 27%, the same as the current administration. Then there are the issues of does it really matter and how you can consider one individual responsible


Mon, Dec 24, 2012 : 3:58 p.m.

Is Bush still in office? or Obama? Did Obama man up and take responsibility? (Hint, watch the video). BTW, Carter sucked as a president too. People have given it up already. Also, I'm projecting that Michigan wins the Outback bowl. Big deal. Projections work until somebody flies an airplane into some skyscrapers.


Mon, Dec 24, 2012 : 3:47 p.m.

Hmm...when Bush came into office, there was a projected surplus, when he left, economy in shambles, nearly a trillion dollar defecit.


Mon, Dec 24, 2012 : 3:35 p.m.

2008 $10,025 debt 2009 - Obama blames Republicans, then claims he will fix it 2012 $16,066 debt So, sure, whatever, the data is there. Spin away.


Mon, Dec 24, 2012 : 3:20 p.m.

@ Ben Freed, re: "Rouge collection agencies." Now you've got me picturing the ex-governor of Alaska collecting debts at gunpoint.


Mon, Dec 24, 2012 : 2:38 p.m.

Hello, Mr. Obama; Yes.....about that loan you have out with my client, China. Well, I have some bad news.......


Mon, Dec 24, 2012 : 1:42 p.m.

Debt collectors "despair"? Yeah, sure. Oh the humanity!


Mon, Dec 24, 2012 : 11:41 p.m.

Sorry, I've been gone all day -- are they still "despairing"? Yes?? Excellent.


Mon, Dec 24, 2012 : 1:36 p.m.

Kant's categorical imperative: When deciding if an action is right or wrong, one should first evaluate the action in terms of the consequences if everyone acted in the same manner. If all college students cheated on all examinations, a college degree would have no value. Those of us who do our duty need Bill Collectors to protect us from those who don't (do their duty) viz if all credit card customers failed to pay their account, the economy would collapse. (nice citation of Maslow in the article . . .).


Mon, Dec 24, 2012 : 2:45 p.m.

Idealism is nice but it's still just must ALSO be pragmatic...yes I said ALSO...

Wolf's Bane

Mon, Dec 24, 2012 : 1:30 p.m.

Seems like living within your means is just an outdated anachronism these days. Whatever have happened to fiscal responsibility in this town?


Mon, Dec 24, 2012 : 1:26 p.m.

You're a company that BUYS other people's debt so that YOU get to be the ones that HARASS people... A LOT of the debt this kind of company buys is debt that people were outright tricked into through deceptive marketing practices....which is why that debt is sold so cheap to these "debt collector" companies and they can STILL make a fair profit off of that "10 cents on the dollar" collection ratio. There's a reason all these 3rd party debt collection agencies sprung up in the past decade or so...and the ONLY way they can be profitable is if they buy that debt ULTRA cheap....if they collect "10 cents on a dollar or less" then they HAVE to buy that debt for less than that. 3rd party debt collectors in NO possible way perform any kind of public service NOR is what they do a respectable business. And you want me to feel sorry for the people who work for them? That's like asking me to feel sorry for Datastat employees. They KNOW who they working's not like what their employer does was sprung on them....

Tom Todd

Mon, Dec 24, 2012 : 7:48 p.m.

AMEN Duane.


Mon, Dec 24, 2012 : 5:37 p.m.

"Rouge" like they are red in the face from trying to collect from poor people? Or "Rogue" like they are not commissioned from legitimate creditors, and they try to collect orphaned or already settled debts using unscrupulous means?


Mon, Dec 24, 2012 : 3:39 p.m.

Companies try and scam you into debt all the time. Before it even gets to the credit agency they just hope the person will pay because they feel afraid not to. U-M Health System had at a basic doctor appointment a nurse come in to "demonstrate" how a breath test device worked. Took less than 5 minutes; no warning that this might be an extra cost or not part of the visit. Afterwards the insurance company wouldn't pay and they claimed it was a $200 service. Because it was "separate from the visit", with no notice so an education that a monkey with a pamphlet could have conveyed could be refused. Told them to fight with the insurance if they really wanted to scam someone. After trying they eventually turned it over to a credit agency. A lot of what they do is stuff like that. It's not everyone with a widescreen tv laughing at not paying for it.

Ben Freed

Mon, Dec 24, 2012 : 3:05 p.m.

Billy, Actually, debt collection bureaus like the Ann Arbor one do not "buy" debt. They are commissioned by creditors to collect the debt. They are paid a fee plus commission on debt returned, however the majority of the money paid goes to the original creditor. The companies do not perform a public service, they are a business, but they do help many businesses that are unable to allocate the resources to collect debts owed to them that can make the difference for some companies between a net positive or negative year. No one is asking you to feel sorry for debt collectors, but they run a legitimate business collecting legitimate debt. They often work with consumers to find ways to pay down debts and unless the matter is taken to litigation do not tack on large fees. There are "rouge" collection agencies that do that and the operators of this business expressed that they were extremely frustrated by the bad name they give the industry. Best, Ben

Duane Collicott

Mon, Dec 24, 2012 : 2:48 p.m.

Unless somebody signed their name while a gun was being held to their head, it's all legitimate debt. The trend away from personal responsibility these days is extremely disturbing.


Mon, Dec 24, 2012 : 2:40 p.m. think because I'm calling a business out that I'm absolving those that legitimately racked up debt in the first place? I said, or implied, no such thing. I mentioned that they buy a lot of "illegitimate" debt, which means the kind of debt that was created by giving credit to people they KNEW wouldn't pay the as to rack up "fees" and increase that debt...and then sell THAT for a profit. Or were you unaware such a thing existed?

Basic Bob

Mon, Dec 24, 2012 : 1:54 p.m.

What a relief. I thought I bought more stuff than I could pay for. Now I know I was tricked into it. Heck, I could have bought a big screen home theater system. Thanks, Billy.


Mon, Dec 24, 2012 : 1:33 p.m.

Billy, is anyone ever responsible for their personal behavior in your world?


Mon, Dec 24, 2012 : 12:46 p.m.

Sounds like a real Republican, dont't spend what you don't have.

Stan Hyne

Thu, Dec 27, 2012 : 9:29 p.m.

Re Ann English; You hit the nail on the head. That is seldom done. Many commenters have trouble identifying the problem, let alone giving a knowledgable reply.

Ann English

Mon, Dec 24, 2012 : 11:05 p.m.

It was the Democrats who dreamed up the idea that "Everybody should be able to buy a home, and government can make it possible." No, government cannot create prosperity needed for there to be more homeowners, but all over the world, it can and does cause poverty, through high taxation and burdensome regulations. When the Democrats passed legislation forcing banks to lend to people who should never have bought homes in the first place, sooner or later reality hit the borrowers. The legislation created a temporary illusion that would-be homeowners COULD spend what they didn't have.


Mon, Dec 24, 2012 : 1:33 p.m.

Actually, if that is the message then he sounds like a responsible person. You should never spend what you don't have. Im absolutely not a republican, and I think am a bit concerned that you think responsibility isnt important. Beyond the terrible things that it causes the person themself when they go in to debt, it places a burden on their community. Have the Lessons of the housing crisis faded already?


Mon, Dec 24, 2012 : 1:32 p.m.

And what is wrong with that? the opposite is spend what you don't have, expecting others to cover for you! Before credit cards, things worked pretty well.

tom swift jr.

Mon, Dec 24, 2012 : 11:54 a.m.

Why do I find it odd that the President of the local credit union refers to us as "consumers", not "customers", not "partners" (which, for a credit union is true), not even a generic "people", but "consumers". Happy holidays, folks, you've been defined.....


Mon, Dec 24, 2012 : 6:24 p.m.

Commenting before READING the article is usually a bad thing. Collection Agency v.s. Credit Union. This story is about a collection agency.....


Mon, Dec 24, 2012 : 4:03 p.m.

Where did credit unions come from?


Mon, Dec 24, 2012 : 1:39 p.m.

Why do you find it odd? I don't know. Maybe it's because this guy isn't president of a credit union, but of a credit bureau?


Mon, Dec 24, 2012 : 1:32 p.m.

A credit union is still just a bank....don't care if they say "member controlled," cause it's really not. When you have a board of directors you're a bank...


Mon, Dec 24, 2012 : 12:33 p.m.

"Consumer" is the generally accepted word used when referring to customers or people utilizing services. Been that way for at least 10 years.