Debt collectors turning to illegal methods

  • 2008-05-01
  • By Marge Tubalkain-Trell

Debtors Jail? Lawyers say you can not end up here just for not paying up.

TALLINN - Debt collection agencies have started to resort to using bullyboy tactics to get money from bad creditors, many using tactics that lawyers have deemed dishonest and outright illegal.
Some debt collectors letters send warning to debtors claiming that they face jail if they do not pay their debts. Others send aggressive text messages on a daily basis.

Meelis Pirn, a lawyer with Kaasik & Co said the letters that debt collection agencies have been sending out 's many of which threaten jail time for bad creditors 's were at best misleading and at worst criminal.
"It's certainly not legal. It falls under the law of obligation and cannot be handled in criminal court. They do this just to scare people, but it surely doesn't have any [legal] grounds," she said.

The Law Society said debt-collecting companies cannot seize properties or freeze bank accounts 's this can only be done by a bailiff and only in worst case scenarios. According to the Law Society, someone cannot be sent to jail simply for not paying their debts.

Some debt collection agencies threaten bad debtors with up to 10 years in jail.  Some letters contain references to three different laws, accusing debtors of illegal embezzling, fraudulence and theft.
Teigo Tamm, a member of the board in AS Era Leasing, said the methods that his company uses are legitimate.
"If a person doesn't want to pay the loan we use all legal measures to get that debt paid. We certainly only use legal methods that are used by other debt collecting agencies, the kind used by banks and so on," he said.

Linda Kala, a woman who has had experience with Era Leasing, said that she was unhappy with the way that the company had dealt with her case. Kala said the letters she received were horrible. She said it got to the point where she did not even read them.

"The agency told me they have fast and effective methods to take me to court, but I didn't really read the letter they sent me," Kala said.

Kala started having trouble after she took an SMS loan. When the time came to repay the loan, she decided to renew the loan, because she did not have any money. The renewal failed and just five days after the repayment day had passed she got a letter from the company demanding that she pay it back.

After that, she received two to three text messages per day, reminding her she had to pay. When she eventually paid back the debt, she also closed the account because she did not want to have that kind of trouble again.

The text of one letter at the disposal of The Baltic Times reads: "We often get feedback from clients saying they do not have the money to pay back and there is no chance that money could come in any time soon."
"An SMS loan offers services for a very short period and there is no way that in such a short time such hindrances would appear that might stop [a person from] paying the loan back 's and even if they do, it is your responsibility to let [the agency] know immediately. We want to take very concrete measures for our long-term debtors, which include turning to the courts and police," the letter said.

"You must take into consideration that these measures will bring about a very long and complicated process and the final result is negative for you. All taken responsibilities must be paid back and no one will get away with it," it said.

The last  line of the letter reads: "You may be punished with two to ten years in prison."
According to the law, a company can only persuade people to pay their debts. They can, however, go to the debtor's home or place of work.  The consumer protection board refused to comment on the issue saying that if these letters were being sent out then it was a matter for the police.