With revisions, 5/17/08 10:30 a.m.
The very day I posted my previous note about Dell Financial Services and their unscrupulous collection practices, I picked up a copy of the previous Thursday's (4/24) NY Times and found this article on debt collection outsourcing to India, focusing in particular on Encore Capital Group, the very company that services Dell and is apparently responsible for most of those junk calls I've received. The article, unfortunately, is essentially an apology for these vipers. The author, Heather Timmons, paints debt collection outsourcing as some sort of growth industry. She apparently thinks it's a wonderful thing that these folks have "a sophisticated automated system that dials tens of thousands of Americans every hour". You get the impression that she is smiling as she depicts the lengths they go to track down their victims. J. Brandon Black, who is identified as the CEO of Encore, is quoted uncritically, as in the following:Although the stereotype of a collector may be “some guy with chains and a cut-off shirt,” Mr. Black said, collectors in India are “very polite, very respectful, and they don’t raise their voice.” He added, “People respond to that.”
Another promoter of this scurrilous business tells us how lovely it is to be chased down by an Indian collector:In the past, the prevailing wisdom about wringing money from late payers has been “if you’re calling the Midwest, you want someone from the Midwest to twist their arm,” said Mark Hughes, an analyst with Sun Trust Robinson Humphrey who covers the industry. That theory is changing as the pool of trained phone professionals in India and other locations deepens, and companies look outside the United States for lower costs.
This is definitely one of the most uncritical and least-researched articles I've seen in the Times with regard to something that is obviously an ethically questionable business practice. Ms. Timmons tries to paint it as a fascinating cultural and business phenomenon and does not want to sully the reputation of the industry by bothering to look into the numerous complaints about them that can be found on the web (see my previous post).Ms. Timmons states that Indian debt collectors are trained in qualities like "sympathy"; but no example of such sentiments is provided. Instead, we find examples of how they handle "abusive" clients by telling them, "This attitude is not going to get you anywhere." This exactly mirrors my own experience with these agents. When I answered the phone and was asked for a person who does not live with me, I told them that, and added that they had better stop calling me or I would take action. "This will not help" came the reply; and indeed, it did not - only the agency was the abusive party, not me. The calls continued, hundreds of them, day and night, even though I had given them all they had a right to know: the person they were looking for is not at my number.Talk about a great sucking sound - the article documents how the offshore collection agents have been trained to use the U.S. tax rebate, which is meant to jumpstart the ailing U.S. economy, as a weapon against recalcitrant debtors. "This gives you an advantage so you can increase your wallet share", a collection team leader says. Bye-bye, stimulus, hello trade deficit. These companies are, as I suggested, paid by commission. Encore also "files sheaves of lawsuits against customers who do not respond".
All this is very disturbing material is neither is not not even delivered by Ms. Timmons in a tone that is cleared biased. For example, she manages interviews a U.S. debt collector who states some specific problems with overseas debt collectors, like the added annoyance of having someone who does not speak understandable English harassing you for money. But the same person is then alleged to have said that he "had not run into any specific problems with overseas debt collectors" and that they "are very well spoken". Can anyone believe that this was not coaxed for the sake of legitimizing the offshore vampire approach to debt collection? What sort of reporting this is, I don't know; I'm a mere blogger, unskilled in the journalistic ways of Times correspondents.One of "Encore's best collectors", a gum-chewing 27-year-old, is said to be one who "wheedles work and cellphone numbers out of debtors' relatives to track them down". If this isn't enough to make your skin crawl, you have to read the article and get a load of the self-congratulatory spirit of these collection teams, which operate like sales forces and applaud each other when they elicit a commitment - relishing the thought that someone halfway around the world who can't pay their bills will be lining their pockets with commissions. Still not enough? These people make only $425 a month, plus commissions; sounds like all told their incomes range to about $300 a week - about 20% of what U.S. collectors are said to make. It's a tried and true technique: get the exploited to do the exploiting for you, and don't forget to give them a sense of purpose and a belief that they are doing a good thing. And if you can keep them 12,000 miles from the people they are abusing, so much the better.People should pay their debts, or not incur them in the first place. But aside from the impossibility of predicting a disaster that will render you unable to do so, or the lack of alternatives when you cannot afford basic necessities, there are the usurious interest rates still charged by credit card companies, the exploitative schemes built into the structure of debt (the right of banks to charge you up front for the interest due on a long-term loan, for example), and outright mistakes, such as the ones that many customers say Dell made in their billing. In my experience, a great many so-called debts referred for collection are simply charges that the customer disputes or has already paid, and result from either aggressive billing practices or careless record keeping. None of the collector's concern, though; they get a referral and start cranking out the nuisance calls on their wonderful high-tech automated calling system. It seems to be part of the financial system that you are responsible for taking the time and effort to prove that you paid something, even though it is the company's fault that they do not have a record of it. This is why I don't feel like debt collection is a completely legitimate business. Outsourcing it makes it even worse, adding a glib disregard for ethical norms of conduct and the frustration of dealing with automated calling systems and heavily accented staff. This is not a charming cultural phenomenon to be viewed as a growth opportunity amid stagnation. It's a depressing deterioration of both the moral integrity of U.S. business practices and the ability to reign in the outflow of capital. Why the Times would see fit to do anything but lament this is beyond me.
"This is Dell Financial Services. Thank you for your patience. I will be with you momentarily."
For several months now, I have been the object of attention of a notorious gang of highway bandits that goes by the name of Dell Financial Services. This firm, an arm of Dell Computer, "facilitates customer financing of products and services sold by Dell through consumer and small business revolving loans and fixed-term business loan and lease financings in the U.S.", according to their web site. In other words, they extend credit to buy Dell computers. It stands to reason, then, that I must either be an outstanding potential marketing opportunity for them (perhaps I need to set up a data center in my walk-in?) or that I owe them large amounts of money (my own personal dot-com bust?). Why else would they be calling me 10-20 times a day, on two different lines?
The problem is, I have no thought, actually, of setting up a data center. Nor have I ever taken a loan to buy anything from Dell. Nor will I ever buy anything from Dell, even if they are the last computer company on earth. The one thing I ever bought from Dell was a computer, several years ago, which I finally managed to return. It was, at the time, a pretty high-end PC, with a brand new Turtle Beach sound card to fulfill my aural fantasies. The computer failed to boot about one out of three times. Every night I was on the phone with Dell technicians, who took me through a dizzying array of built-in troubleshooting utilities and had me do everything from rebooting to opening up the box and checking wires. After spending what I considered to be a ridiculous amount of time with perhaps four or five technicians, I asked them to honor their putative on-site service contract and take care of the problem. Many phone calls and complaints later, they finally agreed to send someone. He came when I was not home (my wife let him in), replaced the hard drive (which I had repeatedly told them was not the problem) and left. When I came home and turned it on, the system failed to boot. It was not the on-site guy's job to check out the system, I was told, just to install the drive. Actually the drive worked okay, but the problem was the same as before.
After weeks of these shenanigans I asked Dell to replace the computer. No, they insisted, we are known for service, and we would not dream of withdrawing that support. Our highly rated technicians are more than happy to spend hours and hours with you on the phone. Finally, after going through endless, useless reboots and technical routines which they frankly would not have had a prayer of getting a non-technical user to do, I demanded my money back. Oh no, says Dell, we can't do that, it's beyond the two week return period! So, a few days before the end of the 60 day period in which you can challenge a credit card charge, I called my credit card customer service line and protested Dell's charge. Now, I am not going to become a cheerleader for credit card companies, but to their credit (lol) they actually forced Dell to take the computer back and give me a full refund.
Last note, before I get to the present situation. Before contacting Dell's illustrious technicians I had set the BIOS to display the boot-up sequence, and I knew full well that the system often hung after loading the sound card drivers. This fact was conveyed to Dell's highly rated service group from the beginning. Nevertheless, I was assured that this had nothing to do with the problem. Just before Dell agreed (under pressure) to accept the computer back I found a review of the Turtle Beach sound card online. The guy who wrote the review, which was several pages in length, must have been one of the world's leading experts in sound cards, because he knew stuff about them that only a sophisticated acoustic engineer could know. And he mentioned that he had had exactly the problem I was having at first, and had downloaded an updated driver that solved the problem. So I did the same, and booted the PC about 20 times without an error. Be that as it may, I was so furious with Dell by that point that I decided never to deal with them again, and returned the PC anyway. (Sad to say, the Micron system that replaced it wasn't much better - I still have it, and it still tends to freeze in hot humid weather.)
There is a point here that is not irrelevant to my present issue. Dell built their reputation largely on getting top ratings for service from PC Magazine and its readers. Perhaps it says something about these kinds of ratings - they don't dig deep enough, and lack the ability to discern the superficially good from the really good. That Dell support was available to me is beyond dispute. That "support" of this sort was in my interest, or that of any consumer, is another story. After a couple of hours on the phone, if a system won't boot normally, the normal reaction should be: "Here's an RMA #, please send it back and we'll ship a new one." There is absolutely no justification for keeping a customer on the phone every night for days on end, and forcing them to run all kinds of tests, to solve a problem that should not be there in the first place. Dell did not ship a working system; that was their problem, and however they decided to fix it, they had no right to utilize excessive amounts of my time in doing so. Obviously, Dell likes to put on a user-friendly face, but has no issue with intruding themselves in an extremely annoying way into the lives of their customers.
Turn the page. It is five years later. I pick up my home phone, and get what I recognize as a junk call. The telltale sign: you say "Hello", and then you hear nothing for a second or two, until someone says, "Hello, am I speaking with...?" I usually hang up before that voice comes on. But this goes on for several days, until I get quite annoyed, and wait for the voice to see who it is. Now I hear, with those recognizable trained-actor intonations, "This is Dell Financial Services. Please hold..." Excuse me? You're calling to sell me some garbage and you want me to hold? Is this a joke?" I hang up. Days more, and the calls increase. They are coming at 8:00 a.m., in the evening, on weekends - I normally screen my home phone calls, but this is getting very annoying. Finally I decide, if I can end this by answering one call, I'll do it. So I answer. To my surprise, the person on the other end asks for a name I do not recognize. I tell them there is no such person here, and that if they call me again I will report them to the FCC. And perhaps I utter an expletive or two. The Indian voice on the other end informs me that "This will not solve the problem." I hang up.
The calls continue. In fact, several days later, I begin to get calls on my cell phone from a number I do not recognize: 908-854-1973. It turns out to be the same company. I recall that a long time ago, when I recorded my home phone message, I put my cell phone number on it for people who wanted to reach me right away. The company had finally gotten a human being to call my number, who did what a calling robot cannot do: recognize another number in the message.
Go ahead and Google 908-854-1973. You Google most phone numbers and what do you get? For public numbers, you get a listing; for cell or unlisted numbers you get maybe one or two direct hits, and then some partial stuff, or maybe nothing. For 908-854-1973 you get three pages of direct hits, almost all of them complaint forms: this one, for instance. Not only that, try Googling Dell Financial Services. You get not only their web site, but this page of users threatening a class action suit against DFS for harassment of consumers who aver that they do not owe Dell a penny or are being unfairly asked to pay extremely high interest rates that they did not agree to. Indeed, some of these people complain of "threatening phone calls day and night", "someone in India that was rude and kept talking around the issue", and the like. There appear to be few dozen people who want to sign on to this suit, most of them complaining either about telephone harassement, or incompetent accounting practices, or bills and hardware sent to the wrong address, resulting in demands for immediate repayment or usurious interest rates. One person points to a previous lawauit against DFS. Perhaps it is no surprise, then, that Dell has put DFS up for sale, and has already received bids. The only question is whether the bidders are aware of not only the potential class action liabilities, but the fact that DFS is involved with a company called CIT that is being hit hard by the subprime mortgage mess.
What appears to be going on, then, is that Dell has a troubled lending unit that is attempting to protect its shaky financial situation by hitting individual consumers, who can least defend themselves, as hard as possible for every penny. Their own accounting practices appear to be very lax. They have employed call centers, onshore or offshore, largely staff by persons of Indian background, who are trained to threaten and harass Dell's U.S. customers, employ calling robots that dial phones day and night. DFS apparently does not keep accurate records of their accounts, and has been the subject of lawsuits and possibly a future class action suit. This is the financing arm of the same company that, as I said, built its reputation on its alleged superiority in customer service!
What is wrong with this picture? Everything. But at bottom, the problem is our own notion of business ethics and what we allow technology companies to get away with. First, I tried calling Verizon and Verizon Wireless, and asked if they could block these harassment calls. No, we don't do that, they said. Why not? They should be required to do that. No one should be subjected to this kind of abuse without having a simple remedy. All phone companies should be responsible for following up and dealing with telephone harassment. This is a no-brainer. ISP's should be responsible for blocking spam; very simple algorithms could get rid of 90% of it, by targetting the servers that forward it. These companies (including Verizon) are making $billions off of their customers, but our lax model of business ethics lets them watch as their networks are used for illicit purposes. Napster can be taken down for allowing users to share files, though Napster itself did not engage in any illegal activity; but Verizon can pass along the most insidious crap without penalty. It is appalling.
Second, back to my earlier problem, computer hardware and software companies have to be responsible for shipping products that work, or for getting them working without undue effort on the part of the user. This is obvious and indisputable, yet it is a principle that is basically ignored in the regulation of U.S. technology businesses. I am not, of course, underestimating the level of sophistication involved in producing even an ordinary laptop or word processor. But that is not the issue. The technology issues are handled hierarchically, at each level of manufacture, so that by the time Dell or any other company snaps together its PC's, they do not have to be responsible for what happened in the clean rooms where the chips or disks were manufactured. If they send me something that does not work, they are tacitly stating that they are confident enough in the technology to sell it to me. If it does not work as it should, they have to do something about it. To the extent that it helps me to avoid shipping things back and forth I am happy to sit in front of a screen and try a couple of things; and when it is no longer in my interest, it should be their problem to deal with. And this goes for software too; but that is such a long discussion it needs its own post.
Third, we have a cheap labor issue, and the Indian subcontractors are being exploited just as much as we are. It is not cost effective to pay top dollar to people who are supposed to collect money, since collection is by nature an uncertain enterprise. So you look for the most cost efficient way of doing that, and perhaps you pay for the service on a commission basis. In any case, the subcontractor is given an interest in producing results, and if they are willing to engage in practices that would be considered unethical by our normal social standards, like calling people constantly, at odd hours, and taking their cell numbers off voicemail messages, then the company (Dell, in this case) is insulated from the charge of unethical practices while reaping the benefits. Of course, by exploiting cheap Indian labor for this purpose, U.S. private enterprise also helps cause enmities among the people who are all victims of this system. Some of the perpetrators are indeed Indian - the Indian businessmen who are greedy enough to agree to do Dell's dirty work. But the people we talk to on the phone are just hungry grunts who are not trained in customer service or to act professionally; indeed doing so could probably cost them their jobs. They are the frontline soldiers who are supposed to do the dirty work while absorbing all the verbal abuse that their irate victims give them. The ultimate responsibility lies with our own government and legal system: its lax communication laws, and lax regulation of collection practices. Secondarily, with Dell and their competitors, who are never satisfied with the $billions they make and always need to exploit every opportunity for increasing their relatively thin margins. Third, with the exploitative subcontractors in India or elsewhere who act like they are training attack dogs and feel immune to basic ethical standards that are at least sometimes observed by similar U.S. companies.
And fourh, with us, for putting up with this garbage over and over again, year after year, election after election. As political interest groups go, technology users must be one of the largest there is. Yet which one of the candidates has offered anything remotely resembling a comprehensive platform for technology policy (or finance policy, in spite of the mess we're now in) - from acceptable uses of bioletric identification to responsibility for post-sale consumer support, from telephone harassment to 30% financing rates for PC purchases? Nobody, and no one but a few small privacy and technology user groups is demanding that they do. That is a travesty. Nearly every single person in the U.S. has an interest in proper regulation of technology, but we don't raise our voices about this. So it will be the case that we have to put up with shoddy products and unethical practices, until we get serious about cases like Dell Financial Services.
Finally, I have a personal moral dilemma. I recently discovered that the person Dell is trying to reach is someone who lives in my building. I actually have a contact number for him, though I've met him only once and never tried using it. There is a good possibility that this individual intentionally gave Dell my number; perhaps he owes them money and wanted to throw them off. Should I get Dell of my back, and give this individual what he probably deserves? It is tempting. So far, I have not. (Indeed, the few times I have answered the cell phone calls, the party on the other end terminates the call after putting me on hold, so I cannot even give them information it I want to.) Between the corporate abuse practiced by Dell and its partners, and the unethical action by an individual with whom I am slightly acquainted, I find the former by far the more obnoxious, and do not want to further their cause. They may have a problem I can help them with, but I do not wish to do so, because they do not deserve to have their techniques legitimized. And I trust that eventually, some lawyer or state attorney general or other entity will put a stop to DFS and their practices; or, as an act of poetic justice, they may just go under. That would warm my heart a bit, but it would be better to fix what is broken in both technology and financial policy in this country. As for my dubious friend in the building, he will get his comeuppance too. This kind of person does not need assistance to get himself in trouble. Then again, assisting him might be a worthy act nonetheless.
