Pull the Other One

I was scanning through the news sites the other day and I ran across a story out of Arizona that I can’t help thinking epitomizes the false naivety that is responsible for so much of our current political gridlock. I usually try to avoid political discussions in this space, partly because there are already more political blogs online than there are people who want to read them, and partly because it’s not really my field. None of my degrees are in political science, history or law, and until “running this government like a business” becomes more of a possibility than a punch line there isn’t going to be much I can contribute to the conversation. That said, it’s events like this one that make me wonder if there’s really a dialog left, or if both sides are just trying to score points at the expense of everyone else…

As reported in the Phoenix Business Journal online, Arizona’s governor has just signed into law a new bill that will allow collections companies to use a defaulting customer’s last billing statement as proof of the amount that he or she owes when they attempt to collect the debt. Supporters of the bill claim that this will make it easier for companies to collect what they are actually owed, harder for deadbeats to skip out on their responsibilities, and allow companies to get more money from the sale of defaulted account debts to companies that specialize in recovering those funds. Naturally, the backers insist, this information would never be used to make it harder for people to recover from bankruptcy, add extra fees, charges and interest to accounts after the fact, or defraud people who don’t even owe anything into paying up to avoid legal expenses…

Opponents of the bill, naturally enough, insist that this is exactly what will happen under the new law. Even assuming that every member of every company extending credit, every collections agency trying to recover money, and every finance company buying up defaulted accounts are paragons of virtue and justice – and this would be a very unlikely assumption in a time when certain large banks keep trying to foreclose on properties that aren’t even mortgaged – it’s still hard to imagine how a law that allows a creditor to “prove” that you owe them any amount they like simply by printing a new version of your final statement is good for anybody. In fact, they will insist, at least some of the business interests pushing for this new law are probably gearing up to do exactly that…

Now, as usual, the truth is probably somewhere in between those extremes. I’ve spent some time in collections myself, and it’s certainly true that there are a lot of people who feel entitled to anything they can make off with, and will game any system just for the fun of it even if there’s no actual profit to be had. It’s also unavoidably true that any system built and run by humans is going to include human error, and that means that allowing this practice will inevitably cause harm to people who have done nothing wrong, even if none of the companies involved ever does anything wrong either. The problem here is that the companies already have all of the advantages of money, power and political connections over the consumer, that a single unjust “collections” attempt can destroy a family’s entire world – and that the people pushing this measure are pretending that no such thing as a fraudulent collections attempt could ever happen…

I don’t have an answer for the current financial crisis, or for the ongoing meltdown of consumer credit. And I can’t deny that collections failure is an issue, or that any company that gets dragged down by deadbeat customers and unrecovered collections will take all of its employees, suppliers and stockholders with it, making the whole national crisis that much worse. But whatever the answer might be, I’m reasonably sure that this isn’t it…