The End of Off-Shoring Collection Agencies?

It’s tough enough managing the press for the collection industry based solely on American debt collectors — what with the questionable data being used in most mainstream press stories about the industry and a knee-jerk misunderstanding about what collectors really do.

Then, there’s India.

According to this Paramus Post story, there’s a direct link between foreign call centers and an increase in fraudulent debt collection activity.

Now, before you get your typing fingers ready to malign the Subcontinent — wait a moment. Seriously. As unfair as it is to paint the entire collection industry as a cess pool of bullies, it’s equally unfair to go throwing around xenophobic talk about an entire country based on some bad apples there.

But uy, those apples.

The U.K.’s Sunday Times has run a series of investigative pieces about fraudulent agencies that set up in India and wreak all kinds of havoc — from identity theft to abusive collection tactics. (See also: FTC Shuts Down Debt Collection Agency.)

At issue is the practice of off-shoring some of these collection agencies in the hopes of cheaper labor. But, as these reports demonstrate, that cheap labor can be incredibly expensive for agencies who pick an aforementioned bad apple with which to place their accounts.

In the U.S., there’s a piece of federal legislation introduced by Rep. Tim Bishop (D-NY) and Rep. Dave McKinley (R-WV), with nearly 100 co-sponsors that would bring some call center jobs back home and provide U.S. consumers with more rights and accountability – including being told the location of the call center to which they are speaking.

Additionally, the legislation would ensure that companies contributing to the off-shoring of call center jobs from the U.S. would be ineligible for certain federal grants.