An employee at West Asset Management in Omaha, Neb., explained that
she wasn't legally obliged to pay, according to a recording of the
November call reviewed by The Wall Street Journal. Then he veered into
a discussion about how she could "get this taken off your plate."
Mrs. Long, of Cape Coral, Fla., told the debt collector she had "lost
everything." She had sold the couple's motor home to help cover
medical bills and funeral costs. All that was left, she said, was
$2,000 in life-insurance proceeds.
"I can give you that," she said when asked for the money, "anything
just to get this off of my head."
When you die, your debts usually die with you. Surviving family
members rarely have a legal obligation to pay unless they co-signed a
loan, such as a mortgage or credit card. That leaves lenders in the
But debt collectors have found a way to help lenders get their money
anyway. Working on behalf of financial giants from Bank of America and
Capital One Financial Corp. to Discover Financial Services and
Citigroup Inc., collection firms target survivors who might agree to
pay at least part of what the dead person owed.
Debt collectors say the survivors have a moral obligation to pay,
especially in cases where they benefited from purchases rung up by
ACA International, the industry's main trade group, says that
collecting payments on debts owed by the dead helps ensure that
lenders will continue to extend credit at competitive interest rates
to older Americans. David Cherner, corporate counsel for the ACA, says
lenders must try to collect the debt or else write it off. "Just
because someone has passed doesn't mean the debt is wiped clean," he
None of the financial firms would say how much debt-recovery work is
outsourced. Nor would they comment on any individual collection cases.
The companies say that they comply with all applicable laws and make
sure surviving relatives are approached with sensitivity.
For the rest of the story, see this article in the Wall Street Journal: