By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
We are a nation in debt and the bill has come due. The average American consumer has four credit cards, owes nearly $10,000 in non-mortgage debt, and can no longer rely on his home equity as a safety net. With spiking fuel prices, stagnant wages, and bankruptcy costlier than ever, more people are falling behind on their bills—and getting dragged into ruin.
All of which makes now a good time to be a debt collector. Awash in fresh accounts, the business is also expanding into new areas: In the last decade, years-old consumer debt has become a commodity to be bought and sold on the free market. "Buy it now! Buy it all!" screams the six-page ad in a recent issue of Collections & Credit Risk, an industry trade publication that offers a smorgasbord of unpaid tabs for sale: credit cards, car loans, hospital expenses, mortgages, even gas bills.
When a debtor won't pay, collectors use a variety of techniques—some legal, some not—to extract the money. They might threaten to ruin your credit score, garnish your wages, and, in extreme cases, even cuss out your child. Last year, the Federal Trade Commission reported receiving 71,000 complaints about debt collectors behaving badly—more than any other industry monitored, and the highest total in the 30 years that the authority has been keeping track.
If debt collectors thrive on intimidation, there's one man who strikes fear into them: Pete Barry. In the decade he's been suing dirty debt collectors, Barry has pried loose millions of dollars in damages. So successful are his techniques that he's begun teaching seminars nationally to train up an army of lawyers equipped with the weapons to sue rogue debt collectors and win.
In person, Barry is no less impressive. With his linemen's physique and trim goatee, Barry could pass for a street fighter were he not decked out in a $3,000 suit. Sitting in his office, a spacious chamber in Minneapolis, Barry can't help but break into a grin as he discusses all the ways he bedevils the debt collection industry.
"The best is serving a grotesquely abusive debt collector," he says. "Nothing makes me enjoy my job more."
• • • • •
"WHY DID YOU CALL my client a lowlife piece of shit?" Barry asked.
He was in California, deposing a debt collector who wore a Sean John T-shirt and a look of disdain.
"In my opinion, why was he a lowlife piece of shit?" the debt collector asked.
"No," Barry said, in no mood to argue semantics. "Why did you call him that?"
"Let me explain why I expressed that opinion," the collector said, launching into a long-winded soliloquy about how he approaches customer service.
Barry cut him off mid-sentence. "Why did you call my client a lowlife piece of shit?"
"In 10 seconds you're going to have your answer, Mr. Barry," the collector said.
Once more, Barry cut him short. "I'm asking you and I'm going to ask you again: Why did you call my client a lowlife piece of shit?"
"Because in my opinion, a person who doesn't pay his bills, a person who lies, and a person who—in my opinion—steals, is a person, in my opinion, who's a lowlife piece of shit."
One of the first times Barry got treated like a lowlife piece of shit was when he was nine years old. After Barry was caught fighting on the playground, his elementary school principal dressed him down. "You're worthless," the principal said. "You'll never amount to anything."
"Tears were streaming down my cheeks," Barry recalls 30 years later. "I'd rather that he'd paddled me."
At the time, there was little indication Barry would amount to anything special. Growing up the sixth of eight kids, the child of an accountant and a social worker in Brooklyn Center, he was nobody's favorite to succeed. At odds with his father—Barry declines to get into specifics—Barry moved out on his own at age 16. His new home, a tiny studio apartment in Anoka, offered little except a couch, a table, and freedom.
Entering his 20s without a college degree, Barry had limited options, so he hitched his wagon to the most promising horse he could find. In the early 1980s that was Target, then a bit player on the national retail scene, but well positioned for a major expansion. Barry took a job nabbing shoplifters. It required a keen eye for detail and an ESP-like ability to read body language, but Barry was a natural talent. Within 18 months, he was a rising star and took a promotion that brought him to the hot, dry air of Tucson.
It was on a day like any other when Barry came face-to-face with how dangerous the job could be. One of his co-workers had caught a man filching a pack of Duracels. In the cramped back office, Barry sized the guy up: He was scruffy, but seemed harmless enough. It would take a while for the cops to arrive, so Barry took off the man's handcuffs to make him more comfortable. His reward for his kindness was the business end of a Dillinger. "What do you think about that?" the thief asked, then skulked out the door, scot-free.