For American people just starting out, the most current analysis of trends in our economy points to the fact that incomes are decreasing. Many financial experts and leaders in the collections industry have reason to believe that this paradigm shift will be a permanent one. Out of all of the demographics in the United States, young adults are the most uninsured when it comes to health care coverage. A staggering thirty percent of these individuals have absolutely no insurance. And even though a large portion of uninsured young people are employed, many have just begun their careers and work at low wage jobs for employers who offer limited or no health care benefits.
From the perspective of the collections industry, this new economic progression has the capacity to have massive ramifications. With this many young adults currently scrambling to pay for day to day expenses, let alone medical bills, experts are predicting that their personal debt will grow to massive proportions. As health care prices spike it is crucial to bear in mind that uninsured young people are twice as likely as those with privatized health insurance to have no education beyond high school. Not only will these people not have coverage, but their lack of education will limit their earnings potential in the future as the job market grows more and more competitive. This, coupled with young people's financial inexperience makes them prime territory for debt collectors.
Yet another factor is the credit industry itself. With the CARD Act and America's financial woes, stricter credit standards have been imposed and will most likely make it more difficult for many young people to get credit or loans for "good debts," any type of productive debt that could improve an individual's situation such as a mortgage for a home or a loan for post graduate education. As bill collectors scramble to wrap their heads around all of the economic changes, advances in technology make bill collection practices and their regulations (The Fair Debt Collection Practices Act) seem dated and ambiguous. One blaring example of this fact is the existence of cell phones. The FDCPA was written in the 1970s and as a result does not have stipulations guiding cell phone calls, and it is estimated that over forty percent of consumers do not have landlines at this moment. Out of everybody, young people are the least likely to have landlines and therefore the hardest to get in touch with.
One way that collection industry leaders are trying to address this issue is by crafting more methodical profiling systems to help debt collection companies when they are trying to collect on these accounts with an active cell phone number. Better, more efficient communications with credit bureaus will aid them in figuring out if the debtor has obtained a new address or phone number.
Because this is a time to think outside the box, the collections industry can be likened to the wild west. It seems that these days, anything goes. But one thing is for sure: with changes accelerating faster and faster, the smartest debt collection agencies are gearing up for younger adults, attempting to use the ways that these individuals prefer to do business and communicate. Some debt collectors are considering text messages, and many agencies have recently added online systems to their businesses that permits debtors to make payments over the internet, rather than deal with a debt collector in person or via United States Postal Mail.
Tuesday, June 15, 2010
Monday, June 14, 2010
The Leaner, Meaner, IRS Has More Power Now And Is More Angry
According to the new Treasury Secretary, Timothy Geithner, the infamous Internal Revenue Service will be stepping up its efforts to collect what they are owed as taxpayers complete their 2009 returns. That’s right. Today’s IRS is even meaner and more powerful than ever before. According to the IRS, billions of dollars in income tax assessments have not been paid by American citizens. If they are not collected, yearly taxes that go unpaid will continue to accumulate each year with penalty and interest charges. These all ball up together to create an inventory of “tax debts” which approached a massive three hundred billion at the end of the fiscal year.
As many of us are painfully aware, the IRS has a complicated process to collect on taxes that have gone unpaid by getting in touch with taxpayers through telephone calls, foreboding notices, and in person. Treasury Secretary Timothy Geithner, himself an accused tax evader estimates that a total of three hundred and thirty two million dollars will be devoted to the new IRS enforcement efforts. That includes one hundred and twenty eight million dollars to add about eight hundred new IRS employees to go after tax evaders.
In these hard economic times where even Uncle Sam owes a massive amount of money, this all makes sense. “The US Treasury is desperate for cash and the IRS has been informed to get tougher in collecting old debts” says Anthony E. Parent, founder of IRS Medic. And they mean business. The IRS has hired a number of new and very forceful Revenue Officers to come to people’s houses, businesses, or even crash a Rotary Club meeting or two in hopes of finding suspected delinquent tax payers. Parent warns us that these new employees may be overly aggressive in hopes of impressing their superiors and obtaining a promotion.
For the first time in American history, taxpayers’ primary residences can now be harvested by the new, lean, mean IRS. They were not able to seize retirement accounts in the past, but this too, has changed. “The IRS is getting bolder” says Parent. “They can and will clear out a taxpayers entire retirement savings.”
The moral? Anybody that owes money to the IRS needs to take a proactive stance not wait for the IRS to come and get them! “We have had clients who have approached us after the IRS has gone after them. This makes helping them a great deal harder” he says. “If you get help early in the game, you have more options. Never ignore the IRS.”
As many of us are painfully aware, the IRS has a complicated process to collect on taxes that have gone unpaid by getting in touch with taxpayers through telephone calls, foreboding notices, and in person. Treasury Secretary Timothy Geithner, himself an accused tax evader estimates that a total of three hundred and thirty two million dollars will be devoted to the new IRS enforcement efforts. That includes one hundred and twenty eight million dollars to add about eight hundred new IRS employees to go after tax evaders.
In these hard economic times where even Uncle Sam owes a massive amount of money, this all makes sense. “The US Treasury is desperate for cash and the IRS has been informed to get tougher in collecting old debts” says Anthony E. Parent, founder of IRS Medic. And they mean business. The IRS has hired a number of new and very forceful Revenue Officers to come to people’s houses, businesses, or even crash a Rotary Club meeting or two in hopes of finding suspected delinquent tax payers. Parent warns us that these new employees may be overly aggressive in hopes of impressing their superiors and obtaining a promotion.
For the first time in American history, taxpayers’ primary residences can now be harvested by the new, lean, mean IRS. They were not able to seize retirement accounts in the past, but this too, has changed. “The IRS is getting bolder” says Parent. “They can and will clear out a taxpayers entire retirement savings.”
The moral? Anybody that owes money to the IRS needs to take a proactive stance not wait for the IRS to come and get them! “We have had clients who have approached us after the IRS has gone after them. This makes helping them a great deal harder” he says. “If you get help early in the game, you have more options. Never ignore the IRS.”
Thursday, June 10, 2010
What Is A Credit Score And How Is It Calculated?
As of 2009, bankruptcy filings that were new increased by over thirty five percent in only one year. Although it may seem like a dismal sign, one good way to look at it is that all of these people are on their own paths to rebuilding their credit scores and ultimately, financial freedom. We have all seen the commercials with "people just like you and me" prodding us to visit whatever website and find out what our credit score is. We know that if the number is high, it's a good thing. It it's low, it could mean trouble finding a loan, getting a job, or a new place to stay. But just what is a credit score?
Your credit score is summed up in one (hopefully!!!) three digit number that is formed from a statistical analysis of your personal credit file. Credit scores are here to give you a major headache, and for the banks to determine your ability to take on debt and repay a credit obligation. That's why credit card businesses and banks will assess your score to figure out how much credit they want to offer you and at what interest rate.
So how is your score determined, you may be asking? The Fair Issac Corporation, or as you may know them, FICO, was the first group to come up with a scoring system in 1958. The report recently underwent a makeover (FICO 08) but it's not used by all credit reporting agencies. In this new, improved FICO 08 version, minor credit delinquencies are not stacked against you when you for the most part do a good job repaying your money.
A credit score asks five questions. What is your payment history like? How much money do you currently owe? Just how long have you had credit? How many times have there been credit inquiries made on your report? And what type of credit do you have? So let's say, for the sake of example, that you screwed up. Just how long will negative marks have an impact on your credit score? Well, that depends on the type of information. Plain old negative information can stay on your credit report for up to seven years. In the case of bankruptcy filing it can stay up to ten years. Here's where we get into the creepy big brother aspect of credit reports. Every individual has a personal credit file, and what this means is that the impact from person to person will affect each differently.
If you are considering filing for bankruptcy, concerned about your financial situation, or just want to know more and feel more secure, it is in your best interest to seek out the advice of a financial planner. One that works for a fee is preferable, because they will have your best interest at heart and not their commission instead. Good luck in your financial journey!
Your credit score is summed up in one (hopefully!!!) three digit number that is formed from a statistical analysis of your personal credit file. Credit scores are here to give you a major headache, and for the banks to determine your ability to take on debt and repay a credit obligation. That's why credit card businesses and banks will assess your score to figure out how much credit they want to offer you and at what interest rate.
So how is your score determined, you may be asking? The Fair Issac Corporation, or as you may know them, FICO, was the first group to come up with a scoring system in 1958. The report recently underwent a makeover (FICO 08) but it's not used by all credit reporting agencies. In this new, improved FICO 08 version, minor credit delinquencies are not stacked against you when you for the most part do a good job repaying your money.
A credit score asks five questions. What is your payment history like? How much money do you currently owe? Just how long have you had credit? How many times have there been credit inquiries made on your report? And what type of credit do you have? So let's say, for the sake of example, that you screwed up. Just how long will negative marks have an impact on your credit score? Well, that depends on the type of information. Plain old negative information can stay on your credit report for up to seven years. In the case of bankruptcy filing it can stay up to ten years. Here's where we get into the creepy big brother aspect of credit reports. Every individual has a personal credit file, and what this means is that the impact from person to person will affect each differently.
If you are considering filing for bankruptcy, concerned about your financial situation, or just want to know more and feel more secure, it is in your best interest to seek out the advice of a financial planner. One that works for a fee is preferable, because they will have your best interest at heart and not their commission instead. Good luck in your financial journey!
Wednesday, June 9, 2010
Shady Debt Consolidation Promises To Be On The Lookout For
If you are being inundated with phone calls from debt collectors demanding money, and advertisements that blare "get out of debt now," debt consolidation and debt settlement businesses may be looking very good to you at this current moment. With debt settlement and consolidation centers, you combine your debts and pay a portion of the total. However, many of these businesses may be just too good to be true.
Any debt consolidation place that seeks to satisfy your debt for "cents on the dollar" should be considered dubious. After all, it is difficult, near to impossible to make and keep a promise like that without being aware of the details of how long you have owed the money, how much money you owe, and to which creditors. These debt consolidation companies aren't aware of your past payment history. They don't know what creditors you owe. Also, each person has different assets that can be used to satisfy their own debts. You can never make a blanket statement.
Debt settlement centers that guarantee that you will be debt free in three months should also be taken with a grain of salt. Again, the business is unaware of how much you owe, or who you owe it to. Additionally, some obligations, such as student loans, child support and back taxes cannot be covered in a debt settlement plan.
Companies that claim that you can not obtain help without paying an upfront fee or deposit may be less than reputable. While some debt consolidation businesses may accept an upfront fee of as little as fifty dollars, generally, the person in debt pays the debt settlement company a percentage of the debt owed, often fifteen percent, for negotiating the deal.
Generally, the firm will negotiate a payment between you and the businesses and people you know and will accumulate enough money to make that payment. The debt settlement company will hold on to the money until you reach the settlement amount.
In the meantime, your creditors are not being paid. Unfortunately, while you are accumulating that payment, you are not paying your bills and you may be delving further and further into more debt. Instead of taking this gamble check out a not for profit credit counseling firm that might charge you only twenty dollars, if anything. Instead of billing the debtor, these non profit counselors will generally get what is called a fair share percentage payment from your creditors after your debts have been paid.
Finally, and most important, do NOT automatically trust in the debt settlement counselor who let's you know that "We will handle everything. You should stop communicating with your creditors." Despite the thought that the idea of not speaking to creditors and ignoring their mail sounds like it could be a real load off of your back, ultimately, it is your debt, your money owed and your credit score at hand. Never send in a change of address form directing all creditor mail to a debt settlement company.
It is important to bear in mind that the creditor is the one with whom you signed your contractual agreement. When all of your statements are being sent to the debt settlement company, you relinquish that control. You do not know how much in interest and late fees are being tacked on. You also won't know if your debt has been moved into collection.
A few final words of wisdom. If you believe that you need debt settlement, try debt management first. Call up your creditors and request suspended payment, reduced interest or any other payment terms that may suit your financial situation in a more favorable light. Even though it might seem like a long shot, or a pain, it is always very important if you are about to miss a payment to call your creditor and say "Listen, I can't make this month's payment. I'd like to work something out with you."
Any debt consolidation place that seeks to satisfy your debt for "cents on the dollar" should be considered dubious. After all, it is difficult, near to impossible to make and keep a promise like that without being aware of the details of how long you have owed the money, how much money you owe, and to which creditors. These debt consolidation companies aren't aware of your past payment history. They don't know what creditors you owe. Also, each person has different assets that can be used to satisfy their own debts. You can never make a blanket statement.
Debt settlement centers that guarantee that you will be debt free in three months should also be taken with a grain of salt. Again, the business is unaware of how much you owe, or who you owe it to. Additionally, some obligations, such as student loans, child support and back taxes cannot be covered in a debt settlement plan.
Companies that claim that you can not obtain help without paying an upfront fee or deposit may be less than reputable. While some debt consolidation businesses may accept an upfront fee of as little as fifty dollars, generally, the person in debt pays the debt settlement company a percentage of the debt owed, often fifteen percent, for negotiating the deal.
Generally, the firm will negotiate a payment between you and the businesses and people you know and will accumulate enough money to make that payment. The debt settlement company will hold on to the money until you reach the settlement amount.
In the meantime, your creditors are not being paid. Unfortunately, while you are accumulating that payment, you are not paying your bills and you may be delving further and further into more debt. Instead of taking this gamble check out a not for profit credit counseling firm that might charge you only twenty dollars, if anything. Instead of billing the debtor, these non profit counselors will generally get what is called a fair share percentage payment from your creditors after your debts have been paid.
Finally, and most important, do NOT automatically trust in the debt settlement counselor who let's you know that "We will handle everything. You should stop communicating with your creditors." Despite the thought that the idea of not speaking to creditors and ignoring their mail sounds like it could be a real load off of your back, ultimately, it is your debt, your money owed and your credit score at hand. Never send in a change of address form directing all creditor mail to a debt settlement company.
It is important to bear in mind that the creditor is the one with whom you signed your contractual agreement. When all of your statements are being sent to the debt settlement company, you relinquish that control. You do not know how much in interest and late fees are being tacked on. You also won't know if your debt has been moved into collection.
A few final words of wisdom. If you believe that you need debt settlement, try debt management first. Call up your creditors and request suspended payment, reduced interest or any other payment terms that may suit your financial situation in a more favorable light. Even though it might seem like a long shot, or a pain, it is always very important if you are about to miss a payment to call your creditor and say "Listen, I can't make this month's payment. I'd like to work something out with you."
Monday, June 7, 2010
15 Steps To Better Finances
Financially, times have been tough for all of us. Organizing your budget and giving your finances a good spring cleaning could be very helpful right about now. Below are fifteen tips for getting started. First, we will tackle your debt situation, or dig up some additional cash, then we will figure out ways to utilize that new found money.
1. Check your credit card interest rates. Even if you pay off your credit card bills each month, it is a good idea to double check your rates in the case that you hit a rough financial patch and have to delay paying your cards in full for a couple of months. Many credit card companies raised their rates in the last year, but as a result, they did lose a lot of customers. A few of these companies are trying to win customers with a good history back, so you can find a good bargain out there with the help of internet search tools like bankrate.com.
2. Set up autopay on your debts. This is something you want to get on right away. Just one late payment can hit your credit tremendously, and you could end up seeing your interest rates shoot sky high. Even though the new credit card law puts more controls on credit card companies, they can raise your rates for at least six months when you pay late. Additionally, you have the capacity to even earn points if you pay your bills on a credit card with reward points. If you are not allowed to use credit to pay some of your debts, set up an autopay utilizing online banking. That way, you will never have to worry about a late payment.
3. Check your reward cards. Many credit card companies reduced their reward benefits before the new credit card bill took effect, but some have introduced cards with better rewards as they look for the best customers. So if you do have good credit, take advantage of it and compare your rewards with the new cards on the market.
4. Review your cable deal. Cable companies are constantly running new deals that introduce new channels or internet services. Go to their website and check out the deals that are available now. You might be able to get a better one!
5. Review your wireless bill. Look over your wireless usage and be sure that you have a plan that meets your needs. Can you lower the amount of minutes you use, resulting in a lower bill? Or should you buy extra time instead of letting those extra minutes rack up?
6. Check the deal on your home phone. Nowadays, more and more telephone companies offer unlimited long distance. Also, many offer package deals that include wireless and cable. Figure out which one is the best considering how much you use wireless, landline and cable services.
7. Look over your home and car insurance policies. With home prices plummeting, you might be able to save some cash by lowering your insurance to match the current value of your home. You might also be able to lower costs by increasing deductibles.
8. Shop for new home and auto policies. After you look over your policies, take a while to shop for new policies. You might discover that you can save money by switching insurers. Check with Insurance.com begin your search.
9. Spend your gift cards. Don’t let them just expire because you forgot about them! Use them to buy items you may need right away. If they hang out in your wallet too long, you could even end up losing them. Look at it this way: if you don’t spend the money, consider it a gift to the store or credit card company from which it was bought.
10. Check your credit reports. For free, once a year by using annualcreditreport.com. It is much easier to fix a problem the sooner you catch it. Also, it will help you to be vigilant on your watch for identity theft.
11. Fix any credit problems. If you do find any errors, or questionable accounts in your credit report, work on it immediately. You will receive instructions that explain how to question errors on your report when you receive your copy.
12. Increase your retirement savings. Now that you have a little more money, increase your automatic savings into your retirement account! An increase as small as 1% a year can really make a difference.
13. Review your investments. Look into them, see how they are doing and see how your investments add up.
\
14. Rebalance your investments. Make sure you have the right percentage invested in stocks or stock mutual funds, bond mutual funds, or bonds and cash.
15. Set up an appointment with a financial planner. It is a good idea to sit down with a financial planner once a year to look over what you are doing with your money, set achievable goals and make sure that your money is in the right spots so you have the opportunity to meet those goals. Seek out a planner who is fee based rather than commission based. When a planner receives money based on commission, you may be getting advice that helps the planner earn more money, not you.
Looking through and organizing your finances this year is a lot more important as we bounce back from one of the worst downturns this country has ever experienced. While it is a good idea to look over your finances every year, it is crucial to review them now.
1. Check your credit card interest rates. Even if you pay off your credit card bills each month, it is a good idea to double check your rates in the case that you hit a rough financial patch and have to delay paying your cards in full for a couple of months. Many credit card companies raised their rates in the last year, but as a result, they did lose a lot of customers. A few of these companies are trying to win customers with a good history back, so you can find a good bargain out there with the help of internet search tools like bankrate.com.
2. Set up autopay on your debts. This is something you want to get on right away. Just one late payment can hit your credit tremendously, and you could end up seeing your interest rates shoot sky high. Even though the new credit card law puts more controls on credit card companies, they can raise your rates for at least six months when you pay late. Additionally, you have the capacity to even earn points if you pay your bills on a credit card with reward points. If you are not allowed to use credit to pay some of your debts, set up an autopay utilizing online banking. That way, you will never have to worry about a late payment.
3. Check your reward cards. Many credit card companies reduced their reward benefits before the new credit card bill took effect, but some have introduced cards with better rewards as they look for the best customers. So if you do have good credit, take advantage of it and compare your rewards with the new cards on the market.
4. Review your cable deal. Cable companies are constantly running new deals that introduce new channels or internet services. Go to their website and check out the deals that are available now. You might be able to get a better one!
5. Review your wireless bill. Look over your wireless usage and be sure that you have a plan that meets your needs. Can you lower the amount of minutes you use, resulting in a lower bill? Or should you buy extra time instead of letting those extra minutes rack up?
6. Check the deal on your home phone. Nowadays, more and more telephone companies offer unlimited long distance. Also, many offer package deals that include wireless and cable. Figure out which one is the best considering how much you use wireless, landline and cable services.
7. Look over your home and car insurance policies. With home prices plummeting, you might be able to save some cash by lowering your insurance to match the current value of your home. You might also be able to lower costs by increasing deductibles.
8. Shop for new home and auto policies. After you look over your policies, take a while to shop for new policies. You might discover that you can save money by switching insurers. Check with Insurance.com begin your search.
9. Spend your gift cards. Don’t let them just expire because you forgot about them! Use them to buy items you may need right away. If they hang out in your wallet too long, you could even end up losing them. Look at it this way: if you don’t spend the money, consider it a gift to the store or credit card company from which it was bought.
10. Check your credit reports. For free, once a year by using annualcreditreport.com. It is much easier to fix a problem the sooner you catch it. Also, it will help you to be vigilant on your watch for identity theft.
11. Fix any credit problems. If you do find any errors, or questionable accounts in your credit report, work on it immediately. You will receive instructions that explain how to question errors on your report when you receive your copy.
12. Increase your retirement savings. Now that you have a little more money, increase your automatic savings into your retirement account! An increase as small as 1% a year can really make a difference.
13. Review your investments. Look into them, see how they are doing and see how your investments add up.
\
14. Rebalance your investments. Make sure you have the right percentage invested in stocks or stock mutual funds, bond mutual funds, or bonds and cash.
15. Set up an appointment with a financial planner. It is a good idea to sit down with a financial planner once a year to look over what you are doing with your money, set achievable goals and make sure that your money is in the right spots so you have the opportunity to meet those goals. Seek out a planner who is fee based rather than commission based. When a planner receives money based on commission, you may be getting advice that helps the planner earn more money, not you.
Looking through and organizing your finances this year is a lot more important as we bounce back from one of the worst downturns this country has ever experienced. While it is a good idea to look over your finances every year, it is crucial to review them now.
Thursday, June 3, 2010
Debt Collection Agency Forced To Shell Out 1.5 Million Dollars For Harassing Phone Calls
In a mind-blowing turn of events, bill collectors from Advanced Call Center Technologies LLC have to shell out a whopping one point five million dollars for rude and vulgar voicemails that were sent to a man's mobile phone. According to sources, the company sent out eight threatening and demeaning voice mails on Allen Jones' phone attempting to collect what it claimed he owed on a credit card.
Most of the voice mails were ridden with rude language and horrifying racial slurs. "This is your mother (curse) wakeup call you little lazy (curse) (curse)," a collector was quoted as saying in one message. "Get your (racial slur) (curse) up and go pick some mother (curse) cotton fields," said another. Jones is African-American."This isn't acceptable. No one should have to experience what I had to go through," he said.
Mark Frenkel, one of Jones'' attorneys was quoted as saying: "If we did not have the messages on tape, no one would have ever believed that this happened." "This is without a doubt, definitely, the most disgusting collection lawsuit I have ever seen," Dean Malone, Jones'' other lawyer, added. Jones took Advanced Call Center Technologies to court over the harassing calls. And last Friday, a Dallas County jury awarded him of the biggest verdicts of its type - 50,000 dollars in mental anguish and one point five million dollars in punitive damages.
"We made a statement today" said Jones, "and the statement is we will not tolerate abusive debt collectors." According to the attorneys, employees from Advanced Call Center Technologies confessed to the calls, but it remains unclear if they are still with the company and whether it will appeal.
All the while, Jones has always disputed the debt and alleges that he paid it, and the sum in question was a small amount of two hundred dollars. It seems unfathomable that this man had to suffer like this for such a minuscule amount, and now, thanks to the American court system, and justice, it is.
Most of the voice mails were ridden with rude language and horrifying racial slurs. "This is your mother (curse) wakeup call you little lazy (curse) (curse)," a collector was quoted as saying in one message. "Get your (racial slur) (curse) up and go pick some mother (curse) cotton fields," said another. Jones is African-American."This isn't acceptable. No one should have to experience what I had to go through," he said.
Mark Frenkel, one of Jones'' attorneys was quoted as saying: "If we did not have the messages on tape, no one would have ever believed that this happened." "This is without a doubt, definitely, the most disgusting collection lawsuit I have ever seen," Dean Malone, Jones'' other lawyer, added. Jones took Advanced Call Center Technologies to court over the harassing calls. And last Friday, a Dallas County jury awarded him of the biggest verdicts of its type - 50,000 dollars in mental anguish and one point five million dollars in punitive damages.
"We made a statement today" said Jones, "and the statement is we will not tolerate abusive debt collectors." According to the attorneys, employees from Advanced Call Center Technologies confessed to the calls, but it remains unclear if they are still with the company and whether it will appeal.
All the while, Jones has always disputed the debt and alleges that he paid it, and the sum in question was a small amount of two hundred dollars. It seems unfathomable that this man had to suffer like this for such a minuscule amount, and now, thanks to the American court system, and justice, it is.
Tuesday, June 1, 2010
BMI Turns To Ring Tones To Collect Royalties
It appears as though the music industry has found a new strategy to cash in on royalties. As music lovers are well aware, at first these companies tried to sue individual users for illegally downloading music. But it is painfully clear that this approach to recover from major financial loss has destroyed their image in the public eye.
In lieu of lowering the price of albums in order to go up against the free music circulating through the internet, the music industry has turned to collection agencies who are now taking legal action against cellphone companies over royalties from ring tones. They claimed that ring tones counted as public performances so cell phone companies should be obligated to pay performance fees. The courts quickly renounced this claim.
After this unsuccessful attempt to collect money, Broadcast Music Inc is now suing T-Mobile over ring back tones, contesting that the cell phone company is selling them without agreeing to licensing agreements. Instead of ring tones, which play out loud when someone calls a cellphone, ring back tones play expressly to the person calling. That is to say, instead of hearing a cellphone dialing tone, the caller will hear a song chosen by the cell owner.
Critics are quick to point out the apparent irony of this lawsuit. If ringtones, which can be heard by anyone around a cellphone, do not constitute public performance, it seems ludicrous to sue the mobile carriers over a ringback tone that can be heard only by the caller. With record companies suffering from huge financial losses, it seems as though they are grasping at straws in order to collect any money that they possibly can.
It does not appear that lowering the cost of CDs, DVDs and other media is an plan that has occurred to the music industry. There are still quite a few fans out there that prefer to collect and own the actual products, but with prices constantly spiking, downloading music for free seems very appealing. Many CDs generally go on sale for about seventeen dollars.
A few bands have bypassed the issue of free music downloads through creative tactics. Radiohead, an alternative rock band, built a website where fans can obtain the mp3s for free, or for a donation. Nine Inch Nails' Trent Reznor made a similar site. The music industry's unsuccessful lawsuits and declining public image leads one to believe that thinking outside of the box and lower pricing may be more effective than bullying money out of mobile carriers and individual users.
In lieu of lowering the price of albums in order to go up against the free music circulating through the internet, the music industry has turned to collection agencies who are now taking legal action against cellphone companies over royalties from ring tones. They claimed that ring tones counted as public performances so cell phone companies should be obligated to pay performance fees. The courts quickly renounced this claim.
After this unsuccessful attempt to collect money, Broadcast Music Inc is now suing T-Mobile over ring back tones, contesting that the cell phone company is selling them without agreeing to licensing agreements. Instead of ring tones, which play out loud when someone calls a cellphone, ring back tones play expressly to the person calling. That is to say, instead of hearing a cellphone dialing tone, the caller will hear a song chosen by the cell owner.
Critics are quick to point out the apparent irony of this lawsuit. If ringtones, which can be heard by anyone around a cellphone, do not constitute public performance, it seems ludicrous to sue the mobile carriers over a ringback tone that can be heard only by the caller. With record companies suffering from huge financial losses, it seems as though they are grasping at straws in order to collect any money that they possibly can.
It does not appear that lowering the cost of CDs, DVDs and other media is an plan that has occurred to the music industry. There are still quite a few fans out there that prefer to collect and own the actual products, but with prices constantly spiking, downloading music for free seems very appealing. Many CDs generally go on sale for about seventeen dollars.
A few bands have bypassed the issue of free music downloads through creative tactics. Radiohead, an alternative rock band, built a website where fans can obtain the mp3s for free, or for a donation. Nine Inch Nails' Trent Reznor made a similar site. The music industry's unsuccessful lawsuits and declining public image leads one to believe that thinking outside of the box and lower pricing may be more effective than bullying money out of mobile carriers and individual users.
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