Complaints against debt collectors on rise
Consumer complaints against debt collectors are way up, say government regulators.
Last year (2005) consumers filed 66,627 complaints against third-party debt collectors. That compares with 58,698 complaints filed against debt collectors in 2004, according to a new report released by the Federal Trade Commission.
The number of complaints against debt collectors reflected 19.1 percent of all complaints filed with the FTC — or more than filed against any other specific industry.
The FTC is required to file its debt collection report with Congress each year, summarizing complaints and enforcement actions. The FTC is authorized to curtail abusive, deceptive and unfair debt collection practices, which hurt consumers financially and personally.
The Federal Debt Collection Practices Act permits reasonable collection efforts. But the FTC last year saw a rise in complaints of abusive actions. Those actions included: demanding larger payments than permitted by law; harassing debtors; threatening dire consequences; making impermissible calls to consumers at work; failing to send required notices and failing to verify disputed debts.
You can read our three part series on debt collectors here.
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The FTC report recommends Congress strengthen laws that, among other things, clarify standards concerning notices collectors must give consumers, how long collectors can continue collection activities and information consumers have a right to know about creditors.
The report concludes that “vigorous federal and state law enforcement in this area is essential to stop those debt collectors who fail to follow” the debt practices act.