• 25
  • March
    2011

The Fair Debt Collection Practices Act of 1978 was made into law in order to protect consumers from debt collection practices that are harassing, deceptive and abusive. According to ABC News, however, in 2010 the Federal Trade Commission received a record number of complaints that third party debt collectors were engaging in these illegal practices.

The FTC received 140,036 complaints in 2010 about illegal debt collection practices. The number of complaints was 17 percent higher than in 2009 and is higher than complaints for any other industry, according to ABC News. Consumers complained that debt collectors were harassing them by calling them repeatedly, falsely threatening them with legal action, and even threatening them with violence.

Many people also told the FTC that creditors did not send the mandatory notice they are required to send to consumers within the first five days of trying to collect on the debt. The mandatory notice sent to consumers must contain information on the debt being collected, including how much money is owed, who the creditor is and who the debt is owed to.

The complaints are increasing against third party creditors, companies that sometimes purchase debts from other companies for a discount and then try to collect where others have failed. In the change of hands, misinformation can bloom and errors can multiply.

A new Consumer Financial Protection Bureau is opening this upcoming July. This new federal agency will begin to hear consumer complaints and hopefully crack down on these illegal practices.

Source:

FTC: Debt Collectors Provoke More Complaints Than Any Other Industry (ABC News)