FTC To Investigate Debt Collection Process

Not surprisingly, the debt collection industry generates more consumer complaints to the Federal Trade Commission than any other industry. The burgeoning complaints have spurred the FTC to start a comprehensive investigation into debt collection processes. Chief among the agency’s concerns are the numerous and serious mistakes made by debt-buyers (in other words, collection agencies); they are infamous for contacting the wrong people, making inaccurate claims over debts, and lacking real documentation to back up their demands for money.On average, companies that buy debt—from banks, credit card companies, and other lenders—pay only four cents on every dollar of debt, so they stand to profit nicely from every debt they collect successfully. Usually there is minimal communication between the original owner of the debt and the company that buys it, resulting in fast transactions with minimal details; the principal, interest and fee breakdown information gets left out, as do important documents. Debt sales are usually conducted “as is,” which ensures a minimum of work and detail on the part of the seller.And, with this minimal information, debt collection agencies go after every debt in their portfolio, regardless of whether the debt is unverifiable, past the statute of limitations, or previously disputed. People have to spend time and money disputing inaccurate claims, and others end up paying off debts they don’t actually owe and the collection agencies cannot verify. The FTC reports that only 3.2% of debt they studied was disputed by the debtor. One way to defend against fraudulent claims, if you find yourself being harassed by a debt collector, is to request information about the original creditor, the account number, the date of the last payment, and other solid details.If a collection agency has harassed you, you may be entitled to money damages up to $1,000.00, based on the FDCPA, which has been around for almost 35 years. The FDCPA is a federal law that applies to every state. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collectors can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt. Plus, the FDCPA has a fee-shift provision. This means, the collection agency pays your attorney’s fees and costs. Founding attorney, Michael Agruss, has settled over 1,500 debt collection harassment cases. We want to help you, too.