For the last known year, 2010 was the worst year for consumers dealing with debt collection agencies. According to the Federal Trade Commission (FTC), complaints about debt collectors are up 25% since 2008. There were about 104,000 complaints in 2008 and about 140,000 in 2010. All the while, debt collectors are aggressively lobbying Congress to weaken the Fair Debt Collection Practices Act (FDCPA).
Normally, the FTC does nothing actively to combat unfair debt collection. It does take complaints from consumers and file an annual report mandated by the FDCPA. It might file the occasional lawsuit against a really, really bad debt collector. But on par, the FTC is mostly concerned about other consumer areas.
Recently, the FTC has touted 10 lawsuits against debt collectors it filed in the last 3 years. That is a big jump, statistically, from the only 6 lawsuits it filed in the 3-year period prior. But, the FTC’s dearth of lawsuits no matter what year is counted is perplexing and has irked Consumer Rights Attorneys.
Tom Pahl, an assistant director with the FTC, said “We receive more complaints about the debt collection industry than any other industry; the conduct of debt collectors is a major consumer protection problem.” The FTC believes it is doing its part by filing the above 10 lawsuits.
The FTC lawsuits did target very egregious debt collection actions. Take for instance an elderly woman who incurred funeral bills burying her two sons. A collection agency then relentlessly pursued her despite the 72-year-old’s missing leg and a $694/month disability check.
Pahl, commenting on the case, said “In hard times, people have a harder time paying, and debt collectors have to work harder to go after them; some debt collectors cross the line into violation of the law.” He qualified his comment with some debt collectors while sitting on a pile of 140,000 complaints about them.
In another FTC lawsuit, a debt collector was sued for calling consumer debtors: “deadbeat,” “white trash,” “cracker head” and “scumbag.” A court-appointed receiver has already seized that company though it is fighting the charges.
Still, another debt collection agency, West Asset Management of Marietta, Ga., was accused of allowing its employees to withdraw money fraudulently from consumers’ bank accounts or added false charges to their credit cards. Although it did not admit to wrongdoing, its agreement to pay a $2.8 million fine, the largest in recent memory, speaks volumes.
While the FTC could only muster enough gumption to file a measly 10 lawsuits, all eyes gaze upon the new Consumer Financial Protection Bureau which is hoped to be far more aggressive in going after debt collectors who violate the FDCPA. However, without an agency head, it is floundering while Congress dithers.