New York City Debt Collection Defense Attorney

Complaints about debt collectors are up

We came across this great ABC News video

about debt collector tactics on YouTube. The video, in which ABC has assembled a collection of tapes of abusive and harassing telephone calls from consumers and lawyers, dates from 2006, but sadly, things haven’t really changed in the intervening years. In fact, they’ve gotten worse.

The Federal Trade Commission ("FTC"), currently[1] in charge of oversight of the debt collection industry, said in its 2011 annual report, released in March of this year, that complaints about third-party and in-house debt collectors combined rose from 119,609 in 2009 to 140,036 for 2010, and accounted for about one quarter of all complaints it received. (The FTC oversees other industries as well as debt collection). Complaints about third-party debt collectors increased from 88,326 in 2009 to 109,0997 in 2010. Complaints about in-house collectors decreased slightly, but remained constant, with 32,200 complaints in 2009, and 31,952 in 2010.

The most frequent complaint, which will come as no surprise, was harassment by debt collectors. This complaint accounted for 49.7% of all complaints received by the FTC in 2010. These included complaints that debt collectors used obscene or profane language, called at inconvenient hours, or hours prohibited by law, or threatened to use violence. The second most frequent complaint, accounting for 31.1% of total complaints to the FTC, was demanding a larger payment than is permitted by law. The third was failing to send the consumer the proper notice of the debt required by law, and the fourth making threats against the consumer if he or she does not pay.

The Consumer Financial Protection Bureau ("CFPB"),will begin working with the FTC in July to oversee the debt collection industry. We are hopeful that the CFPB will have some teeth to protect the consumer against these kind of abuses once all the wrangling is over in Congress about the Bureau’s leadership and responsibilities.

-Sheril Stanford