Happy National Consumer Protection Week! In honor of the thirteenth annual observation, you might want to check out the website for the newly established Consumer Financial Protection Bureau. Formed by the Obama administration in the wake of the financial melt-down, the agency is tasked with “making consumer financial products easier to understand, and to make the markets for them more fair, transparent and competitive."
And speaking of government agencies, the Federal Trade Commission (“FTC”) this week released its annual list of top consumer complaints. For 2010, identity theft topped the list with 250,854 complaints. In the number two spot? You guessed it – debt collection complaints with 144,159 complaints filed. That’s 11% of all complaints filed with the FTC. The FTC works for consumers to prevent fraudulent, deceptive and unfair business practices. Visit the FTC and get more information about debt collection defense here.
And one last bit of news. Finally, one of the big debt buyers is feeling in its own back pocket the heat of regulations meant to protect consumers. We recently reported on big fourth quarter gains (Encore and Portfolio profits) by two of the country’s biggest debt buyers, Portfolio Recovery and Encore. We also noted the injustice of such businesses thriving at a time when consumers, many who are victims of predatory lending to begin with, are struggling.
So it’s something of a pleasure to report that Asset Acceptance, another large debt buyer and debt collector, reported not big gains but a net loss of $1.6 million. A company spokesperson attributed much of the loss to $2 million in costs that it incurred during 2010 in connection with an ongoing investigation by the FTC. The company disclosed in April of 2010 that the FTC had begun its investigation in 2006, on suspicion that the company had violated the Fair Credit Reporting Act, the Fair Debt Collection Practices Act and the Federal Trade Commission Act. The FTC has proposed a consent decree that includes a monetary penalty, plus monitoring and reporting obligations and customer disclosures. (See Asset Acceptance article here).
-Sheril Stanford