Naughty debt collectors draw consumers’ ire

CONSUMER FORUM 

Posted March 14, 2016, at 12:17 p.m.

Roll two of America’s top consumer complaints into one, and the result might wear a T-shirt proclaiming, “I am a phony debt collector.”
The Federal Trade Commission just released its annual list of consumer complaints. Debt collection topped the list, and imposter scams came in third. Together, the two categories accounted for roughly 1.2 million complaints, 40 percent of all complaints the FTC received in 2015.

Nationally, the FTC last year increased its effort to protect consumers from illegal debt collection practices. The agency coordinated a federal-state-local effort called Operation Collection Protection; through that program, more than 130 legal actions were brought. The FTC brought 12 actions against 52 defendants, and permanently barred 30 companies and individuals from the debt collection industry. The agency said in a recent statement that it obtained almost $94 million in judgments against debt collectors.

Among the bad practices that have drawn fire from regulators in recent years are these:

— One big bank robo-called a couple 700 times over four years and followed up with letters threatening foreclosure; a judge ordered the bank to pay the couple $1 million.

— A Georgia firm collected $4 million for nonexistent offenses, claiming it had been hired by the federal government; federal officials say these phony collectors have operated in all 50 states.

— A collector threatened a central Maine consumer, who recorded the phone conversation. A transcript of the conversation persuaded the company — which was licensed to do business in Maine — that it should let the employee find work elsewhere.

2015 Debt Collection Booklet.pub

Click image to read online.

David Leach, Principal Examiner at Maine’s Bureau of Consumer Credit Protection, said more than 1,000 debt collection companies are licensed in Maine and that the majority of them abide by the Fair Debt Collection Practices Act. However, Leach said the number of complaints about scammers or unlicensed collectors is “enormous and growing.” Call the bureau at 800-DEBT-LAW with your questions about debt collection or to receive a copy of “Downeaster Common Sense Guide: Debt Collection” or read the guide online .

The Maine Bar Association reminds consumers that Maine’s Fair Debt Collection Practices Act forbids bad language, calling people at work, telling others about someone’s debt and other harassment. It also prohibits using phony letterheads to imitate law enforcement and threats of legal action they can’t take. For general information (not legal advice), visit the Bar Association’s website, mainebar.org/lawyer-referral/legal-information/maine-fair-debt-collection-practices.aspx.

While we’ve written about debt collection before (see Consumer Forum, 12/7/2015 on our blog), some points bear repeating. If a collector calls about an old debt, don’t send money without question. Make sure the debt is really yours by having the collector detail the amount owed and to whom it is owed. Have the collector mail the details to you, and get a physical location of the collector’s place of business. If you do pay, send a check rather than sending funds by wire.

The FTC has published a list of companies that it has banned from further debt collection activities. You can see that list at ftc.gov/enforcement/cases-proceedings/banned-debt-collectors.

Next week, we’ll take a closer look at some imposter scams.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: