New Federal Report on Debt Collection Practices Indicates Area of Concern


. By Lucy Campbell

Earlier this year, The Federal Trade Commission (FTC) released its study on debt buyers. The report on debt collection was done because it is the industry that generates the most consumer complaints to the FTC annually.

According to a review of the study in the National Law Journal, published January 30, 2013, the FTC study examined data on debt buyers, and evaluated over 5,000 portfolios containing nearly 90 million consumer accounts with a face value of $143 billion. It is common practice for creditors to sell debt that they have not collected to debt buyers.

The FTC found that debt buyers try to collect about one million debts that consumers assert they don’t owe" and this is every year. The FTC wrote the "proper handling of this large number of disputed debts is a significant consumer protection concern."

The information for the FTC study came from nine of the country’s largest debt buyers, and showed that most of the debts stemmed from unpaid credit card charges, though the study also included debts from mortgage, medical, utility, telecommunications, and other creditors. The FTC study also revealed that typically, debt sellers refused to guarantee the accuracy of the information about the debts, selling the debt “as is and with all faults.”

Another "major concern" for the FTC is the conduct of some debt buyers in collecting, threatening to sue, or suing on debt that is time-barred. Currently, there are three pieces of federal legislation to protect consumers from invasive debt collectors. Those are the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Telephone Consumer Protection Act. Together, these statutes set out when debt collectors can contact debtors, how they can contact debtors and what action they can legally take against consumers who owe money.

Debt Collection Legal Help

If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to a financial lawyer who may evaluate your claim at no cost or obligation.
READ MORE Debt Collection LEGAL NEWS