Aggressive Debt Collection Tactics Are Drawing Federal Scrutiny
Los Angeles Times
August 20, 2012
The recession pushed millions of Americans into debt, subjecting many of them to an unending stream of collection agents, aggressive lawyers, and companies that profit if they pay up. The debt collection industry, which makes about $12 billion a year, is built on the misfortunes of those who have fallen behind on their bills. The Great Recession led to a sharp increase in the number of people facing debt collectors to an estimated 30 million this year, up nearly 50 percent over 2003. Recent lawsuits and numerous complaints have lead many states to investigate the actions of debt collection firms over aggressive tactics that officials say are becoming commonplace. The unsavory practices include intimidating phone calls, threats of arrest, harassment of relatives, and a slew of lawsuits aimed at getting customers to pay. Now, regulators at the Federal Trade Commission are taking action. Last year, the agency received 180,928 complaints about debt collectors, which does not include lawsuits for such collections. Additionally, the Consumer Financial Protection Bureau is considering new regulations for debt collectors. Consumer advocates say the majority of the problems stem from problem debt that is sold to debt collection firms eager to make a profit.
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