In the U.S. The Federal Trade Commission (FTC), the nation's consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you. Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them. The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage.
"Debt collectors must comply with a number of requirements that seek to protect debtors from unfair, abusive, or deceptive conduct."
The FTC's data shows that many complaints allege FDCPA violations by "unknown" collections companies. These "rogue" debt collectors may break the law and harass debtors by operating from the shadows.
A recent report from the Federal Trade Commission (FTC) included some surprising findings about debt collectors: a large number of debt collection complaints pointed to "rogue" companies. This report indicates that some debt collectors might be trying to avoid complying with consumer protection laws by hiding in the shadows. Consumers should be aware that these practices are illegal here in Pennsylvania and throughout the United States.
The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) applies to all personal (non-business related) debts in the United States. Debt collectors must comply with a number of requirements that seek to protect debtors from unfair, abusive, or deceptive conduct. Among other protections, debt collectors cannot harass anyone by using threats, profanities, or lies to collect a debt. The law generally prohibits using abusive behavior to collect a debt.
Despite these well-known rules, debt collectors frequently violate the FDCPA. Americans can report alleged violations to the FTC and nearly 200,000 people filed complaints about illegal debt collection practices in 2011 alone. The FTC provides details about all of the complaints it receives - and the most recent report shows a disturbing development.
Anonymous "rogue" collectors responsible for many complaints
As Forbes reported this summer, the FTC's recent report showed a large number of complaints regarding mysterious or "rogue" debt collectors. These complaints either identified the collection company's name as "unknown" or referred to a fake organization without a recorded license. One complaint said that a debt collector simply "wouldn't say" what the company was called. Some people even reported a company that brazenly called itself the "Department of Crime and Punishment" - apparently trying to pass as a government agency.
In total, the FTC received 10,000 complaints about rogue debt collectors, accounting for 20 percent of the reports received in the first quarter of 2012.
Many of these complaints may reflect illegal and unlicensed collection entities. Unlicensed debt collectors would have no reason to operate compliance departments or train their employees. Instead, they operate in the shadows without identifying management or location.
By refusing to identify themselves, these companies can try to keep violating the FDCPA's consumer protection provisions. For example, a company could get away with harassment and deceitful threats about its ability to punish a debtor because the government cannot track it down to prosecute it for breaking the FDCPA. Without any identifying information, consumers cannot help the authorities respond to violations. The debt collector can just slip back into the shadows.
The new Consumer Financial Protection Bureau (CFPB) is taking over enforcement of debt collection as it begins to come online. But, as Forbes concludes, it will probably have a difficult time responding to alleged abusive practices if these companies keep hiding from the law.
Attorney Kenneth Hiller, of The Law Offices of Kenneth Hiller, PLLC, represents consumers in Pittsburgh, Erie and throughout western Pennsylvania in consumer protection lawsuits - www.kennethhillerlaw.com
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