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FTC Requests Information From Debt Buyers to Understand Consumer Complaints

January 19, 2010

Our Fullerton debt collection abuse attorneys were pleased to see a recent article from debt collection industry publication InsideARM about federal action against debt buyers. The Jan. 11 article says the Federal Trade Commission, the agency responsible for enforcing the Fair Debt Collection Practices Act, has requested purchase and sales records from the nine biggest debt buyers in the U.S. The companies are not accused of wrongdoing. Rather, the FTC says it wants to better understand the debt buying industry, which has grown in recent years and is the subject of many consumer complaints. The debt buyers chosen by the FTC are the biggest in their industry, collectively representing about 75% of all debt purchased in the country.

Debt buyers are companies that purchase written-off debt from the original creditors and try to collect it. They are the focus of numerous complaints about harassment from consumers who say they are victims of mistaken identity; unproven debts; debts too old to collect; and violations of the FDCPA. A Scripps Howard newspaper investigation from 2009 showed that debt buyers frequently get incomplete or bad information, leading to incorrect collection attempts, lawsuits and damage to the consumer's credit score. The FTC said it was seeking to understand the industry better by requesting detailed information on the companies' sales and earnings; number of debt portfolios purchased; ages and types of accounts; and other information. Complying with this request is not optional, and debt buyers have until Feb. 25 to comply. A study may follow.

As Riverside unfair debt collection lawyers, we are extremely pleased to see the FTC shine a spotlight on the practices of debt buyers. As the Scripps investigation said, debt buyers don't always get the full information when they buy a debt. This can lead to mistaken identity, confusion about whether the debt was paid off and other mistakes. To make matters worse, some debt collectors are actively hostile when consumers point these mistakes out, believing they're lying to get out of paying what they owe. And particularly in this bad economy, some debt buyers are so eager to collect the debts that they're willing to break the law by harassing consumers, calling their workplaces, neighbors and family or even resorting to threats.

Howard Law represents consumers who are victims of this unfair and illegal behavior. The federal FDCPA and a similar state law specifically forbid debt collectors from using these and other tactics. They also require collection agents to do certain things, including providing written validation of the debt when asked. However, many consumers don't even realize they have these rights -- so they never fight back. Our Buena Park debt collection abuse attorneys represent clients who are ready to change that. Under the FDCPA, victims of legal violations may sue the debt collector for up to $1,000 in statutory damages, plus attorney fees and any actual damages, such as lost income if you lost a job because of the harassing phone calls.

If you're sick of phone calls from debt collectors who don't respect the law or your rights, Howard Law can help. To set up a free, confidential evaluation of your case, please contact us through our Web site or call 1-800-872-5925 toll-free.