Growing Complaints Against Collectors
The growth in consumer debt in America, which is now at a record $2.17 trillion*, gave rise to the tremendous growth in the number of debt purchasers and collection agencies. In fact, between 1995 and 2004, the amount of debt purchased by the collection industry grew from $12 billion to $77.2 billion*.
This trend also sparked a sharp rise in the number of complaints. In 2000, the Federal Trade Commission (FTC) logged 13,950 complaints against debt collectors. In 2004, the FTC logged 58,687 complaints, and in 2005 that figure rose to 66,627*, a figure higher than the number of consumer complaints filed against any other industry.
Report on the Fair Debt Collection Practices Act reports, “The Commission believes that the number of consumers who complain to the agency represents a relatively small percentage of the total number of consumers who actually encounter problems with debt collectors.”
On average, individual debt collectors are said to make between 40,000 to 50,000 calls per year. With about 100,000 debt collectors, the number of collection calls per year is estimated to be about 4 billion2.
Consumers are complaining to the FTC about abusive and harassing collection techniques, such as threatening to sue, arrest or even violently attack the debtor for failure to pay a debt. One collection technique that is gaining attention is when a collector convinces a debtor to pay just a little, after which the collector uses the debtor's bank information to make unauthorized withdrawals.
Washington Post reporter Caroline E. Mayer, who wrote an expose on debt purchasing industry abuse, says that the key to protecting yourself against abusive collectors is to know your rights under the Fair Debt Collection Practices Act and to report any abuses to the Federal Trade Commission, Better Business Bureau and your State Attorney General.
The consumer debt purchasing portion of the collection industry got its start in the early 1990s. In 1996, there were only about a dozen such companies. The number of debt purchasers is over 500 today.
http://www.msnbc.msn.com/id/14251360/site/newsweek/
Washington Post article “As Debt Collectors Multiply, So Do Consumer Complaints” by Caroline E. Mayer, July 28, 2005
FTC Annual Report 2006 http://www.ftc.gov/os/2006/04/P0648042006FDCPAReport.pdf
