Debt collectors who lie, intimidate and harass their targets, account for roughly one-quarter of the consumer complaints received by the Federal Trade Commission each year, according to a recent report.
The FTC is in the middle of an ongoing effort to crack down on abusive debt collection practices in the wake of a recession that's left roughly 10% of Americans out of work and has caused the number of delinquent credit card debts to soar. As part of that effort, the agency is attempting to educate consumers about what practices are illegal and what they can do about them.
What are top eight consumer complaints about illegal debt collection practices?
- 46.5% said debt collectors called continuously in an effort to harass them, including calling in the wee hours of the morning or late at night. Debt collectors are barred from calling before 8 a.m. or after 9 p.m., unless you give them express permission to do so. While terms like "continuously" are subject to interpretation, calling multiple times in a single day would be a violation of the law. Debt collectors also can't shout or swear at you.
- 31.1% said the debt collector attempted to collect too much money. In some cases, they attempted to collect debts that had been discharged in bankruptcy or that were never owed. Some said the collector simply added a host of fees and charges that were not allowed by law.
- Consumers are entitled to receive a notice that stipulates how much is owed; who the debt is owed to; and what fees and charges were added to the debt in the collection process. However, the third most common complaint, coming from 25.7% of those contacting the FTC, was that the collector failed or refused to provide this notice.
- 20.9% said the collector threatened dire consequences -- including having the debtor thrown in jail -- if they didn't pay up. Federal law says that the debt collectors can tell you that they'll sue you for a legitimate debt, but they can't threaten an action that they have no authority or intention of taking.
- 13.6% of consumers complained that the collector called them at work. If you ask a debt collector not to call you at work, they are barred by federal law from violating that request.
- 12.2% of complaints alleged that the collector revealed information about the consumer's debt to a third party. Giving information about a consumer's debt to an employer, co-worker or even a relative is strictly forbidden.
- 11.5% of the complaints said that the collector refused to investigate a disputed debt as required by law.
- Some 8.4% of collectors ignored the consumer's entreaty to stop calling. Collectors must stop calling, if you ask them to. But they can sue you, if you refuse to pay or discuss a legitimate debt.
If you are being harassed by a debt collector, it makes sense to know your rights. The Federal Trade Commission offers a consumer guide to debt collection that spells out your rights and responsibilities. It can be downloaded from their website.
If you are having problems with a collector and believe they are violating the law, report them to your state attorney general. (You can find the appropriate office through the National Association of Attorneys General.) Or you can report the violation to the FTC. The FTC does not resolve individual complaints, but may choose to sue a company that's the subject of multiple complaints. In addition, the agency operates a consumer help line, which may help you learn about and assert your rights. The phone number: 877-382-4357. (Don't be fooled by the automated system that doesn't appear to have an option for asking a question. Hit "0" and you'll be connected with someone who can take a complaint or answer your questions.)
In addition, Gerri Detweiler, co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, provides free answers to debt collection questions at her web site at debtcollectionanswers.com.
"It is important that consumers are clear about their rights," Detweiler said. "Too often they believe what unscruplous debt collectors tell them or are intimidated by debt collectors and end up making bad decisions about how to deal with them."