Year-after-year, the debt collection industry tops the FTC’s complaint list. In 2011, the FTC received 117,374 complaints against third-party debt collectors. The complaints the FTC receives may not represent the true number of debt collector complaints since consumers may not realize they can go to federal agency with these types of complaints. Many of those complaints fell within just a few categories.
The biggest complaint category was with harassing phone calls. This includes collectors calling continuously, using profane language, or calling at inconvenient times. Debt collectors are not allowed to call repeatedly. They're not allowed to use any profane or obscene language. And, collectors should not call before 8am or after 9pm or at any other time they know or should know is inconvenient. Together, harassment, use of profane or abusive language, and inconvenient calls made up 63.4% of FDCPA complaints.
Consumers also complained that debt collectors were trying to collect more than the amount permitted by law. Some collectors were trying to collect debts that didn’t exist. Others were asking consumer to pay more than what was actually owed either by increasing the balance due or by charging excess interest and fees. And, some collectors were even pursuing debts that had been discharged in bankruptcy. This was 47.5% of complaints.
Debt collectors are required to send written notice of each debt they're collecting. The notice should include the consumer’s right to dispute the debt in writing. Without a written notice, consumers may never know they have the right to request verification of debts they owe. Failure to send this notice was another top complaint against debt collectors. This category made up 26.2% of FDCPA complaints.
Collectors are not allowed to make threats about what will happen if the consumer doesn’t pay unless the collector has both the intent and authority to do so. Consumers reported that collectors were falsely threatening lawsuit and other actions they couldn’t make. For example, collectors aren’t allowed to threaten any type of criminal prosecution, wage garnishment, seizure or property, or job loss because of an outstanding debt. In 2011, this complaint category made up 25.3% of all debt collectors complaints.
Debt collectors are required to identify themselves as collectors when they're speaking to the person who allegedly owes the debt. They’re not allowed to imitate attorneys or government agencies if they’re not attorneys or government agencies. Not only do collectors have to reveal that they are collecting a debt, in their first communication they must state that any information obtained will be used for the purpose of collecting the debt. Of all FCDPA complaints, 17.7% of consumers say the collector did not include this warning in their communications.
Consumer complaints fell into a few other categories, but at a lower rate. This includes revealing the debt to third parties, making prohibited calls to the consumer’s place of employment, failing to provide proof of disputed debts, and continuing to call after receiving a cease and desist letter.
A debt collector could contact you even if you pay all your bills on time. They’ve been known to fabricate debts and pursue payment as if these debts were legitimate. Know your rights when it comes to collection agencies. Contact the Federal Trade Commission and your state Attorney General with complaints of law violations.