Debt Collection Abuse Tops FTC Consumer Complaint List
The Federal Trade Commission has issued a new report outlining the numerous complaints made by citizens concerning abusive debt collection calls. No other industry generated as much complaint, not even telemarketing. The FTC also shows in their report that current laws do little protect consumers from harassment or abuse over unsubstantiated debt. Repeated, continuous calls throughout the day and night was the most common form of harassment consumers reported from debt collectors. False claims inflating the amount of debt, misinformation about the status of debt amounts and the withholding of federally required explanations of consumer rights were all common as well.
As consumer debt rises and debt buyers are suing consumers, debt collection abuse has risen drastically says the Consumers Union. The non-profit organization who publishes the popular Consumer Reports is calling for legislation that protects consumers from debt harassment and abuse. The Consumer Financial Protection Bureau was formed to help protect U.S. Consumers from financial scams, and it should take action against unlawful debt collection practices asserts the group.
Consumers Union has done its own research and report on this topic earlier in 2011, in conjunction with the East Bay Community Law Center. One shocking practice that the report highlighted was lawsuits being pressed by debt buyers without any proof to document the claim. Debt collectors are legally allowed to sue for debt repayment without documentation. This allows consumers to be sued over amounts they have already paid or settled with the company.
Consumers Union is calling for a number of new protections. They are recommending that debt collectors be required to sign paperwork attesting to the legality of their claim and keep accurate documentation of the debt. Debt that has passed from a credit report after seven years should not be recoverable, and all debt collectors should have to inform consumers of their rights and give them full disclosure on the owner and amount of their debt.