Debt Collectors

Do consumers need additional safeguards?

Introduction

Lawsuits filed against debt collectors multiplied in recent years, as have complaints to regulators about abusive collection tactics. Indeed, the Federal Trade Commission (FTC) receives more consumer complaints against debt collectors than any other industry. Collection companies, which recover billions of dollars in delinquent debt for creditors annually, defend their practices and challenge the validity of many of the lawsuits and consumer complaints. Nevertheless, over the past 18 months, the FTC and state attorneys general have stepped up enforcement against collection agencies they believe are breaking consumer-protection laws. Meanwhile, the Internal Revenue Service has drafted rules aimed at curbing aggressive collection methods at nonprofit hospitals, including dunning sick patients for payment in the emergency room. At the same time, the collection industry is bracing for ...

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