In testimony recently given to the Senate Subcommittee on Banking, Housing and Urban Affairs, representatives with the Federal Trade Commission underscored the importance of tackling unlawful debt collection practices throughout the U.S.
Our Miami consumer rights attorneys understand the agency has labeled this a top priority, which it plans to combat with not only aggressive law enforcement, but also public outreach and education, policy initiative and research.
The FTC’s Active Associate Director for the Division of Financial Practices, James Reilly Dolan, said that his agency receives more complaints about the debt collection industry than any other. The agency recently expanded its complaint receipt policy, which is no longer limited to credit card debt. Consumers may now also file debt collection complaints on auto loans, student loans and medical bills too.
Dolan said that while debt collection is not inherently a bad thing – it keeps credit affordable and available – when its done unlawfully, it puts law-abiding collectors at a competitive disadvantage and victimizes consumers.
The FTC’s primary law enforcement actions of late have involved making sure that debt collectors are in compliance with the Fair Debt Collection Practices Act. Just since the beginning of this year, the agency has brought a total of 15 enforcement actions against debt collectors that have resulted in $56 million in judgments. One of those cases, you may recall, involved the world’s biggest debt collectors, Expert Global Solutions Inc., with the company agreeing to pay a record $3.2 million civil penalty.
Debt collection practices are strictly regulated by federal law, but that often doesn’t stop agencies from testing those legal boundaries. Part of the problem is that consumers aren’t sure of the scope of their rights, though that is beginning to change.
Among those practices that are against the law:
- Threats of harm or violence;
- The use of profane or obscene language;
- The use of the phone to harass or annoy a debtor;
- Falsely claiming to be a lawyer;
- Falsely accusing you of a crime;
- Misrepresenting the amount of money you owe;
- Asserting that certain documents are legal forms when in fact they aren’t, or visa versa;
- Threats to arrest you, sue you or garnish your wages if the agency lacks the power to do so;
- Providing false information to anyone regarding your credit;
- Cashing a post-dated check earlier than the agreed-upon date.
With regard to the cases in which the FTC has been involved, preliminary relief actions have involved asset freezers, appointment of receivers and in some cases, temporary restraining orders.
One of the major problems the FTC has identified in recent months is the proliferation of “phantom” debt collection agencies. These are firms that formulate their entire business model around collecting debts that either don’t actually exist or aren’t owed to the agency that is calling.
Dolan rounded out his testimony by offering some of the more recent policy initiatives, such as the FTC’s collaboration with the newly-formed Consumer Financial Protection Bureau. One of those efforts resulted in a workshop that detailed how consumer information is handled in the debt collection process.
If you’re battling debt collection or foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
FTC Testifies before Senate Banking, Housing, and Urban Affairs Subcommittee on Debt Collection and the Fair Debt Collection Practices Act, July 17, 2013, Press Release, Federal Trade Commission
More Blog Entries:
Consumer Debts Bought by Third-Party Collections Often Violate Federal Law, July 8, 2013, Miami Consumer Rights Lawyer Blog