Debt collection is a profitable business in the U.S., but not all debt collectors follow legitimate, legal collection practices. According to officials from the Federal Trade Commission (FTC), most consumer complaints made annually involve illegal debt collection practices, which is why they have made recent efforts to crack down on these types of tactics.
In response, the FTC has launched a multi-agency campaign called “Operation Corrupt Collector.” This crackdown campaign focuses on educating consumers on how to identify illegal debt-collection practices, as well as enforcement against debt collectors who are found to be breaking the law.
The FTC is joining forces with federal and state agencies to focus their efforts on debt collection companies that are preying on consumers, trying to convince them to pay on debts that are no longer legally collectible, such as debt that is past the statute of limitations, or debts that the consumer doesn’t even owe. This practice is known as phantom debt collection.
Other illegal debt collection practices the FTC is focusing on include making threats against the consumer in an effort to get them to pay on the debt. Under the Fair Debt Collection Practices Act (FDCPA), these types of debt collection actions are illegal, although not all consumers are aware of the rights that they have under the FDCPA.
Some of the more extreme tactics taken by debt collectors involve threatening imprisonment in the event the individual does not pay, impersonating law enforcement or an attorney, or threatening to contact the person’s employer or family members.
In the event a debt collector is pursuing a consumer aggressively for payment, the FTC and their state and federal partners say to resist the urge to pay. When speaking with a collector, they recommend that the consumer first obtain as much information as he or she can regarding the caller, including the name and address of the debt collector, their phone number, and the name of the original creditor.
Consumers also have the right to request written confirmation of the debt, to be supplied to him or her within 30 days of the request. This confirmation allows the consumer to verify that the debt and the amount listed is, in fact, accurate.
Additionally, once the consumer obtains the name of the original creditor, he or she should contact the creditor directly to confirm that the debt is legitimate and that the third party debt collector has been authorized by the creditor to contact the consumer.
If the consumer finds any discrepancy or does not owe the amount claimed, he or she should dispute the debt as soon as possible. The consumer should request the debt collector provide him or her with information needed to formally dispute the debt. If the collector refuses to provide this information, this refusal should also raise a red flag that the collector is not acting legitimately. At this point, the consumer should report the collector to the FTC.
The FTC reports that they have received more than 87,000 debt collection complaints this year, with half of them connected to “Operation Corrupt Collector.” The operation has resulted in 50 enforcement actions, including warning letters, civil lawsuits, and even criminal charges against illegal debt collectors.
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