In Boom Time for Debt Collectors, States Curb Aggressive Tactics


With more people falling behind on their consumer loan payments, regulators and consumer advocates say they’re seeing a surge in aggressive – and sometimes questionable – debt-collection tactics, reports USA Today. Complaints against debt collectors, after plunging in 2005, are rising again, the Council of Better Business Bureaus says. And the Federal Trade Commission, which receives more complaints about debt collectors than about any other industry, says it’s seen a steady rise in complaints against debt collectors.

Federal law bars debt collectors from repeatedly calling borrowers after being asked, in writing, to stop; it also prohibits them from threatening people with fake lawsuits. Some regulators say that as the economy struggles, they’re seeing more violations. New York’s attorney general has fined two debt-collection agencies in the past six months for falsely pretending to be lawyers, among other tactics. The California attorney general is receiving more complaints against debt collectors and has begun investigating a couple of agencies. In Minnesota, Attorney General Lori Swanson says she plans to file lawsuits against debt collectors for increasingly “abusive” tactics. Her office is receiving more complaints about collectors trying to collect debt from the wrong person and garnishing Social Security benefits in violation of state law.


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