Debt Collector Complaints Spike As Americans Struggle To Pay Bills
As the down economy makes it increasingly difficult for Americans to pay their bills, debt collectors are targeting consumers in droves, prompting an uptick in complaints against the companies.
The number of complaints about debt collectors filed to the Federal Trade Commission jumped to 140,036 in 2010 from 104,766 per year in 2008, according to USA Today, as more Americans try to scrape together enough money to pay their bills. In the past three years, the FTC has taken 10 companies to court -- compared to 6 companies in the three years before that.
As high unemployment, a weak housing market and stagnent wages pinch Americans' budgets, they're having more trouble paying back debts, which means increased opportunities for debt collectors. But the squeeze can also have consequences for the companies notorious for pestering consumers -- if households are running out of money they're less likely to pay it back.
To get consumers to pay, some debt collection agencies are intimidating households, bugging them during all hours and at increasingly close intervals. In some cases, they're even calling the bereaved to collect on debts they don't owe.
And the debt collection sector is only poised to grow. The industry expects to grow 26 percent in the next three years. But their tactics may get more aggressive as well because the economic down turn has made it more difficult for them to collect.
The agency has had some success at stopping these companies looking to prey on consumers having trouble paying their bills. A U.S. district court stopped activity at seven connected California-based debt collection companies last month and temporarily froze their assets, after the FTC filed a complaint that the collection companies were using lies, threats and insults to get consumers to pay up.
But in many cases, the consumers the companies were calling didn't owe anything at all, according to the FTC complaint.
Threats and intimidation may be some of the more egregious examples of unfortunate debt collector practices, but consumers across the country have also contended with aggressive debt collectors in less extreme situations. A man in Shiner, Texas filed a federal suit against a debt collection agency earlier this month, after he allegedly told the company that the statute of limitations on his debts was up, but they kept calling anyway -- sometimes before 8 a.m. -- according to the Victoria Advocate.
An Orlando woman said a debt collection agency called her on behalf of Bank Of America about 15 times asking her to pay her recently dead husband's $16,600 credit card debt, even though under Florida law she's not responsible for the debt, My Fox Orlando reports. Now, she's suing BofA and the collection agency.
It's not debt collection agencies getting more aggressive, either. A Hawaii woman also accused BofA robo-calling her in the immediate aftermath of her husband's death over a missed mortgage payment, in some cases calling every 15 minutes, according to a lawsuit she filed in September.