04/30/2012 11:14 am ET

Canton, Ohio Might Hire Debt Collectors To Recoup $4 Million In Unpaid Water, Sewer Bills

The city of Canton, Ohio might be giving the debt-collection industry some rather good business soon.

The Canton city council will vote Monday on whether to enter into a two-year partnership with Capital Recovery Systems, a debt collection agency based in Columbus, according to a recent report in the Canton Repository.

The city is trying to recoup about $4 million in unpaid water and sewer bills, among other debts. Capital Recovery Systems would get to keep 23 percent of the debt it collects.

Capital Recovery Systems was the object of some public ire in 2010 when it mistakenly sent out collection notices for unpaid municipal fines to several thousand people. The company works for multiple levels of government in numerous states.

The proposal speaks to the severity of the situation in Canton -- a former steel and iron capital that was named one of the most miserable cities in America a couple of years ago. Analysts say the city may not recover from the economic downturn until after 2021. Today, unemployment in the greater Canton area is 8.8 percent, more than half a percentage point above the national average.

Canton is far from the only city that's been struggling since the recession hit, adding to a long list of potential debt-collection clients. At the personal level, more and more Americans are having trouble just covering their basic living expenses, providing no end of work for recovery agencies. Those struggles have created a striking reality: Today, roughly one in seven Americans has had some kind of encounter with a debt collector, up from one in 14 in the year 2000, according to the blog Naked Capitalism.

At the same time, there's been a rising trend of unscrupulous and abusive practices among debt collectors, according to a recent study from Marketdata Enterprises. Collection agents have been harassing people over Facebook, showing up at the hospital to visit patients, and making vulgar threats to people who may or may not actually owe money. Consumer complaints about debt collectors reached an all-time high in 2011, according to the Federal Trade Commission.