Many who run debt collection operations ride roughshod over people targeted for collections, even when there’s no money owed. A new report to Congress from the Consumer Financial Protection Bureau (CFPB) paints an ugly picture of industry practices.
About 30 million Americans have an outstanding average debt of about $1400 for health care, mortgages, vehicles or student loans. And there’s an army of companies and individuals standing by to try to collect these debts.
It’s reasonable for those legitimately owed money to get paid, but many involved in the debt collection business work as though they live in a lawless country.
The CFPB received more than 30,000 complaints about debt collectors in six months from July to January 2013.
- 34 percent of those complaints were from consumers who said they were called by individuals or companies for debts they didn’t owe.
Outrageously, in 55 percent of the cases debt collectors continued to call after they were told they had the wrong person or the wrong number. Sometimes the call was for a person with a similar name, or the consumer’s number was mistakenly listed in the debt collector’s information.
Nevertheless, debt collectors often threatened, cursed and used abusive language and called these consumers, who owed nothing, at their workplaces.
60 percent of the callers threatened that the consumer would be arrested and thrown in jail if they didn’t pay. Some even threatened to physically harm the consumer. Remember, these threats were made to people who owed nothing.
The CFPB says consumers were often frustrated and unable to to get information in writing about what they owed, or supposedly owed.
Debt collections is clearly an industry in need of reform.We think Congress should respond to this report in a meaningful way.
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