If you have ever had to deal with a debt collector in Colorado or elsewhere, you know how some of their tactics can lead some debtors headed for a bankruptcy attorney. Having to respond to legitimate debt collection efforts is frustrating enough, but throw in the scammers and con artists who attempt to collect on either a paid debt or one that never existed in the first place and you might want to call an attorney for a different reason. It is unfortunate that in today's tough economy already cash-strapped Coloradoans and others are forced to endure collection efforts for debts they do not even own.
A detailed report on complaints involving debt collection gathered by the Federal Trade Commission for the first quarter of this year brought some surprising results. For starters, there were 180,000 complaints to the FTC regarding debt collection issues last year. The group that released the report, insideARM.com, said it expected thousands of complaints involving the largest debt collectors would surface in the report, but that didn't happen.
Instead, the review found there were two faces to the debt collection industry, one a legitimate effort at debt collection and the other rather villainous. Now to be sure, many of the largest debt collection companies did come up and one cannot assume all of the complaints were indeed violations of debt collection practices. Perhaps one reason some of the largest companies rose to the top of the list is due to the fact they provide clients with their actual, real names, not some legitimate-sounding legal entity.
The report found that 20 percent of the complaints received by the FTC involved unknown corporations. The field in the complaint form was either left blank, had "unknown" or the person making the complaint stated the caller "wouldn't say" the company's name. Fake or legally sounding government agencies or a fictitious law firm name were written in thousands of other complaints. If creditors are harassing you, legitimate or otherwise, it can be beneficial to consult with a bankruptcy attorney who can explain your rights and steps you can take to prevent further harassment in the future.
Debt collection practices are tightly regulated and when the new Consumer Financial Protection Bureau takes over reporting the complaints against debt collectors it will be interesting to see how the industry responds. It is reported the CFPB will use a similar method that it uses when collecting and reporting complaints against credit card companies.
Source: Forbes, "Two Shades of Debt Collection," Stephanie Eidelman, July 27, 2012
Our law firm, located in Lakewood, Colorado, can help you understand your rights in regards to debt collection and personal debt relief, including Chapter 7 and Chapter 13 bankruptcy.