Victory and Disappointment for the Debt World Today: Total Debt Falls While Harassment Complaints Rise

CNN Money’s recent article, “Debt collectors get nasty” showed some real insight into the current debt collection process in this country. They touched on information reported by the Federal Trade Commission, FTC, about the number of complaints of debt collector harassment issues on the rise.

Apparently these debt collectors haven’t heard of a little thing called the “Fair Debt Collection Practices Act” by the FTC. FDCPA? No? I mean, it’s only been around since 1978. Perhaps they missed the memo. Only 32 years late…

It appears they were not informed that harassing phone calls, violent threats and obscene language were frowned upon in this country when trying to collect a debt.

“Complaints of harassment by debt collectors surged 50% to 67,550 in 2009, according to the Federal Trade Commission. And they are on track to jump 13% this year, based on the number of FTC complaints filed in the first six months.”

The FTC states on their website that “debt collectors may not harass, oppress, or abuse you or any third parties they contact.” Perhaps these collectors have not seen these fun facts.

Something they might want to know…

The FTC defines harassment as being:

• “use of threats of violence or harm;
• publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
• use of obscene or profane language; or
• repeatedly use the phone to annoy someone.”

Those last two bulleted items there really struck a cord considering in the past year the number one complaint from consumers has been repeated calls and 35% of complaints involved the use of obscene or profane language.

Some consumers reflected on their experience with debt collectors and the harassment they’ve gone through. One woman mentioned a collector would call and demand, “you better talk to me, you deadbeat”. She was very put off by his threatening calls and was afraid of who would show up at her door.

“When she refused to answer the phone, the collector called her estranged sister, an ex-boyfriend and her husband’s ex-wife’s mother.”

These sort of violent or threatening complaints more than doubled last year with 2,517 cases.

Ok, let’s face it – these collectors know of the FDCPA and they have for 32 years. I personally feel they should be able to recite it in their sleep; it appears they know what they are doing but refuse to play by the rules. Perhaps they think that bullying customers is the best way to collect a debt?

I beg to differ; abuse should never be an option.

What some people don’t know is that YOU have the power to report them and their abusive behavior. If you don’t they will continue these practices on other clients and it will proceed to be a continuous cycle.

Look at Allen Jones, the Lewisville Texas resident, that reported vulgar collector harassment back in May. By doing so he sued the company and produced sound evidence of the calls placed by collectors to him. He won $1.5 million in punitive damages because of a collector’s harassing calls for his $200 debt.

On a positive note in the debt world, the FTC did release another report yesterday showing revolving consumer debt outstanding seems to be falling at a steady rate. Be it consumers are trying to get on higher ground during these rough economic times or the fact that creditors are pulling credit away from them.

Either way, after examining the amount of consumer credit outstanding the FTC concluded that, “consumer credit decreased at an annual rate of 4-1/2 percent in May 2010. Revolving credit decreased at an annual rate of 10-1/2 percent, and non-revolving credit decreased at an annual rate of 1-1/2 percent”.

That means that excluding mortgages and car loans and other “non-revolving” debts the total consumer debt dropped $9.1 billion in May while economists only expected a $2.3 million sink in debt. In the last 17 months this is the 15th drop in overall outstanding revolving credit resulting in a net fallen total of $146 billion (5.7% since 2008).

While total debt is falling, harassment complaints are on the rise. It’s hard to tell if this is a day of triumph for debtors in America to be making progress to becoming debt free or a disappointment based on how many creditors have been harassing them.

All I can say is, keep paying those debts. Don’t be a victim. Know your rights. And stand up for them if they’re violated.

Original Articles:
“Debt Collectors Get Nasty”
“Consumer Debt Falls Again, Led By Credit Cards”