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Sunday, December 13, 2009
Ind. Law - "Debt collectors' 'bully' tactics drawing scorn"
A story today in the Evansville Courier & Press by Mark Wilson:
Using records obtained under the federal Freedom of Information Act and from extensive interviews, a three-month Scripps Howard study found:A second story today in the C&P is headed "Know your rights when it comes to debt collection."> The volume of debt-collection complaints has risen during the recession, dominated by charges that collectors misrepresent debts, contact people repeatedly and fail to send written notice — practices forbidden by federal law.
> The booming debt-collection industry is feasting on rising consumer credit default rates and is seeking easier ways to contact people on cell phones.
> Collection companies face scant threats if they're caught breaking the law, consumer advocates said.
> The rise in complaints comes as Americans say they're being contacted more frequently by debt collectors, according to a poll by Scripps Howard/Ohio University. The poll found that 30 percent of respondents said they or their family had been contacted before 8 a.m. or after 9 p.m. — times that are prohibited by law. * * *
If the allegations of abusive collection tactics are true, that would violate the 1977 Fair Debt Collection Practices Act, which prohibits deceptive and harassing behaviors. The law allows consumers to request verification of the debt alleged, and it requires the collection company to stop making contact if asked by the consumer.
"They know what buttons to push on people to get them to pay, even when they don't think they're going to pay," said Ira Rheingold, executive director of the National Association of Consumer Advocates, a Washington-based advocacy group. "The rationale at this point is: 'Do I need to comply with the law or do I need to do whatever I can to collect money?'"
Bozikis said the Tri-State Better Business Bureau goes through the federal act with callers, instructing them on what collectors can and cannot do according to the law. However, he must refer them to the Federal Trade Commission if they wish to lodge an official complaint with someone about the collector.
That is about all other organizations and agencies can do, too.
"Mostly what we do is inform them of their rights," said Katherine Ryback, a local staff attorney with Indiana Legal Services Inc.
The Indiana Attorney General's Office often fields complaints, too. For 2009, the state received 540 complaints against "collection agencies" through the first week of November, said Molly Butters, a spokeswoman on consumer issues for the attorney general's office.
"The vast majority of these complaints go to our mediation group who will attempt to resolve the dispute between the consumer and the collection agency," Butters said. "Depending on the content of letters/communications or possibly issues with the statute of limitation, a smaller number of complaints are flagged for possible litigation and are investigated."
The goal of mediation is to resolve the consumer complaints short of enforcement actions. * * *
Meanwhile, the industry wants easier access to the public, and it wants Congress to legalize automated calls to cell phones. Currently, collectors must call cell phones by hand, according to an ACA official. Michael Barrist, the chief executive of the world's largest debt-collection company, Horsham, Pa.-based NCO Group, told Scripps Howard that increased access to consumers' cell phones would be an "industry changer."
Posted by Marcia Oddi on December 13, 2009 03:26 PM
Posted to Indiana Law