Regulators say collection agencies
increasingly are harassing innocent people and badgering
consumers into paying money they don't owe. More people complain
to the Federal Trade Commission about debt collectors than
about any other industry, and consumer attorneys say a booming
trade in old, poorly documented debts is fueling the problem.
Consider:
-
The FTC charged that as much as 80% of the money
collected by Capital Acquisitions and Management (CAMCO),
a large debt-collection
firm, came "from consumers who never owed the original
debt in the first place." These consumers typically
paid the company to stop its harassment of themselves,
their families, their friends and their co-workers. CAMCO
agreed
to a $300,000 civil penalty in March 2004, but in the ensuing
eight months the problems continued. The FTC received more
than 2,000 additional consumer complaints about the company
-- three times more than the agency received in the two
years prior to the settlement. The FTC eventually succeeded
in
shutting CAMCO down.
-
In
July 2005, the FTC won a record $10.2 million court
judgment against National Check Control
after
accusing the debt
collector of illegally threatening consumers with
arrest and wage garnishment. Again, many of the consumers
targeted by National Check Control didn't owe the original
debt,
the FTC said.
-
Allied
Interstate, the company that contacted the Burks,
was sued by the Minnesota attorney
general for repeatedly
calling innocent consumers despite requests to stop.
Allied eventually agreed to a settlement that prohibits
it from
contacting such consumers after being orally told that
they don't owe the debts in question.
-
Applied
Card Systems hassled relatives, neighbors and employers
with
repeated phone calls in its efforts to track down
debtors, according to the FTC. The company ignored
requests to stop calling, and its representatives
sometimes used
obscene language when its hapless targets protested
that they didn't know how to contact the debtors.
The company
agreed to a consent decree that prohibits it from harassing
consumers.
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