Collection Agencies Draw Consumer Fire Nationwide

Collection agencies made the top 5 list among consumer complaints for several states this week, indicating again the near nationwide dislike of the business. This week is dubbed National Consumer Protection Week, leading to the release of complaint data by top law enforcement officials at various states.

In Maryland, collection agencies drew the fifth spot in the top five consumer complaints for 2007, according to a press release from Maryland Attorney General Douglas Gansler.

Nearly 3 percent of complaints filed by Marylanders with Gansler’s office last year concerned collection agency practices. According to the release, “Consumers often complained of collection agencies attempting to collect debt not owed and inaccurate information reported to credit reporting agencies.” The industry receiving the most complaints was classified as Landlord/Property Manager with 3.8 percent of all complaints filed.

On Monday, collection agencies made the number two spot on the top 20 consumer complaint categories for 2007 for the state of Washington. Attorney General Rob McKenna reported that collection agencies received 1,620 of the 19,686 consumer complaints filed with his office. Complaints against collectors rose by 24 percent from 2006.

Also on Monday, Attorney General Lisa Madigan of Illinois released data showing that collectors received the most complaints in the category Credit/Financial Services. Madigan’s office reported that agencies refused to verify that a consumer owed the debt; that agencies failed to properly identify the debtor; and agencies abused collection practices, including calls to the debtor’s workplace or at inappropriate times, or used abusive language.

The top complaint in Illinois regarded identity theft.

Collection agencies top the list of consumer complaints with the Federal Trade Commission. In 2006, the agency received more than 69,000 complaints related to the FDCPA, the law regulating collection agencies. That was an increase in the number of complaints and as a percentage of all complaints. The agency hasn’t released statistics for 2007.