Collection Agents Again Top FTC Complaint List

Consumer complaints over alleged FDCPA violations by collection agents once again topped all other complaints received by the Federal Trade Commission, according to its annual report to Congress released Friday.

In 2007, there was a total of 91,019 consumer complaints against third-party and in-house collectors, representing 26.7 percent of all complaints the FTC received. That was small increase from 2006 when 90,706 consumer complaints represented 26.1 percent of all complaints the agency received.

Third-party debt collectors received the most complaints, generating 70,951 in 2007, virtually flat from the 69,249 filed in 2006, according to the FTC. The complaints in 2007 represented 20.8 percent of all the consumer complaints the agency received, up from 19.9 percent in 2006.

In-house collection agents received 20,068 complaints in 2007, down from 2006 when these agents received 21,457 complaints.

The report, the 30th annual FDCPA report that the agency has sent to Congress, is titled “FTC Issues 2008 Fair Debt Collection Practices Report to Congress,” and is available on the FTC’s Web site.

The FTC noted that not all the complaints refer to a violation of the law. In addition, the agency acknowledged that collection agents make millions of consumer contacts a year, so the number of complaints “is but a small percentage of the overall number of consumer contacts.”

Rozanne Andersen, senior vice president and general counsel of trade group ACA International, told insideARM that one complaint is one too many, that the organization modified its ethics code last July to address consumer complaints, and that the ACA is close to completing negotiations with the National Council of Better Business Bureaus for it to administer an enhanced dispute resolution program and serve as an ‘ombudsman’ for the collection industry.

In its report, the FTC also breaks down complaints in eight categories, with the most complaints related to agents that allegedly misrepresented “the character, amount, or legal status of a debt.” This category received 27,393 complaints or nearly 39 percent of all FDCPA complaints.

Last year, nearly 20 percent of the FDCPA complaints were from consumers alleging the collector harassed them with continuous or repeated calls. More than 9 percent of complaints claimed the collector “used obscene, profane or otherwise abusive language.”

Other categories that the FTC spotlighted include: threatening dire consequences if consumer fails to pay, impermissible calls to consumer’s place of employment, and revealing alleged debt to third parties.

Andersen said that complaints dropped in six of the eight categories and that the industry is addressing the other two – failure to verify disputed debts, and continuing to contact consumers after receiving "cease communication" requests.

In its report the agency noted that it is “currently conducting a number of non-public investigations of debt collectors” to find if they have violated the FDCPA or the FTC Act. The report doesn’t provide further details of these investigations. The report also recaps some investigations of agencies that were concluded in 2007.