With the number of Americans struggling with debt in today’s economy, many have been contacted by creditors and debt collectors regarding unpaid bills and delinquent accounts. However, debt collectors often turn to using threatening tactics in order to collect debt, making it difficult for consumers to feel confident about finding a solution to manage their debt and to get back on track with their finances.
Florida has especially been hit hard with plummeting home prices, unemployment and an increase in expenses. The financial crisis our residents are in is clearly illustrated in our state’s high foreclosure and bankruptcy rates. Unfortunately, many Floridians have also experienced some form of creditor harassment while trying to sort out their financial issues.
According to the Federal Trades Commission, more than 140,000 complaints were made during 2010 against debt collection agencies. Complaints increased by 17 percent from 2009. Although many consumers may feel like there is nothing they can do to stop the harassing calls at work and during all hours of the day, the FTC is taking the number of complaints seriously. Beginning in July, the Consumer Financial Protection Bureau will start handling and investigating consumer complaints against collections agencies.
What many Floridians and other Americans many not understand is that creditor harassment is illegal. In 1978, the Fair Debt Collection Practices Act was adopted to protect consumers from abusive and deceptive collections practices. However, because the act was created in 1978 and technology has significantly advanced since then, the act does not address many issues regarding creditor harassment today. As a result, the Consumer Financial Protection Bureau has been created in order to better address the problem of creditor harassment. The associate director at the FTC commented, “The big difference I think is while the FTC does not have any rule-making ability, the new bureau will.”
The number of consumer complaints has certainly caught the attention of regulators. Hopefully the new agency responsible for investigating consumer complaints against debt collection firms will be able to create and enforce new guidelines in order to reduce the amount of creditor harassment. Consumers can also take issues into their own hands by learning about the options available to them that may help put an end to creditor harassment while also controlling their debt. In Florida, if a consumer files for Chapter 7 or Chapter 13 bankruptcy, creditors can no longer attempt to collect on unpaid debts while the consumer works on their debt consolidation and reorganization plan. Florida consumers may be able to put an end to the threats from collection agencies while also moving forward with a better financial plan.
ABC News: “FTC: Debt Collectors Provoke More Complaints Than Any Other Industry,” Ben Forer, 22 Mar. 2011