States Warn About Debt Collector Harassment

Milwaukee, WIAs more and more consumers file complaints about debt collector harassment, more states are getting involved, warning about bill collector harassment and other unethical tactics used by debt collectors. Debt collector lawsuits have been filed against unscrupulous bill collectors, some of whom harass people who do not actually owe a debt.

Recently, the Wisconsin Department of Financial Institutions warned residents about shady debt collection practices. In a news release (8/21/13), the department noted that it has received more than 100 written complaints and on average several phone calls per day about unethical debt collectors who threaten jail if the consumer does not act immediately on a debt.

“The callers do not represent law enforcement and any threats of arrest or jail are bogus,” the department notes. In some cases, the debt collector is attempting to collect from a person who either does not owe money at all or does not owe money to the company doing the calling. Even in cases where a debt is legitimately owed, the company may be using illegal debt collection practices, including threats of arrest or seizure of private property, calling outside approved hours, or using threatening, harassing or violent language.

Debt collectors are not permitted to threaten arrest, threaten to tell a third party about your debt, or call before 8 am or after 9 pm. Despite rules prohibiting certain practices, however, debt collectors are routinely a source of extreme frustration for consumers and lawmakers.

The Federal Trade Commission (FTC) reports that it receives more complaints about debt collectors than it does about any other industry. The FTC is responsible for enforcing the Fair Debt Collection Act, which makes it illegal for debt collectors to use deceptive, unfair and abusive tactics to collect on debts. According to the FTC, the agency has sued more than 30 debt collection companies for violations of the law.

Among those was a lawsuit filed against Expert Global Solutions, described by the FTC as the world’s largest debt collection operation. That lawsuit resulted in a $3.2 million penalty charged to Expert Global Solutions, the largest penalty ever obtained by the FTC in a claim against a third-party debt collector, according to an FTC news release (7/9/13). The FTC filed its complaint accusing Expert Global Solutions of calling consumers multiple times in a day, ignoring requests to stop contact and calling outside normal hours.