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Debt Collector Harassment Nightmare Continues for Consumers

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Seattle, WAFor the people who receive threatening phone calls in the middle of the night, tales of debt collector harassment aren’t news. For those people, stories about bill collector harassment activities - such as late night phone calls, obscene language and threats of jail time - are simply further proof of problems within the debt collection industry. Concerns about debt collector harassment are so widespread that multiple government agencies and consumer advocacy groups have weighed in, and each report rampant abuse of the system.

Debt collection is often - though not always - undertaken by a company that purchases a consumer’s debt from a creditor or debt owner. According to a January 2013 report from the Federal Trade Commission, “The Structure and Practices of the Debt Buying Industry,”
“the most significant change in the debt collection business in recent years has been the advent and growth of debt buying.”

The FTC also notes in its report that it receives more consumer complaints about debt collectors - including debt buyers - than about any other single industry, with many complaints relating to the quantity and quality of information collectors have about the debts. This includes insufficient and/or inaccurate information, which can result in collectors attempting to recover from the wrong consumer, in the wrong amount or for a debt that has already been paid.

Meanwhile, the Center for Responsible Lending ( has issued its own report on debt collection. The organization noted that from 2003 to 2012, revenue from debt collection rose 600 percent. At the same time, predatory behavior on the part of debt collectors reportedly also rose. The same report also noted that when a consumer’s debt is sold to a third party, it is often sold without supporting documentation or with incomplete information.

Part of the reason debt collection is so profitable, according to one organization, is that collectors file lawsuits against consumers who owe and those lawsuits are often based on inaccurate or incomplete information. According to a report by New Economy Project (former NEDAP;, more than 200,000 debt collection lawsuits were filed in 2011 in New York state alone. The report, titled “The Debt Collection Racket in New York,” notes “fraudulent and deceptive debt collection practices” on the part of the industry. Among egregious acts attributed to some debt collectors are robo-signing (fraudulent documents that are submitted to the courts), falsely claiming that consumers have been served with court papers and lying to the courts about information the debt collectors actually do not have.

According to the report, debt collectors and creditors use these tactics to obtain default court judgments and then have the consumer’s bank accounts frozen or wages garnished.

Among statistics from the New Economy Project’s report were that in 2011 debt buyers obtained approximately $230 million in judgments in New York alone, that debt collection lawsuits accounted for 8 out of 10 of all default judgments and that only 2 percent of New Yorkers sued had legal representation.

Other complaints against debt collectors are making phone calls outside of legally allowed times, making threats or using obscene language when contacting consumers, and lying or misrepresenting themselves when calling consumers. Lawsuits have been filed against some debt collectors, alleging harassing, obscene and/or threatening tactics were used to intimidate consumers.


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