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According to the Attorney General’s Office, complaints regarding collection agencies increased by 37 percent in 2007. Without knowing what the complaints are, I found myself wondering why the percentage of complaints has increased. Media attention, and “get rich quick schemes,” have made millions claiming to educate consumers on how to get out of paying their debts.
The collection industry is governed by the Fair Debt Collection Practices Act (FDCPA). This act requires collection agencies to follow specific guidelines to be in compliance with Federal laws. These laws can be confusing to collectors and debtors alike, not to mention misinterpreted.
For example the FDCPA provides that if a collector contacts a consumer to collect a debt and the consumer disputes the debt or requests verification of the debt in writing; the collector must cease collection efforts until the collector sends verification of the debt to the consumer. Therefore upon receiving a dispute or verification request, a collector has two options:
- They can provide the requested verification and continue collection activities.
- They can cease all collection activities.
If a collector chooses to cease collection activities, the collector is not required to provide verification.
We receive many requests for “debt validation” and letters requesting we “cease and desist.” Although some consumers are sincere in their request most are doing what they do best, stalling or not paying at all. Additionally, any dispute must be reported as such to the credit bureaus. Some companies will not look at disputed accounts negatively and the consumer is allowed to continue obtaining credit based on incorrect information manipulated by the consumer.
Therefore some complaints made against collection agencies are not actually a violation of the FDCPA. However, this does not mean that some of the complaints are not in fact valid.
When disciplinary action is taken against a collection agency it will generally substantiate the complaint. If there has been no disciplinary action taken, the complaint frequently is not justified. Disciplinary action can be quite costly. Therefore most collection agencies find compliance with the FDCPA allows their business to be more profitable. The collection industry is like any other business industry and is interested in profit. Violation of the FDCPA would be counter productive to any collection agency.
(Editor’s Note: Paula Bartlett is the owner of Saba & Associates, a Poulsbo-based collection agency. She can be reached at 360-698-1432 or sabacollections@comcast.net.)
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