The National Trial Lawyers
  • Home
    • Meet Our Team
    • Contact Us
    • Mission & Goals
    • FAQ
  • Webinars
  • News
  • Membership Directory
    • Top 100 Map – Civil Plaintiff
    • Top 100 Map – Criminal Defense
    • Top 40 Under 40 Map – Civil Plaintiff
    • Top 40 Under 40 Map – Criminal Defense
  • Top 100
    • Civil Plaintiff Officers / Executive Committee
    • Criminal Defense Officers / Executive Committee
    • Benefits
    • About
    • Top 100 Presidents Message
    • Diplomat
    • Membership Renewal
    • Member Profile Updates
    • Top 100 Badge
  • Top 40
    • Civil Plaintiff Officers / Executive Committee
    • Criminal Defense Officers / Executive Committee
    • Top 40 Under 40 Trial Academy Bootcamp
    • Benefits
    • About
    • Top 40 Presidents Message
    • Membership Renewal
    • Member Profile Updates
    • Top 40 Badge
  • Specialty Assoc
    • About
    • Shop
    • Officers
    • Membership Renewal
    • Member Profile Updates
  • Nominate
    • Top 100
    • Top 40
    • Specialty Association
    • Trial Lawyer Hall of Fame
    • Trial Lawyer of the Year
    • Trial Team of the Year
    • America’s Most Influential Trial Lawyer
    • America’s Most Influential Law Firm
    • Lifetime Achievement Award
  • Shop
  • Magazine
    • A-List
  • Education and Networking Agenda
    • Trial Lawyers Summit
    • Top 40 Under 40 Trial Academy Boot Camp
    • Mass Torts Made Perfect
    • The Lanier Trial Academy Master Class 6.0
    • The Business Of Law
    • Webinars
  • Hall of Fame
    • Trial Lawyer Hall of Fame

Unscrupulous Debt Collectors Generate 88,300 Complaints a Year

Posted on May 13, 2015 by Larry Bodine

debt collectorBad debt collectors have become a worsening problem in the lives of consumers. According to Consumer Financial Protection Bureau’s annual report:

  • 35 percent or 88,300 of consumer complaints in 2014 were about debt collection
  • 20 percent or 51,200 complaints were about mortgage collection the same year.

 

Nebraska attorney, Jeffrey Lapin has dedicated a website to educate consumers on their rights and the signs of collectors making illegal collection calls.

Call, harass and sue

Creditors sell the debt to junk debt buyers who call, harass and sue unsuspecting creditors. The debt may be legitimate but the debt is so old the statute of limitations has expired and the it is no longer legally collectable in court.

According to Lapin, in an interview on Personal Injury.com, some warning signs for bad debt collectors are:

  • Failure to provide debt validation or written proof of underlying debt;
  • Collectors calling from various locations;
  • Providing limited or generic information about the consumer.

 

If a consumer approaches an attorney with a collection issue, Lapin states his inquiry will usually begin by:

  • Is the debt legitimate?
  • If so, is the debt amount correct?; and
  • Has the collector violated any rights under the Fair Debt Collection Practices Act?

 

The FDCPA protects consumers from unfair practices such as calling after 9:00PM or at a consumer’s workplace, using threats or violence, failure to validate debts, and misapplying payments for consumers with multiple debts.

Consumer Bureau Cracks Down

See also: Collection Agency Liable for Charging Debtor for Calls 

The CFPB is a federal agency created in 2011, solely focused on consumer financial protection. Since its inception, the agency has handled among other issues complaints about credit cards, mortgages and car loans.

The agency was also responsible for the crackdown of aggressive collection practices on payday loans in 2013.

Once a consumer files a complaint, the CFPB screens the complaint, then sends it to to the company for a response. The company sends a response to the consumer and the CFPB. The collector has about two weeks to respond to the complaint before the complaint becomes available to the public.

The CFPB maintains a record of the type of complaints reported by consumers. These complaints are compiled in database available for public viewing. 37 percent of consumer’s complaints were the companies “continued attempts to collect debt not owed.” This type is followed by 20 percent of consumers stating the telephone communication was frequent and occurred at inconvenient times of the day.

Recent Bad Debt Collector Cases

Some companies recently faced penalties for their debt collection practices. Encore Capital Group, a major debt buyer, agreed to a settlement recently. The company agreed to vacate improper judgments totaling nearly $18 million and pay $675,000 in civil penalties. Encore purchased consumer debts such as credit card debts from the original creditors at a discounted price.

In this case, the New York Attorney General sued the company for improperly suing New York residents for unpaid debts and obtaining default judgments against the residents who failed to respond.

Under New York Law, it is unlawful to sue consumers when the claimed debt is outside the statute of limitations. For a creditor to make a timely complaint, the action must be filed within the statute of limitations. What time frame applies depends on the state where the original creditor was located.

Based on the NY Attorney General’s investigation, the company is responsible for vacating over 4,500 improper consumer judgments.

Additionally, in March the CPFB filed suit in the federal district court of Northern Georgia against the leaders of a robo-call debt collection scheme. The leaders established several entities in Georgia and New York and used them to collect and process payments from vulnerable consumers.

CPFB claimed consumers were tricked into thinking the collection was legitimate because the company verified personal information such as family members, social security number, and date of birth. The company also used a legitimate payment processor to accept debit and credit card payments.

It is important for consumers to be aware of illegitimate debt collectors and understand there are ways to have control over their financial lives.

To find out more, visit Consumer Financial Protection Bureau and Stop Bad Collectors.

Posted in Blog, Business Law, Consumer Protection

One thought on “Unscrupulous Debt Collectors Generate 88,300 Complaints a Year”

  1. Jeffrey Lapin on May 13, 2015 at 4:51 pm said:

    Owing a debt does not mean that a person can be harassed, abused or threatened. Unfortunately, many debtors do not know their rights and fall victim to the illegal tactics of some debt collectors.

    Thank you for this post so, hopefully, consumers will learn more about their rights and options when it comes to a debt.

News Categories

Read about other Top Jury Verdicts

The New Mexico Supreme Court Upholds $165 Million Damage Awards in a Deadly FedEx Crash

The New Mexico Supreme Court Upholds $165 Million Damage Awards in a Deadly FedEx Crash

The New Mexico Supreme Court on Thursday upheld $165 million of jury awards against FedEx in a wrongful-death lawsuit stemmin[Read More...]
Virginians Will Receive $489 Million in a Payday Loan Settlement

Virginians Will Receive $489 Million in a Payday Loan Settlement

Online payday loan companies that charged as much as 919% interest will spend $489 million to reimburse some 555,000 borrower[Read More...]
The State of Minnesota Will Pay $1.5 Million to a Man Who Alleged Excessive Force During an Arrest

The State of Minnesota Will Pay $1.5 Million to a Man Who Alleged Excessive Force During an Arrest

Minneapolis has agreed to pay $1.5 million to a man who said police used excessive force when he was arrested during the prot[Read More...]
A $230 Million Settlement Is Reached Over a 2015 Southern California Oil Spill

A $230 Million Settlement Is Reached Over a 2015 Southern California Oil Spill

The owner of an oil pipeline that spewed thousands of barrels of crude oil onto Southern California beaches in 2015 has agree[Read More...]
The LeClairRyan-UnitedLex Dispute Reaches a Pending $21 Million Settlement

The LeClairRyan-UnitedLex Dispute Reaches a Pending $21 Million Settlement

After a prolonged mediation process, the LeClairRyan bankruptcy estate looks to have reached a sizable settlement in one of t[Read More...]

#LegalNews

@@TheNTLtop100

Contact Us | Terms of Use | Privacy Policy

Attorney information and content provided on this website is provided for the benefit of members of The National Trial Lawyers and as a public service by Legal Associations Management, Inc. The website and all data are the property of Legal Associations Management, Inc. Data, including without limitation attorney information and content, on the site may not be mined, sold, or used commercially for any purpose without the explicit written consent of Legal Associations Management, Inc. This site may not be accessed by any automated program for extracting data for any use. By accessing and using the site you agree that you will not develop, support or use software, devices, scripts, robots, or any other means or processes (including crawlers, browser plug-ins and add-ons, or any other technology) to scrape data or otherwise copy profiles and other data. Unauthorized use or attempted unauthorized use of this system may subject you to both civil and criminal penalties.