Posted: December 16, 2015
In light of the regulations that have been passed to prevent them, debt collection practices are highly scrutinized. The Federal Trade Commission (FTC) recently created a coalition of federal, state, and local partners to crack down on illegal debt collection tactics. The FTC, Department of Justice (DOJ), Consumer Financial Protection Bureau (CFPB), along with 47 state AG’s, 17 state regulators, local authorities and one Canadian agency have made their commitment to “Operation Collection Protection”.
Why would all of these forces need to join together to tackle one industry?
Let’s take a look at the damage they’ve done that has potentially ruined the reputation of the good actors in the industry.
As claimed by the FTC, the harassing acts have been committed all over the country. From New York to California, and everywhere in between. The Commission claims consumers have been abused, harassed and mistreated by overly aggressive and likely non-compliant debt collection tactics.
Although such activities typically tend to be tied to debt collection companies, the suspects represent a plethora of industries. Suspects range from rogue individuals, to debt collection companies, to some of the biggest names/sellers in business.
The companies in question are suspected of violating the FTC’s Fair Debt Collection Practices Act (FDCPA) for their debt collection practices. These companies have disclosed debts to third parties, failed to identify themselves as debt collectors, and failed to notify consumers of their right to receive verification of the purported debts. The alleged violations, as claimed by the FTC, don’t stop there, some bad-actors have used harassment methods such as: threats of arrest, wage garnishment, lawsuits and other malicious actions.
This team-up of forces isn’t just a scare tactic, these agencies are enforcing the regulations in every way possible. According to the FTC, this year alone, 115 enforcement actions have been announced. Settlements this year have reached $6.4 million of a total of $350 million in settlements and has sued as many as 250 debt collectors since 2010. In addition to the civil penalties, companies found in violation may face asset freezes, injunctions, and even imprisonment.
The FTC states that it wants to work with the debt collection industry stop questionable practices before they start as part of its Operation Collection Protection initiative.
Whether it’s the FTC’s FDCPA or the FCC’s TCPA, we know there are many requirements impacting debt collection practices and meeting compliance can be challenging.
For more information on the FDCPA requirements, TCPA compliance, or Operation Collection Protection, please contact us at email@example.com.
Alex Sharpe is a Consultant at CompliancePoint. She works with clients in a variety of industries and aims to keep them updated on the latest changes in the regulatory environment related to U.S. federal and state consumer contact requirements and direct marketing compliance. Her focus is on helping clients navigate and understand how the regulations affect their business. Alex has earned her Customer Engagement Compliance Professional (CECP) certification from the Professional Association for Customer Engagement (PACE) and has a B.B.A. in Management from the University of Georgia’s Terry College of Business.