Research, regulation, industry reports

Debt collection complaints still top FTC list in ’07

Connie Prater

Complaints about illegal and questionable debt collection practices rose slightly in 2007 over the previous year, according to the latest report released by the U.S. Federal Trade Commission (FTC).

The FTC sends a briefing to Congress each spring detailing consumer reports of violations of the Fair Debt Collection Practices Act, the 31-year-old law governing abusive debt collection practices. Those complaints rose to nearly 71,000 in 2007 — up from a little more than 69,000 in 2006. The increase — just shy of 3 percent — comes as debt collection activity and consumer defaults on overdue credit card obligations have skyrocketed in recent months.

Complaints about debt collection continued to top the list of all consumer problem areas tracked by the FTC. One out of five complaints received by the FTC in 2007 involved some type of debt collection issue — a phenomenon that has prevailed at least since 2003. Since that year, debt collection complaints have more than doubled, up from 34,565.

Consumers reporting alleged abuses by in-house collection divisions of credit card issuers (as opposed to third-party debt collection agencies) decreased slightly in 2007 — down to about 20,000 from more than 21,000 in 2006. Consumer advocates point out that credit card issuers are often more abusive with debtors than third-party debt collection agencies because the fair debt collection law generally does not cover creditor practices and behavior.

Leveling off
Rozanne Andersen, general counsel and executive vice president of ACA International, the largest debt collector trade group, predicted there would be a leveling off of complaints in ’07 when I interviewed her in February 2008 for our debt collection package. “Betweeen 2006 and 2007, they definitely leveled off. We hope to see an actual decline,” she said.

ACA has launched its own complaint system in an effort to self police its industry and weed out bad apples among the collectors. Andersen says about a dozen debt collection agencies are expelled from the trade group each year for questionable practices. The group has also developed a code of ethics.

List of top offenses
Here’s the list of primary complaints filed in ’07:

Complaint type % of complaints # of consumers
Demanding larger payments than permitted by law



Calling repeatedly or continuously



Repeated calling of friends, relatives or co-workers to find the consumer



Use of obscene, profane or abusive language



Falsely threatening to file suit or take other actions they do not intend to take



Improperly calling consumers’ jobs



Ignoring written notices to cease communication



Telling others about alleged debts



Failure to provide notice of debts



Falsely threatening to arrest consumers or seize property



Failure to verify disputed debts



Demanding interest, fees and expenses that were not owed



Calling before 8 a.m. or after 9 p.m.



Using or threatening to use violence



Source: U.S. Federal Trade Commission
Note: Percentages do not add up to 100 because consumers may have filed complaints about multiple violations.

A true picture?
A few footnotes to the report: Debt collectors contact millions of consumers each year and the number of FTC complaints represents only a small fraction of those calls and letters. While many consumers never file complaints and others do not know they have the right to do so, others may not be aware that questionable debt collection activity violates the law.

Some consumers may file complaints with their state or local consumer protection agencies — and forego the FTC, which does not investigate individual complaints. A spike or drop in complaint numbers may also be an indication of increased ease of efficiency of filing complaints. Therefore, tracking the number of debt collection complaints may not present an accurate picture of the extent of nationwide debt collection problems.

Getting help
Consumer advocates recommend debtors who want to report abusive debt collection practices call BOTH their local consumer protection agency and the FTC. Call the toll-free FTC hotline at 877-FTC-HELP or go to their Web site. The National Association of Attorneys Generals has a listing of contact information for each state attorney general’s office.
See related: “Consumer credit woes mean debt collection boom,” “Know your rights: the Fair Debt Collection Practices Act,” “11 tips for dealing with debt collection,” “Sample letters,” “Blog: I’m not a deadbeat, but I play one on my cell phone,” “Blog: Debt collector calling…and texting…and emailing

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, we ask that you do not disclose confidential or personal information such as your bank account numbers, social security numbers, etc. Keep in mind that anything you post may be disclosed, published, transmitted or reused.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.