The growth of debt collection industry has been through aggressive practices

What would it feel like to have your wages garnished for a debt that you didn’t even owe? This unfortunate scenario happened two times to a New Mexico woman who had no connection to the Target Bank account or to the collectors employed by Target. Because the debt buying industry has grown in leaps and bounds since the 1980′s, cases like this are becoming more and more common. Now the combination of technology and large debt buyer firms has created a profitable industry that also holds the record for highest industry complaints logged with the Federal Trade Commission. Regulators are not able to deal with every case, but the Fair Debt Collection Practices Act grants citizens important rights in debt disputes.

Lucinda Yazzie had the unfortunate experience of receiving some calls from bill collectors claiming she owed a late balance on a Target card. The creditors were informed by her, that the debt did not belong to her and that another person in area shared her name. Debt collectors successfully obtained a garnishment order despite her repeatedly contacting dept collection agencies. Her employer insisted this was not the same employee and the garnishment was dropped. Yazzie had another garnishment order against her two years later when the same debt collection firm filed suit again. Till the time she filed a suit in the court on her own for FDCPA violations, this order stayed.

In the end, she received a $1,260,000 settlement in the lawsuit. An extremely big award for a case like this. Lucina Yazzie took action and held the collection agency accountable; but most all persons don’t defend themselves against an industry with plenty of money and composed of very competitive employees who are pushed to the maximum on noisy collection floors.

The savings and loan crisis of the 1980′s lead to the creation of the debt buying and 3rd party debt collection industries. After dealing with Savings and Loan assets the debt buying and collection industry known by insiders as the “Adjustable Receivables Management” industry, branched out into credit card and other consumer debts.

Until the recession in 2008 debt buyers and collectors grew slowly but steadily, and then analysts predicted an increase in the business. In 2007, there were around 100,000 complaints as predicted earlier. By 2009 the number had increased to 130,000 per year. Several factors influencing the rise in complaints include aggressive tactics that ignore legal boundaries, technology to increase calls to consumers and the increasing use of local courts to sue for delinquent credit card debts.

Creditors are required to hire collection agencies with a qualified attorney in the same state as the one who owes the debt, however the empty threat of “legal action” is a favorite among bill collectors. If immediate capability and intention to sue on the debt is not held by the collector then this is often an FDCPA violation.

Most people don’t go to court to defend themselves against lawsuits from creditors; current research shows that those people that did show up to defend themselves, were more likely to have the case dismissed. If sued by a creditor the most important thing a consumer can do is to respond through the court system within the time allowed even if the debt is not theirs, the study shows.

The courts are rejecting the legal actions of a lot of creditors, which shows that they are often unable to follow through with their threats. In 2010, this industry has experienced a 58% growth in its yearly profits. Being aggressive can pay off even if the laws aren’t always followed.

To defend themselves against non compliant debt collectors, the Federal trade commission urges consumers to use the provisions under the Fair debt collections practices act Similar to today’s partisan legislative environment, the FDCPA faced a heated debate in Congress in 1977 and barely passed the vote. However Congress ultimately realized that there was a need to protect people from all parts of society against abusive debt collection practices that were also rampant in the Seventies. Today the nee still exists.

A CNN article on money the head of a debt collection company notes that “It’s harder to get rid of debt these days.” Debt is now a fact of life and a burden to manage for many Americans. Luckily Certified Debt Specialists are available who have worked with numerous bill collectors. These individuals know how everything works because they are professionals. Now more than ever consumers are beginning to realize the need for certified specialists with advanced technology to help as a negotiator with big debt collection operations that just keep get bigger and bigger.

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