Say on Pay: Complaints About Debt Collectors Surge

As Americans sink further into debt, so does their distaste for paying it back. Complaints about debt collection rose 34 percent from 2004 to 2008, according to a new FTC report.

The agency last year received roughly 79,000 complaints regarding those third-party debt collection services everyone loves so much. That amounted to nearly one-fifth of all consumer complaints to the FTC.

The most common complaints about debt collectors involved, in order of prevalence: (1) misrepresentation of the amount or legal status of a debt; (2) excessive telephone calls; (3) telephone calls from collectors looking for other individuals; (4) use of obscene, profane or abusive language; and (5) threatening to sue if payment was not made.

In some ways, this is no surprise. I know that when someone rings me up late at night to ask for their pound of flesh, my first impulse is to say, "Dad, trust me, I'm good for it."

Joking aside, collecting debts is a thankless, but necessary, task. As the FTC concedes, it's hard to tell if the growing chorus of complaints means that debt collectors are getting nastier or if it's merely a sign of the economic times, as financially strapped folks fall behind on payments.

Either way, it's good to know your rights. The Fair Debt Collection Practices Act protects consumers from a range of unsavory practices, as detailed below. And if anyone asks you about me, mum's the word.

• Communications. The act regulates how collectors can communicate with consumers who may owe a debt and with others associated with the consumer. For example, it prohibits a collector from informing a consumer's employer about the debt and prohibits collectors from calling before 8:00 a.m. or after 9:00 p.m. Consumers also may request that the collector cease further communication.
• Treatment of debtor. Debt collectors may not harass, oppress, or abuse consumers; use or threaten violence; use obscene language; or use a telephone to engage in actions intended to annoy, such as causing the telephone to ring repeatedly.
• False or misleading representations. Debt collectors may not misrepresent who they are, falsely represent the legal status of the debt, fail to disclose to the consumer that they are attempting to collect a debt or imply that nonpayment is a crime.
• Unfair practices. The act prohibits the use of unconscionable or unfair practices, including trying to collect the wrong amount of debt; adding unauthorized fees, interest or other charges to the debt; or causing the consumer to incur collect-call telephone charges.