Historically, the FTC delivers an annual report on the Fair Debt Collection Practices Act (FDCPA) to Congress. However, the Consumer Financial Protection Bureau (CFPB) recently took over the majority of the responsibilities outlined in the FDCPA. The FTC helped the CFPB prepare its first report, which included a letter delivered this week outlining its work on nine debt collection cases that occurred in 2013.
The FTC actually has a number of actions it can take to resolve issues related to debt collection violations, but is most effective by using consumer education, research and enforcement. The FTC said that since the recession, the most valuable tool they have is enforcement.
As an example of its enforcement proceedings, the FTC was able to stop illegal debt collection activities seven times in 2013 by obtaining court orders. The FTC also sent two cases to the Department of Justice. Restraining orders are also employed to halt the activities of potentially illegal debt collection operations.
Debt collection firms operating outside of the law can receive swift action. For instance, Asset & Capital Management Group and Goldman Schwartz Inc. each had their assets frozen and their operation was appointed to other firms as it went through court proceedings. Forensic Case Management Services, Inc., received some severe punishment from the FTC in the form of a lifetime ban from ever operating within the industry.
In a first of a kind move, the FTC took action against National Attorney Collection Services, In., for using text messages inappropriately for debt collection purposes. The Glendale, California based firm was ordered to pay $1 million in a settlement over federal violations.
NCO Group incurred civil penalties of $3.2 million after it violated the FDCPA last year. This marks the largest penalty ever levied against a third party debt collector. The violations included calling debtors multiple times a day, continued calls after requests to cease contact had been made, calling debtors at their work and leaving messages that disclosed information that is illegal to divulge.
It’s behavior like this that keeps business owners from seeking out the services of a debt collection agency. The fear among business owners is that when collections are brought into the mix, the customer base will react negatively and hurt the reputation of the company. A reputable company will treat debtors with respect, which helps to keep the brand of the company they represent in the good graces of the public.
Reputable debt collectors like Omega-RMS collections applaud swift action taken by the FTC. They work hard to satisfy clients by treating debtors ethically, professionally, responsibly and with respect. Omega-RMS collections works with clients to provide a meaningful and positive experience. It’s this approach to quality that has brought us to the front of the industry and recognized as a valuable member of the Association of Credit and Collection Professionals.