Complaints against debt collectors are on the rise, thanks to the lack of industry standards, poor record keeping and other troubles within the account receivables management industry. One debt settlement executive is calling for improvements to protect consumers.
Columbia, MD -- (ReleaseWire) -- 09/06/2007 -- Debt Shield President John Gourdin is alerting consumers to the record number of complaints filed against the debt collection industry and said that many of these complaints are caused by the debt collection industry’s poor record keeping and lack of industry standards.
The Federal Trade Commission (FTC) received 69,000 complaints against debt collectors, more than any other industry in 2006. Gourdin says debt purchasers often fail to verify the information they purchase, such as the amount and validity of a debt, before they attempt to collect the debt and this lack of due diligence leads, inevitably, to complaints. He said the immense volume of accounts within a debt portfolio purchase is also a contributing factor.
“Debt buyers purchase past-due accounts in bulk, and without any systems setup to verify information for each of the thousands of accounts in each portfolio, we can expect to continue to see record numbers of complaints against debt collectors each year,” said Gourdin. “These systems should exist in every link in the debt-purchasing chain, from the original creditor who established the account to the broker who packages and sells the portfolios to the debt purchaser who buys and attempts to collect on each past-due account.”
FTC officials recently issued a statement urging debt collection agencies to deal with consumer complaints. On July 27, Peggy Twohig, associate director of the FTC's Division of Financial Services, encouraged agencies to create complaint departments and designate personnel to address complaints. She reminded the collection industry that the government chooses companies to target for enforcement based, in part, on the number of complaints consumers file against them.
“Self regulation and sound business practices would benefit the collection industry as well as consumers,” said Gourdin. “Standardizing these business practices across the industry would also be a tremendous help to reduce such incidents as successfully disputed accounts being resold, causing the consumer to dispute the debt all over again.”
Gourdin urges consumers immediately report harassing or abusive debt collection tactics to the FTC.
About Debt Shield:
Debt Shield, Inc., is a debt settlement company dedicated to helping consumers resolve their unsecured debt through mutually agreeable and discounted lump sum settlements in consideration of legitimate financial hardships. By helping consumers avoid bankruptcy, Debt Shield provides a service for both debtors and creditors. For more information about Debt Shield, call 1-888-397-7546 or visit the website at http://www.debtshield.com.