The Federal Trade Commission on Monday held its first in a series of nationwide "Debt Collection Dialogue" events. The meeting took place in collections hub Buffalo, N.Y. and the goal of the series is to share information promoting fair collection practices.
The FTC and the New York Attorney Generals Office collaborated on Monday's event, held at the SUNY Buffalo State campus. Members of the FTC and the AGs office gave presentations on collection issues, existing laws and the enforcement of fair practices. Audience members then had the opportunity to ask panelists questions.
New York Attorney General Eric Schneiderman, according to the Buffalo News, said that while there are strong state laws and enforcement against deceptive collection practices, collaborating with the FTC sends a strong message.
"There are a lot of folks trying to do this legitimately, and a lot of folks who try to take advantage of debtors when theyre feeling weak," he said, according to the newspaper.
The goal, he added, is ultimately to not just catch the bad guys but to have laws in place so there are fewer bad guys to catch.
The FTC in the last 18 months has filed a half-dozen cases against Buffalo-area debt collectors concerning allegations of egregious practices against consumers. New York has the nation's highest number of collection agencies.
There are an estimated 4,700 debt collectors employed in the Buffalo region alone and, thus, a large number of complaints about collection practices also originate in the area, added Jessica Rich, director of the FTCs Bureau of Consumer Protection.
The need to address collection practices nationwide is reflected in data seen by the FTC, said Rich, who added that the FTC continues to receive more complaints about collections than any other industry. Approximately 282,000 complaints were received last year alone regarding deceptive or abusive collections.
Illegal methods arent necessary to collect debt, Rich added. To prevent unfair practices, the FTC previously has held similar workshops and discussions to spread information. Two more FTC dialogue events are planned for the fall in Dallas and Atlanta.
Regulators continue to crack down on illegal collection agencies and debt buyers, often operations far removed from the legitimate collection industry. Examples of unfair collection practices include suing a consumer for debts they dont even owe or filing lawsuits on debts that have surpassed the statute of limitations. New York States statute of limitations to collect on debt is generally six years.But many large debt buyers - including Asta Funding, Encore Capital, PRA Group and Sherman Financial - also have been involved in regulatory actions and settlements in New York since last year. The FTC has filed eight cases this year against companies allegedly violating collection laws.
In December, New York regulators unveiled new collection rules requiring collectors, among other things, to produce loan documents or a court judgment if requested. New York Superintendent of Financial Services Benjamin Lawsky said the regulations are meant to help guide an industry that has gone largely unregulated despite thousands of consumer complaints each year.