Attorney Praises FTC Report; Blasts Collection Industry's Response

Attorney Sergei Lemberg on Thursday applauded this week's release of the Federal Trade Commission's annual report to Congress on the Fair Debt Collection Practices Act (FDCPA).

Lemberg, the nation's second most active consumer attorney in 2010 in terms of lawsuits filed against debt collectors, says that the report undermines the collection industry's argument that "fair debt attorneys are abusing the FDCPA by filing frivolous lawsuits and are placing an unfair burden on third-party debt collectors."

The FTC report summarized complaints against the collection industry and discussed the FTC's enforcement activities (see story). The report covered 2010, and indicated that the FTC received more complaints about collections than any other industry. Collection complaints accounted for 27% of all complaints received by the FTC. Moreover, the number of collection complaints last year (140,036) far surpassed those in 2009 (119,609).

Lemberg further took exception to the collection industry's response to the report (see story). ACA International said that the FTC's complaint methodology "paints an interesting but inaccurate portrait of consumer complaints against the third-party collection industry," in part because the FTC's numbers include both inquiries and complaints.

According to Lemberg, "Either ACA International didn't read the report, or it's trying to put up a smokescreen. The FTC report explicitly acknowledges that the agency receives both inquiries and complaints, but says, 'The data presented here include only consumer contacts that the CRC has identifies as complaints.' It couldn't be more clear."

He concluded, "Although the [FTC's] report is mandated by the FDCPA, it's crucial that the transgressions of the predatory debt collection industry see the light of day. All too often, debt collectors believe bulldozing consumers is part of the job. They need to know that they'll be called out for their bad behavior."

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