Consumers lodged 70,951 complaints of violations of the Fair Debt Collection Practices Act by third-party debt collectors last year, 2.4% more than the 69,249 complaints received during 2006, according to the Federal Trade Commission's annual report, released March 21.
The FTC also received 20,068 complaints about creditors' in-house collectors, down 6.5% from 21,457 complaints received during 2006.
Complaints about third-party and in-house collectors combined totaled 91,019 last year, up 0.3% from a combined total of 90,706 complaints during 2006.
The most frequent complaint was that collectors attempted to collect debts that consumers did not owe or a debt larger than what consumers actually owed. In 2007, the FTC received 27,393 such complaints – or 38.6% of all complaints, which compares with 40.3% of complaints to the FTC in 2006.
The next most frequent complaint was that collectors harassed consumers by calling them repeatedly or continuously, according to the FTC report.
In 2007, 19.7% of FDCPA complaints the commission received (or 13,989) alleged harassment. Of those, 6,535 consumers alleged that a collector had used obscene, profane or otherwise abusive language; 1,402 complained that collectors called them during off hours; and 219 consumers complained that collectors used or threatened to use violence if they failed to pay.
About 6.5% (or 4,592 consumers) alleged that third-party collectors falsely threatened a lawsuit or some other action that they could not or did not intend to take, down from 8.4% of complaints that alleged the same conduct in 2006.
Last year, 5.9% of FDCPA complaints (or 4,162 consumers) concerned calls to consumers at work. The law instructs collectors not to call consumers at work if the consumer has stated their employer prohibits such contacts and such contacts may put the employee's job at risk.
Improper third-party contacts, which many consumers view as a violation of privacy when the collector has informed the third party about the consumer's debt rather than merely obtaining information about the consumer's location, made up 3.8% of FDCPA complaints last year, representing 2,672 consumers. This is down from 4.3% of FDCPA complaints during 2006.
Other consumer complaints include: Failing to send written notice of the debt, to whom it is owed, instructions for disputing the debt in writing and receiving verification; failing to verify disputed debts; and continuing to contact debtors after receiving notice to cease communications.
Rozanne Andersen, executive vice president and general counsel for collection industry trade group ACA International, said the ACA "denounces any unfair collection practices. We are confident that the number of complaints represents a very small fraction of annual contacts made to consumers."
ACA has "a fair and thorough system in place for complaint resolution," Andersen said, and the association is negotiating with a vendor to administer an enhanced dispute-resolution program and serve as an ombudsman over the industry.
