As residents of Texas and the rest of the nation continue to suffer under what's come to be called the Great Recession, adding to the angst of the economic tribulations are the sometimes nasty tactics of collection agencies. Intimidation, dunning phone calls, threats of arrest, even harassment of friends and relatives are not unheard of. Many people make the mistake of thinking there is no way out from under, but personal bankruptcy stands as one option that many might do well to explore.
And while wise individuals under the pressure of excessive debt examine their options and gain some confidence that there is a light of financial stability at the end of the tunnel, perhaps they can take heart in knowing that federal regulators and those in some states are doing what they can to tamp down the unconscionable practices of collectors.
According to some reports there are an estimated 30 million Americans facing undue confrontations with collectors. In many instances, officials say, these agencies are leveraging all the tactics mentioned above, and the courts, to try to milk money out of consumers. It's gotten to the point where it's a $12-billion-a-year business.
Two of the worst players in the field, by consumer advocates' standards, are Encore Capital Group, Inc. and Brachfe3ld Law Group. The first has been tagged in numerous lawsuits around the country for allegedly using false and incorrect documentation to go after debtors. The second is finding itself confronted with charges that it has undertaken legal actions without properly investigating the facts of the cases they're pursuing ahead of time.
Both companies say they've straightened out their practices, but regulators aren't taking their word for it. They have good reason to be skeptical. The Federal Trade Commission says that last year it received more than 180,000 complaints about debt collectors. That's up 73 percent from 2008, and officials say no other industry is the target of more complaints.
Since 2010, the FTC and attorneys general from 38 states have been fighting back. One result has been a $5.7 million settlement with Encore for alleged use of false affidavits.
While this may be good news, it may not be enough to turn the tide for some in Texas who still suffer. For them, checking into the option of personal bankruptcy may remain the most viable option available.
Source: Los Angeles Times, "Aggressive debt collection tactics are drawing federal scrutiny," Jim Puzzanghera, Aug. 20, 2012