The Federal Trade Commission made a statement last week when they banned two managers of a debt collection business from the industry.
According to a laundry list of complaints against the defendants, they threatened physical harm and death to their debtors and their pets; threatened to desecrate the bodies of dead relatives; used profane language; illegally informed third parties about the debt; falsely threatened debtors with lawsuits and seizure of assets and; claimed consumers would be liable for the legal fees incurred in the collection of their debt (not true).
And it doesn’t end there.
The defendants claimed to work on a contingency fee meaning they only charged a fee after they successfully collected on a debt. That is all well and good but more often then not they kept all the money for themselves instead of forwarding on the clients allocated share. In addition, they continually asked their clients for more money siting expenses from lawsuits which were subsequently never filed.
Unfortunately stories like this have been common place in a loosely regulated industry. But change is on the horizon and this case delivers a very clear message to all unscrupulous collection agencies…shape up or ship out. It is my belief that many more will simply “ship out” because the coming regulations will make it difficult if not impossible for them to operate effectively.
Do Good and Make Money!