MAKING YOU PAY: Still No Reason For Abusive Debt Collectors To Fear Regulators

[Purveyor]

BOSTON (MarketWatch) -- Let's see if I get this right. If a big financial institution gets into trouble, the government is ready to step in and bail it out and make the little guy pay for it.

But if the little guy gets into trouble, and the big financial institution comes demanding its money back, not only does the little guy get no relief, but he gets little to no real government protection when the lender applies strong-arm tactics to collect its debt. And for all of the talk of meaningful change in Washington, abusive collection actions won't be stopped any time soon.

Last week, the Federal Trade Commission issued a report saying that the debt-collection legal system must be reformed and modernized "to reflect changes in consumer debt, the debt collection industry and technology." The idea is to put more bite into the Fair Debt Collection Practices Act, and the problem is that the moves being discussed are more like a wink and a smile than a growl at the bad guys.

The FTC took in roughly 105,000 complaints about third-party and creditor debt collection in 2008, according to numbers released last week. That makes it the subject generating the second most complaints -- identity theft is No. 1 -- about one in every 11 that the agency receives.

The Fair Debt Collection Practices Act was enacted in 1977 to protect the public from abusive, unfair and deceptive practices by debt collectors, with the FTC made the primary enforcer of its rules and regulations. The rules have been tweaked over the years, but the premise has always held steady: Debt collectors are entitled to do their job, but not by badgering, pestering, brow-beating and intimidating the debtor.

Judging from the complaints -- and FTC officials have long acknowledged that few people who have any problem go to the trouble of filing a complaint -- a multitude of consumers believe they're not being treated within the spirit of the law.

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MARKETWATCH: http://www.marketwatch.com/news/story/weak-regulatory-changes-wont-stop/story.aspx?guid={F8D359CC-E8E1-43C8-B367-09B3288B40C5}&dist=msr_1

[doodadem]

1. The worse things now are the robo-calls

We're getting recorded messages 5-6 times a day. They always start mid-message, so you have no idea who it's for, and if that's the best they can do, we're past caring.

[Edweird]

2. Savvy consumers can turn abusive collectors into a net profit.

On the whole it isn't all bad....