The consumer debt purchasing portion of the collection industry got its start in the early 1990s. In 1996, there were only about a dozen such companies. However, the number of debt purchasers is over 500 today.
The growth in consumer debt, which now tops $10 trillion, gave rise to the tremendous growth in the number of debt purchasers and collection agencies. In fact, between 1995 and 2004, the amount of debt purchased by the collection industry grew from $12 billion to $77.2 billion.
This trend also sparked a sharp rise in the number of complaints. In 2000, the FTC logged 13,950 complaints against debt collectors. Last year, the FTC logged 58,687 complaints.
On average, individual debt collectors are said to make between 40,000 to 50,000 calls per year. With about 100,000 debt collectors, the number of collection calls per year is estimated to be about 4 billion.
Consumers are complaining to the FTC about abusive and harassing collection techniques, such as threatening to sue, arrest or even violently attack the debtor for failure to pay a debt. One collection technique that is gaining attention is when a collector convinces a debtor to pay just a little, after which the collector uses the debtor's bank information to make unauthorized withdrawals.
Washington Post reporter Caroline E. Mayer, who recently wrote an expose on debt purchasing industry abuse, says that the key to protecting yourself against abusive collectors is to know your rights under the Fair Debt Collection Practices Act and to report any abuses to the FTC, BBB and your State Attorney General
National Financial Awareness Network, Inc.
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