It is common knowledge that debt collection agencies can be, charitably, difficult to deal with. Those unlucky enough to find themselves targets of collection often have horror stories of their own to relate. CNN Money took a look today at some of the more egregiously illegal collection tactics used by these agencies:
Threatening to take away children: Last week, the Federal Trade Commission shut down a Texas-based debt collector, Goldman Schwartz, for using deceptive and abusive scare tactics to force people to pay their payday loan debts. Among the alleged offenses:collectors called consumers incessantly, saying "we can take you to jail" or "we'll send the sheriff's department to your job and take care of this the hard way," even though they had no legal basis to do so.
Before federal oversight of these agencies by the Consumer Financial Protection Bureau (CFPB) began on January 2, 2013, civil suits brought by consumers, and the odd administrative enforcement of the Fair Debt Collection Practices Act, were the sole checks on collection agencies' actions. The CFPB will have oversight over agencies "that have annual receipts of more than $10 million, [or] roughly 175 companies. They account for about 63 percent, or $7.7 billion, of the industry’s $12.2 billion in annual collections."
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