Blog

BLOG

March 26, 2010

FTC pushes back on improper debt-collection tactics

By CREW Staff

Federal Agencies, Federal Trade Commission (FTC), Financial

In this recent op-ed, former Labor Sec. Robert Reich noted that by the end of last year, Americans' consumer debt averaged $43,874 per person. Many companies have tried to earn profits by collecting portions of that debt, and some debt collectors have engaged in illegal or unethical practices.

Earlier this month, a debt-collection company called Credit Bureau Collection Services (CBCS) agreed to pay a civil fine in order to settle a complaint from the Federal Trade Commission that CBCS inaccurately reported credit information and pressured consumers to pay debts that in many cases they did not owe.

According to the watchdog site CorporateAbuse.net, CBCS will pay a $1.1 million civil penalty. The settlement order also directs how CBCS must act when a debt is questionable or a consumer questions it. In these cases, the company must either abandon collection efforts or investigate the dispute. If CBCS investigates and cannot show that the consumer owes a debt, the company is not permitted to sell the debt to any business other than the original client.

It's encouraging to see the FTC cracking down on improper practices.