The recession has caused a lot of financial damage to Americans all across the country. With shrinking incomes, a lack of jobs, high gas prices, falling home values and other overwhelming expenses, credit cards have become an ever important resource to struggling families. Unfortunately, relying so heavily on credit cards can lead to mountains of debt. And collection agencies
have benefited from this often necessary dependency.
According to a recent report by Marketdata Enterprises, the collections industry experienced a nearly 4 percent growth
in 2011. This year, collections are projected to increase another 4.6 percent, which will create $12.8 billion in revenue.
The fact is that because so many people are still feeling financial desperation, the collections business has experienced record profits. But even though the economic landscape currently encourages enormous revenues, collections is a very competitive industry. The people who work in this field often earn their living based on recovery rates and service fees. Because of this structure, some collectors are engaging in illegal or aggressive strategies. So now state attorneys general and the Federal Trade Commission (FTC) have become involved.
How the Fair Debt Collection Practices Act Helps
Since it was enacted in 1978, the Fair Debt Collection Practices Act
(FDCPA) has been an ongoing defense against aggressive and threatening tactics used by collection agencies. Its purpose is to protect consumers from this type of abuse. So even though there are many families who have fallen behind in their payments during this economic crisis, collection agencies are barred from employing overly assertive measures to retrieve debt.
In 2011, the FTC received a massive amount of objections from consumers
about the practices of collectors. Almost 165,000 complaints were filed. Furthermore, in May of 2012 alone, an estimated 890 consumer credit lawsuits were put in motion around the country. These numbers amount to a 12.4 percent rise in lawsuits from April of 2012. Generally, such filings have increased every month since the 2012 year began
This is a troubling trend. But there is a place to turn for people who feel targeted by collection businesses. The FDCPA gives consumers power to sue a collector in state or federal court for anything from repeated telephone calls to threatening an arrest if a debt is not paid off. People who feel they are being harassed by a collection agency have the option to sue for damages in the amount of any losses as well as compensation up to $1,000.00 plus payment of their attorneys’ fees.
Consumers Always Need to Be Wary
The collections industry may disagree with statistics about the escalation in lawsuits against them. It may also downplay figures that support the revenue growth this business has seen during the recession. But that should not stop consumers from taking advantage of the safeguards that the FDCPA offers, if a collection agency is using abusive tactics.
While everyone must be responsible for paying off debts, that does not justify a collection agency’s aggressive or threatening manner of attaining these funds. The fact is that you have rights
. So if you feel you are the victim of illegal debt collection
methods, the best thing to do is to consult a lawyer and learn how to protect yourself.