A new report from the Government Accountability Office (GAO) urges legislators to revise the Fair Debt Collection and Practices Act (FDCPA) to give consumers more rights.
Debt defaults are at the highest level in 18 years, which has presumably led to more people than ever being contacted by debt collectors. The report indicates that the Federal Trade Commission (FTC) gets more complaints about abusive debt collectors than any other industry. Enacted 32 years ago, with only minor revisions along the way, the FDPCA is due for a massive overhaul.
One major concern between the FTC and GAO is how debts are verified as they are sold from debt collector to the next. Consumers contacted by debt collectors have a difficult, if not impossible, task of trying to figure if they really owe money to the person on the other end of the phone.
The FTC and GAO want the FDCPA modified to require debt collectors to disclose the original creditor, break down the debt by principal and fees, and require debt collectors to proactively inform consumers of their rights under the FDCPA. These changes will not solve the problem, but they are a step in the right direction.
The next hearing is a FTC roundtable on December 4, 2009, which can be viewed via webcast at www.ftc.gov.
Calling the debt collectors on abuse | The Washington Post