ABC’s popular television show 20/20 ran an interesting investigative report exposing the sometimes abusive and illegal practices of debt collection. The report featured recorded abusive debt collection phone calls and exposed the often unethical practices of the debt collection industry. These recordings can be heard at ABC News.
It came as no surprise to me to hear some of the abusive language and illegal tactics used by debt collectors. Over the years, I’ve heard countless similar stories from my bankruptcy clients who are often hounded on a daily basis for debts that they simply cannot afford to repay. Often, it is these abusive phone calls that motivate people to file bankruptcy. To be fair, some debt collectors are courteous and act in a professional manner, but clearly something needs to be done to clamp down on the rampant abuse throughout the industry.
Consumers do have protections available for violations of the The Fair Debt Collection Practice Act (FDCPA), but the damages are often statutorily limited to as little as a $1000 for violations. To most large collection agencies, the potential fines are so small compared with their profits, that they don’t have the motivation to make fair and ethical practices a priority.
In my opinion, Congress needs to impose tougher fines and increase the statutory damages limits. They need to send a message to the debt collection industry that unethical or illegal collection methods will not be tolerated. Only then will consumers receive enough protection to rest assured that they will not be illegally harassed by debt collectors in their time of financial distress.