Debt Collection Activity on the Rise

Debt Collection Activity on the Rise

03/4/2011

A new report made by Consumers Union and the East Bay Community Law Center revealed that debt collectors continue to step up their activities despite a lack of proof for much of the claims.

The report, which was titled “PAST DUE: Why Debt Collection Practices and the Debt Buying Industry Need Reform Now,” revealed more lawsuits are being filed by debt collectors against consumers regardless of the lack of proof that the claims really exist.

The problem worsened when consumers were not able to receive any timely notice of their possible claims, or when they do not have accurate proof of the precise amount of their claims so as to defend themselves.

Some $110 billion in debt in 2005 were bought up by debt collections. This figure is up from the mere $6 billion during 1993.

Debt collectors often target individuals devoid of legal representation that do not know what their rights are under the law. These types of agents operate by buying debt for pennies on the dollar and using aggressive ways to collect the full amount of the claims recorded.

According to the report, debt collectors can even make profit by collecting a portion of the amount of claims owed and then reselling the debt to a new collection agency, which then can bring the collection efforts back to square one.

According to a statement made by Gail Hillebrand, the Director of Consumers Union’s Defend Your Dollars campaign, “The debt collection system is in dire need of reform.” He also stated, “Current law fails to address rampant debt collection abuses and leaves consumers vulnerable to being harassed for debt that has been paid off or that they don’t even owe.”

WRITTEN BY:

blakeh@wellsdrew.com