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ICFE eNEWS #12-11 - March 27th 2012

FTC Highlights Expanded Work on Debt Collection Issues Over the Past Year

The FTC Enforces the Fair Debt Collection Practices Act and Promotes Related Education, Research, and Policy Development Initiatives

The Federal Trade Commission stepped up enforcement of the Fair Debt Collection Practices Act in the last year by cracking down on collectors who allegedly used abusive tactics to intimidate consumers, misled consumers while seeking payment on time-barred debts, used faulty data to identify debtors and the amount they owe, used deceptive tactics to collect on payday loans, and otherwise committed egregious violations of the Act/a> and other federal laws, according to a letter the FTC sent to the Consumer Financial Protection Bureau.

"Protecting consumers from deceptive or abusive debt collectors is one of the most important things the FTC does," said David Vladeck, Director of the agency's Bureau of Consumer Protection.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is required to submit annual reports to Congress on the Fair Debt Collection Practices Act, a task previously assigned to the FTC. The first CFPB report is due on March 20, 2012, and to assist the CFPB in preparing its report, the FTC's letter summarizes its own recent work on debt collection issues.

Over the past year, the FTC has brought or resolved seven debt collection cases affecting hundreds of thousands of consumers. This is the highest number that it has brought or resolved in any single year. In two cases that included civil penalties, the FTC obtained $2.8 million and $2.5 million, respectively, for West Asset Management, Inc., and Asset Acceptance, LLC, the two largest civil penalty amounts the agency has ever obtained for alleged violations of the Fair Debt Collection Practices Act.

The FTC also filed actions against payday lenders American Credit Crunchers, LLC for allegedly making misrepresentations to collect on payday loan debts that they in fact weren't authorized to collect on, or that consumers did not owe; and LoanPoint, LLC and Payday Financial, LLC for allegedly misrepresenting that they could lawfully garnish supposed debtors' wages without obtaining a valid court order. The FTC charged two other debt collectors with especially egregious Practices: Defendants in Forensic Case Management Service, Inc., doing business as Rumson, Bolling & Associates, allegedly threatened physical harm to consumers, desecration of their deceased family members, and killing of their pets to persuade consumers to pay. They also allegedly retained more fees from their clients than they had agreed to take. Defendants in Rincon Debt Management Services, LLC targeted English- and Spanish-speaking consumers, impersonating process servers and other officials, and falsely threatening to sue and arrest those whom they claimed owed money, the FTC alleged.

In outlining the FTC's other debt collection enforcement efforts, the Commission noted its new policy statement addressing whom debt collectors can contact if an alleged debtor has died and what collectors can do in collecting on debts in these circumstances. The FTC also filed two "friend of the court" briefs in federal court. The first amicus brief opposing a proposed class action settlement with debt buyer Midland Funding LLC argued that the settlement would require consumers to surrender important protections provided by the Fair Debt Collection Practices Act in exchange for a minimal payment. The FTC also joined the Solicitor General's office in filing an amicus brief in Fein, Such, Kahn, & Shepard PC advocating that the U.S. Supreme Court decline to hear an appeal from an appellate court decision addressing whether the Fair Debt Collection Practices Act applies to collector communications with consumers' attorneys.

The letter also references the FTC's consumer education work, as well as its 2011 Debt Collection 2.0 workshop on protecting consumers amid technological change in the industry, a pending study of the debt buying industry, and follow-up work from the agency's 2010 report on debt collection litigation and arbitration, Repairing A Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration.

The Commission vote approving the report was 4-0.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business Practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.


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Sent by:

Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

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Copyright ©  1997 - by Paul S. Richard
and the Institute of Consumer Financial Education, All Rights Reserved.
View our
Privacy Policy Our Terms and Conditions

Institute of Consumer Financial Education
PO Box 34070
San Diego, Ca 92163
Paul S. Richard, Executive Director
Phone 619-239-1401

FAX 619-923-3284

Questions for www.financial-education-icfe.org Click to go to Website Contact Us or 
Website Design Donated by Desgn School Programs