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FTC Says Collection Agencies Threatened Debt-Holders with Violence

FTC Says Collection Agencies Threatened Debt-Holders with Violence

Introduction

Debt collection agencies are essentially companies that specialize in collecting debt on behalf of creditors. However, there have been numerous reports of some collection agencies using unethical tactics to recover outstanding debt. In fact, the Federal Trade Commission (FTC), which is the agency tasked with protecting consumers from unfair and deceptive business practices, has received several complaints against debt collection agencies that threaten debt-holders with violence. This article focuses on the recent FTC report that revealed such threats from these agencies.

What is the FTC?

The FTC is a federal agency established in 1914 to protect consumers from unfair and deceptive business practices. The act that created the FTC, known as the Federal Trade Commission Act, prohibits unfair methods of competition in commerce and deceptive acts that affect commerce. The commission is empowered to investigate violations of this act and to bring legal actions against violators. It also has authority over a wide range of activities that affect consumers, including advertising, marketing, and financial practices.

FTC Report on Collection Agencies

In 2021, the FTC released a report that revealed the extent of violent threats by debt collection agencies. The report found that some debt collection agencies were threatening to harm or kill debtors if they did not pay their debts. The report also found that some of these agencies were contacting debt-holders’ family members, friends, and even co-workers, and threatening them with the same violence.

The report notes that these agencies were using a variety of tactics to intimidate debt-holders. Some agencies were pretending to be law enforcement officers or government officials, while others were using abusive language or making false statements about the debt-holders. Additionally, some agencies were using robocalls and other automatic dialing systems to repeatedly call debtors, which is a violation of the Fair Debt Collection Practices


Two California collection agencies used abusive and intimidating tactics to harass consumers stricken with debt, with one agency threatening to kill debtors’ pets or desecrate the bodies of their deceased kin, according to a recent Federal Trade Commission complaint.
These complaints highlight an increase in filings concerning the debt-collection industry and their tactics to seek repayment. Consumers filed over 140,000 complaints with the FTC regarding debt collectors last year—more than any other industry.
Earlier this month, the FTC alleged that Rumson, Bolling & Associates unscrupulously harassed a woman who was unable to fully pay for her daughter’s funeral. The firm’s employees told the woman they would dig up the young girl’s body and hang it from a tree if she couldn’t meet her obligations, the complaint said. In addition to routinely calling her “white trash”, they also threatened to shoot and eat her dog.
In a separate case, the FTC accused Rincon Debt management of falsely threatening consumers that they could be arrested for not fulfilling their debts. While making these bogus threats, employees of Rincon posed as lawyers or process servers—a scheme that immorally collected almost $10 million in profits and harmed consumers in more than a dozen states.
Federal law bans a debt collector from demanding more debt than a consumer owes, making threats that they do not plan to carry out or are legally dissuaded from and disclosing to third parties that a consumer owes debt.