Complaints about debt collectors are pouring into a federal database that tracks allegations of illegal late-night phone calls, arrest threats and other abuse. But few of the complaints are likely to result in enforcement actions.
The debt-collection industry, booming as many Americans struggle to catch up on their payments or walk away from what they owe, was the subject of a record 164,361 complaints through Dec. 8 of this year, according to the Federal Trade Commission. The total is 17% higher than the 140,036 debt-collection complaints the FTC got for all of 2010.
Since the start of this year, though, the FTC has launched just four enforcement actions against debt-collection firms under the primary federal law used to oversee the industry. From 2005 to 2010, the average was two cases a year.
The actions often target companies that are responsible for hundreds, if not thousands, of consumer complaints.
The agency usually goes after debt collectors by filing lawsuits against companies in federal court. Officials also can levy fines and demand that violators reimburse consumers for any money that was obtained illegally.
FTC officials said the small number of enforcement actions against debt collectors is a misleading barometer of its determination to punish violators. J. Reilly Dolan, acting director of the agency's financial-practices division, said in an interview that the FTC "is cracking down on abusive collection practices and directs its resources to go after some of the largest debt collectors."
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