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Study Criticizes Debt Collection Industry

Brian Kelly
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ST. LOUIS (KMOX)-A new study by the Better Business Bureau says that while the debt collection industry is thriving, complaints against it are soaring.

According to the report released Thursday, which you can read here, consumer complaints filed with the Federal Trade Commission increased 17% in 2011.

BBB Spokesman Chris Thetford says consumers are complaining that some debt collectors are using illegal, strong-arm tactics, “Consumers have told us things like, ‘The debt collector threatened to take away my disability pay. The debt collector threatened to file criminal charges on me and the debt collector said things like I would be arrested.'” Thetford says all of those things are prohibited by the Fair Debt Collection Practices Act.

Thetford says debt collectors are also taking consumers to court, filing suits using scant or false information. He says in many cases they win default judgements and then garnish the wages or attach the debtor’s bank accounts.

He says if a debt collector sues you, don’t ignore it, “Even if you think you don’t owe the debt you should go to court and make that point, rather than allowing a default judgement to be entered against you and to allow a garnishment process to start.’

Thetford says one of the problems facing consumers in Missouri, is that the state is one of only a few in the country without its own version of that act, and he’d like to see that change in the upcoming legislative session. He says if a Missouri consumer has a problem with a debt collector, they have to sue them in federal court.

Thetford suggests that if you have debt issues, try to work with your creditors. If that doesn’t work, check with reputable non-profit organizations for counseling.

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