Government starting to crack down on debt collectors

Last week, a Minnesota-based debt collection firm with a long history of shady practices and consumer complaints was slapped with a whopping $1.75 million fine by the Federal Trade Commission. It was the second-highest fine ever issued in a civil trial against a debt collection company. Among the offenses committed by the company, Allied Interstate, Inc., were charges that it violated the Fair Debt Collection Practices Act, the FTC said. Allied also tried to collect debt without proof or checking for accuracy - the same accusation that's now roiling the foreclosed mortgage market.

The circumstances that brought the messy state of foreclosure documentation to light have also helped shine a light on similar practices that some assert have long existed in the debt collection business. The New York Times explored the day-to-day jobs of debt collection employees whose job it was to review and sign documents verifying the legitimacy of the debts the company held.