Unscrupulous Debt Collectors Are Seniors' Top Financial Peeve
"It is increasingly common for older Americans to carry debts into their retirement years, and consumers living on fixed incomes often struggle to pay off these debts," CFPB Director Richard Cordray said. "Older Americans deserve to be treated with the respect they have earned."
Debt collection is a huge industry in the U.S. Nearly 5,000 companies collect debts, and about 30 million consumers have debt that is subject to collection, the CFPB said.
Making Them Pay
Federal law prescribes what debt collectors can -- and cannot -- do. Collectors can only call during certain hours, and they can't just say whatever they feel like to coerce you into paying. Harassing consumers, chasing after family members of those in debt (or family members of deceased debtors) and threatening arrest or garnishment of federal benefits all cross the line. The Federal Trade Commission offers a guide to the Fair Debt Collection Practices Act.
If a debt collector violates the terms of the Act, you can sue them and collect up to $1,000. In addition, class-action lawsuits are regularly filed against collectors who are accused of violating the law. Such lawsuits can result in up to $500,000 in penalties. While such lawsuits -- even when won by the plaintiffs -- won't result in the erasing of people's debts, they can help ease some of the burden, and hold unscrupulous collectors responsible for their actions.
If you're dealing with a debt collector whom you believe has crossed the line, you can report them to your state Attorney General's office, the Federal Trade Commission, and the Consumer Financial Protection Bureau.