Regulation

FTC Says It Filed 12 Cases Against Illegal Debt Collection Practices In 2016

The Federal Trade Commission on Tuesday (Feb. 14) laid out how it fought back against illegal debt collection practices in 2016 in its report to the Consumer Financial Protection Bureau.

According to a press release, the FTC said that, during 2016, it filed or resolved 12 cases against 16 defendants in the unlawful debt collection industry, obtaining close to $70 million in judgments. What’s more, the FTC said during the year it stopped 44 companies and individuals from engaging in debt collection practices after the companies and individuals engaged in serious and repeated violations. The companies and individuals are banned from working in the industry forever.

In addition to those actions, the FTC said that, during last year, it secured successful summary judgment decisions in three litigated matters, which resulted in orders banning defendants from the debt collection industry. “Many of the FTC’s law enforcement actions focused on curbing egregious debt collection practices, including phantom debt collection. Additionally, this past year, two U.S. Courts of Appeals adopted favorable interpretations of the FDCPA in cases in which the FTC and CFPB had filed joint amicus briefs,” the FTC said in the press release.

During the year, the FTC said it also worked to educate consumers and businesses about their rights and responsibilities under the FDCPA and the FTC Act. The FTC relied on around 16,000 community-based organization and national groups during 2016 to reach consumers and also distributed 15.5 million print publications to libraries, police departments, schools, nonprofits, banks, credit unions, other businesses and government agencies.

In late December, the Consumer Financial Protection Bureau announced that debt collection garners the most complaints among consumers. According to the CFPB, over a third of complaints, or 39 percent, focused on debt collection had to do with consumers who said they were contacted about paying back debts they no longer owe, with lots of consumers saying they were never given any documentation to prove they owed the money, even after asking for verification. What’s more, the CFPB said consumers also complained their accounts were sent to third-party collectors without getting any notice of the action or the outstanding balance.

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