|Received:||6/7/2007 12:26:28 PM|
|Agency:||Federal Trade Commission|
|Rule:||Debt Collection Workshop|
Comments:Here are my recommendations: First, Debt Collectors (DCs) should inform debtors of their rights under the FDCPA. Most people do not know that they can submit a cease and desist letter or request an accounting. The standard "this is an attempt to collect a debt…" message should be replaced with "this is an attempt to collect a debt... Under federal law you have the right to request in writing that we cease all further communication with you except to supply specific information required by law. Further, you may request an itemized statement of the basis for the debt we are attempting to collect, and have the right to dispute this debt. You may submit these requests via by facsimile at ..., or via mail at our address..." Second, DCs should be prohibited from making multiple daily phone calls to a person's residence. The DC industry uses automatic dialers to leave multiple messages on answering machines, or hang up multiple times: precisely the type of harassment that the FDCPA was meant to address. Further, the agencies use different numbers or block their calls, demonstrating that the sole purpose of the hang-ups is harassment. Third, there should be greater regulation of third-party contact. DCs frequently contact third parties, identify themselves as DCs, and claim that they are attempting to locate someone. Once a person says they are a DC, the damage is done. Often, the need to locate a person is mere pretense. At a time when I was having financial trouble, several DCs contact my parents and, in one instance, my mother paid a bill that I was disputing because the DC -- who had never contacted me -- called every day. On another occasion, NCO Financial (which, from what I have read, is one of the worst) contacted my aunt and uncle with whom I have never lived, with whom I do not share a last name, and who have never been involved in my financial affairs, even though I know for certain that the company for whom they were attempting to collect the debt had my current contact information. Third, the threat of criminal prosecution or imminent civil prosecution needs to stop. This threat was baselessly thrown about, and DCs often offer skewed or patently inaccurate explanations of the “law” to unwitting victims. Fourth, research should be done regarding the psychological effect of DC. The recent MacDermid v. Discovery case (6th Cir. 5/29/07), illustrates how these practices can push someone over the edge, but DC can be traumatizing to even the most stable person. My belief is that the social impact of these practices is extremely negative. Empirical research, if done, would likely show that the transaction cost of pursuing a debtor outweighs the potential for payment, and the after-effect is a sense of helplessness in the debtor that increases their complacency with their own financial irresponsibility and the incumbent social sequelae. Lastly, fines should be increased, punitive damages allowed, and the FTC should pursue claims on behalf of idividuals. Further, a law should be enacted allowing judgments to be set in the amount owed at the time of default, with pre- and post- judgment interest accruing at the statutory rate. DC practices are often directed at the groups that are least likely to vindicate their rights, and have become an alternative system for avoiding supervised collection in the courts. DCs exert enormous pressure by through default rates and penalties, thus leaving debtors, rather than creditors, the victims of injustice. Victims of predatory lending and usury (if usury laws had not been pre-empted), become victims of DC abuse, and then years later, if the debtor has not acquiesced, DCs expect the courts to place an imprimatur on their overreaching.