News & Resources

Debt collection industry needs to unite against scammers, shoddy practices

Jun 25, 2013 Philip Burgess

The debt collection industry has undergone a variety of changes in the past several years, especially when it comes to law enforcement oversight and the technology used to improve the efficiency of collections. Additionally, the Federal Trade Commission saw debt collection complaints increase substantially last year, as this category moved into the second-most disputed type of action in the nation.

However, advocacy groups have been largely opposed to this data, as a high rate of the complaints have yet to be verified. What's more, the actions of a few less experienced, or more incendiary, agencies are tarnishing the image of the industry as a whole. Debt collection firms that adhere to the law as explained in the Fair Debt Collection Practices Act and use advanced technology to streamline processes can build trust and improve the reputation of the industry.

Fake agencies ravaging Tennessee
Clarksville Online recently reported that identity thieves and other criminals are beginning to pose as debt collectors to steal money and personal information from residents in Tennessee. The federal Better Business Bureau, as well as the organization that represents the agency in the state, has increased notifications to minimize the damages caused by these scammers.

According to the news provider, consumers in Tennessee have experienced increased calls from fraudulent collectors who use empty threats such as arrest warrants and prosecution. However, experienced debt collectors will know that this type of rhetoric is not only unacceptable, but also illegal under the FDCPA.

The source explained that the BBB was tipped off by a consumer who had been receiving calls from an individual who was posing as an employee with the S&P Law Group. The scammer had told the consumer that the firm would arrest his son if he didn't pay $800 immediately, though the calls seemed to continue.

The BBB swiftly investigated the case and found that the S&P Law Group was in fact not a business, and that the consumer who contacted the agency could have lost that money like many other victims who have fallen for similar tricks. Clarksville Online stated that this has become one of the more common tactics of scammers, especially as it is highly effective.

The source noted that the BBB implores consumers, as well as businesses, to understand the law so that they too can identify fraudulent collection schemes. One of the tell-tail signs of a fake collector is the use of abusive language and threats for criminal prosecution.

Going above and beyond the call of duty
Debt collectors are faced with a variety of challenges today, while the stigma attached to the industry is likely the most prevalent. However, debt collectors can improve their reputations, as well as that of the industry, by going a step further than simple compliance with the FDCPA.

For example, many debt collectors are beginning to train employees in more advanced customer service practices, and others are using progressive technology to streamline the collection process. Agencies can see even stronger performances by educating clients in the best practices of collections.