Professional debt collectors have a reputation almost worse than serial killers. From what I have seen, they have not come by this standing in innocence. The stories I have heard over the years would make even the most hardened individual’s blood curdle.
Letters to supposed debtors for amounts owed, together possibly with a variety of interest-bearing penalties, list the continuing perils to the debtor for not paying up immediately. Phone calls are made to the offending party in the middle of the night with bullying intimidation and follow-up calls designed to consistently interrupt their sleep if they do send a check in the mail promptly. Collection accounts are listed on credit reports, many for debts never incurred by the individual being penalized, and are nearly impossible to have removed unless that individual pays something to the collection company. Often they ignore information that would prove a debtor either already paid a debt or that the debt never belonged to them.
Some would say, if people owe money and do not pay their debts, they must suffer whatever consequences result. But what about the callousness practiced by these debt-collection companies when they chase supposed debts from consumers who never owed this money to begin with or who had paid the debt years before?
This nightmare has been experienced by countless consumers when having to deal with collection companies. It’s especially difficult when an individual looking to take out a mortgage or refinance finds that any collection-company debt listed on a credit report needs to be paid in full or removed before they can receive new financing.
Debt-collection companies purchase debts, from entities who are owed money, for a few cents on the dollar. They then take these debts that they have purchased and try to collect from the debtor to make a profit. Unfortunately, because of the huge volume of debt that these companies purchase, a large portion of those accounts may contain errors as to who those debtors actually are and which are innocent parties whose names were entered in error.
Also present in this volume of debt purchased are debts that have expired due to the statute of limitations. By law, a debt collector may try to collect this debt if the debtor voluntarily will pay, but they cannot force the debtor to pay if he chooses not to. The statute of limitations is a very interesting aspect of the law—in this case, if the debtor pays even a part of this debt, the debt automatically becomes current and the statute of limitations countdown to when the debt expires begins from scratch again.
The Federal Trade Commission has finally decided to crack down on debt collectors who harass consumers for money they many not even be legally obligated to pay. This is not as strong a stand as consumer organizations would like the FTC to take, but it certainly is a step in the right direction.
In the second-largest penalty to be levied on a debt collector, Asset Acceptance, one of the nation’s largest debt-collection companies, has agreed to pay a $2.5 million civil penalty to settle charges that their company deceived consumers when trying to collect old debts.
FTC officials claim this is a broader attempt to address illegal practices being used by collection companies in collecting debt but not informing consumers about the statute of limitations.
The complaint also addressed the prevalence of inaccurate information about consumers being reported to credit-report companies and the failure of the company to conduct reasonable investigations into the accuracy of the information they were reporting.
This is a long time in coming and certainly a welcome sign in addressing a “Wild West” way of doing business that the debt-collection industry has been practicing for many years. Let’s hope that the FTC will continue to weed out the wildcat procedures that these companies have been utilizing to prey upon innocent victims as well as those whose rights have been violated.

Anessa Cohen lives in Cedarhurst and is a licensed real-estate broker and a licensed N.Y.S. mortgage broker with over 20 years of experience, offering full-service residential and commercial real-estate services (Anessa V Cohen Realty) and mortgaging services (First Meridian Mortgage) in the Five Towns and throughout the tri-state area. She can be reached at 516-569-5007 or via her website, www.AVCrealty.com. Readers are encouraged to send questions or comments to anessa.cohen@AVCrealty.com.