Who is Utilizing Debt Settlement Companies to Collect More Debt?

Recently, InsideARM.com conducted a survey of the ARM industry to better understand how creditors, collectors, debt buyers and legal recovery firms were levering the newly regulated debt settlement industry to improve collections. With 649 ARM professionals responding to this survey, one thing that was immediately apparent is that the debt settlement is on the radar of ARM professionals.

The Limits on Direct and Vicarious Liability Under the FDCPA

Consumers and their attorneys are constantly seeking to expand the pool of potential FDCPA defendants using principles of vicarious liability. Debt buyers are being sued based on the conduct of their agencies and law firms. Lawyers and agency owners are being sued based on the conduct of their clients and their collectors. Even original creditors, who are not subject to the FDCPA, are being drawn into FDCPA litigation under various theories of recovery.

What are the limits of vicarious liability under the FDCPA? How can debt collectors avoid liability for the conduct of others?

Asset Acceptance to Pay $2.5 Million in Settlement with FTC Over Time-Barred Debt

One of the nation’s largest consumer debt buyers has agreed to pay a $2.5 million civil penalty to settle Federal Trade Commission charges that it made a range of misrepresentations when trying to collect old debts. The company has also agreed to tell consumers whose debt may be too old to be legally enforceable that it will not sue to collect on that debt.

The FTC also issued a new publication for consumers, “Time-Barred Debts: Understanding Your Rights When It Comes to Old Debts.”

Study Reveals Third Party Debt Collection Impact on Economy: $45 billion

Third-party debt collection agencies returned $45 billion to creditor clients in 2010, and saved the average American household $396 by keeping credit costs low, according to the results of a comprehensive study conducted by Ernst and Young on behalf of ACA International. Collectors also gave more than $85 million to charity in the year and account for more than 300,000 jobs.