Ohio Attorney General Fires Warning Shot at Debt Collectors Over Complaints

Comment from Rob Schwartz on September 1, 2009 at 11:15AM EST

2,446 complaints sounds like a big number, and I do believe the industry as a whole should have zero tolerance for illegal activities. By the same token, how many collection calls were made in Ohio in 2008? In the millions I'm sure, so when looked at on a percentage basis, that 2,446 begins to look a whole lot smaller.

Of course the issue as to how many of those calls represented legitimate complaints - as opposed to the increase being possibly due to current economic conditions, and people using complaints as a methodology for avoiding payment - does not appear to have even been addressed.

Comment from R.Lengling on September 1, 2009 at 11:23AM EST

How many of these complaints are valid? It appears they always look at volume vs.validity. Complaints can include "They sent me a notice how dare they"

Comment from Goch on September 1, 2009 at 11:33AM EST

The number of complaints made to the Ohio Attorney General have increased from 1699 in 2006 to 2446 in 2008 accounting for 747 new complaints being filed. However, in the grand scheme of things, when you look at the rate that delinquency has risen as well as collection agency placement volumes, the 747 new complaints are a drop in the bucket. It is a shame that we live in such a litigious society; it is an even bigger shame that we don't have people intelligent enough to look at percentage increases and/or economic factors that are driving stated "facts".

Comment from Jerry Cameron, President Recovery One Dublin, Ohio on September 1, 2009 at 12:05PM EST

It's clear the consumer is using the complaint process as a way to avoid paying a debt owed. The consumer thinks by complaining to the AG, BBB and/or the FTC he can buy more time to pay or may even make the debt go away.

The large majority of collection firms follow the rules and the regualtions of the FDCPA and make every attempt to work with consumers in these difficult ecomomic times. Most agencies attempt to treat debtors with dignity and respect. Agencies don't want the complaints nor do their clients.

The one fact that is not being discussed is that delinquent account placements are up 2 1/2 times over last year. That increase in number of accounts placed for collection directly impacts the number of potential complaints.

Comment from Jeffrey Deutsch on September 1, 2009 at 12:07PM EST

Hello,

You're both right in that just because people make complaints, even a substantial number of them, it doesn't necessarily mean they're valid. Anyone can complain, and if people start assuming that complaints are generally valid that will even further encourage frivolous complaints.

At the same time, keep in mind that certain things, including collection complaints, go underreported. Many debtors feel guilty, and don't enforce their rights to be treated reasonably. So 2,000-odd complaints - say only one-quarter, or 500, of them are valid - may stand in for maybe 5,000 instances of mistreatment.

Also, why is the number of complaints rising so rapidly over the last couple of years? What about complaints relative to the total number of collection accounts or of collection calls? Maybe the latter have held steady - after all, many people have lost their jobs over the last couple of years.

Otherwise, *maybe* collection managers - I speak as a former third-party collector (secondary agency; private unsecured debts) - should take a good hard look at their practices. Maybe debtors have suddenly become much more opportunistic. Maybe government offices have dramatically improved their outreach and made it easier for debtors to complain.

On the other hand, *maybe* collectors have implicitly figured that they're in a race for rapidly dwindling pre-layoff or pre-bankruptcy dollars, and decided to put the squeeze on debtors by any means necessary.

What do you think?

Jeff Deutsch

Comment from T.Keller on September 1, 2009 at 12:11PM EST

The same thing with complaints to the BBB. The majority of them are from people who are angry about receiving a letter or a call from a collector, not from illegal collection practices.

Comment from Anonymous on September 1, 2009 at 12:16PM EST

R. Lengling you are so right. Of these complaints, how many were not resolved? How many were false claims against the agency?

Comment from paybill on September 1, 2009 at 12:34PM EST

This is the same story over and over. Attorney General offices across the country, FTC, BBB you name it, they all have it in for our industry. None of them seem to get it, meaning as delinquencies increase and more calls are made, complaints will ALWAYS go up, that doesn't mean they need to regulate more. With the current political climate, our industry is in trouble. ACA and other industry organizations better be ready to fight harder than ever before.

Comment from Anonymous on September 1, 2009 at 12:54PM EST

We are not only having to battle the AG, BBB etc. We are also fighting a battle with attorneys who claim to be "consumer rights attorneys". They are filing large amounts of frivolous lawsuits against agencies with the hopes that we settle rather than go to trial. These Extortionist are making is harder to collect and forcing us to file judgements quicker against debtors.

Comment from paybill on September 1, 2009 at 1:08PM EST

exactly anonymous. Problem is the the FTC wants to regulate how we can sue debtors, but they completely ignore the legal extortion that is going on with consumer attorney's.

Comment from Jean Manary on September 1, 2009 at 2:44PM EST

As a former Collection Agency Owner I know that most of the complaints are an attempt to intimidate the collector. Of course consumers should be treated with respect, however we are collecting legitimate bills and many people including the FTC and AG's don't take that into consideration. Most collectors abide by the law and the few that don't give everyone else a bad name. That is unfortunate.

Comment from JASON CASH on September 1, 2009 at 4:37PM EST

Gee, maybe it has something to do with the recessional economy. God, these politicians are shallow !

Comment from Anonymous on September 1, 2009 at 6:26PM EST

How quickly we forget the role of the Big Bad Debt Collector. It isn't bad enough that creditors have to sell accounts for pennies on the dollar and jack up the rates for those of us that pay our debts. NOW we have to go after the guy who is trying to extract a little bit of justice from this system by collecting a very small percentage of these Bad Debts. Can we all try to imagine how low credit card interest rates could be or how small your doctor bill might be if just 25% of these debts did not have be charged off!! Poor debtor...

Comment from Rich Rollins on September 1, 2009 at 6:46PM EST

Can you say debt buyers? I checked with our A.G. and 80% of the claims they had were from companies that collect Credit Card debt and pay day loan debt.

Comment from anonymiss on September 1, 2009 at 9:24PM EST

I am so tired of collectors saying "I wonder how many of these complaints are valid". If you have ever looked at the form that you have to sign your name to as to the validity and truthfulness of the complaint, telling this to the Attorney General of your State, you would not question these consumers complaints. Unlike some attorney collectors and buyers who think they are above the law, most consumers fear prosecution for signing a document without valid documentation or proof to back up their claim. The consumer cannot win unless they are being truthful.

Comment from Anonymous on September 1, 2009 at 10:57PM EST

I agree to R. Lengling's comment.. How many of these complaints are valid? It appears they always look at volume vs.validity. Also, Do the customers know what is in the perview of Federal Laws? Do they know what kind of Collection activities are permissible by collection agencies? We need to educate the consumer about the legal laws instead of Firing Warning Shots at the Collection Agencies.

Comment from lweil@apmfinancial.com on September 2, 2009 at 7:04AM EST

I have been in the business since 1996 and I have not changed the way we do business. We have always prided ourselves on talking to debtors as people and trying to build a relationship. We are firm believers that you can attract more bees with honey not vinegar.

Despite this the complaints filed by debtors against my company have gone up exponentially, even though we are not doing anything different (except even be more compliant) than we did years ago when we hardly generated any complaints!! Are we really the main problem??? Maybe the AG's should look into this more closely and they might see that they are part of the problem. Most of our complaints are internet generated form complaints. Half the time the debtors put a previous company that was calling them on the complaint. It is frustrating for us as we are trying to do everything right!!

Comment from Anonymous on September 2, 2009 at 10:59AM EST

My guess is it boils down to a few things:

1. Consumers are seeing unethical debt collectors drug through the mud on television and on the internet. So, even though they are called by a collector following the rules, they only see it as an "unethical" collector.

2. Most consumers do actually want to pay their debts. However, they want to do it on their terms, unreasonable as those term may be. So, when they get called repeatedly, they completely miss the line between the ethical and the unethical and lump all collectors into the "bad" group.

3. Add to this the general economic trend, particularly in a state like Ohio (where I live). Someone who does not have a job, is on unemployment, who has taken a minimum wage job where they used to earn 2 or 3 times that, is letting their debts slide so they can continue to eat and keep a roof over their head, is far more likely to look for a "fast, easy" way to keep the collectors off their back. Hence the AG's office and the BBB trying to get them to go away.

I have been collected from and done collecting myself. My experience is that the overwhelming majority of collectors are ethical and operate within the regulations. But, when I was out of a job, newly divorced, broke, and was getting a call every single day about a debt that I simply could not pay, I was looking for an easy way to make it stop. Never thought of the AG though. Fortunately, got a job fast and was able to pay off my debt. Today, that is not as east as it used to be.

Comment from Illlinois on September 3, 2009 at 10:25AM EST

"It's clear the consumer is using the complaint process as a way to avoid paying a debt owed" I'm not so sure than is totally true. I think it still comes down to this. if all a debt collector has is a spread sheet with names, no collection efforts should be made. If a debt collector has access to signed documents that created the debt, that said contract confirms the debt is collectable, that there is evidence the debtor is in default of that agreement, and that verification of the balance owed, and then that the collector is willing to promptly forward said documentation to the debtor, the trend of increasing complaints would be reversed.

Comment from Jesus on September 14, 2009 at 12:44AM EST

Big banks lend big money then can't help everyone to renegotiate or settle out their debts. Credit needs to be tempered by income. No income = no credit. The banks want you to default sooner so they can write it off and get bailed out with billions of tax payer dollars. Shame on our system.

Comment from former ohio rsident on September 18, 2009 at 12:43PM EST

How about the Ohio Attorney General's office charging me 4800% on what is owed to the State Of Ohio. What a joke!!!!!!!!!!!