On March 19, 2021, the Federal Trade Commission (FTC) released its annual letter to the CFPB on Debt Collection Activities. The letter, found in its entirety here, describes the FTC’s efforts regarding debt collection during the past year.
The FTC’s debt collection program focuses primarily on enforcement; however, the letter also describes the FTC’s public outreach and education programs. Among the actions taken to combat unfair, deceptive, and otherwise unlawful debt collection practices in 2020, the FTC:
- led Operation Corrupt Collector, a nationwide federal-state law enforcement sweep and outreach initiative targeting phantom debt collection and abusive and threatening debt collection practices;
- filed or resolved 7 cases against 39 defendants and obtained $26 million in judgments;
- brought the first federal action combatting unlawful “debt parking”;
- banned the operator of a debt collection scheme who engaged in serious and repeated violations of law from ever working in debt collection again;
- deployed educational materials to inform consumers about their rights, and educate debt collectors about their responsibilities under the FDCPA and FTC Act; and
- supplied 15,755 copies of a graphic novel on debt collection, developed for Spanish speakers to raise awareness about scams targeting the Latino community.
To highlight its actions under Operation Corrupt Collector, the FTC described actions it filed against several collections agencies, including National Landmark Logistics (National), Absolute Financial Services (Absolute), and Midwest Recovery System (Midwest). In December 2020, the FTC reached a settlement agreement with Midwest Recovery Systems. Just last week, National, Absolute, and certain affiliates and individuals were banned permanently from collections.
Despite its focus on enforcement, the FTC signified that its public outreach and education programs remain paramount by citing examples of its attempts to educate consumers about their rights through multiple formats. Notably, in addition to the graphic novella targeted toward the Latino community, in 2020, the FTC also created an infographic to help consumers understand their rights. According to the FTC, “The colorful, easy-to-read infographic explains how to respond to a debt collection call, where to learn more, and how to report to the FTC.” Users downloaded the infographic 800 times in three months.
The FTC concluded the letter by reiterating that it will continue working closely and coordinating with the CFPB on consumer protection issues relating to debt collection.