Karma can be a funny thing. Sometimes your debt collector harasses you for the money you owe, and sometimes you’re the one pursuing them. That was the case this week, when the FTC ruled that collection conglomerate Asset Acceptance must pay its victims clients $2.5 million in civil fines for using what the government refers to as “unfair and deceptive methods” to pursue uncollected debts. While this is just a small step back for the massive Michigan-based company, it’s a giant leap forward for anyone who has ever been victimized by this unscrupulous industry.
Companies like Asset Acceptance make their money collecting “bad debt” that they buy off of credit card companies for pennies on the dollar. Due to the nature of the business, these companies tend to tread on the edge of what’s defined as legal under the Fair Debt Collection Practices Act. In this case, Asset Acceptance took a running leap off the cliff and laughed all the way down.
According to the FTC’s official complaint, Asset Acceptance engaged in multiple illegal collection practices last year. Most egregiously, the company called consumers whose debts had been forgiven under their state’s statute of limitations and convinced them that they still owed money, threatening to sue if they didn’t pay up. Worse, they trained their employees to trick consumers with expired debt into making a payment on those old balances, knowing full well that any new payment, no matter how small, would “revive” the balance and make the debt eligible for collection again.
Asset Acceptance isn’t the only collection agency that’s been taking the law into their hands, either. Just last year, the FTC slammed West Asset Management with a $2.8 million fine for committing the same crimes. Thankfully, with this newest ruling it looks like the government is finally tightening the collar on these rabid collection agencies. As part of the FTC’s ruling, Asset Acceptance must now inform every one of their debtors that they can’t be sued for “stale” debt. Additionally, the company must notify a consumer in writing every time it submits a negative report to the credit monitoring agencies. According to David Vladeck, director of the Consumer Financial Protection Bureau, “We are sending a signal that we’ve been long critical about some of the practices of debt buyers.”
While new regulations won’t completely eliminate the abuses Americans have to suffer at the hands of collection agencies, it should limit the damage that these companies can do. At the same time, we’d like to remind our readers that this settlement isn’t a forgiveness of debt. Anyone with an unexpired balance is still expected to pay off their debts, even if they’re making the checks out to Asset Acceptance. If you’re struggling to make minimum payments on your balance, then we suggest calling the National Foundation for Credit Counseling immediately and scheduling a consultation. Paying off debt is never easy, but as long as you stick to the right path you will get back in the black eventually.
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