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FTC Calls for Debt Collection Law Reform

The Federal Trade Commission urges reform of debt collection laws on the heels of a report that found now that more Americans are out of work, collection agencies are in higher demand.

The FTC issued the Fair Debt Collection Practices Act annual report to Congress in late February.  In the report the FTC recommended changes that will make collections a more open process.  In the report, the FTC recommended to congress that updating the law to give the debt collector better information so that they attempt to collect the right amount and that they are speaking with the correct consumer.

The FTC wants to improve the flow of information within the FDCPA by requiring "validation notices" to be sent to the consumer that will disclose the original creditor and list the debt specifics and inform consumers of particular rights they have under the FDCPA.  Specifics include the original amount of the debt, total interest, and total fees.  The FTC wants to require debt collection agents to investigate specific disputes by the consumer.

In addition to the aforementioned changes recommended to the Fair Debt Collection Practices Act, the FTC recommends moderizing the bill to reflect changes in technology by prohibiting debt collectors from contacting consumer by mobile phone, including text messaging, unless the debt collector has express consent.  The FTC also calls for collection agencies utilizing new paymnet technologies to obtain express and verifiable authorization by consumers before accessing any account.

Commentary:
These changes are long overdue for the debt collection industry.  The debt collectors themselves are to blame for a drop in debt collections.  As a whole, their collection practices are best suited for enemy interrogation.  If we ever go to war with an English speaking country, all we need to do is give a couple debt collectors a phone list for the leaders of the other country and we'll stop the war before it really starts since their leaders will be affraid to pick up the phone and they'll just get depressed and go into hiding.  Eventually they'll get angry and envoke their rights under the FDCPA but it will be too late.  :)