By Michelle Singletary
The Washington Post
— I had a "Die Hard" moment when I saw that the Federal Trade Commission had slammed a debt collector for various infractions, including trying to collect money that people didn't owe.
When Bruce Willis is after a bad guy and he says "Yippee-ki-yay," you want to pump your fist and cheer because justice is being served.
That's my reaction to the announcement from the FTC that it has levied a $3.2 million civil penalty against Expert Global Solutions -- which the agency says is the largest debt collector in the world -- and its subsidiaries. The penalty is the largest ever obtained against a debt collector, said Christopher Koegel, assistant director in the agency's division of financial practices.
This case is a big deal and may help significantly curb some unsavory practices by debt collectors, who generally operate on behalf of an original creditor or buy debt outright. In the latter instance, the debt can be sold multiple times. Often, as the debt becomes older and sold over and over, there is limited documentation other than the debtor's name, last known address, Social Security number and debt amount.
Every year, the FTC receives more complaints about debt collection than any other industry, Koegel said. Since 2010, the agency has brought 15 debt collection cases collecting more than $52 million.
When the recession hit, so much consumer debt collection was going on that the agency ramped up its efforts to protect consumers, Koegel noted.
The FTC says Expert Global Solutions violated the law when it called consumers at home or on their jobs multiple times per day, even after being asked to stop or told that the person's employer prohibited such calls.
One tactic that debt collectors use is to shame people into paying a debt. They do this by calling a person's relatives, neighbors, co-workers or even a boss and then disclosing private details. But the law prohibits debt collectors from sharing a person's debt information with third parties except under limited exceptions, such as contacting an attorney or a co-debtor.
Under the agreement with the FTC, Expert Global Solutions and its subsidiaries can't leave voicemails that reveal the alleged debtor's name or the fact that he or she may owe a debt. The company will also be required to record at least 75 percent of its debt-collection calls beginning one year after the date of the order, and retain the recordings for 90 days.
Expert Global Solutions neither admitted nor denied the allegations. But in responding to the FTC settlement, the company said in a prepared statement: "We are pleased to have resolved this matter with the Federal Trade Commission and to have this legacy issue, dating back to 2008, behind us. We cooperated fully with the FTC's 2010 investigation and have already implemented systems and procedures to help address their areas of concern."
The Consumer Financial Protection Bureau, which has also been focusing on unlawful debt collection practices, is now accepting debt-collection complaints. To submit one, you can go online to www.consumerfinance.gov/complaint or call toll-free (855) 411-2372. The TTY/TDD phone number is (855) 729-2372. You can also fax your complaint to (855)-237-2392 or mail it to the CFPB at P.O. Box 4503, Iowa City, Iowa 52244.
The CFPB is also issuing several bulletins reminding companies to refrain from committing unfair, deceptive or abusive acts or practices when collecting debt. Additionally, the agency has created several excellent template letters that consumers can use -- filling in their individual information -- to help communicate with a debt collection company. One letter lays out the information a consumer would ask a debt collector to provide to verify and document that there is a valid basis for the company to collect the debt. You can find a link to the letters on the agency's home page at consumerfinance.gov.
One of the best conditions the FTC got from Expert Global Solutions concerns debt that may not belong to the person who is the subject of the collection effort. Under the proposed settlement, which still requires court approval, whenever a consumer disputes the validity or the amount of a debt, the company has to either close the account and end collection efforts or conduct an investigation to verify the information they have is accurate.
Please don't misinterpret my glee. I believe companies have a right to pursue debts they are owed. They have a right to sell their right to collect such debt to other companies. But that right shouldn't result in harassment. People shouldn't be threatened or lied to or relentlessly pursued for debt that isn't theirs.
Readers can write to Michelle Singletary c/o The Washington Post, 1150 15th St., N.W., Washington, D.C. 20071. Her email address is firstname.lastname@example.org. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.