American Banker has posted an article that discusses an underway FTC study about the accuracy of debt-buying firms. Collection agencies buy debts from organizations like banks for a fraction of the debt’s value and then pursue full payment from the debtor.
The FTC says that many collection firms frequently contact the wrong consumers or try to collect the wrong amounts. The question is whether or not the companies buying the debt are contributing to the problem by supplying inaccurate information from the beginning, such as…
What information do they have before deciding to purchase a portfolio? And what information do they receive from sellers and seek from consumers after the purchase?
When buyers are not paid, they often sell the accounts to other buyers. Many debts are purchased and resold several times over a period of years before all collection efforts finally cease.
The FTC also wants to understand how resales are handled and whether data on accounts is being transferred.
Nine companies ( Arrow Financial Services LLC in Niles, Ill.; Asta Funding Inc. of Englewood Cliffs, N.J.; B-Line LLC of Seattle; eCast Settlement Corp. of Whippany, N.J.; Encore Capital Group Inc. of San Diego; NCO Portfolio Management Inc. of Horsham, Pa.; Portfolio Recovery Associates of Norfolk, Va.; Sherman Financial Group of New York; and Unifund Corp. of Cincinnati.) were selected for the study, not because the FTC suspects them of wrongdoing, but because they buy about 75% of consumer debt.
If you have had problems with collection agencies, feel free to contact us through our website or by calling 205-879-2447.
You can join our Facebook Fan Page – Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.